Boise Cascade Corp. v. Peterson

• Decision Date: 29 July 1991
• Docket Number: No. 90-5238,90-5238
• Citation: 939 F.2d 632
• Parties: , 119 Lab.Cas. P 10,868, 14 Employee Benefits Ca 1208 BOISE CASCADE CORPORATION, a Delaware corporation, BE & K Construction Company, a Delaware corporation, Charles L. Lee, Relco Unisystems Corporation, a Minnesota corporation, Forrest Dahmes, Mid-States Mechanical Services, Inc., a Minnesota corporation, and Kristine Southard, Appellants, v. Kenneth PETERSON, Commissioner of the Department of Labor and Industry, State of Minnesota, Appellee, and Minnesota Mechanical Contractors Association, Intervenor.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 632

939 F.2d 632

60 USLW 2115, 119 Lab.Cas. P 10,868,

14 Employee Benefits Ca 1208

BOISE CASCADE CORPORATION, a Delaware corporation, BE & K

Construction Company, a Delaware corporation, Charles L.

Lee, Relco Unisystems Corporation, a Minnesota corporation, Forrest Dahmes, Mid-States Mechanical Services, Inc., a Minnesota corporation, and Kristine Southard, Appellants, v. Kenneth PETERSON, Commissioner of the Department of Labor and Industry, State of Minnesota, Appellee, and Minnesota Mechanical Contractors Association, Intervenor.

No. 90-5238.

United States Court of Appeals,

Eighth Circuit.

Submitted Oct. 8, 1990.

Decided July 29, 1991.

David P. Pearson, St. Paul, Minn. and Lowell J. Noteboom of Minneapolis, Minn., argued, for appellant Relco Unisystems Corp.; David P. Pearson, St. Paul, Minn. and Lowell J. Noteboom and Robert P. Thavis of Minneapolis, Minn., on the brief.

Scott R. Strand, St. Paul, Minn., argued, for appellee; Hubert H. Humphrey, III and Scott R. Strand, St. Paul, Minn., on the brief.

Marshall H. Tanick, argued, for intervenor/appellee Minnesota Mechanical Contractors Ass'n; Marshall H. Tanick and Teresa J. Ayling of Minneapolis, Minn. on the brief.

Before McMILLIAN, WOLLMAN and BEAM, Circuit Judges.

McMILLIAN, Circuit Judge.

Plaintiffs Boise Cascade Corp., BE & K Construction Co. (BE & K), Charles L. Lee, Relco Unisystems Corp., Forrest Dahmes, Mid-States Mechanical Services, Inc., and Kristine Southard appeal from a final order entered in the District Court for the District of Minnesota granting summary judgment in favor of Kenneth Peterson, Commissioner of the Minnesota Department of Labor and Industry. The district court The underlying facts are not disputed. The following background information is taken in large part from the memorandum opinion of the district court.

held that a state rule ¹ regulating the ratio of licensed pipefitters to apprentices working on Minnesota jobsites was not preempted by either the Employee Retirement Income Security Act, as amended, 29 U.S.C. Secs. 1001-1381 (ERISA), or the National Labor Relations Act, as amended, 29 U.S.C. Secs. 157-158 (NLRA). Boise Cascade Corp. v. Peterson, 735 F.Supp. 1434 (D.Minn.1990) (memorandum and order). For reversal, plaintiffs argue the district court erred in holding that the state rule was not preempted by ERISA, the NLRA or both. For the reasons discussed below, we reverse the order of the district court.

This case arises out of the efforts of the state of Minnesota to regulate the training of pipefitter apprentices. ² Minnesota has regulated high-pressure pipefitting (formerly known as steamfitting) since 1937. See Minn.Stat. Secs. 326.46-.52 and Minn.R. pt. 5230. High-pressure pipefitting is a very dangerous activity; most of the work is not visible when residential or commercial construction is completed, and poor work can cause explosions. The state's regulatory scheme includes both an extensive technical code establishing minimum requirements for the design, testing and installation of high-pressure piping and provisions for the licensing of pipefitters. There are two types of pipefitter licenses: contracting steamfitters and journeymen steamfitters. Only licensed pipefitters and apprentices working under the supervision of a licensed pipefitter can install high-pressure piping. "Contracting steamfitters" are qualified to plan and oversee the installation of high-pressure piping and to employ journeymen steamfitters. "Journeymen steamfitters" can install high-pressure piping in the employ of a contracting steamfitter. Unlicensed apprentices work under the supervision of licensed pipefitters. However, apprentices must either register with the state code enforcement division or enroll in an apprenticeship training program approved by the state division of voluntary apprenticeship. The state division of voluntary apprenticeship approves only those programs that meet certain minimum standards. As early as 1946, these minimum standards included a minimum jobsite ratio of journeymen to apprentices. Since 1973, the minimum standards have specified no more than one journeyman for the first apprentice and then three journeymen for each additional apprentice on the jobsite. The minimum standards also require 4 years of vocational education. Many collective bargaining agreements contained the minimum jobsite ratios of journeymen to apprentices.

