National Elevator Industry, Inc. v. Calhoon

• Citation: 957 F.2d 1555
• Decision Date: 26 February 1992
• Docket Number: No. 90-6236,90-6236
• Parties: 123 Lab.Cas. P 57,164, 1 Wage & Hour Cas.2d (BNA) 98 NATIONAL ELEVATOR INDUSTRY, INC., Plaintiff-Appellant, v. Dean H. CALHOON, as Commissioner of the Department of Labor for the State of Oklahoma; the Department of Labor for the State of Oklahoma, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1555

957 F.2d 1555

123 Lab.Cas. P 57,164, 1 Wage & Hour Cas.2d (BNA) 98

NATIONAL ELEVATOR INDUSTRY, INC., Plaintiff-Appellant, v. Dean H. CALHOON, as Commissioner of the Department of Labor for the State of Oklahoma; the Department of Labor for the State of Oklahoma Defendants-Appellees.

No. 90-6236.

United States Court of Appeals Tenth Circuit.

Feb. 26, 1992.

Charles O. Strahley of Crowe & Dunlevy, Oklahoma City, Okl. (Michael T. McGrath of Putney, Twombly, Hall & Hirson, New York City, with him on the briefs), for plaintiff-appellant.

Rabindranath Ramana, Asst. Atty. Gen. of Oklahoma (Robert H. Henry, Atty. Gen. of Oklahoma, with him on the brief), Oklahoma City, Okl., for defendants-appellees.

Before LOGAN, MOORE and ANDERSON, Circuit Judges.

LOGAN, Circuit Judge.

Plaintiff National Elevator Industry, Inc. appeals from the dismissal of its complaint which sought to have a ruling of the Oklahoma Commissioner of Labor declared preempted by either the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq., or the National Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq., or both. Plaintiff seeks to overturn a ruling by defendant Oklahoma Commissioner of the Department of Labor under Oklahoma's prevailing wage law that an elevator constructor helper on state public works projects must be enrolled in a certified Bureau of Apprenticeship Training program in order to receive the rate of pay for apprentices and trainees rather than the rate of pay for mechanics. See Declaratory Ruling of the Labor Commissioner, Ruling 1-89 (Dec. 22, 1989), II R. ex. B; Okla.Stat. tit. 40, §§ 196.1, 196.2.9, 196.6.A. The district court dismissed the complaint on the motion of defendants, Department of Labor for the State of Oklahoma and its Commissioner. This court has jurisdiction over plaintiff's appeal pursuant to 28 U.S.C. § 1331 and 28 U.S.C. § 1291.

I

For many decades, the wages, hours and working conditions of mechanics and helpers employed in the elevator industry have been established by a series of nationwide collective bargaining agreements. These agreements provide for "teams"; each team consists of one mechanic and one helper. Helpers are workers who have not completed training under the National Elevator Industry Education Program (NEIEP) and passed a mechanics examination. Any helper may participate in this national training program in order to qualify as a mechanic, and many do. NEIEP is funded by employers based upon hours worked by all mechanics and helpers.

The wages for mechanics and helpers are calculated under the collectively bargained contract using a specific formula that utilizes variables from local geographical areas to determine the appropriate prevailing wage for a particular area. Helpers' wages are set at seventy percent of mechanics' wages. Despite plaintiff's collectively bargained agreement determining wages for helpers, defendants refuse to recognize the helper category for purposes of the Oklahoma prevailing wage law. Therefore, helpers working on State of Oklahoma public works projects must be paid at the mechanics' collectively bargained wage. Helpers on federal or private projects in Oklahoma continue to be paid at the helper's wage rate. Defendants, in the ruling under challenge here, would allow helpers to receive the lower wage rate for apprentices and trainees if the helpers' education program were approved by the federal Bureau of Apprenticeship Training (BAT). Plaintiff does not challenge the validity of the Oklahoma prevailing wage law itself but does contest defendants' construction of that law.

II

Whether defendants' ruling is preempted by ERISA is a question of law subject to de novo review. Local Union 598, Plumbers & Pipefitters Indus. Journeymen & Apprentices Training Fund v. J.A. Jones Constr. Co., 846 F.2d 1213, 1218 (9th Cir.), aff'd mem., 488 U.S. 881, 109 S.Ct. 210, 102 L.Ed.2d 202 (1988); see Allis-Chalmers Credit Corp. v. Tri-State Equip., Inc. (In re Tri-State Equip., Inc.), 792 F.2d 967, 970 (10th Cir.1986) (questions of law are subject to de novo review).

