Assoc Builders v. MI Dept of Labor ( 2008 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 08a0347p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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ASSOCIATED BUILDERS & CONTRACTORS, SAGINAW X
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Plaintiffs-Appellees/Cross-Appellants, -
VALLEY AREA CHAPTER, et al.,
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Nos. 07-1639/1649/1654
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v. >
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MICHIGAN DEPARTMENT OF LABOR AND ECONOMIC
Defendants-Appellants/Cross-Appellees. -
GROWTH, et al.,
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Appeal from the United States District Court
for the Eastern District of Michigan at Bay City.
No. 91-10373—Thomas L. Ludington, District Judge.
Argued: July 23, 2008
Decided and Filed: September 16, 2008
Before: SUTTON and COOK, Circuit Judges; ROSE, District Judge.*
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COUNSEL
ARGUED: Dennis Raterink, OFFICE OF THE ATTORNEY GENERAL, Lansing, Michigan, John
R. Canzano, KLIMIST, McKNIGHT, SALE, McCLOW & CANZANO, Southfield, Michigan, for
Appellants. David John Masud, MASUD, PATTERSON, SCHUTTER, PETERS & VARY,
Saginaw, Michigan, for Appellees. ON BRIEF: Dennis Raterink, Richard P. Gartner, OFFICE OF
THE ATTORNEY GENERAL, Lansing, Michigan, John R. Canzano, KLIMIST, McKNIGHT,
SALE, McCLOW & CANZANO, Southfield, Michigan, for Appellants. David John Masud,
Katherine S. Gardner, MASUD, PATTERSON, SCHUTTER, PETERS & VARY, Saginaw,
Michigan, for Appellees.
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OPINION
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SUTTON, Circuit Judge. “This is another Employee Retirement Income Security Act of
1974 (ERISA) pre-emption case,” De Buono v. NYSA-ILA Med. & Clinical Servs. Fund, 520 U.S.
806, 808 (1997), one that asks whether ERISA preempts two provisions of a Michigan law
*
The Honorable Thomas M. Rose, United States District Judge for the Southern District of Ohio, sitting by
designation.
1
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governing the training of apprentice electricians. Because “the substantive standards to be applied
to apprenticeship training programs are . . . quite remote from the areas with which ERISA is
expressly concerned,” and because of “the paucity of indication in ERISA and its legislative history
of any intent on the part of Congress to pre-empt state apprenticeship training standards,” Cal. Div.
of Labor Standards Enforcement v. Dillingham Constr., N.A., Inc., 519 U.S. 316, 330–31 (1997),
we hold that ERISA does not preempt the provisions.
I.
In 1990, the Michigan legislature imposed two requirements on the training and supervision
of apprentice electricians. It required there to be a one-to-one ratio between trained electricians and
apprentice electricians at all work sites. See Mich. Comp. Laws § 338.883e(3). And it established
an “equivalency requirement” for the Michigan Electrical Administrative Board, which meant that
individuals could be certified in an apprenticeship training program only if the program met the
apprentice-training requirements imposed by the U.S. Department of Labor Bureau of
Apprenticeship and Training. See id. § 338.883e(2).
In 1991, Associated Builders & Contractors, a trade organization, together with three of its
members (collectively, “Associated Builders”) filed this action against a state agency and its director
(collectively, the “State”), claiming that ERISA preempted the ratio and equivalency requirements.
The district court agreed and ordered the State to refrain from enforcing the requirements.
Associated Builders & Contractors v. Perry, 817 F. Supp. 49, 54 (E.D. Mich. 1992). The State did
not appeal the decision. (When an intervening trade association appealed the decision, we dismissed
the appeal for lack of standing. See Associated Builders & Contractors v. Perry, 16 F.3d 688, 689
(6th Cir. 1994).)
Fourteen years later, in 2006, Michigan filed a motion under Rule 60(b)(5) of the Federal
Rules of Civil Procedure to dissolve the 1992 injunction, claiming that intervening Supreme Court
decisions had swept away the legal premises of the order. Associated Builders responded that the
motion was untimely and lacked merit to boot. The district court concluded that the State had filed
the motion within a reasonable time and revisited the merits of the 1992 decision. But it ultimately
denied the State’s request for relief, concluding that, even though the relevant case law had changed
in the intervening years, ERISA continues to preempt each of the two apprentice-training
requirements.
II.
Associated Builders, as an initial point of dispute, argues that the State’s Rule 60(b)(5)
motion was untimely and thus should never have been considered on the merits in the first place.
This aspect of the district court’s decision receives abuse-of-discretion review. See Days Inns
Worldwide, Inc. v. Patel, 445 F.3d 899, 905 (6th Cir. 2006).
Under Rule 60(b)(5) of the Federal Rules of Civil Procedure, a court may dissolve an
injunction if it “is based on an earlier judgment that has been reversed or vacated” or if applying the
injunction prospectively “is no longer equitable.” One predicate for altering an injunction or consent
decree under the rule is a change in law—new court decisions or statutes that make legal what once
had been illegal. See Rufo v. Inmates of Suffolk County Jail, 502 U.S. 367, 388 (1992); Sys. Fed’n
No. 91, Ry. Employes’ Dept., AFL-CIO v. Wright, 364 U.S. 642, 647 (1961); Sweeton v. Brown, 27
F.3d 1162, 1166 (6th Cir. 1994) (en banc).
A party bringing a Rule 60(b)(5) motion must do so “within a reasonable time,” Fed. R. Civ.
P. 60(c)(1), a requirement that turns on the length of the delay, the explanations for the delay, the
prejudice to the opposing party caused by the delay and the circumstances warranting relief. See
In re G.A.D., Inc., 340 F.3d 331, 334 (6th Cir. 2003). Also relevant is the nature of the dispute and
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whether it involves a purely private disagreement or a matter of public interest. “[T]he public
interest is a particularly significant reason for applying a flexible modification standard” because
injunctions often “reach beyond the parties involved directly in the suit and impact the public’s right
to the sound and efficient operation of its [government].” Rufo, 502 U.S. at 381 (internal quotation
marks omitted).
The district court did not abuse its discretion in determining that the State filed its motion
within a reasonable time. One, there has been a change in law. Ignoring for a moment the potential
significance of when ERISA-preemption law changed—whether in 1997, as Associated Builders
urges, see Fourth Br. at 4, or as late as 2004, as the State urges, see Third Br. at 5 & n.6—the fact
remains that the law “has changed so that the enjoined behavior, which once might have been
[preempted by] federal law, [may] no longer [be preempted] at all,” Sweeton, 27 F.3d at 1166
(emphasis omitted). In De Buono, 520 U.S. at 813, the Supreme Court itself acknowledged
differences between the Court’s “earlier ERISA pre-emption cases” and its cases since New York
State Conference of Blue Cross & Blue Shield v. Travelers Insurance Co., 514 U.S. 645 (1995), and
so have the lower courts, see, e.g., S. Cal. IBEW-NECA Trust Funds v. Standard Indus. Elec. Co.,
247 F.3d 920, 927 (9th Cir. 2001); Willmar Elec. Serv., Inc. v. Cooke, 212 F.3d 533, 537 (10th Cir.
2000).
Two, this case plainly implicates a matter of public concern—a State’s police-power interest
in regulating the safety and training of new apprentice electricians—not simply a dispute between
two private citizens. A court should not lightly deny a State’s request to regulate a matter of public
safety, particularly when the obstacle to the regulation rests on a legal foundation that may no longer
be sound.
Three, while one could imagine a State responding more quickly to these changes in the law
than Michigan did, there are practical reasons for excusing the delay. The district court issued the
underlying injunction in 1992, and the first Supreme Court decisions suggesting a new way of
viewing ERISA preemption cases came in 1997 when the Court decided Travelers, De Buono and
Dillingham. But even the most sophisticated reader of ERISA case law could not claim with a
straight face that a red light on regulating apprentice training before 1992 suddenly became green
after 1997. In construing the “relate to” scope of preemption, the pre-1992 cases are as context-
specific and as short on bright-line guidance as the post-1997 cases. Far from announcing a brave
new line for ascertaining ERISA preemption, the post-1997 cases show only a willingness to place
more emphasis on the presumption against preemption and on the underlying purposes of the ERISA
statute—both of which give the States wider, but hardly unreviewable, berth in regulating the area.
