In the July 16 ruling of Merit Construction Alliance v. City of Quincy, the First Circuit Court of Appeals found that the Employee Retirement Income Security Act (ERISA) preempts a controversial city ordinance that forced contractors to “engage in a bona fide apprentice training program" registered with the Massachusetts Department of Labor Standards as a condition of bidding for city work.
Rejecting an appeal by Quincy from a trial court injunction against the city’s responsible employer ordinance (REO), the appeals court held that the ordinance violated ERISA, stating in the decision
“We have no difficulty concluding that the ordinance goes far beyond simply influencing ERISA apprentice training programs. It mandates an employee benefit structure and specifies how that structure must be administered. This is simply too intrusive to withstand ERISA preemption.”
According to the ruling, “To comply with the ordinance, an employer with an ERISA-governed apprentice training program either would have to modify that program to provide apprentices on Quincy-based projects with special benefits or would have to establish and coordinate a separate plan into which such apprentices would be funneled. Either way, the employer's hope of uniform administration would be dashed by the Ordinance's demands. Such balkanization of benefit administration is exactly the sort of outcome ERISA was designed to prevent.”
As a result of this decision, construction contracts procured by the City of Quincy should receive increased competition, which will reduce costs for taxpayers. In addition, ABC members and other experienced contractors who were discriminated against by the previous REO now have an opportunity to compete for taxpayer-funded contracts on a level playing field.
The ruling is a blow to the construction unions’ campaign to promote restrictive apprenticeship mandates and other union-friendly REOs in communities across the country. Another federal court in Cincinnati issued a similar ruling blocking another local apprenticeship mandate on June 30.
ABC’s Construction Legal Rights Foundation supported the filing of an amicus brief by ABC General Counsel Maury Baskin, supporting the Merit Construction Alliance’s complaint.