The State of California requires a contractor on a public works project to pay its workers the prevailing wage in the project's locale. An exception to this requirement permits a contractor to pay a lower wage to workers participating in an approved apprenticeship program. This case presents the question whether the pre-emption provision of the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U. S. C. § 1001 et seq., supersedes California's prevailing wage law to the extent that the law prohibits payment of an apprentice wage to an apprentice trained in an unapproved program. We conclude that California's law does not "relate to" employee benefit plans, and thus is not pre-empted.
Since 1931, the Davis-Bacon Act, 46 Stat. 1494, as amended, 40 U. S. C. §§ 276a to 276a—5, has required that the wages paid on federal public works projects equal wages paid in the project's locale on similar, private construction jobs. California, in 1937, adopted a similar statute, which requires contractors who are awarded public works projects to pay their workers "not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is performed." Cal. Lab. Code Ann. § 1771 (West 1989). Under both the Davis-Bacon Act and California's prevailing wage law, public works contractors may pay less than the prevailing journeyman wage to apprentices in apprenticeship programs that meet standards promulgated under the National Apprenticeship Act, 50 Stat.
The federal arbiter of apprenticeship program adequacy is the Bureau of Apprenticeship and Training (BAT), located within the Department of Labor. An apprenticeship program that seeks to provide federal public works contractors with apprentice-wage-eligible apprentices must receive the blessing of either the BAT or a "State Apprenticeship Agency." 29 CFR § 29.3 (1996). Since 1978, California's state apprenticeship agency, the California Apprenticeship Council (CAC), has been authorized under 29 CFR § 29.12 to approve apprenticeship programs for federal purposes. App. 37. California has also charged the CAC with approving apprenticeship programs for purposes of California's prevailing wage statute. See Cal. Lab. Code Ann. § 3071 (West 1989). Pursuant to the Fitzgerald Act, the United States Secretary of Labor has promulgated apprenticeship program standards. 29 CFR § 29.5 (1996). California has adopted its own apprenticeship standards, 8 Cal. Code Regs. § 212 (1996), that are "substantively similar" to the federal standards. Southern Cal. Chapter of Associated Builders and Contractors, Inc., Joint Apprenticeship Committee v. California Apprenticeship Council, 4 Cal.4th 422, 434, 841 P.2d 1011,
An apprenticeship program in California may be sponsored by an individual employer, an individual labor union, a group of employers, a group of labor organizations, or by a joint management-labor venture (a so-called joint apprenticeship committee). See Cal. Lab. Code Ann. § 3075 (West 1989).
In the spring of 1987, respondent Dillingham Construction was awarded a public works contract as the general contractor for the construction of the Sonoma County Main Adult Detention Facility. Dillingham subcontracted electronic installation work to respondent Manuel J. Arceo, doing business as Sound Systems Media.
When Sound Systems Media was awarded the subcontract, it was signatory to a collective-bargaining agreement that provided a wage scale for apprentices, and required Sound Systems Media to contribute to a CAC-approved apprenticeship program, the Northern California Sound and Communications Joint Apprenticeship Training Committee.
In May 1988, after work on the project was underway, the existing union withdrew its representation of Sound Systems Media employees. Two months later, Sound Systems Media entered a new collective-bargaining agreement with a different union. That agreement, like the earlier one, included a scale of wages for apprentices and provided for an affiliation with a joint apprenticeship committee, the Electronic and Communications Systems Joint Apprenticeship Training Committee (Electronic and Communications Systems JATC). Sound Systems Media relied on this new committee for its apprentices, to whom it paid the apprentice wage provided in the collective-bargaining agreement. The Electronic and Communications Systems JATC, however, did not seek CAC
In March 1989, yet another union filed a complaint against Sound Systems Media with petitioner Division of Apprenticeship Standards of the California Department of Industrial Relations. Petitioner issued a notice of noncompliance to both Dillingham Construction and Sound Systems Media, charging that Sound Systems Media had violated Cal. Lab. Code Ann. § 1771 (West 1989) by paying the apprentice wage, rather than the prevailing journeyman wage, to apprentices from a nonapproved program. The County of Sonoma was ordered to withhold certain moneys from Dillingham Construction for the violation.
Respondents filed suit to prevent petitioners from interfering with payment under the subcontract. Their complaint alleged, inter alia, that ERISA pre-empted enforcement of the prevailing wage law. Respondents argued that the Electronic and Communications Systems JATC was an "employee welfare benefit plan" within the meaning of ERISA § 3(1), 29 U. S. C. § 1002(1),
The Court of Appeals for the Ninth Circuit reversed. 57 F.3d 712 (1995). Agreeing with the District Court, the Ninth Circuit held that the Electronic and Communications Systems JATC was an employee welfare benefit plan and that § 1777.5 "relate[d] to" it. Id., at 718-719. Because California's prevailing wage statute was not an "enforcement mechanism" of the Fitzgerald Act, however, the Ninth Circuit parted company with the District Court and held that § 1777.5 was not preserved by ERISA's saving clause. Id., at 721. The decision of the Court of Appeals accorded with that of the Court of Appeals for the Tenth Circuit in National Elevator Industry, Inc. v. Calhoon, 957 F.2d 1555, cert. denied, 506 U.S. 953 (1992). Both decisions conflict— as to whether a state prevailing wage law "relate[s] to" apprenticeship programs, and as to the reach of the saving clause—with that of the Eighth Circuit in Minnesota Chapter of Associated Builders and Contractors, Inc. v. Minnesota Dept. of Labor and Industry, 47 F.3d 975 (1995). We granted certiorari, 517 U.S. 1133 (1996), and now reverse.