The last thing, indeed, that a purpose-driven approach to statutory construction guarantees is clarity.
The key effect of permitting judges to generalize from the purposes of a statute, as opposed to just
its text, is to give them more rather than less discretion in construing a law’s scope.
Even today, the question whether ERISA preempts these laws is not an easy one. When
Congress passes a law that is as plausibly and implausibly preemptive of a wide range of state laws
as ERISA’s “relate to” clause and when the courts understandably struggle to place state laws on
one side or the other of the line, there is little reason to construe the “reasonable time” limitation in
Rule 60 as a rigid statute of limitations. An unduly strict reading of the reasonable-time
requirement, moreover, would tend to force premature Rule 60(b)(5) motions due to a State’s fear
of losing forever the opportunity to correct an injunction or consent decree. In the aftermath of the
1997 decisions, at any rate, state lawyers may well have questioned whether the cases ushered in a
materially different view of ERISA preemption, or elected leaders in the legislative or executive
branches in office in 1997 may not have agreed with the regulatory objectives of the laws preempted
by the 1992 decision and therefore would have had no reason to ask the court to revisit the validity
of its decision.
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Four, Associated Builders has not pointed to any prejudice that the alleged delay caused it
to suffer. The lapse in time gave the association and its members more time to be free of these
allegedly burdensome regulations and more time for all concerned to see how other courts construed
the 1997 Supreme Court ERISA decisions. All things considered, the district court did not abuse
its discretion in accepting this Rule 60(b)(5) motion and in reaching the merits of the State’s ERISA
arguments.
III.
Does ERISA, as construed by the Supreme Court, require us to dissolve the injunction
prohibiting enforcement of these two Michigan laws? Yes, and accordingly the State may now
enforce them.
ERISA by its terms preempts “any and all State laws insofar as they may now or hereafter
relate to any employee benefit plan.” 29 U.S.C. § 1144(a). The statute defines an “employee benefit
plan” as
any plan, fund, or program . . . established or maintained by an employer or by an
employee organization, or by 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) (emphasis added); see also id. § 1002(3). While the “relate to” clause might at first
glance seem to have an horizonless reach, Travelers counsels that “infinite relations cannot be the
measure of pre-emption.” 514 U.S. at 656. In ascertaining what state laws “relate to” ERISA-
defined plans, Travelers tells us to “look . . . to the objectives of the ERISA statute as a guide to the
scope of the state law that Congress understood would survive.” Id.
Of particular relevance to today’s dispute, Dillingham applied this text and Travelers’
construction of it to a state law regulating apprentices. At stake was the validity of a California
statute that required contractors who were awarded state public-works projects to pay their
apprentices the local prevailing wage, unless the State had approved the apprenticeship program,
in which case the contractors could pay a lower rate. 519 U.S. at 319. A law “relates to” an ERISA
plan, the Court explained, if it has a “reference to” or a “connection with” a plan. Id. at 324. The
law did not “refer[] to” an ERISA plan because it applied equally to training programs funded by
a separate ERISA fund and those funded out of an employer’s general assets. Id. at 328. Because
the California law affected ERISA and non-ERISA plans alike, it did not “refer to” a plan. Id.
In holding that the law did not have a “connection with” an ERISA plan, the Court began
“with the presumption that ERISA did not intend to supplant it,” id. at 332, because “apprenticeship
standards and the wages to be paid on public works have long been regulated by the States,” id. at
330. It then reasoned that the California statute merely “alter[ed] the incentives, but d[id] not dictate
the choices, facing ERISA plans.” Id. at 334. Because contractors with apprenticeship programs
could escape the statute’s requirements by opting not to work on state public-works projects or by
paying their apprentices the local prevailing wage, the statute did not “mandate[] employee benefit
structures or their administration.” Id. at 328 (internal quotation marks omitted). The law
“merely . . . provide[d] . . . economic incentive[s]” to comply with the state law, which does not
suffice to preempt it. Id. at 332.
