CALIFORNIA DIVISION OF LABOR STANDARDS ENFORCEMENT ET AL. v. DILLINGHAM CONSTRUCTION, N. A., INC., ET AL.
No. 95-789
Supreme Court of the United States
Argued November 5, 1996—Decided February 18, 1997
519 U.S. 316
James A. Feldman argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Days, Deputy Solicitor General Kneedler, J. Davitt McAteer, Allen H. Feldman, Nathaniel I. Spiller, and Edward D. Sieger.
Richard N. Hill argued the cause and filed a brief for respondents.*
*Briefs of amici curiae urging reversal were filed for the State of Washington et al. by Christine O. Gregoire, Attorney General of Washington, and Lynn D. W. Hendrickson and Jeff B. Kray, Assistant Attorneys General, Dennis C. Vacco, Attorney General of New York, Victoria A. Graffeo, Solicitor General, and Daniel F. De Vita and M. Patricia Smith, Assistant Attorneys General, Winston Bryant, Attorney General of Arkansas, M. Jane Brady, Attorney General of Delaware, Charles F. C. Ruff, Corporation Counsel for the District of Columbia, Margery S. Bronster, Attorney General of Hawaii, Andrew Ketterer, Attorney General of Maine, J. Joseph Curran, Jr., Attorney General of Maryland, Scott Harshbarger, Attorney General of Massachusetts, Frank J. Kelley, Attorney General of Michigan, Hubert H. Humphrey III, Attorney General of Minnesota, Joseph P. Mazurek, Attorney General of Montana, Frankie Sue Del Papa, Attorney General of Nevada, Deborah T. Poritz, Attorney General of New Jersey, Theodore R. Kulongoski, Attorney General of Oregon, and Thomas W. Corbett, Jr., Attorney General of Pennsylvania; for the American Federation of Labor and Congress of Industrial Organizations et al. by Jonathan P. Hiatt, Laurence J. Cohen, Terry R. Yellig, Laurence Gold, Marsha S. Berzon, and Donald J. Capuano; for the California Association of the Sheet Metal and Air Conditioning Contractors National Association et al. by Robert E. Jesinger; for the Council of State Governments et al. by Richard Ruda and Lee Fennell; and for the National Electrical Contractors Association, Inc., by Gary L. Lieber.
Briefs of amici curiae urging affirmance were filed for Associated Builders and Contractors, Inc., et al. by Mark R. Thierman; and for Signatory Members of the Coalition to Preserve ERISA Preemption by Maurice Baskin.
Briefs of amici curiae were filed for the American Association of Retired Persons et al. by Mary Ellen Signorille, Cathy Ventrell-Monsees,
JUSTICE THOMAS delivered the opinion of the Court.
The State of California requires a contractor on a public works project to pay its workers the prevailing wage in the project‘s locale. An exception to this requirement permits a contractor to pay a lower wage to workers participating in an approved apprenticeship program. This case presents the question whether the pre-emption provision of the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended,
I
A
Since 1931, the Davis-Bacon Act, 46 Stat. 1494, as amended,
The federal arbiter of apprenticeship program adequacy is the Bureau of Apprenticeship and Training (BAT), located within the Department of Labor. An apprenticeship program that seeks to provide federal public works contractors with apprentice-wage-eligible apprentices must receive the blessing of either the BAT or a “State Apprenticeship Agency.”
An apprenticeship program in California may be sponsored by an individual employer, an individual labor union, a group of employers, a group of labor organizations, or by a joint management-labor venture (a so-called joint apprenticeship committee). See
B
In the spring of 1987, respondent Dillingham Construction was awarded a public works contract as the general contractor for the construction of the Sonoma County Main Adult Detention Facility. Dillingham subcontracted electronic installation work to respondent Manuel J. Arceo, doing business as Sound Systems Media.
When Sound Systems Media was awarded the subcontract, it was signatory to a collective-bargaining agreement that provided a wage scale for apprentices, and required Sound Systems Media to contribute to a CAC-approved apprenticeship program, the Northern California Sound and Communications Joint Apprenticeship Training Committee.
