-DAD Independent Training and Apprenticeship, et al v. CA Dept. of Industrial Relations, et al, No. 2:2011cv01047 - Document 29 (E.D. Cal. 2011)

Court Description: STIPULATION and ORDER FOR ENTRY OF FINAL JUDGMENT signed by Judge Garland E. Burrell, Jr. on 10/28/2011 ORDERING the Clerk to enter judgment in favor of Defendants. CASE CLOSED. (Zignago, K.)

Download PDF

1 5 Zachary Smith (State Bar No. 78241) Charles L. Post (State Bar No. 160443) Wendy M. Thomas (State Bar No. 268695) weintraub genshlea chediak a law corporation 400 Capitol Mall, 11th Floor Sacramento, CA 95814 (916) 558-6000 – Main (916) 446-1611 – Facsimile 6 Attorneys for Plaintiffs 2 3 4 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 12 13 14 LAW CORPORATION weintraub genshlea chediak 11 15 16 17 18 19 20 21 22 23 ) Case No.: 2:11−CV−01047−GEB −DAD ) ) STIPULATION AND [PROPOSED] ) ORDER FOR ENTRY OF FINAL ) JUDGMENT ) ) ) ) Complaint Filed - April 18, 2011 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) INDEPENDENT TRAINING AND APPRENTICESHIP PROGRAM, a California corporation, BRANDIN MOYER, and HAROLD E. NUTTER, INC., a California Corporation, Plaintiffs, v. CALIFORNIA DEPARTMENT OF INDUSTRIAL RELATIONS, an agency of the State of California, by and through CHRISTINE BAKER, in her official capacity as Acting Director of the CALIFORNIA DEPARTMENT OF INDUSTRIAL RELATIONS, DIVISION OF APPRENTICESHIP STANDARDS, by and through GLEN FORMAN, in his official capacity as Acting Chief, DIVISION OF LABOR STANDARDS ENFORCEMENT, by and through JULIE SU, in her official capacity as Labor Commissioner, Defendants. 24 25 WHEREAS, plaintiffs Independent Training and Apprenticeship Program, a California 26 Corporation, Brandin Moyer, and Harold E. Nutter, Inc., a California Corporation (collectively, 27 “Plaintiffs”) filed their complaint in this action on April 18, 2011 and Defendants California 28 Department of Industrial Relations, by and through Christine Baker, in her official capacity as {1378202.DOC;} 1 Stipulation and Order for Entry of Final Judgment 1 Acting Director of the California Industrial Relations (“CDIR”), Division of Apprenticeship 2 Standards, by and through Glen Forman, in his official capacity as Acting Chief, Division of 3 Apprenticeship Standards (“DAS”), and Division of Labor Standards Enforcement, by and 4 through Julie Su, in her official capacity as Labor Commissioner (“DLSE”) (collectively, 5 “Defendants”) have appeared in this action through their respective attorneys. California Labor Code section 3075(b) in combination with California s prevailing wage law, 8 California Labor Code section 1775.5 (to the extent that Defendants purport to require public 9 works contractors to pay journeyman s prevailing wage rates to apprentices participating in 10 apprenticeship programs certified by the U.S. Department of Labor but not approved or certified 11 by DAS) is unauthorized, invalid, unlawful and unenforceable as such actions violate the 12 Fitzgerald Act, the Civil Rights Act, and/or the U.S. Constitution; and 2) a preliminary injunction 13 enjoining Defendants and their agents, employees, attorneys, representatives as well as all those 14 LAW CORPORATION WHEREAS, Plaintiffs complaint sought: 1) a declaration that Defendants enforcement of 7 weintraub genshlea chediak 6 persons acting in active concert or participation with them: 15 (a) From refusing to recognize and comply with the United State Department of 16 Labor Administrative Review Board s “Final Decision and Order” of January 31, 2007 and the 17 U.S. Department of Labor s March 2, 2007 public notice, pursuant to 29 CFR 29.13(d), that 18 “[T]he CDIR and the CAC no longer have authority to register or oversee apprenticeship programs 19 for „Federal purposes ;” (72 F.R. 9590) 20 (b) From enforcing California Code of Regulations Section 16001 with respect 21 to projects involving “any Federal financial or other assistance, benefit, privilege, contribution, 22 allowance, exemption, preference or right pertaining to apprenticeship;” 23 (c) From enforcing California Labor Code Section 1777.5 with respect to 24 apprentices from federally approved apprenticeship training programs working on public works 25 projects with a Federal purpose; 26 (d) 27 From refusing to enforce 29 CFR Part 29 with respect to what constitutes a “Federal purpose;” 28 (e) {1378202.DOC;} From refusing to acknowledge that Plaintiff I-TAP is an approved 2 Stipulation and Order for Entry of Final Judgment 1 apprenticeship program for all public works projects with a “Federal