(Adapted from a letter to the Housing Bond Bill conferees dated July 12, 2024.)
Regarding Housing Bond Bill, H.4726 and S.2850, the legislative conference committee should strike the language in the House bill relative to mandatory apprenticeship programs.
First, it runs afoul of the federal Employee Retirement Income Security Act. Inclusion of an apprenticeship mandate in a state law or local ordinance would run afoul of legal precedent. In 2014, the US Court of Appeals for the First Circuit upheld a lower court ruling that invalidated an apprentice-mandate ordinance on public construction projects. (Merit Construction Alliance v. City of Quincy.) It is now settled throughout the First Circuit’s jurisdiction, including all of Massachusetts, that apprenticeship provisions like those contained in H. 4726 are unlawful and unenforceable under ERISA, which expressly preempts any and all state laws and local ordinances which “relate to” any employee benefit plan.
The ERISA caveat in lines 3771-3773 won’t save this provision. The House’s apprenticeship mandate seeks to do what the City of Quincy did prior to being struck down by the federal court. In 2013, the federal district court in Boston ruled: “…Quincy’s regulation effectively makes Massachusetts standards mandatory for its bidders’ apprenticeship programs, including any ERISA apprenticeship programs. By setting compulsory standards that apply to ERISA apprenticeship programs, Quincy’s regulation ‘mandate[s] employee benefit structures [and] their administration.’ … It is therefore preempted for its “connection with” ERISA plans.” (Citation removed.) The ruling was upheld on appeal.
Second, the provision is fundamentally unfair and will not increase opportunity for apprentices. In fact, the bill does not mandate the use of apprentices; only that a construction company have an apprenticeship program. An apprenticeship mandate would harm small businesses and Minority- and Women-Owned Business Enterprises. Most MWBE construction firms are merit shops and small businesses which do not have the wherewithal to create an apprenticeship program. Ironically, the apprenticeship requirement could hurt the ability of housing authority projects to meet MWBE goals.
Organized labor promotes apprenticeship mandates and similar schemes to reduce competition from merit shops. Every local signatory contractor is deemed to participate in a registered apprenticeship program, by virtue of being signatory to the local craft CBA.
Most of the Commonwealth’s 500-plus state-registered apprentice programs are operated by merit shop contractors. Merit shops invest company resources in training the future and current workforce. Yet not every merit shop has an apprentice program, and it should not be public policy to mandate one.
To increase apprenticeship opportunities in a meaningful way, the Legislature should address the state’s artificial limit on the available apprenticeship seats. Arcane, unjustifiable rules, called jobsite ratios, require a certain number of journeymen for every apprentice. Ratios are set by the state based on union collective bargaining agreements. For example, the Bricklayer’s Local 3 contract sets the ratio at one apprentice for every five journeymen.
The ratios are arbitrary. “We have located no study, authoritative or otherwise, which supports these ratios,” reported the American College of Construction Lawyers Journal in 2020.
The Commonwealth can create more apprenticeship opportunities by setting ratios that are reasonable, safe and in line with industry standards. The state could set ratios of one-to-one or one-to-two without sacrificing safety or the quality of training.
Oddly, union lobbyists have resisted this change on Beacon Hill, and legislation filed by then-Gov. Charlie Baker to change the ratios went nowhere. It’s puzzling as to why, unless you consider the goal of union activists is to use public policy and laws to disadvantage their merit shop competitors.
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