FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

OREGON COLUMBIA BRICK MASONS 

JOINT APPRENTICESHIP TRAINING

COMMITTEE; OREGON-COLUMBIA

CEMENT MASONS JOINT

APPRENTICESHIP TRAINING COMMITTEE,

Plaintiffs-Appellants,

v.

DAN GARDNER, in his capacity as No. 03-35864

Oregon Labor Commissioner and

D.C. No. Oregon State Apprenticeship and  CV-02-01711-JJ Training Council Chairperson; JOHN

MOHLIS; VICKY L. BACON; KATHRYN OPINION

J. MATTIMORE; RONALD S. SHERMAN;

CONSTANCE ASHBROOK; ED J.

GORMLEY; CHET CARUTHERS; STEPHEN

SIMMS, Esq.; LARRY JONES, each in

their capacity as members of the

Oregon State Apprenticeship and

Training Council,

Defendants-Appellees. 

Appeal from the United States District Court

for the District of Oregon

John Jelderks, Magistrate Judge, Presiding

Argued and Submitted

March 7, 2005—Portland, Oregon

Filed May 22, 2006

Before: Stephen Reinhardt, Marsha S. Berzon, and

Jay S. Bybee, Circuit Judges.

5557
Opinion by Judge Berzon

5558 OREGON COLUMBIA BRICK MASONS v. GARDNER
COUNSEL

John Spencer Stewart, Robert B. Coleman, & Matthew A.

Wand, Stewart Sokol & Gray LLC, Portland, Oregon, for the

plaintiffs-appellants. 

Hardy Myers, Attorney General, Mary H. Williams, Solicitor

General, & Erika L. Hadlock, Assistant Attorney General,

Salem, Oregon, for the defendants-appellees.

5560 OREGON COLUMBIA BRICK MASONS v. GARDNER
OPINION

BERZON, Circuit Judge: 

We consider whether an Oregon prerequisite for state recognition of a proposed apprentice training committee — that

it be “necessary to serve the needs of the various apprenticeable occupations,” OR. REV. STAT. § 660.135(1), a requirement known as the “needs” requirement — is preempted by

the Employee Retirement Income Security Act of 1974

(ERISA), 29 U.S.C. §§ 1001-1461. 

BACKGROUND

“Since the founding of the American republic, states have

regulated training programs for individuals seeking to enter

skilled crafts, in order to prevent their exploitation by employers.” Assoc. Builders & Contractors of S. Cal., Inc. v. Nunn,

356 F.3d 979, 982 (9th Cir. 2004). Oregon has since 1931

promoted apprentice training programs by establishing a registration system for programs that meet specified criteria. See

1931 OR. LAWS 138. Oregon does not, however, mandate that

employers hire only registered apprentices. Instead, “[f]or

building contractors, a major benefit of hiring registered

apprentices is that they can pay them a special rate for work

that they perform on public construction projects,” Nunn, 356

F.3d at 982, typically lower than the prevailing wage established by Oregon law. See OR. REV. STAT. § 660.142(1).1

 Con1The statute provides, in relevant part: 

(1) No employer shall pay a registered apprentice at a rate

less than that obtained by applying the schedule, set forth in the

applicable standards, at the apprentice’s level of apprenticeship,

to the journeyman hourly rate of wage currently in effect for journeymen in the occupation for which the apprentice is being

trained, as determined by the appropriate local joint committee.

(2) The journeyman hourly wage rate shall be the average

hourly wage currently being paid by employers participating in

OREGON COLUMBIA BRICK MASONS v. GARDNER 5561
tractors may pay this lower rate only if they hire apprentices

from registered programs. Id. § 660.142(2). 

In Oregon, the registered programs are run by “local joint

committees,” id. § 660.135, in accordance with standards

approved by the Oregon State Apprenticeship and Training

Council (Council). Id. § 660.137. At the heart of this case is

the standard prescribing that, “[i]n each locality where

apprentices are employed, there shall be formed as many local

joint committees as are necessary to serve the needs of the

various apprenticeable occupations.” Id. § 660.135(1)

(emphasis added). This needs requirement limits the number

of State-recognized apprenticeship programs in a given geographic area. 