ERISA contains a sweeping preemption provision that 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). In our analysis we are guided by Congress' clear intent and the Supreme Court's direction that ERISA preemption be construed broadly. See, e.g., Ingersoll-Rand Co. v. McClendon, --- U.S. ----, 111 S.Ct. 478, 482, 112 L.Ed.2d 474 (1990) (Congress intended expansive ERISA preemption); FMC Corp. v. Holliday, --- U.S. ----, 111 S.Ct. 403, 407, 112 L.Ed.2d 356 (1990) (ERISA "pre-emption clause is conspicuous for its breadth."); see also Straub v. Western Union Tel. Co., 851 F.2d 1262, 1263 (10th Cir.1988) (scope of ERISA preemption is very broad).

Section 1144(a) contains three requirements which must be satisfied before preemption will be found. There must be a state law, an employee benefit plan, and the state law must "relate to" the employee benefit plan. ¹ If these three requirements are satisfied, then a court must consider whether any of the preemption exceptions under §§ 1003(b) or 1144(b), (d) apply.

First, we note that defendants' interpretive ruling is clearly "State law" for purposes of § 1144(a). Section 1144(c)(1) defines "State law" to include "all laws, decisions, rules, regulations, or other State action having the effect of law, of any State." 29 U.S.C. § 1144(c)(1); see also id. at (2) (defining term "State" to include any state agency).

Next, the district court found, and defendants on appeal agree, that NEIEP is an employee benefit plan under ERISA. We also agree that the helpers' training program, the NEIEP, is an employee benefit plan under ERISA. Section 1002(1) defines "employee welfare benefit plan" to mean:

any plan, fund, or program which was heretofore or is hereafter 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....

29 U.S.C. § 1002(1) (emphasis added); see also id. at (3) ("employee welfare benefit plan" is an "employee benefit plan"). NEIEP is a national training program administered by a board of trustees; it receives regular contributions from employers and exists for the exclusive benefit of employees. The clear language of the statute indicates that training programs, as distinct from apprenticeship programs, qualify as employee welfare benefit plans.

The more difficult issue in this case is whether the state law "relates to" the employee benefit plan. The Supreme Court noted in Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983), that "[a] law 'relates to' an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan." Id. at 96-97, 103 S.Ct. at 2899-900. Moreover, "relate to" should be read broadly. Id. at 98, 103 S.Ct. at 2899; see also Straub, 851 F.2d at 1264. Even broad construction, however, has limits; the Court in Shaw stated that "[s]ome state actions may affect employee benefit plans in too tenuous, remote, or peripheral a manner to warrant a finding that the law 'relates to' the plan." Shaw, 463 U.S. at 100 n. 21, 103 S.Ct. at 2901 n. 21. In recognition of this limitation articulated in Shaw, a number of courts have found state laws of general application with some limited effect on ERISA plans do not "relate to" the ERISA plans under § 1144(a). See, e.g., Aetna Life Ins. Co. v. Borges, 869 F.2d 142, 146-47 (2d Cir.) (upholding general escheat law that affected ERISA benefit plans), cert. denied, 493 U.S. 811, 110 S.Ct. 57, 107 L.Ed.2d 25 (1989); Firestone Tire & Rubber Co. v. Neusser, 810 F.2d 550, 556 (6th Cir.1987) (upholding general income tax that included employee contributions to ERISA plan); Sommers Drug Stores Co. Employee Profit Sharing Trust v. Corrigan Enters., Inc., 793 F.2d 1456, 1470 (5th Cir.1986) (finding no preemption of state law breach of fiduciary duty claims), cert. denied, 479 U.S. 1034, 107 S.Ct. 884, 93 L.Ed.2d 837 (1987); Rebaldo v. Cuomo, 749 F.2d 133, 140 (2d Cir.1984) (upholding statute regulating hospital rates that affected ERISA plans' ability to negotiate special rates), cert. denied, 472 U.S. 1008, 105 S.Ct. 2702, 86 L.Ed.2d 718 (1985).

There is no simple test for determining when a law "relates to" a plan. Borges, 869 F.2d at 145. The Ninth Circuit in Martori Bros. Distributors v. James-Massengale, 781 F.2d 1349 (9th Cir.), cert. denied, 479 U.S. 1018, 107 S.Ct. 670, 93 L.Ed.2d 722 (1986), recognized four types of laws that have been held to "relate to" ERISA plans. They are:

First, laws that regulate the type of benefits or terms of ERISA plans. Second, laws that create reporting, disclosure, funding, or vesting requirements for ERISA plans. Third, laws that provide rules for the calculation of the amount of benefits to be paid under ERISA plans. Fourth, laws and common-law rules that provide remedies for misconduct growing out of the administration of the ERISA plan.

Id. at 1356-57 (footnotes omitted); see also General Elec. Co. v. New York State Dep't of Labor, 891 F.2d 25, 29 (2d Cir.1989), cert. denied, 496 U.S. 912, 110 S.Ct. 2603, 110 L.Ed.2d 283 (1990). On the other hand, laws of general application--not specifically targeting ERISA plans--that involve traditional areas of state regulation and do not affect "relations among the principal ERISA entities--the employer, the plan, the plan fiduciaries, and the beneficiaries"...