Some non-union employers have established their own pipefitter apprenticeship programs outside the control of the state division of voluntary apprenticeship. These programs do not require a minimum jobsite ratio of journeymen to apprentices. Instead each employer determines the ratio of journeymen to apprentices for each jobsite according to the complexity of the work at that jobsite and the experience and ability of the particular individuals available. However, in general, the ratio of journeymen to apprentices on non-union jobsites is substantially lower than the 3 to 1 ratio specified by collective bargaining agreements and the state division of voluntary apprenticeship. Employers who hire apprentice pipefitters do not have to establish an apprentice training program, but all apprentices must be registered with the state code enforcement division (which keeps track of apprentices' on-the-job experience) Until 1985-1986 almost all pipefitter apprentices were trained in programs where the jobsite ratio of journeymen to apprentices was at least 3 to 1. However, in the mid-to-late 1980s more non-union employers began establishing apprenticeship training programs which did not comply with the voluntary apprenticeship program minimum standards, particularly the 3 to 1 ratio of journeymen to apprentices. The state department of labor and industry questioned whether pipefitter apprentices working for non-union employers were receiving adequate training or working under adequate supervision. The state's concern was exacerbated by Boise Cascade's selection of a non-union contractor (BE & K) as general contractor for the $535 million expansion of its manufacturing facility located in International Falls, MN.

and must take the licensing exam after 4 years of experience.

In May 1988 the commissioner of the state department of labor and industry initiated rulemaking proceedings on pipefitter apprenticeship training standards. In June 1989 the state department of labor and industry published a proposed rule adopting the 1 to 1 and 3 to 1 ratios for journeymen and apprentice pipefitters on the jobsite. After an administrative hearing, a state administrative law judge found that the state department of labor and industry had demonstrated a need for the minimum jobsite ratio rule and that the rule was rationally related to its ends. The proposed rule was adopted on January 22, 1990, to be effective on February 1, 1990. The rule did not contain a grandfather clause exempting construction projects already in progress on the effective date. The state had argued that the minimum jobsite ratios were necessary because of the grave danger to the public posed by the improper installation of high-pressure piping and the inadequacy of the training and supervision received by apprentices working for non-union employers.

On January 23, 1990, plaintiffs filed this action in federal district court seeking a declaration that the minimum jobsite ratio rule was preempted by ERISA and the NLRA and to enjoin implementation of the minimum jobsite ratio rule. On January 31, 1990, the district court granted a temporary restraining order (TRO) ³ against enforcement of the minimum jobsite ratio rule and, with the consent of the parties, consolidated the motions for preliminary and permanent injunctive relief and referred the consolidated motions for injunctive relief, as well as the state's motion for summary judgment, to a magistrate judge for a hearing and report and recommendation. The magistrate judge recommended granting summary judgment in favor of the state, and plaintiffs filed objections.

The district court granted summary judgment in favor of the state and denied plaintiffs' consolidated motions for preliminary and permanent injunctive relief. The district court held that the minimum jobsite ratio rule was not preempted by either ERISA or the NLRA. 735 F.Supp. at 1438-43. The district court held that ERISA did not preempt the minimum jobsite ratio rule because the rule was one "of general application concerning [occupational training and public safety,] ... subject[s] traditionally reserved to the states[,] which has no implications for ERISA's regulatory concerns and only an incidental effect on the administration of training programs.... [and which] in no way threatens the administrative integrity of employee benefit plans." Id. at 1441. The district court also held that the NLRA did not preempt the minimum jobsite ratio rule because the rule did not interfere with either the primary jurisdiction of the National Labor Relations Board over what is and what is not an unfair labor practice, id. at 1442, citing San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959), or the collective bargaining The district court denied plaintiffs' motion to continue the TRO pending appeal but, in the interests of justice, continued the TRO for 14 days to enable plaintiffs to file an appeal and seek a stay pending appeal from this court. This appeal followed. This court granted plaintiffs' motion for a stay pending appeal, thus continuing in effect the TRO against state enforcement of the minimum jobsite ratio rule, and expedited the appeal.

process. 735 F.Supp. at 1442-43, citing Lodge 76, International Ass'n of Machinists v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 96 S.Ct. 2548, 49 L.Ed.2d 396 (1976).

STANDARD OF REVIEW

We review summary judgments de novo. E.g., AgriStor Leasing v. Farrow, 826 F.2d 732, 734 (8th Cir.1987); accord Hydrostorage, Inc....