The “joint” aspect of the local joint committees is that they

“consist of an equal number of representatives of employers

and employees.” Id. § 660.135(2). Employee representatives

on “joint committees” need not be members of a labor organization or a collective bargaining unit. If there is no collective

bargaining agreement that “covers the trade or occupation that

is the subject of the apprenticeship or training program

administered by the local joint committee,” an “employee representative must be, or have been, a skilled practitioner of the

particular trade or occupation that is the subject of the apprenticeship or training program administered by the local joint

committee.” Id. § 660.135(5). 

Rules issued by Oregon’s Bureau of Labor and Industries

further regulate joint apprenticeship committees. Relevant to

this case is one that explains the application of the needs

requirement as follows: 

a program to their skilled workers, that is, to those employees

with demonstrated knowledge, experience and proficiency in that

trade or occupation who are currently performing the type of

work for which the apprentice is to be trained. 

OR. REV. STAT. § 660.142. 

5562 OREGON COLUMBIA BRICK MASONS v. GARDNER
The Council will approve the creation of a new local

joint committee, in an area already served by a committee in the same trade or craft, only if the applicant

for the new program can first demonstrate to the satisfaction of the Council by a preponderance of evidence that the existing program fails or refuses to

address valid and legitimate needs of the applicant.

OR. ADMIN. R. 839-011-0084(3).2 Another pertinent regulation

requires that, “[a]ll employers and their apprenticeable

employees shall be afforded the opportunity to participate, on

a non-discriminatory basis, in existing programs.” OR. ADMIN.

R. 839-011-0084(2). 

FACTUAL AND PROCEDURAL BACKGROUND

In this case, the Oregon Columbia Brick Masons Joint

Apprenticeship Training Committee and the Oregon Columbia Cement Masons Joint Apprenticeship Training Committee, two apprenticeship training committees not registered by

the Council, seek a declaratory judgment that Oregon’s needs

requirement for the establishment of new registered apprenticeship training committees is preempted by ERISA. The two

committees initially sought approval by the Council in June

2000. The Council’s Standards Review Subcommittee recommended against Council approval three times between then

and September 20, 2001, when the Council finally denied the

plaintiffs’ application. 

2This administrative rule was amended, effective August 23, 2005, to

replace the general requirement that an applicant demonstrate “that the

existing program fails or refuses to address valid and legitimate needs”

with a requirement that the application satisfy a number of set criteria. See

OR. ADMIN. R. 839-011-0084 (2005). Because the amended rule does not

apply retroactively, the relevant regulation is the one in force at the time

appellants submitted their application for new apprenticeship training

committees. All citations in this opinion to the administrative rule are to

the former version, unless otherwise noted. 

OREGON COLUMBIA BRICK MASONS v. GARDNER 5563
In reviewing the appellants’ application for new registered

apprenticeship training committees, a Council subcommittee

considered whether existing committees could meet the needs

identified by appellants for their proposed programs. The

existing registered apprenticeship committees represented that

they could address all of the identified needs by incorporating

some of the appellants’ proposed curriculum into their programs. They also offered appellants an opportunity to participate in curriculum development. Ultimately, the subcommittee recommended that the Council deny approval because

of perceived deficiencies in appellants’ proposed curriculum.

The subcommittee also doubted that the existing registered

apprenticeship committees could not or would not meet appellants’ stated needs. 

Before the full Council there was extensive debate on the

appellants’ application, but the application was ultimately

rejected. Appellants argued, first, that they had an “unmet

need” related to “philosophical differences,” because the

existing registered apprenticeship training committees

included union members. The Council did not recognize this

“philosophical difference” as an “unmet need,” reasoning that

an Oregon administrative rule mandates non-discriminatory

access to existing programs, see OR. ADMIN. R. 839-011-

0084(2), and thus that it could not sanction a program premised on excluding union-affiliated participants. 

Second, appellants argued that “cost efficient training” was

a need unmet by the existing programs. The Council was not

persuaded by this position, as appellants “refused to fully document costs or provide cost justifications for their training

cost claims, while at the same time acknowledging that all

known costs were not included in the original estimates provided to the Subcommittee and Division staff.” 

After the Council denied their application, the appellants

brought this declaratory action in federal court. The plaintiffs

sought a judgment declaring that Oregon Revised Statute

5564 OREGON COLUMBIA BRICK MASONS v. GARDNER
§ 660.135(1), delineating the needs requirement, and Oregon

Administrative Rule 839-011-0084 are preempted by ERISA,

and also sought related injunctive relief. Both appellants and

appellees presented declarations concerning the factual background of appellants’ rejected application for registration as

apprenticeship training committees. In addition, appellees

offered undisputed evidence that Oregon’s registered apprenticeship training programs include both programs supported

by independent funds created exclusively for that purpose and

others supported by alternate arrangements not involving the

creation of a separate fund. According to an affidavit from

Stephen Simms, a member of the Council, at least sixty-eight

apprentice training committees maintain funds for the purpose

of financing their training programs, and at least sixty-one do

not. The unfunded committees “are supported either directly

by the participating employer or employers or have made contractual arrangement for the operation of their programs.” 

On cross-motions for summary judgment, the magistrate

judge granted summary judgment to the appellees. This

appeal ensued.

DISCUSSION

At the core of this case is ERISA’s “broadly worded preemption provision.” Ingersoll-Rand Co. v. McClendon, 498

U.S. 133, 138 (1990). It provides:

Except as provided in subsection (b) of this section,

the provisions of this subchapter and subchapter III

of this chapter shall supersede any and all State laws

insofar as they may now or hereafter relate to any

employee benefit plan described in section 1003(a)

of this title and not exempt under section 1003(b) of

this title. 

29 U.S.C. § 1144(a) (emphasis added). 

OREGON COLUMBIA BRICK MASONS v. GARDNER 5565
[1] In California Division of Labor Standards Enforcement

v. Dillingham Construction, N.A., Inc., 519 U.S. 316 (1997),

the Supreme Court considered whether ERISA preempts a

California law, similar to the Oregon statute, requiring contractors of state public works projects to pay the prevailing

wage unless the contractor hires apprentices from approved

programs. The Court used a two-part inquiry in “apply[ing]

the ‘unhelpful text’ of ERISA’s pre-emption provision,” id. at

324: First, does the law “refer to” ERISA plans? Second, if

not, does the law have an impermissible “connection with”

ERISA plans? Id. at 324-35; see also Nunn, 356 F.3d at 984-

86 (applying the Dillingham criteria). 

Appellants maintain that we should not apply the Dillingham analysis afresh to this case, as we have already

decided, in Associated General Contractors v. Smith, 74 F.3d

926 (9th Cir. 1996), that a needs requirement for state registration of an apprenticeship program is preempted by ERISA.

Smith, however, relied substantially on our overturned decision in Dillingham Construction N.A., Inc. v. County of

Sonoma, 57 F.3d 712 (9th Cir. 1995), rev’d, 519 U.S. 316.

See Smith, 74 F.3d at 929-30. Furthermore, the Supreme

Court, in reversing our decision in Dillingham, substantially

altered the ERISA preemption analysis for apprenticeship

plans. Consequently, we cannot rely on Smith, but instead

must apply the ERISA preemption analysis developed by the

Supreme Court in Dillingham to the Oregon needs requirement. See Miller v. Gammie, 335 F.3d 889, 893 (9th Cir.

2003) (en banc) (holding that when intervening Supreme

Court case law is clearly irreconcilable with a prior circuit

decision, a panel of this court is “bound by the later and controlling authority, and should reject the prior circuit opinion”).

I. “REFER TO” 

Dillingham held, first, that California’s prevailing wage

law did not “refer to” ERISA plans because approved apprenticeship programs in California were “not necessarily . . .

5566 OREGON COLUMBIA BRICK MASONS v. GARDNER
ERISA plans.” 519 U.S. at 325. The Court identified as critical to its analysis the consideration that among California’s

approved programs were both joint apprenticeship committees, i.e., those “sponsored by the collective efforts of management and organized labor,”

3

 that must maintain ERISA

trust funds, and those “maintained by a single employer,

[whose] costs can be defrayed out of that employer’s general

assets.” Id. at 325-26. This “funded/unfunded distinction,” id.

at 327, was critical to Dillingham’s holding that California’s

approved apprenticeship programs do not “refer to” ERISA

plans. 