Both lower courts determined, and neither party disputes, that the Electronic and Communications Systems JATC was a "plan, fund, or program [that] was established or is maintained for the purpose of providing for its participants . . .
Since shortly after its enactment, we have endeavored with some regularity to interpret and apply the "unhelpful text" of ERISA's pre-emption provision. New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 656 (1995). We have long acknowledged that ERISA's pre-emption provision is "clearly expansive." Id., at 655. It has
Our efforts at applying the provision have yielded a two-part inquiry: A "law `relate[s] to' a covered employee benefit plan for purposes of § 514(a) `if it  has a connection with or  reference to such a plan.' " District of Columbia v. Greater Washington Bd. of Trade, 506 U.S. 125, 129 (1992) (quoting Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-97 (1983)). Under the latter inquiry, we have held pre-empted a law that "impos[ed] requirements by reference to [ERISA] covered programs," Greater Washington Bd. of Trade, supra, at 130— 131; a law that specifically exempted ERISA plans from an otherwise generally applicable garnishment provision, Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825, 828, n. 2, 829-830 (1988); and a common-law cause of action premised on the existence of an ERISA plan,
A law that does not refer to ERISA plans may yet be pre-empted if it has a "connection with" ERISA plans. Two Terms ago, we recognized that an "uncritical literalism" in applying this standard offered scant utility in determining Congress' intent as to the extent of § 514(a)'s reach. Travelers, 514 U. S., at 656. Rather, to determine whether a state law has the forbidden connection, we look both to "the objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive," ibid., as well as to the nature of the effect of the state law on ERISA plans, id., at 658-659.
As is always the case in our pre-emption jurisprudence, where "federal law is said to bar state action in fields of traditional state regulation, . . . we have worked on the `assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.' " Id., at 655 (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)) (citation omitted).
Respondents and several of their amici urge us to conclude that § 1777.5 makes "reference to" ERISA plans. Because it seems that approved apprenticeship programs need not necessarily be ERISA plans, we decline to do so.
On its face, § 1777.5 appears to allow the lower apprentice wage only to a contractor who acquires apprentices through a "joint apprenticeship committee"—an apprenticeship program sponsored by the collective efforts of management and organized labor. See Cal. Lab. Code Ann. §§ 3075, 3076 (West 1989). Were this the true extent of the prevailing
To comport with § 302(c)(6) of the Labor Management Relations Act, 1947, 61 Stat. 157, as amended, 29 U. S. C. § 186(c)(6), the expenses of any joint apprenticeship committee must be defrayed out of moneys placed into a separate fund. The existence of that fund triggers ERISA coverage over programs like that of the Electronic and Communications Systems JATC. See ERISA Advisory Op. No. 94-14A (Apr. 20, 1994). But an employee benefit program not funded through a separate fund is not an ERISA plan. In Massachusetts v. Morash, 490 U.S. 107 (1989), we recognized a distinction between vacation benefits paid out of an accumulated fund and those paid out of an employer's general assets. A fund established to pay vacation benefits, we held, constituted an employee welfare benefit plan; the policy at issue in Morash, whereby vacation benefits were paid out of general assets, did not. The distinction, we concluded, was compelled by ERISA's object and policy:
Benefits paid out of an employer's general assets presented risks indistinguishable from "the danger of defeated expectations of wages for services performed," a hazard with which ERISA is unconcerned. Ibid.
The Secretary has carried this funded/unfunded distinction into areas that are, we think, analogous to that of apprenticeship programs. See, e. g., 29 CFR § 2510.3-1(k) (1994) (scholarship programs paid for out of an employer's general assets are not ERISA plans); § 2510.3-1(b)(3)(iv) (training provided on the job with general assets does not constitute ERISA plan); see also ERISA Advisory Op. No. 94-14A (Apr. 20, 1994) (apprenticeship programs paid for out of trust funds are ERISA plans); ERISA Advisory Op. No. 83-32A (June 21, 1983) (in-house professional development program financed out of general assets is not an ERISA plan). Although none of these regulations specifically answers the question whether an unfunded apprenticeship program is covered by ERISA, they suggest—as does our decision in Morash —that it is not.
In Shaw v. Delta Air Lines, Inc., we held that the New York Human Rights Law, which prohibited "employers from structuring their employee benefit plans in a manner that discriminates on the basis of pregnancy," and New York's Disability Benefits Law, which required "employers to pay employees specific benefits," "relate[d] to" ERISA plans. 463 U. S., at 97. Shaw and other of our ERISA pre-emption decisions, see, e. g., FMC Corp. v. Holliday, 498 U.S. 52 (1990); Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504 (1981), presented us with state statutes that "mandated employee benefit structures or their administration"; in those cases, we concluded that these requirements amounted to "connection[s] with" ERISA plans. See Travelers, 514 U. S., at 658.