In May 1988, after work on the project was underway, the existing union withdrew its representation of Sound Systems Media employees. Two months later, Sound Systems Media entered a new collective-bargaining agreement with a different union. That agreement, like the earlier one, included a scale of wages for apprentices and provided for an affiliation with a joint apprenticeship committee, the Electronic and Communications Systems Joint Apprenticeship Training Committee (Electronic and Communications Systems JATC). Sound Systems Media relied on this new committee for its apprentices, to whom it paid the apprentice wage provided in the collective-bargaining agreement. The Electronic and Communications Systems JATC, however, did not seek CAC
In March 1989, yet another union filed a complaint against Sound Systems Media with petitioner Division of Apprenticeship Standards of the California Department of Industrial Relations. Petitioner issued a notice of noncompliance to both Dillingham Construction and Sound Systems Media, charging that Sound Systems Media had violated
Respondents filed suit to prevent petitioners from interfering with payment under the subcontract. Their complaint alleged, inter alia, that ERISA pre-empted enforcement of the prevailing wage law. Respondents argued that the Electronic and Communications Systems JATC was an “employee welfare benefit plan” within the meaning of ERISA § 3(1),
The Court of Appeals for the Ninth Circuit reversed. 57 F. 3d 712 (1995). Agreeing with the District Court, the Ninth Circuit held that the Electronic and Communications Systems JATC was an employee welfare benefit plan and that § 1777.5 “relate[d] to” it. Id., at 718-719. Because California‘s prevailing wage statute was not an “enforcement mechanism” of the Fitzgerald Act, however, the Ninth Circuit parted company with the District Court and held that § 1777.5 was not preserved by ERISA‘s saving clause. Id., at 721. The decision of the Court of Appeals accorded with that of the Court of Appeals for the Tenth Circuit in National Elevator Industry, Inc. v. Calhoon, 957 F. 2d 1555, cert. denied, 506 U. S. 953 (1992). Both decisions conflict—as to whether a state prevailing wage law “relate[s] to” apprenticeship programs, and as to the reach of the saving clause—with that of the Eighth Circuit in Minnesota Chapter of Associated Builders and Contractors, Inc. v. Minnesota Dept. of Labor and Industry, 47 F. 3d 975 (1995). We granted certiorari, 517 U. S. 1133 (1996), and now reverse.
II
Both lower courts determined, and neither party disputes, that the Electronic and Communications Systems JATC was a “plan, fund, or program [that] was established or is maintained for the purpose of providing for its participants...
Since shortly after its enactment, we have endeavored with some regularity to interpret and apply the “unhelpful text” of ERISA‘s pre-emption provision. New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U. S. 645, 656 (1995). We have long acknowledged that ERISA‘s pre-emption provision is “clearly expansive.” Id., at 655. It has
“a ‘broad scope,’ Metropolitan Life Ins. Co. v. Massachusetts, 471 U. S. 724, 739 (1985), and an ‘expansive sweep,’ Pilot Life Ins. Co. v. Dedeaux, 481 U. S. 41, 47 (1987); and... it is ‘broadly worded,’ Ingersoll-Rand Co. v. McClendon, 498 U. S. 133, 138 (1990), ‘deliberately expansive,’ Pilot Life, supra, at 46, and ‘conspicuous for its breadth,’ [FMC Corp. v. Holliday, 498 U. S. 52, 58 (1990)].” Morales v. Trans World Airlines, Inc., 504 U. S. 374, 384 (1992).
Our efforts at applying the provision have yielded a two-part inquiry: A “law ‘relate[s] to’ a covered employee benefit plan for purposes of § 514(a) ‘if it [1] has a connection with or [2] reference to such a plan.‘” District of Columbia v. Greater Washington Bd. of Trade, 506 U. S. 125, 129 (1992) (quoting Shaw v. Delta Air Lines, Inc., 463 U. S. 85, 96-97 (1983)). Under the latter inquiry, we have held pre-empted a law that “impos[ed] requirements by reference to [ERISA] covered programs,” Greater Washington Bd. of Trade, supra, at 130-131; a law that specifically exempted ERISA plans from an otherwise generally applicable garnishment provision, Mackey v. Lanier Collection Agency & Service, Inc., 486 U. S. 825, 828, n. 2, 829-830 (1988); and a common-law cause of action premised on the existence of an ERISA plan,
A law that does not refer to ERISA plans may yet be pre-empted if it has a “connection with” ERISA plans. Two Terms ago, we recognized that an “uncritical literalism” in applying this standard offered scant utility in determining Congress’ intent as to the extent of § 514(a)‘s reach. Travelers, 514 U. S., at 656. Rather, to determine whether a state law has the forbidden connection, we look both to “the objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive,” ibid., as well as to the nature of the effect of the state law on ERISA plans, id., at 658-659.
As is always the case in our pre-emption jurisprudence, where “federal law is said to bar state action in fields of traditional state regulation,... we have worked on the ‘assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.‘” Id., at 655 (quoting Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 230 (1947)) (citation omitted).
A
Respondents and several of their amici urge us to conclude that § 1777.5 makes “reference to” ERISA plans. Because it seems that approved apprenticeship programs need not necessarily be ERISA plans, we decline to do so.
On its face, § 1777.5 appears to allow the lower apprentice wage only to a contractor who acquires apprentices through a “joint apprenticeship committee“—an apprenticeship program sponsored by the collective efforts of management and organized labor. See
To comport with § 302(c)(6) of the Labor Management Relations Act, 1947, 61 Stat. 157, as amended,
“In enacting ERISA, Congress’ primary concern was with the mismanagement of funds accumulated to finance employee benefits and the failure to pay employ-
ees benefits from accumulated funds. To that end, it established extensive reporting, disclosure, and fiduciary duty requirements to insure against the possibility that the employee‘s expectation of the benefit would be defeated through poor management by the plan administrator.” Id., at 115 (citation and footnote omitted).
Benefits paid out of an employer‘s general assets presented risks indistinguishable from “the danger of defeated expectations of wages for services performed,” a hazard with which ERISA is unconcerned. Ibid.
The Secretary has carried this funded/unfunded distinction into areas that are, we think, analogous to that of apprenticeship programs. See, e. g.,
B
In Shaw v. Delta Air Lines, Inc., we held that the New York Human Rights Law, which prohibited “employers from structuring their employee benefit plans in a manner that discriminates on the basis of pregnancy,” and New York‘s Disability Benefits Law, which required “employers to pay employees specific benefits,” “relate[d] to” ERISA plans. 463 U. S., at 97. Shaw and other of our ERISA pre-emption decisions, see, e. g., FMC Corp. v. Holliday, 498 U. S. 52 (1990); Alessi v. Raybestos-Manhattan, Inc., 451 U. S. 504 (1981), presented us with state statutes that “mandated employee benefit structures or their administration“; in those cases, we concluded that these requirements amounted to “connection[s] with” ERISA plans. See Travelers, 514 U. S., at 658.
The state law at issue in Travelers, our most recent exercise in ERISA pre-emption, stands in considerable contrast. That statute regulated hospital rates, and required hospitals to exact surcharges (ranging from 9% to 24% of the rate set under the statute) from patients whose hospital bills were paid by any of a variety of non-Blue Cross/Blue Shield providers. Because ERISA plans, as might be expected, were predominant among the purchasers of insurance, see Brief
We upheld the statute. The “indirect economic influence” of the surcharge, we noted, did not “bind plan administrators to any particular choice and thus function as a regulation of an ERISA plan itself.” 514 U. S., at 659. Nor did the indirect influence of the surcharge “preclude uniform administrative practice or the provision of a uniform interstate benefit package if a plan wishe[d] to provide one.” Id., at 660. Indeed, if ERISA were concerned with any state action—such as medical-care quality standards or hospital workplace regulations—that increased costs of providing certain benefits, and thereby potentially affected the choices made by ERISA plans, we could scarcely see the end of ERISA‘s pre-emptive reach, and the words “relate to” would limit nothing. Id., at 660-661. We also noted that several States regulated hospital charges at the time that ERISA was enacted, and yet neither ERISA‘s language nor legislative history made any mention of pre-empting these state efforts.6
That the States traditionally regulated these areas would not alone immunize their efforts; ERISA certainly contemplated the pre-emption of substantial areas of traditional state regulation. The wages to be paid on public works projects and the substantive standards to be applied to apprenticeship training programs are, however, quite remote from the areas with which ERISA is expressly concerned—“reporting, disclosure, fiduciary responsibility, and the like.” Travelers, supra, at 661 (quoting Shaw, 463 U. S., at 98). A reading of § 514(a) resulting in the pre-emption of traditionally state-regulated substantive law in those areas where ERISA has nothing to say would be “unsettling,” Travelers,
unlikely that the Congress that enacted ERISA would later have sought to encourage a state program that ERISA would pre-empt.
Like New York‘s surcharge requirement, the apprenticeship portion of the prevailing wage statute does not bind ERISA plans to anything. No apprenticeship program is required by California law to meet California‘s standards. See Southern Cal. ABC, 4 Cal. 4th, at 428, 841 P. 2d, at 1013. If a contractor chooses to hire apprentices for a public works project, it need not hire them from an approved program (although if it does not, it must pay these apprentices journeyman wages). So, apprenticeship programs that have not gained CAC approval may still supply public works contractors with apprentices. Unapproved apprenticeship programs also may supply apprentices to private contractors.9 The effect of § 1777.5 on ERISA apprenticeship programs, therefore, is merely to provide some measure of economic incentive to comport with the State‘s requirements, at least to the extent that those programs seek to provide apprentices who can work on public works projects at a lower wage.
Apprenticeship programs have confronted these differential economic incentives since well before the enactment of ERISA, and would face them today even if California had no prevailing wage statute. To supply apprentices eligible for the apprenticeship wage to federal public works contractors, an apprenticeship program must meet the standards promulgated by California under the Fitzgerald Act.10 What is
saddled with “the administrative and financial burden of complying with conflicting directives among States or between States and the Federal Government.” Ingersoll-Rand Co. v. McClendon, 498 U. S. 133, 142 (1990). Then again, the area of apprenticeship training may be one where uniformity of substantive standards across States is impossible. See Brief for United States as Amicus Curiae 20 (“[P]revailing wages in different States—or even in different areas of a single State—may vary substantially, and training requirements for membership in skilled trades may also vary among different trades, different communities, and different States“). We need not resolve this question. Suffice it to say that the federal and state apprenticeship standards are not mandatory, and California‘s standards do not result in disuniformities different in kind from those that would exist without them.
III
For the reasons stated herein, the judgment below is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
JUSTICE SCALIA, with whom JUSTICE GINSBURG joins, concurring.
Since ERISA was enacted in 1974, this Court has accepted certiorari in, and decided, no less than 14 cases to resolve conflicts in the Courts of Appeals regarding ERISA pre-emption of various sorts of state law.1
I join the Court‘s opinion today because it is a fair description of our prior case law, and a fair application of the more recent of that case law. Today‘s opinion is no more likely than our earlier ones, however, to bring clarity to this field—precisely because it does obeisance to all our prior cases, instead of acknowledging that the criteria set forth in some of them have in effect been abandoned. Our earlier cases sought to apply faithfully the statutory prescription that state laws are pre-empted “insofar as they... relate to any employee benefit plan.” Hence the many statements, repeated today, to the effect that the ERISA pre-emption provision has a “broad scope,” an “expansive sweep,” is “broadly worded,” “deliberately expansive,” and “conspicuous for its breadth.” Ante, at 324. But applying the “relate to” provision according to its terms was a project doomed to failure, since, as many a curbstone philosopher has observed, everything is related to everything else. Accord, New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U. S. 645, 655 (1995). The statutory text provides an illusory test, unless the Court is willing to decree a
Bank, 510 U. S. 86 (1993); District of Columbia v. Greater Washington Bd. of Trade, 506 U. S. 125 (1992); Ingersoll-Rand Co. v. McClendon, 498 U. S. 133 (1990); FMC Corp. v. Holliday, 498 U. S. 52 (1990); Massachusetts v. Morash, 490 U. S. 107 (1989); Mackey v. Lanier Collection Agency & Service, Inc., 486 U. S. 825 (1988); Fort Halifax Packing Co. v. Coyne, 482 U. S. 1 (1987); Metropolitan Life Ins. Co. v. Taylor, 481 U. S. 58 (1987); Pilot Life Ins. Co. v. Dedeaux, 481 U. S. 41 (1987); Metropolitan Life Ins. Co. v. Massachusetts, 471 U. S. 724 (1985); Shaw v. Delta Air Lines, Inc., 463 U. S. 85 (1983); and Alessi v. Raybestos-Manhattan, Inc., 451 U. S. 504 (1981).
I think it would greatly assist our function of clarifying the law if we simply acknowledged that our first take on this statute was wrong; that the “relate to” clause of the pre-emption provision is meant, not to set forth a test for pre-emption, but rather to identify the field in which ordinary field pre-emption applies—namely, the field of laws regulating “employee benefit plan[s] described in section 1003(a) of this title and not exempt under section 1003(b) of this title,”