In holding that ERISA did not preempt California’s prevailing-wage law because it was
optional, however, Dillingham did not draw the dispositive preemption line between laws that
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mandate something that potentially affects an ERISA plan and those that mandate nothing. The key
distinction is between a statute that mandates or effectively mandates an aspect of law with which
ERISA is concerned—i.e., a statute that mandates “employee benefit structures or their
administration”—and a statute that does not. See id. at 328–34; see also Air Transp. Ass’n of Am.
v. City and County of San Francisco, 266 F.3d 1064, 1071 (9th Cir. 2001). Illustrating the point,
De Buono held that ERISA did not preempt a state gross receipts tax imposed on all hospitals in a
State, including hospitals operated by ERISA plans, because the statute was “one of myriad state
laws of general applicability that impose some burdens on the administration of ERISA plans but
nevertheless do not ‘relate to’ them within the meaning of the governing statute.” 520 U.S. at 815
(internal quotation marks omitted). What is true of a general state tax is true of many other general
state mandates that affect ERISA plans: They may “increase[] the cost of providing benefits to
covered employees” and they may “have some effect on the administration of ERISA plans, but that
simply cannot mean that every state law with such an effect is pre-empted by the federal statute.”
Id. at 816.
Other cases, including Dillingham itself, support this distinction. See 519 U.S. at 328
(a statute that “mandate[s] employee benefit structures or their administration” satisfies the
“connection with” test) (internal quotation marks omitted); Egelhoff v. Egelhoff, 532 U.S. 141, 147
(2001) (ERISA preempts a statute that “binds ERISA plan administrators to a particular choice of
rules for determining beneficiary status”); De Buono, 520 U.S. at 816 n.16 (“[T]here might be a state
law whose economic effects . . . were so acute as to force an ERISA plan to adopt a certain scheme
of substantive coverage or effectively restrict its choice of insurers and such a state law might indeed
be pre-empted [by ERISA].”) (internal quotation marks omitted); Travelers, 514 U.S. at 658 (“In
each of these cases, ERISA pre-empted state laws that mandated employee benefit structures or their
administration.”); Retail Indus. Leaders Assoc. v. Fielder, 475 F.3d 180, 192–93 (4th Cir. 2007)
(“[A] state law has an impermissible ‘connection with’ an ERISA plan if it directly regulates or
effectively mandates some element of the structure or administration of employers’ ERISA plans.”).
The “connection with” inquiry thus requires two showings to preempt a state law: (1) the
law at issue must mandate (or effectively mandate) something, and (2) that mandate must fall within
the area that Congress intended ERISA to control exclusively. Cf. Dillingham, 519 U.S. at 325
(looking “both to the objectives of the ERISA statute” and to the “nature of the effect of the state
law on ERISA plans”) (emphasis added and internal quotation marks omitted). Compulsion in other
words is a necessary, but not a sufficient, condition for ERISA preemption. With these principles
in mind, we turn to whether ERISA preempts Michigan’s ratio and equivalency requirements.
IV.
The parties share some common ground in applying these lessons to Michigan’s law. They
agree that ERISA applies to Associated Builders’ apprenticeship programs because the programs
are funded through separate funds, not out of the employers’ general assets. See Dillingham, 519
U.S. at 326. And they agree that the ratio and equivalency requirements do not have a “reference
to” ERISA plans: The rules do not “act[] immediately and exclusively upon ERISA plans” and thus
do not depend on “the existence of ERISA plans [for their] . . . operation.” Id. at 325. What
separates the parties is whether the requirements have a “connection with” an ERISA
plan—specifically (1) whether the state laws impose mandates on the training programs and (2)
whether those mandates affect ERISA-regulated concerns.
A.
