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C.A. Greenlights Apprenticeship Regulations Which Conflict With Court of Appeal Ruling
Third District Upholds Rules by Apprenticeship Council That Classify ‘Apprenticeable Trade’ in Opposition to Definition Provided by First District in 2015, Saying Case Was Wrongly Decided
By a MetNews Staff Writer
The Third District Court of Appeal yesterday upheld amended regulations issued by the California Apprenticeship Council which defined “apprenticeable craft or trade” as work “performing…processes included in the apprentice’s approved training program,” a definition rejected by the 2015 First District case of Henson v. Overaa & Company.
Acknowledging that the Office of Administrative Law (the “OAL”)—the agency assigned the responsibility of ensuring that regulations are clear, necessary, legally valid, and available to the public—might have had grounds to disapprove of the regulations based on the Overaa case, the court declared that “we decline to invalidate the regulations here because, in our view, [the case] was wrongly decided on this point.”
In an opinion written by Justice Peter A. Krause, and joined in by Acting Presiding Justice Elana Duarte and Justice Shama Hakim Mesiwala, the court said that “we conclude that the regulations are within the scope of the Council’s rulemaking authority and consistent with the governing law.”
At issue are regulations governing the employment of apprentices on public works projects. The challenged regulations include several amendments to the Code of Regulations governing apprenticeships, found at 8 C.C.R. §202 et seq., which are intended to “clarify and make more specific” the conditions under which apprentices will qualify for payment of a reduced apprenticeship wage rate under Labor Code §1777.5.
Prior to the amendments, the section provided:
“Apprentices employed on public works can only be assigned to perform work of the craft or trade to which the apprentice is registered. Work of the craft or trade consists of job duties normally assigned to journeymen in the apprenticeable occupation.”
Disputes arose over whether public works contractors could select apprentices based on the job duties normally assigned to journey workers—or skilled tradesmen—in the same occupation or by the work processes set forth in the standards governing the training program.
The council explained that the amendments were meant to “ensure that the work performed by apprentices on public works is a genuine part of their training program…and conversely that apprentices will not be used as a source of cheap labor for work processes that are not part of their structured and approved training program.”
After public hearings, the OAL approved the regulations in 2021.
The Associated General Contractors of California Inc., the Construction Employers’ Association, the United Contractors, and The Laborers Training and Retraining Trust of Southern California filed petitions challenging the validity of the new regulations, saying they exceed the scope of the council’s authority and are inconsistent with governing law.
Sacramento Superior Court Judge Stephen P. Acquisto denied the petitions. Yesterday’s opinion affirms the denial.
Governing Law
The petitioners argue that the regulations conflict with §1777.5, which provides that “[e]very apprentice employed upon public works shall be paid the prevailing rate of per diem wages for apprentices in the trade to which he or she is registered and shall be employed only at the work of the craft or trade to which he or she is registered.”
Subdivision (c) of the section states that only apprentices who are training under approved apprenticeship programs qualify for the reduced wages and that the employment must be in accordance with either the agreements under which the apprentice is training or the rules and regulations set forth by the Council.
Pointing to the Overaa decision, the petitioners assert that an apprentice’s craft or trade is defined by the type of work carried out by the journey-level workers in that craft or trade, rather than the work processes described in the apprenticeship program standards.
Krause said: “Petitioners…contend that the challenged regulations conflict with Overaa’s interpretation of the statute because Overaa construed the plain language of the statute to mean that an apprentice’s craft or trade is tied to the journeyworker’s occupation, not the work processes set forth in the approved apprenticeship standards….According to the court in Overaa, apprenticeship standards ‘set a floor, not a ceiling,’ and apprentices are free to receive additional training in processes beyond those expressly listed in their apprenticeship standards….Thus, if an apprentice identifies as a construction craft laborer and is training in an apprenticeship program sponsored by the construction craft laborers’ union, the apprentice may perform any work in which construction craft laborer journeyworkers and other members of the construction craft laborers’ union engage.”
Remarking that “[a]lthough we agree there is tension between the challenged regulations and Overaa’s interpretation of the statute,” he concluded:
“The pivotal language is found in section 1777.5, subdivision (d), which provides that when a contractor ‘employs workers in any apprenticeable craft or trade,’ the contractor also must hire apprentices from an apprenticeship program in that craft or trade….Critically, that same subdivision further provides: ‘ “Apprenticeable craft or trade,” as used in this section, means a craft or trade determined as an apprenticeable occupation in accordance with rules and regulations prescribed by the [Council].’…As interpreted by Overaa, this language requires contractors to hire apprentices who are in the same occupation as the journeyworkers employed on the project. On this point, we have no quarrel.”
However, he continued by saying “Overaa did not analyze the scope of the Council’s authority to promulgate regulations defining the term ‘apprenticeable occupation’ because there was no need to do so—it found that the regulations in place at the time were consistent with the court’s interpretation of the ‘plain language’ of the statute.”
No Statutory Bar
Turning to the challenged amendments, Krause commented:
“After Overaa was decided, the Council amended its regulations, which now provide that an ‘[a]pprenticeable [o]ccupation’ is ‘defined by the work processes contained in the approved apprenticeship standards under which apprentices are training.’….We see nothing in the statute’s plain language that prevents the Council from making this change. To the contrary, the Council did precisely what section 1777.5…impl[ies] it may do: define ‘apprenticeable occupation’ for purposes of employment of apprentices on public works.”
He added:
“[T]he practical effect of the amendments was not to impose a new requirement that apprenticeship standards include the work processes within the apprenticeable occupation. Rather, they ensure that apprenticeship program standards accurately disclose the skills in which apprentices are being trained and that the work performed by apprentices on public works is a genuine part of their training program. So construed, we perceive no conflict with section 1777.5. Contractors must hire apprentices who are in the same occupation as the journeyworkers, as Overaa held, but they may only assign apprentices work that is included in the approved apprenticeship standards under which they are training.”
In a footnote following the court’s announcement that it believed Overaa to be wrongly decided, the jurist declared that “[o]ur conclusion renders it unnecessary to address the issue of whether the Legislature lawfully may delegate to an administrative agency the power to adopt regulations that interpret a key statutory term in a manner inconsistent with an intervening judicial opinion.”
The case is Associated General Contractors of California v. Department of Industrial Relations, C098009.
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