Ninth Circuit Defines "Federal Purposes" for Public Works Project Apprentices | Practical Law

Ninth Circuit Defines "Federal Purposes" for Public Works Project Apprentices | Practical Law

In a case of first impression, in Independent Training v. California Department of Industrial Relations, the US Court of Appeals for the Ninth Circuit affirmed the district court's holding that the pre-emption claim of two contractors and the Independent Training and Apprenticeship Program (I-TAP), who the California Department of Industrial Relations (CDIR) alleged were using apprentices enrolled in I-TAP on public works projects not for "federal purposes," fails because the projects do not qualify as federal purposes.

Ninth Circuit Defines "Federal Purposes" for Public Works Project Apprentices

Practical Law Legal Update 3-542-7345 (Approx. 4 pages)

Ninth Circuit Defines "Federal Purposes" for Public Works Project Apprentices

by Practical Law Labor & Employment
Published on 24 Sep 2013 • USA (National/Federal)
In a case of first impression, in Independent Training v. California Department of Industrial Relations, the US Court of Appeals for the Ninth Circuit affirmed the district court's holding that the pre-emption claim of two contractors and the Independent Training and Apprenticeship Program (I-TAP), who the California Department of Industrial Relations (CDIR) alleged were using apprentices enrolled in I-TAP on public works projects not for "federal purposes," fails because the projects do not qualify as federal purposes.
On September 18, 2013, in a case of first impression, the US Court of Appeals for the Ninth Circuit issued an opinion in Independent Training v. California Department of Industrial Relations, affirming the district court's holding that the pre-emption claim of two contractors and the Independent Training and Apprenticeship Program (I-TAP), who the California Department of Industrial Relations (CDIR) alleged were using apprentices enrolled in I-TAP on public works projects not for "federal purposes," fails because the projects do not qualify as federal purposes. In this decision, the Ninth Circuit adopts the DOL's most recent construction of regulations governing the employment of apprentices on public works projects qualifying as "federal purposes."
In 2010, the CDIR sent letters threatening to impose fines on two contractors because the contractors were using apprentices enrolled in I-TAP on public works projects that the CDIR asserted were qualifying programs under California law.
Under the National Apprenticeship Act of 1937 (Fitzgerald Act), federal regulations govern the employment of apprentices on public works projects qualifying as "federal purposes." I-TAP is registered with the DOL as an approved apprenticeship program for federal purposes. However, I-TAP is not recognized as a California-approved apprenticeship program. Therefore, apprentices enrolled in I-TAP may not be employed as bona-fide apprentices on public works projects in California that are not within the scope of federal purposes.
The two contractors and I-TAP sued the CDIR, seeking declaratory and injunctive relief, on the grounds that the CDIR's actions were inconsistent with federal regulations and therefore were pre-empted. In October 2011, the district court denied the plaintiffs' motion for injunctive relief. The plaintiffs appealed, requesting, in a case of first impression, that the Ninth Circuit determine the meaning of "federal purposes" under 29 C.F.R. § 29.2.
The Ninth Circuit affirmed the decision of the district court, holding that the plaintiffs' preemption claim fails because the public works projects do not qualify as federal purposes and therefore it was permissible for the CDIR to require the contractors on the projects to comply with California's apprenticeship standards. Since this was a case of first impression, the Ninth Circuit invited the DOL to submit an amicus brief on the DOL's interpretation of the meaning of "federal purposes" and its application to this case. In the amicus brief, the DOL:
  • Stated that in May 2012, the DOL had withdrawn its 2004 opinion letters:
    • which interpreted "federal purposes" to include "all federally funded or supported public works projects," excluding only "those projects involving no federal financial assistance;" and
    • which the parties had treated as operative in their initial briefs on appeal.
  • Offered a new interpretation (under Auer v. Robbins) under which "federal purposes" refers to federal laws or actions that in some way address apprenticeship. The matters included in this definition make conformity with federal apprenticeship standards a condition of eligibility for federal assistance.
The Ninth Circuit:
  • Declined to defer to the DOL's new interpretation of the meaning of "federal purposes" because the new interpretation was inconsistent with the DOL's previous interpretations (which had been in place for eight years), creating significant potential for unfair surprise.
  • Despite its refusal to defer to the DOL's new interpretation, the Ninth Circuit:
    • did agree to adopt it as the most persuasive construction of the regulation;
    • held that a public works project qualifies as a "federal purpose" when "conformity with federal apprenticeship standards is a condition of eligibility for federal assistance;" and
    • held that the CDIR's actions did not violate 29 C.F.R. § 29.2 because the public works projects at issue did not qualify under the definition of "federal purposes." Therefore, the plaintiffs' pre-emption claim fails.
Court documents: