Opinion ID: 3037393
Heading Depth: 2
Heading Rank: 1

Heading: “refer to”

Text: Dillingham held, first, that California’s prevailing wage law did not “refer to” ERISA plans because approved apprenticeship programs in California were “not necessarily . . . OREGON COLUMBIA BRICK MASONS v. GARDNER 5567 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 pro- 3 The 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). 5568 OREGON COLUMBIA BRICK MASONS v. GARDNER 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. 4 Following 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. OREGON COLUMBIA BRICK MASONS v. GARDNER 5569
[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 rela- tions 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 —
employees who are employed in an industry affecting commerce; or
officer or employee thereof, which repre- sents, 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 con- 5 A “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. 5570 OREGON COLUMBIA BRICK MASONS v. GARDNER 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 OREGON COLUMBIA BRICK MASONS v. GARDNER 5571 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. 839011-0074(1)(a)(B). Moreover, employee representatives need not be employees, and are chosen by the Council, not the employees themselves.6 See 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 com- 6 The 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). 5572 OREGON COLUMBIA BRICK MASONS v. GARDNER 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. OREGON COLUMBIA BRICK MASONS v. GARDNER 5573
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 indus- try 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 7 An “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). 5574 OREGON COLUMBIA BRICK MASONS v. GARDNER 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. 8 Employee pension benefit plans do have to be funded. 29 U.S.C. §§ 1081-82. OREGON COLUMBIA BRICK MASONS v. GARDNER 5575 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.