Associated Builders and Contractors (ABC) expressed its support for a court decision that upholds the right of Minnesota contractors to enroll apprentices in the ABC Minnesota Chapter apprenticeship program.
The U.S. Court of Appeals for the Eighth Circuit ruled that the Employee Retirement Income Security Act (ERISA) preempts a Minnesota law requiring contractors to enroll sprinkler fitter apprentices in a registered apprenticeship program.
“The Minnesota law essentially prevented merit shop contractors from using apprentices on fire sprinkler work. This ruling prevents discrimination against merit shop fire sprinkler contractors in Minnesota and will allow them to continue to train their apprentices in ABC’s program,” said ABC National Chairman Henry Kelly. ABC’s Construction Legal Rights Foundation provided assistance in the case.
The law said that sprinkler contractors in Minnesota must register all apprentices in a state-approved program. ABC’s sprinkler fitter apprenticeship program has not been approved by the Minnesota Department of Labor and Industry.
The court said that rather than simply creating an economic incentive for the use of registered apprentices, the Minnesota law actually prevented the use of unregistered ones. “The statute does more than simply provide a powerful economic incentive, it prevents the use of apprentices who are not registered in approved programs,” the court wrote.
Under ERISA, programs that seek to regulate aspects of retirement, apprenticeship or other benefit programs are preempted. A fire sprinklers’ union argued that the law should not be preempted by ERISA because it did not seek to regulate apprenticeship programs, it merely provided an economic incentive to use registered programs.
The Eighth Circuit Court found “important distinctions” between a California prevailing wage case — Calif. Div. Of Labor Standards Enforcement v. Dillingham — and the Minnesota case. The Minnesota law “set out in very specific detail the length of an apprenticeship program, responsibilities of the apprentice, how an apprentice should be supervised schedule of work processes, wage schedules, the amount of hours of related instruction required and the hours of work required,” the court wrote. As a result. the Minnesota law unlike the California statute, “dictates the choices facing ERISA plans.”
ABC’s Minnesota Chapter filed the lawsuit along with ABC member-firms in 1994. In 1996. the district court struck down the law, saying that it was preempted by ERISA. The Sprinkler Fitters Local 417 of the United Association of Plumbers and Pipe Fitters appealed the ruling in Feb. 2000.
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