This “funded/unfunded distinction” first arose in Massachusetts v. Morash, 490 U.S. 107 (1989). In Morash, the

Court, interpreting the term “employee welfare benefit plan”

in ERISA, see 29 U.S.C. § 1002(1), “recognized a distinction

between vacation benefits paid out of an accumulated fund

and those paid out of an employer’s general assets.” Dillingham, 519 U.S. at 326. “[C]ompelled by ERISA’s object

and policy,” the Court concluded that “the policy at issue in

Morash, whereby vacation benefits were paid out of general

assets,” was not an ERISA “employee welfare benefit plan.”

Id. 

In considering California’s approval requirement for

apprenticeship training committees, Dillingham relied on the

factual record concerning whether California’s approved

apprenticeship programs maintained ERISA-governed trust

funds. Evidence indicated that “California had 175 joint

apprenticeship programs and 13 ‘unilateral’ ones.” Id. at 327

n.5. Although the record did not indicate whether “some of

the 13 unilateral programs [had] separate funds,” Dillingham

emphasized that “[n]o party . . . ha[d] established that all pro3The Court’s definition of a “joint apprenticeship training program”

cited California law as recognizing only representatives of collective bargaining units as employee representatives. See Dillingham, 519 U.S. at

325 (citing Cal. Lab. Code §§ 3075, 3076). 

OREGON COLUMBIA BRICK MASONS v. GARDNER 5567
grams d[id].” Id. (first emphasis added). The Court concluded

on this basis that the prevailing wage law “function[ed] irrespective of . . . the existence of an ERISA plan.” Id. at 328

(citation and internal quotation marks omitted). 

Similarly, in Nunn, we considered whether a California regulation governing the compensation paid registered apprentices working on private construction projects refers to ERISA

plans. 356 F.3d at 984-86. We noted that there were twentyeight state-approved unilateral apprenticeship programs, id. at

983, and that “[i]n [the pertinent regulation] there is no specific provision that makes ERISA plans essential to its operation or that acts immediately or exclusively upon ERISA

plans.” Id. at 984. We concluded that the statute in question

“survives Associated Builders’ challenge under this ‘reference

to’ prong of ERISA preemption analysis.” Id. 

[2] The question that we must answer with reference to

Oregon’s needs requirement, then, is whether it “is indifferent

to the funding, and attendant ERISA coverage, of apprenticeship programs.”

4 Dillingham, 519 U.S. at 328; see also Nunn,

356 F.3d at 984. Appellants argue that although many Oregon

apprenticeship programs do not in fact maintain trust funds,

they are legally required to do so, either by the Labor Management Relations Act (LMRA), 29 U.S.C. §§ 141-187, or by

ERISA itself. They maintain that if either argument is correct,

then the needs requirement “refers to” ERISA plans and is,

therefore, preempted. We disagree.

4Following oral argument, appellants directed our attention to an administrative decision from the Department of Labor that held that California’s

needs requirements was inconsistent with a different federal law, namely

the National Apprenticeship Act of 1937, 29 U.S.C. § 50. See U.S. Dep’t

of Labor, Office of Apprenticeship Training, Employment, & Labor Servs.

v. Cal. Dep’t of Indus. Relations, Case No. 2002-CCP-00001 (Dep’t of

Labor Apr. 22, 2005), http://www.oalj.dol.gov/Decisions/ALJ/CCP/2002/

EMPLOYMENT_and_TRAIN_v_CALIFORNIA_DEPARTMEN_2002C

CP00001_(APR_22_2005)_082616_CADEC_SD.PDF. That decision,

however, did not concern whether a needs requirement is preempted by

ERISA and thus does not inform our decision here. 

5568 OREGON COLUMBIA BRICK MASONS v. GARDNER
A. LMRA

[3] Section 302(a) of the LMRA provides: 

It shall be unlawful for any employer or association

of employers or any person who acts as a labor relations expert, adviser, or consultant to an employer or

who acts in the interest of an employer to pay, lend,

or deliver, or agree to pay, lend, or deliver, any

money or other thing of value —

(1) to any representative of any of his

employees who are employed in an industry

affecting commerce; or 

(2) to any labor organization,[5] or any

officer or employee thereof, which represents, seeks to represent, or would admit to

membership, any of the employees of such

employer who are employed in an industry

affecting commerce . . . . 