The ratio and equivalency rules plainly contain mandates. The ratio requirement provides
that all apprentice electricians working in Michigan must register with the State’s electrical
administrative board and that the ratio of electrical journeymen or master electricians to registered-
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apprentice electricians at a job site must be one-to-one. The equivalency requirement provides that
all apprentice electricians working in the State must participate in a training program approved by
the board—i.e., a program with requirements “equivalent” to those imposed by the U.S. Department
of Labor Bureau of Apprenticeship and Training. The U.S. Department of Labor, through the
Fitzgerald Act regulations, in turn requires: a written apprenticeship agreement; a term of
apprenticeship of not less than 2,000 hours; an outline of tasks in which the apprentice will receive
supervised work experience; a numeric ratio of apprentices to journeymen consistent with proper
supervision, training and safety; a schedule of wages; adequate and safe equipment and facilities for
training and supervision; and the assurance of qualified training personnel. See 29 C.F.R. § 29.5.
Unlike the statute in Dillingham, which merely offered an incentive to some apprenticeship
programs, Michigan’s statute imposes requirements on all apprenticeship programs. And nothing
short of discharging all of its apprentices will release an employer or a program from the reach of
the Michigan statute.
B.
Because the Michigan rules plainly mandate something, the question is whether that
something falls within the scope of issues that ERISA prohibits the States from regulating. We
think not for several reasons.
First, no one disputes that the States have long regulated apprenticeship standards and
training or that this topic of regulation falls well within their traditional police powers. See
Dillingham, 519 U.S. at 330–32. We therefore start with the presumption that Michigan’s
requirements fall outside of ERISA’s preemptive reach. Id.
Second, the policies underlying the ratio and equivalency rules—the safety of electrical
apprentices and appropriate standards of electrical apprenticeship—are “quite remote from the areas
with which ERISA is expressly concerned.” Id. at 330. ERISA “has nothing to say” about “the
standards to be applied to apprenticeship training programs,” and neither “ERISA [nor] its
legislative history [evinces] any intent on the part of Congress to pre-empt state apprenticeship
training standards.” Id. at 330–31.
Third, what triggers ERISA’s potential application to these laws is not the existence of an
apprenticeship training program, see id. at 326, but the existence of a separate fund to support the
training program. Yet the allegedly preempted laws concern substantive apprenticeship training
standards, not matters directly related to the fund, prompting us to wonder why Congress would
want the States’ public-safety authority to regulate substantive apprenticeship training standards to
turn on how those plans are financed. We do not have an answer, and neither, so far as we can tell,
does Associated Builders.
Fourth, under Associated Builders’ theory, ERISA would prevent the States from regulating
the safety of apprentices and the standards of electrical apprenticeship, even though ERISA does not
regulate these matters either. And the Fitzgerald Act, which regulates just some of these issues,
specifically allows and encourages what Michigan has done—most notably its adoption of some of
the federal rules, a policy choice that generally will have a tendency to further nationwide uniformity
rather than undermine it. Federal preemption, true enough, may in some settings further a regulatory
vacuum that allows market forces to play out. See, e.g., Morales v. Trans World Airlines, Inc., 504
U.S. 374, 378–89 (1992). But no one maintains that ERISA—a law that hardly comes to mind as
one encouraging market-based solutions—is that kind of statute, particularly as it relates to
substantive apprenticeship training standards.
In authorizing the Secretary of Labor to “cooperate with State agencies engaged in the
formulation and promotion of standards of apprenticeship” and to “promote the furtherance of labor
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standards necessary to safeguard the welfare of apprentices,” 29 U.S.C. § 50, the Fitzgerald Act also
undermines any suggestion that Congress sees no role for the States in regulating apprenticeship
safety. The Act, indeed, suggests a direct role for the States in regulating those areas—a point of
particular relevance because the same Congress that passed ERISA also amended the Fitzgerald Act
to its current form. See Pub. L. No. 93-198, 87 Stat. 784 (1973). Just as the existence and continued
enforcement of the two federal laws suggest a distinction between “the areas with which ERISA is
expressly concerned” (i.e., “reporting, disclosure, fiduciary responsibility, and the like”),
Dillingham, 519 U.S. at 330 (internal quotation marks omitted), and the areas with which the
Fitzgerald Act is concerned (the safety of apprentices and the standards of apprenticeship), so they
suggest that there is a distinction between ERISA’s concerns and the Michigan apprenticeship rules’
concerns.