purpose” in California; 2 (f) From refusing to allow contractors to pay Plaintiff I-TAP s apprentices at 3 apprentice prevailing wage rates rather than journeyman prevailing wage rates on public works 4 projects in California with any Federal purpose; 5 6 7 (g) From refusing to allow Plaintiff I-TAP to receive fringe training contributions as an approved program on such projects. Further, Plaintiffs sought an order by preliminary Injunction: 8 (a) Directing Defendants to recognize Brandin Moyer and all other similarly situated electrical tradesmen enrolled in federally certified apprenticeship programs as 10 “apprentices” entitled to all of the “assistance, benefits, privileges, contributions, allowances, 11 exemptions, preferences and/or rights pertaining to apprenticeship” (29 C.F.R. § 29.2) on public 12 works project in California that are accorded to “apprentices” in apprenticeship programs certified 13 by DAS pursuant to the provisions of the California Labor Code; 14 LAW CORPORATION weintraub genshlea chediak 9 15 (b) Directing Defendants to rescind the Civil Wage and Penalty Assessment issued in Case No. 40-26553/254 as against Plaintiff Harold E. Nutter, Inc.; and 16 (c) Directing Defendants to refrain from purporting to enforce any penalties, 17 assessments or sanctions against Plaintiff Harold E. Nutter, Inc. or any other contractor on the 18 grounds that apprentices participating in I-TAP s apprenticeship training program or any other 19 federally certified program do not qualify for payment of apprentice prevailing wage rates 20 pursuant to California Labor Code §1777.5. 21 22 WHEREAS, Plaintiffs filed a motion for preliminary injunction and Defendants opposed the motion; 23 WHEREAS, following the submission of briefs and evidence by the parties and oral 24 argument on July 18, 2011, the Honorable Garland E. Burrell, Jr. of the United States District 25 Court, issued an order denying Plaintiffs motion for preliminary injunction; 26 WHEREAS, the issue at trial of whether Defendants actions, policies and conduct 27 pursuant to California Labor Code sections 3075(b), and other California prevailing wage laws 28 including California Labor Code section 1775.5 are unauthorized, invalid, unlawful and {1378202.DOC;} 3 Stipulation and Order for Entry of Final Judgment 1 unenforceable as such actions violate the Fitzgerald Act, the Civil Rights Act and/or the U.S. 2 Constitution is identical to the issue set forth in Plaintiffs motion for preliminary injunction and 3 Defendants opposition thereto; 4 WHEREAS, the parties wish to preserve scarce resources and to obtain a final judgment of 5 all causes of action before the District Court so that they may present their claims to the Court of 6 Appeals; and 7 WHEREAS, on September 13, 2011, Plaintiffs filed a Notice of Appeal to appeal the 8 District Court s August 15, 2011 order denying preliminary injunction, but the parties now wish to 9 obtain a final judgment and Plaintiffs wish to file an appeal of the final judgment. 10 ATTORNEYS, NOW STIPULATE AND AGREE AS FOLLOWS: 12 Pursuant to Federal Rules of Civil Procedure, Rule 65(a)(2) the Court may order the trial 13 of the action on the merits to be consolidated with the hearing of the application for a preliminary 14 LAW CORPORATION weintraub genshlea chediak 11 PLAINTIFFS AND DEFENDANTS, BY AND THROUGH THEIR RESPECTIVE injunction. The Court may enter judgment as to Plaintiffs complaint against Defendants, in favor 15 of Defendants. The Court may adopt its findings of fact and conclusions of law contained in its 16 August 15, 2011 order denying preliminary injunction, as supplemented herein as the final 17 Findings of Fact and Conclusions of Law in this matter. To the extent that any of the Findings of 18 Fact are deemed to be Conclusions of Law, or any of the Conclusions of Law are deemed to be 19 Findings of Fact, the same shall be deemed to be Conclusions of Law or Findings of Fact, as the 20 case may be. 21 22 23 24 [PROPOSED] FINDINGS OF FACT/CONCLUSIONS OF LAW The Court incorporates all Findings of Fact and Conclusions of Law in its Order of August 15, 2011, and supplements that Order as follows: 1. Plaintiff Independent Training and Apprenticeship Program (“I-TAP”), a California 25 Corporation, is a multi-discipline training program offering apprenticeship training in the electrical 26 trades with its principal place of business in Sacramento, California. (See Complaint, ¶2.) 27 28 2. Plaintiff Brandin Moyer (“Moyer”) is an electrical worker who has received classroom instruction and on the job training while enrolled in I-TAP s apprenticeship training {1378202.DOC;} 4 Stipulation and Order for Entry of Final Judgment 1 2 program as an employee of Gray Electric Co. (See Complaint, ¶3.) 3. Plaintiff Harold E. Nutter, Inc. (“Nutter”) is an electrical contractor duly 3 incorporated in California who employs federally certified and qualified apprentices and 4 journeyman electrical workers such as those trained by I-TAP. (See Complaint, ¶4.) 5 4. Christine Baker is the Acting Director of the CDIR and is responsible for enforcing 6 California laws regarding certification of apprenticeship programs and determination of the 7 general prevailing wage rate for each craft, classification or type of worker needed to execute 8 public works contracts. (See Complaint, ¶6.) 9 5. Glen Forman is the Acting Chief of the CDIR charged with the responsibility for enforcing standards for wages, hours and working conditions of apprentices in California and for 11 administering and/or coordinating through CDIR s Division of Apprenticeship Standards 12 (“DAS”). (See Complaint, ¶7.) 13 6. Julie Su is the California Labor Commissioner and is charged with the 14 LAW CORPORATION weintraub genshlea chediak 10 responsibility for enforcing, inter alia, compliance with California “prevailing wage” laws 15 including the application of such laws to certified apprentices pursuant to California Labor Code 16 section 1770, 1771, 1773 through CDIR s Division of Labor Standards Enforcement (“DLSE”). 17 (See Complaint, ¶8.) 18 19 7. The following Federal Statutes, Regulations, Administrative Actions and California laws are at issue in this case: 20 a. The Fitzgerald Act (29 U.S.C. §50) was enacted for the purposes of 21 protecting apprentices through the establishment of minimum labor standards and promotion of 22 apprenticeship as a system of training skilled workers, and encouragement of the federal 23 government to cooperate with state agencies in formulating apprenticeship standards. 24 Apprenticeship Training Counsel Local 363, International Board of Teamsters, AFL-CIO v. New 25 York State Department of Labor, 984 F.2d 589, 591 (2nd Cir. 1993). Pursuant to the Fitzgerald 26 Act, the Department of Labor promulgated regulations (29 C.F.R. Part 29) to establish for federal 27 purposes, labor standards policies and procedures for the registration, cancellation and 28 deregistration of apprenticeship programs and apprenticeship agreements. {1378202.DOC;} 5 Joint Stipulation and Order for Entry of Final Judgment 1 b. 29 C.F.R. Part 29 provides for “a dual system of approval and recognition 2 so that either [OATEL s] or the State Apprenticeship Council can approve an apprenticeship 3 program for federal purposes[; h]owever, either agency is constrained in its approval to apply the 4 requirements and standards of the federal regulations.” 5 Commission v. McDonald, 949 F.2d 270, 273 (9th Cir. 1991). 6 c. Electrical Joint Apprenticeship “To be approved as a [State Apprenticeship Council (“SAC”)], a state must submit proof of[, inter alia,] acceptable apprenticeship laws and regulations; ... a description of the 8 standards, criteria,and requirements for program registration and/or approval; and a description of 9 the policies and operating procedures which depart from or impose requirements in addition to 10 those in the federal regulations.” S. Cal. Chapter of Assoc. Builders & Contractors, Inc., Joint 11 Apprenticeship Comm. v. Cal. Apprenticeship Council, 4 Cal. 4th 422, 433 (1992) (internal 12 citations omitted). “If a state does not continue to meet the federal requirements, it may be 13 „derecognized. ” Id. (citing 29 C.F.R. § 29.13 (1992).) 14 LAW CORPORATION weintraub genshlea chediak 7 d. “In California, apprenticeship training is governed by the Shelley–Maloney 15 Apprenticeship Labor Standards Act of 1939 [(“Shelley–Maloney Act”)], which is codified as 16 California Labor Code section 3070 et seq.” S. Cal. Chapter of Assoc. Builders & Contractors, 17 Inc., Joint Apprenticeship Comm., 4 Cal. 4th at 433. “Pursuant to the Shelley–Maloney Act, 18 apprenticeship training is administered by the Division [of Apprenticeship Standards (“DAS”)], 19 which is under the auspices of the Department of Industrial Relations [(“DIR”)](hereafter 20 Department).” Id. (citation omitted). “The Chief of the [DAS] ... administers the apprenticeship 21 law . . . and is empowered to investigate and either approve or disapprove written standards for 22 apprenticeship programs.” Id. (citations omitted). 23 e. California was “authorized under 29 C.F.R. § 29.12 to approve 24 apprenticeship programs for federal purposes as a SAC state [in] 1978.” Cal. Div. Of Labor 25 Standards Enforcement v. Dillingham Constr., N.A., Inc., 519 U.S. 316, 320 (1997). However, 26 after California amended its apprenticeship law – California Labor Code § 3075 – in 1999, 27 OATELS “began proceedings to derecognize” California as a SAC state “contending that the 28 amended apprenticeship statute did not conform to federal standards.” Cal. Dept. of Indus. {1378202.DOC;} 6 Stipulation and Order for Entry of Final Judgment 1 Relations, Adm. Rev. Bd. Case No. 05- 093, 2007 WL 352459 (Dep t of Labor Jan. 31, 2007) 2 (final decision and order). The United States Department of Labor s Administrative Review Board 3 ultimately withdrew California s recognition as a SAC state on January 31, 2007. Cal. Dept. of 4 Indus. Relations, 72 Fed. Reg. 9590-01 (Dep t of Labor Mar. 2, 2007) (notice). Therefore, 5 California “no longer has the authority to register or oversee apprenticeship programs for „Federal 6 purposes. ” Id. 7 f. Plaintiffs motion concerns the enforcement of California apprenticeship Elementary School Multi-purpose/Gymnasium Expansion & Four New Relocatable Classroom 10 Buildings Project in Nevada County, (“Chicago Park Project”); (2) the Marysville High School 11 Alternative Education Center Project in Yuba County, (“Marysville High Project”); and (3) 12 Williams-Brotherhood Joint Use Gym in Stockton, California (“Stockton Project”). The "Chicago 13 Park Project" is a multi-purpose gymnasium and classroom expansion project. (Pls. Compendium 14 LAW CORPORATION and prevailing wage laws on the following three public works projects: (1) the Chicago Park 9 weintraub genshlea chediak 8 of Evidence in Supp. of Mot. for Prelim. Inj., Decl. of Michael Genest ¶ 3, ECF No. 6-2 (“Genest 15 Decl.”).) 16 g. The Treasurer of the State of California used a portion of the proceeds from 17 the sale of “Build America Bonds,” which occurred in April 2009 and May 2010, to fund a portion 18 of the Stockton Project and the Chicago Park Project. (Genest Decl. ¶¶ 10a, 10c.) “Build America 19 Bonds” are a new form of municipal bond which are subject to federal taxes. Id. ¶ 8. However, the 20 U.S. Treasury pays a subsidy to the municipal lender to cover the differential costs associated with 21 the taxable nature of the bond. Id. The Treasurer of the State of California funded the Marysville 22 High Project with funds received from the sale of municipal bonds, which are usually exempt 23 from federal taxation. Id. ¶¶ 5, 10b. Plaintiffs argue that the referenced financing for the state 24 projects causes the projects to be projects for a “federal purpose” under the Fitzgerald Act and its 25 implementing regulations, because of the referenced federal tax incentives involved with funding 26 the projects. (Pls. Mot. for Prelim. Inj. at 21-24.) 27 8. 28 Plaintiffs contend that: a. {1378202.DOC;} The public works projects at issue in this case have a “federal purpose” 7 Stipulation and Order for Entry of Final Judgment 1 under the Fitzgerald Act because: (a) the Chicago Park and Stockton Joint Use projects benefit 2 from a direct federal subsidy; (b) the Marysville High School project benefits from a federal 3 subsidy; and (c) all the projects involve “arrangements,” “preferences and rights,” “pertaining to” 4 and “dealing with” apprenticeship; 5 b. The U.S. Department of Labor s “derecognition” of California as a SAC, 6 strips California labor regulatory officials of the authority to regulate apprenticeship for any 7 “federal purpose” including the ability to determine: (a) whether federally certified apprentices 8 qualify for employment at apprentice prevailing wage rates; and (b) whether any particular public 9 works project is one involving a federal purpose; and 10 12 14 9. conduct offends basic constitutional protections and Defendants contend that: a. The Fitzgerald Act and the regulations promulgated under it do not preempt and are not at odds with California s long standing system of apprenticeship regulation; 15 16 Defendants impermissibly burdens interstate commerce. 13 LAW CORPORATION weintraub genshlea chediak 11 c. b. The public works projects at issue in this case do not have a “federal purpose” as defined by the Fitzgerald Act and the regulations promulgated pursuant to it; 17 c. That no private right of action exists under the Fitzgerald Act; 18 d. That regulation of apprenticeship is consistent with Fitzgerald Act 20 e. That their conduct offends no federal constitution principle or protection; 21 f. The Court should abstain from adjudicating this claim; and 22 g. The injunction sought is vague and impermissibly overboard. 19 23 regulations; 10. As to that portion of the injunctive relief sought by plaintiff which seeks to enjoin 24 defendants from enforcing California apprenticeship and prevailing wage laws on any public 25 works project that has a “federal purpose,” the Court questions whether Plaintiffs have standing to 26 assert that claim and/or whether the question framed by that request is ripe. As a result of the 27 conjectural nature of this portion of the relief sought, the court limits its adjudication of the case to 28 that portion of plaintiffs declaratory relief and injunctive relief claim that relate to the specific {1378202.DOC;} 8 Stipulation and Order for Entry of Final Judgment 1 public works projects at issue in this case. 2 11. The Court has jurisdiction under 28 U.S.C. §1331. 3 12. Venue is proper in this district. 4 13. Plaintiffs supremacy clause claim fails because: (a) the federal tax benefits 5 underlying the public works projects at issue in this case do not constitute a “Federal purpose” 6 under 29 C.F.R §29.2. 7 14. Plaintiffs construction of “federal purpose in section 29.2 reads the words 8 “federal” and “pertaining to apprentieship” into thin air. This interpretation is contrary to the 9 court s duty to interpret regulation to “give effect if possible to every clause and word” of the regulation. 11 15. Plaintiffs reliance on two opinion letters written by the administrator of OATELS 12 is misplaced. Even assuming that these opinion letters supported plaintiffs argument that “federal 13 purpose” is defined broadly enough to include a federal financial benefit as tangential as a tax 14 LAW CORPORATION weintraub genshlea chediak 10 exemption or tax subsidy provided to a municipal lender, the interpretation expressed in the 15 opinion letters is not entitled to deference by this Court. Instead, these opinion letters are entitled 16 to the respect of the Court only to the extent that the interpretations of the administrative agency 17 expressed in such opinion letter have the “power to persuade.” The opinion letters at issue render 18 the terms “federal” and “pertaining to apprenticeship” in section 29.2 mere surplusage. Even 19 assuming arguendo that the opinion letters can be interpreted as broadly as plaintiffs argue, that 20 interpretation would be unpersuasive and would not be entitled to respect. 21 16. Defendants enforcement of California s apprenticeship and prevailing wage laws 22 on the three referenced public works projects has no relationship to the flow of articles of 23 interstate commerce. 24 17. Federal apprenticeship programs and California apprenticeship programs are not, 25 based on the evidence submitted to this Court, similarly situated for purposes of an equal 26 protection claim under the U.S. Constitution. 27 28 18. Plaintiffs fail to demonstrate that any fundamental right or liberty interest is implicated by the facts alleged and asserted in this case. {1378202.DOC;} 9 Stipulation and Order for Entry of Final Judgment 1 2 19. Plaintiffs have not adequately alleged a claim of discrimination on the basis of out of state residency necessary to assert a claim under the privileges and immunities clause. 3 4 Plaintiffs and Defendants ask that the Court approve this stipulation and enter Judgment. 5 Plaintiffs reserve their right to appeal on all the contentions raised in their request for declaratory 6 and injunctive relief. This Stipulation and Judgment shall not constitute evidence or an admission 7 by any party. The Court defers any order on costs and attorneys fees pending resolution of the 8 appeal of this Judgment. 9 IT IS SO STIPULATED. 10 Dated: October 24, 2011 WEINTRAUB GENSHLEA CHEDIAK 12 BY: 13 /s/ - Charles L. Post CHARLES L. POST, ESQ. Attorney for Plaintiffs 14 LAW CORPORATION weintraub genshlea chediak 11 15 16 Dated: October 24, 2011 17 CALIFORNIA DEPARTMENT OF INDUSTRIAL RELATIONS OFFICE OF DIRECTOR-LEGAL 18 BY: 19 20 21 22 23 /s/ - Fred Lonsdale FRED LONSDALE, ESQ. Attorney for Defendants IT IS SO ORDERED and the Clerk is directed to enter judgment in favor of Defendants pursuant to the above stipulation. Date: 10/28/2011 24 _________________________ GARLAND E. BURRELL, United States District Judge 25 JR. D EAC_ Sig nature-END: 26 27 61khh4bb 28 {1378202.DOC;} 10 Stipulation and Order for Entry of Final Judgment

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.