29 U.S.C. § 186(a). This general prohibition is not applicable,

however, “with respect to money or other thing of value paid

by any employer to a trust fund established by such representative for the purpose of . . . defraying costs of apprenticeship

or other training programs.” Id. § 186(c)(6). Thus, while an

employer may not pay any money directly to a labor organization or other employee representative, an employer may con5A “labor organization” is defined by 29 U.S.C. § 152(5), which provides: 

The term “labor organization” means any organization of any

kind, or any agency or employee representation committee or

plan, in which employees participate and which exists for the

purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of

employment, or conditions of work. 

OREGON COLUMBIA BRICK MASONS v. GARDNER 5569
tribute to an apprenticeship trust fund established by such an

organization or representative. If a trust fund is established to

comply with the LMRA, then ERISA governs the implementation and governance of that fund. See Dillingham, 519 U.S.

at 326. 

In general, the purpose of § 302(a) of the LMRA is to prevent “corruption of collective bargaining through bribery of

employee representatives by employers, . . . extortion by

employee representatives, and . . . the possible abuse by union

officers of the power which they might achieve if welfare

funds were left to their sole control.” Arroyo v. United States,

359 U.S. 419, 425-26 (1959). Its coverage extends not just to

official bargaining representatives but to “any person authorized by the employees to act for them in dealing with their

employers.” United States v. Ryan, 350 U.S. 299, 302 (1956).

[4] The appellants maintain that to comply with the LMRA,

any approved Oregon apprenticeship training committee must

establish a trust fund to defray the costs of apprenticeship

training, even if its employee members are not members of

collective bargaining units or traditional labor organizations.

They point to no evidence, however, that any Oregon apprenticeship training committees not involving union representatives have in fact established LMRA trust funds, and we know

from the record that at least sixty-one Oregon joint apprenticeships have not. 

We seriously doubt the viability of the appellants’ LMRA

argument. The LMRA’s core purpose is to prevent corruption

of employee representatives who are chosen by, and have a

statutory duty to represent the interests of, other employees.

Although the apprenticeship training committees that include

collective bargaining representatives clearly fall within the

definition of “labor organization” set forth in 29 U.S.C.

§ 152(5), those committees on which the employee representatives are not collective bargaining representatives do not.

Employee representatives on committees that do not involve

5570 OREGON COLUMBIA BRICK MASONS v. GARDNER
a collective bargaining agreement must only “be or have been

a skilled practitioner in the particular trade or occupation that

is the subject of the apprenticeship or training program

administered by the local joint committee.” OR. REV. STAT.

§ 660.135(5) (emphasis added); see also OR. ADMIN. R. 839-

011-0074(1)(a)(B). Moreover, employee representatives need

not be employees, and are chosen by the Council, not the

employees themselves.6See OR. ADMIN. R. 839-011-0074.

The local joint committees, consequently, are not necessarily

“organization[s] . . . in which employees participate,” 29

U.S.C. § 152(5), because none of its members need be “employees,” and employees do not “participate” in the sense that

they select the members of the committees. Further, such

committees do not raise the concern of corrupting the discharge of duties by employee representatives selected under

the processes of the National Labor Relations Act, 29 U.S.C.

§ 158, that is at the core of LMRA § 302. 

[5] In sum, whether a government-mandated committee

composed of government appointed individuals is a “labor

organization” for purposes of the LMRA is at least highly

debatable. In any event, there is no reason in this ERISA preemption case to decide an entirely hypothetical question concerning a separate statute, the LMRA. If the operation of

some or all of the unfunded plans in Oregon is illegal under

the LMRA, that is a matter for LMRA enforcement. See 29

U.S.C. § 186(d)-(e) (providing for criminal penalties and

injunctive relief). Nothing in Dillingham suggests that its

approach to the preemption question depends on the validity

of funded or unfunded plans on independent legal grounds.

Instead, after observing in passing that § 302(c)(6) of the

LMRA requires a separate fund for joint apprenticeship com6The employers may nominate individuals to the committees, see OR.

ADMIN. R. 839-011-0074(1)(a)(A), but the Council can disapprove nominees, see OR. ADMIN. R. 839-011-0074(1)(d). Also, if no individuals are

nominated, “the Apprenticeship Representatives for the area may recommend members.” OR. ADMIN. R. 839-011-0074(3). 