Travelers reinforces the point. The Court reasoned that preemption of the New York statute
at issue was particularly inappropriate because Congress, through the National Health Planning and
Resources Development Act of 1974 (NHPRDA), Pub. L. No. 93-641, 88 Stat. 2225, had “sought
to encourage” precisely what New York was attempting to accomplish through its statute, Travelers,
514 U.S. at 665. Yet by construing ERISA to preempt the state law, the Court “would have rendered
the entire NHPRDA utterly nugatory, since it would have left States without the authority to do just
what Congress was expressly trying to induce them to do by enacting the NHPRDA.” Id. at 667.
A similar problem exists here: By construing ERISA to preempt Michigan’s ratio and equivalency
requirements, which embrace some of the Fitzgerald Act’s apprenticeship requirements as the
State’s own, the court would hardly “promote the furtherance of labor standards necessary to
safeguard the welfare of apprentices” and might well undermine the Secretary’s ability “to cooperate
with State agencies” and to “extend the application of [apprenticeship] standards.” 29 U.S.C. § 50.
“It is not,” to be sure, “inconceivable for the ERISA Congress to intend the pre-emption of state
statutes resulting from the pre-existing Fitzgerald Act,” but the Fitzgerald Act and the analogy to
Travelers do “aid our conclusion that Congress’ silence on the pre-emption of state statutes that
Congress previously sought to foster counsels against pre-emption here.” Dillingham, 519 U.S. at
331 n.7.
Fifth, were it otherwise, ERISA might preempt all sorts of laws of general applicability that
affect ERISA plans, a view that would preempt a slew of state laws regulating not just
apprenticeship standards but also the medical profession, day care centers and the practice of law.
See 29 U.S.C. § 1002(1) (defining “employee welfare benefit plan” to include, among other things,
a plan, fund or program established for the purpose of providing its participants “medical, surgical,
or hospital care or benefits, . . . day care centers . . . or prepaid legal services”); see also Travelers,
514 U.S. at 661. Yet “[t]he bigger the package of regulation with indirect effects [on ERISA plans]
that would fall on the respondents’ reading of [ERISA’s preemption provision], the less likely it is
that federal regulation of benefit plans was intended to eliminate state regulation of [the area].”
Travelers, 514 U.S. at 661. No one seriously contends that Congress intended ERISA to preempt
state laws that, say, permit only licensed physicians to perform certain medical procedures, see, e.g.,
Mich. Comp. Laws § 333.17018, or state laws that require a person certified in CPR to be on duty
when a day care center is providing care to a child, see, e.g., id. § 722.112a, even though such
statutes contain mandates affecting ERISA plans and thereby increase the cost of providing certain
employee benefits. ERISA unsurprisingly has nothing to say about those matters—particularly
when, as is normally the case, the hospital or day care center is not affiliated with an ERISA plan.
Cf. Travelers, 514 U.S. at 661 (“[N]othing in the language of [ERISA] or the context of its passage
indicates that Congress chose to displace general health care regulation, which historically has been
a matter of local concern.”); Retail Indus., 475 F.3d at 191 (“States continue to enjoy wide latitude
to regulate healthcare providers.”). While a party might well wish to create a state-law-free zone
around everything that affects an ERISA plan, “pre-emption does not occur if the state law has only
a tenuous, remote, or peripheral connection with covered plans, as is the case with many laws of
general applicability.” Travelers, 514 U.S. at 661 (internal quotation marks and alterations omitted).
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What makes Associated Builders’ approach particularly odd is the freedom it would give
employers to escape generally applicable state laws that have nothing to do with ERISA’s concerns.
If, for instance, an employer wanted to avoid the higher costs associated with using only licensed
physicians and lawyers to perform medical and prepaid-legal services for its employees, it simply
could create an ERISA plan to pay for those services, then invoke ERISA preemption to duck
responsibility for complying with the state laws. Indeed, the Minnesota Chapter of Associated
Builders has figured out this perceived loophole: Its “promotional materials noted that if companies
joined the foundation and paid for employee apprenticeship classroom training through a foundation
trust account, they may be able to establish an ERISA plan and thereby be ‘exempt from
[supervision] ratios imposed by state and/or local governments.’” Wright Elec., Inc. v. Minn. State
Bd. of Elec., 322 F.3d 1025, 1027 (8th Cir. 2003) (alteration in original).
Sixth, we have some company in reaching this conclusion, at least with regard to the ratio
requirement. In Willmar Electric, the Tenth Circuit concluded that ERISA did not preempt “a
Colorado statute requiring apprentices performing electrical work in Colorado to be supervised on
a one-to-one basis by licensed journeyman electricians.” 212 F.3d at 534. In reaching that
conclusion, the court reasoned that “[t]he subject of the Colorado law, like the California statute in
Dillingham, is outside the area of ERISA’s concerns” and that “Dillingham is particularly instructive
here insofar as it suggests that ERISA’s objectives are not interfered with by state regulation of
substantive apprenticeship training standards.” Id. at 537–58. The court also explained that,
although the
supervision standards may have some effect on [the] administration of [the
plaintiff’s] benefit plan, . . . this is [not] enough to overcome the presumption that
Congress did not intend to supersede state regulation of this area of law. A similar
effect on uniform plan administration would assuredly arise from the apprenticeship
wage law in Dillingham and the state tax at issue in DeBuono, but the Supreme Court
found no grounds for preemption in those cases.
Id. at 539. The Eighth Circuit reached the same conclusion in Wright Electric, agreeing with the
Tenth Circuit that it is “implausible that Congress could have intended for such a regulation to be
superseded by ERISA because its application has some impact on an ERISA plan.” 322 F.3d at
1032 (internal quotation marks omitted).
That leads to one potential obstacle to this approach—at least with respect to the equivalency
rules. In Minnesota Chapter of Associated Builders and Contractors, Inc. v. Minnesota Department
of Public Safety, 267 F.3d 807 (8th Cir. 2001), the Eighth Circuit held that ERISA preempts a
Minnesota statute that resembles Michigan’s equivalency requirement and that “required apprentices
to be actively enrolled in a registered apprenticeship program and registered with a federal or state
agency that approved apprenticeship programs,” id. at 809. We are not, however, persuaded by its
reasoning.
The lynchpin of the court’s conclusion was its belief that Minnesota’s statute, unlike the ratio
requirement in Willmar or the wage requirement in Dillingham, did more than “indirectly increase
the cost of the apprenticeship training”; it served “to actually prevent training [because a] fire
protection contractor working in Minnesota [could not] hire an apprentice from an unapproved
program.” Id. at 815 (emphasis in original). There are two problems with this reasoning. The first
is that neither Minnesota’s statute nor Michigan’s statute prevents training; they prevent only certain
types of training. The second is that, while the Michigan statute does prevent some methods of
apprenticeship training, that does not mean that the law is preempted. To be sure, the Michigan law
prevents some forms of training for the basic reason that the State does not want training that may
result in injuries, overworking or shabby electrical work. But the question, as we have shown, is
whether the statute mandates something with which ERISA is concerned, not simply whether it
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contains a mandate. Cf. id. at 820–21 (Bye, J., dissenting) (stating that the majority’s view “reflects
a more expansive view of ERISA preemption than that expressed by the Supreme Court in
[Dillingham]” and noting that “nothing in ERISA attempts to preempt” all apprenticeship training
programs). Indeed, as with state laws that undoubtedly will prevent ERISA-governed outfits from
providing some forms of medical care, prepaid legal services and day-care services, state laws that
prevent electrical contractors from providing some forms of apprenticeship training address matters
that “are quite remote from the areas with which ERISA is expressly concerned.” Dillingham, 519
U.S. at 330.
V.
For these reasons, we reverse.