OREGON COLUMBIA BRICK MASONS v. GARDNER 5571
mittees, Dillingham went on to identify “[t]he existence of

that fund” — not whether the LMRA might be read to require

the existence of a fund that in actuality does not exist — as

the circumstance that “triggers ERISA coverage.” 519 U.S. at

326 (emphasis added). The Court in Dillingham stated with

emphasis that “an employee benefit program not funded

through a separate fund is not an ERISA plan,” once again

concerning itself with on-the-ground actualities, not with disputed legalities. Id. 

As noted above, the record indicates that not all of Oregon’s apprentice training committees maintain trust funds:

“[A]t least 68 [committees] are supported by a joint training

trust fund. . . . [A]t least 61 . . . [committees] do not use a

joint training trust fund, but are supported either directly by

the participating employer or employers or have made contractual arrangement for the operation of their programs.” The

statute and regulations governing Oregon’s needs requirement

do not distinguish between funded and unfunded plans, but

apply to all apprenticeship programs presented for approval.

Thus, Oregon is “indifferent” to the outcome of the legal dispute between the parties as to whether § 302 of the LMRA

does or does not require that the apprenticeship plans governed by the state-mandated local joint committees be funded.

Either way, the Oregon statutory requirements will be the

same. 

[6] Given the Oregon statutory and regulatory language and

the record in this case, the Oregon statutory scheme cannot be

said to “refer to” ERISA plans. Rather, as in Nunn, “there is

no specific provision that makes ERISA plans essential to its

operation or that acts immediately or exclusively upon ERISA

plans.” 356 F.3d at 984. And, as in Dillingham, the Oregon

statutes and regulations are “indifferent to the funding, and

attendant ERISA coverage, of apprenticeship programs.” 519

U.S. at 328. 

[7] We conclude that Oregon’s needs requirement does not

“refer to” ERISA plans. 

5572 OREGON COLUMBIA BRICK MASONS v. GARDNER
B. ERISA 

Appellants’ argument with regard to ERISA is somewhat

similar. They ask us to hold that approved apprenticeship

training committees in Oregon are covered by ERISA itself

— without the LMRA trigger — because the committees

meet ERISA’s definition of an “employee welfare benefit

plan,” 29 U.S.C. § 1002(1). On that basis, they urge us to conclude that the Oregon statutes and regulations refer to ERISA

plans. 

ERISA’s coverage provision states, in relevant part: 

[T]his subchapter shall apply to any employee benefit plan if it is established or maintained — (1) by

any employer engaged in commerce or in any industry or activity affecting commerce; or (2) by any

employee organization or organizations representing

employees engaged in commerce or in any industry

or activity affecting commerce; or (3) by both. 

29 U.S.C. § 1003(a) (emphasis added). ERISA defines an

“employee welfare benefit plan” as:

any plan, fund, or program which was heretofore or

is hereafter established or maintained by an

employer or by an employee organization,[7] or by

7An “employee organization” under ERISA means: 

any labor union or any organization of any kind, or any agency

or employee representation committee, association, group, or

plan, in which employees participate and which exists for the

purpose, in whole or in part, of dealing with employers concerning an employee benefit plan, or other matters incidental to

employment relationships; or any employees’ beneficiary association organized for the purpose in whole or in part, of establishing such a plan. 

29 U.S.C. § 1002(4). 

OREGON COLUMBIA BRICK MASONS v. GARDNER 5573
both, to the extent that such plan, fund, or program

was established or is maintained for the purpose of

providing for its participants or their beneficiaries,

through the purchase of insurance or otherwise, (A)

medical, surgical, or hospital care or benefits, or

benefits in the event of sickness, accident, disability,

death or unemployment, or vacation benefits,

apprenticeship or other training programs, or day

care centers, scholarship funds, or prepaid legal services. 

Id. § 1002(1). 

[8] Nothing in this statutory scheme mandates that

employee welfare benefit plans be funded.8 Conversely, as

Dillingham holds, “an employee benefit [apprenticeship] program not funded through a separate fund is not an ERISA

plan.” 519 U.S. 326. Whether such an unfunded apprenticeship plan is established by an “employee organization” does

not matter to whether it is an employee welfare benefit plan,

just as it does not matter whether such an unfunded plan is

established by “an employer engaged in commerce.” 29

U.S.C. § 1003(a). Either way, only funded apprenticeship

plans are covered; the sponsor is irrelevant. 

[9] Some of Oregon’s approved apprenticeship training

committees are not funded apprenticeship plans, and

§ 1003(a) does not require that ERISA govern them. It follows, therefore, that the Oregon apprenticeship statutes and

regulations do not “refer to” ERISA plans for the same reason

earlier indicated — that the Oregon apprenticeship scheme,

like the one in California, “is indifferent to the funding, and

attendant ERISA coverage, of apprenticeship programs.” Dillingham, 519 U.S. at 328. 

8Employee pension benefit plans do have to be funded. 29 U.S.C.

§§ 1081-82. 

5574 OREGON COLUMBIA BRICK MASONS v. GARDNER
In sum, appellants’ arguments that Oregon’s needs requirement “refers to” ERISA plans fail. We turn, therefore, to

whether Oregon’s needs requirement has an impermissible

“connection with” ERISA plans. 

II. “CONNECTION WITH”

[10] The second step of the ERISA pre-emption inquiry is

whether a challenged law has an impermissible “connection

with” ERISA plans. For essentially the same reasons that the

requisite “connection” was lacking in Dillingham and in

Nunn, it is lacking here. 

Dillingham observed that there is a “paucity of indication

in ERISA and its legislative history of any intent on the part

of Congress to pre-empt state apprenticeship training standards, or state prevailing wage laws that incorporate them.”

Id. at 331. Building on that observation, Nunn held that we

must apply the “connection with” test with the understanding

that “apprenticeship standards are a traditional area of state

concern [and] Congress has explicitly encouraged continued

state regulation of apprenticeship standards.” 356 F.3d at 986.

[11] Nunn observed that “California does not prohibit

apprenticeship training programs from operating without state

approval, and employers are not required to hire apprentices

from state-approved programs or indeed to hire any apprentices at all.” Id. at 982. The same is true in Oregon. Only a

program that seeks recognition from Oregon’s State Apprenticeship and Training Council is subject to evaluation under

Oregon’s needs requirement. See OR. REV. STAT. § 660.135.

Oregon’s scheme does not require that all apprenticeship

training programs be registered nor does it govern the functioning or internal organization of unregistered apprentice

training committees. Indeed, appellants have existed and

functioned in some fashion since 1986 without state approval.

That appellants would prefer to attain state recognition

because of the financial advantages state recognition offers

OREGON COLUMBIA BRICK MASONS v. GARDNER 5575
does not prevent them from training apprentices as they see

fit without that recognition. 

[12] The needs requirement does provide incentives for

employers seeking to provide apprenticeship training opportunities to join existing programs. In this sense, it is quite similar to the state law at issue in New York State Conference of

Blue Cross & Blue Shield Plans v. Travelers Insurance Co.,

514 U.S. 645 (1995). In Travelers, the Supreme Court considered whether ERISA preempted a New York statute that “require[d] hospitals to collect surcharges from patients covered

by a commercial insurer but not from patients insured by a

Blue Cross/Blue Shield plan, and . . . subject[ed] certain

health maintenance organizations . . . to surcharges that var-

[ied] with the number of Medicaid recipients each enroll[ed].”

514 U.S. at 649. The Court concluded that “[a]lthough there

is no evidence that the surcharges will drive every health

insurance consumer to the Blues, they do make the Blues

more attractive (or less unattractive) as insurance alternatives

and thus have an indirect economic effect on choices made by

insurance buyers, including ERISA plans.” Id. at 659. This

“indirect economic effect,” basically a channeling mechanism, was insufficient to trigger ERISA preemption in Travelers. Oregon’s needs requirement functions quite similarly: It

makes participation in certain apprenticeship programs more

attractive, but does not require such participation. 

[13] In light of Dillingham, Nunn, and Travelers, we can

discern no impermissible connection between Oregon’s needs

requirement and ERISA. 

CONCLUSION

[14] Oregon’s needs requirement does not “relate to”

ERISA. It neither “refers to” nor has an impermissible “connection with” ERISA plans. The needs requirement is therefore not preempted. The district court’s decision is

AFFIRMED.

5576 OREGON COLUMBIA BRICK MASONS v. GARDNER