The state law at issue in Travelers, our most recent exercise in ERISA pre-emption, stands in considerable contrast. That statute regulated hospital rates, and required hospitals to exact surcharges (ranging from 9% to 24% of the rate set under the statute) from patients whose hospital bills were paid by any of a variety of non-Blue Cross/Blue Shield providers. Because ERISA plans, as might be expected, were predominant among the purchasers of insurance, see Brief
We upheld the statute. The "indirect economic influence" of the surcharge, we noted, did not "bind plan administrators to any particular choice and thus function as a regulation of an ERISA plan itself." 514 U. S., at 659. Nor did the indirect influence of the surcharge "preclude uniform administrative practice or the provision of a uniform interstate benefit package if a plan wishe[d] to provide one." Id., at 660. Indeed, if ERISA were concerned with any state action—such as medical-care quality standards or hospital workplace regulations—that increased costs of providing certain benefits, and thereby potentially affected the choices made by ERISA plans, we could scarcely see the end of ERISA's pre-emptive reach, and the words "relate to" would limit nothing. Id., at 660-661. We also noted that several States regulated hospital charges at the time that ERISA was enacted, and yet neither ERISA's language nor legislative history made any mention of pre-empting these state efforts.
That the States traditionally regulated these areas would not alone immunize their efforts; ERISA certainly contemplated the pre-emption of substantial areas of traditional state regulation. The wages to be paid on public works projects and the substantive standards to be applied to apprenticeship training programs are, however, quite remote from the areas with which ERISA is expressly concerned— "`reporting, disclosure, fiduciary responsibility, and the like.' " Travelers, supra, at 661 (quoting Shaw, 463 U. S., at 98). A reading of § 514(a) resulting in the pre-emption of traditionally state-regulated substantive law in those areas where ERISA has nothing to say would be "unsettling," Travelers,
Like New York's surcharge requirement, the apprenticeship portion of the prevailing wage statute does not bind ERISA plans to anything. No apprenticeship program is required by California law to meet California's standards. See Southern Cal. ABC, 4 Cal. 4th, at 428, 841 P. 2d, at 1013. If a contractor chooses to hire apprentices for a public works project, it need not hire them from an approved program (although if it does not, it must pay these apprentices journeyman wages). So, apprenticeship programs that have not gained CAC approval may still supply public works contractors with apprentices. Unapproved apprenticeship programs also may supply apprentices to private contractors.
Apprenticeship programs have confronted these differential economic incentives since well before the enactment of ERISA, and would face them today even if California had no prevailing wage statute. To supply apprentices eligible for the apprenticeship wage to federal public works contractors, an apprenticeship program must meet the standards promulgated by California under the Fitzgerald Act.
For the reasons stated herein, the judgment below is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Justice Scalia, with whom Justice Ginsburg joins, concurring.
Since ERISA was enacted in 1974, this Court has accepted certiorari in, and decided, no less than 14 cases to resolve conflicts in the Courts of Appeals regarding ERISA preemption of various sorts of state law.
I join the Court's opinion today because it is a fair description of our prior case law, and a fair application of the more recent of that case law. Today's opinion is no more likely than our earlier ones, however, to bring clarity to this field— precisely because it does obeisance to all our prior cases, instead of acknowledging that the criteria set forth in some of them have in effect been abandoned. Our earlier cases sought to apply faithfully the statutory prescription that state laws are pre-empted "insofar as they . . . relate to any employee benefit plan." Hence the many statements, repeated today, to the effect that the ERISA pre-emption provision has a "broad scope," an "expansive sweep," is "broadly worded," "deliberately expansive," and "conspicuous for its breadth." Ante, at 324. But applying the "relate to" provision according to its terms was a project doomed to failure, since, as many a curbstone philosopher has observed, everything is related to everything else. Accord, New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 655 (1995). The statutory text provides an illusory test, unless the Court is willing to decree a
I think it would greatly assist our function of clarifying the law if we simply acknowledged that our first take on this statute was wrong; that the "relate to" clause of the pre-emption provision is meant, not to set forth a test for pre-emption, but rather to identify the field in which ordinary field pre-emption applies—namely, the field of laws regulating "employee benefit plan[s] described in section 1003(a) of this title and not exempt under section 1003(b) of this title," 29 U. S. C. § 1144(a). Our new approach to ERISA pre-emption is set forth in John Hancock Mut. Life Ins. Co. v. Harris Trust and Sav. Bank, 510 U.S. 86, 99 (1993): "[W]e discern no solid basis for believing that Congress, when it designed ERISA, intended fundamentally to alter traditional pre-emption analysis." I think it accurately describes our current ERISA jurisprudence to say that we apply ordinary field pre-emption, and, of course, ordinary conflict preemption. See generally Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 248 (1984) (explaining general principles of field and conflict pre-emption); Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947) (field pre-emption); Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-143 (1963) (conflict pre-emption). Nothing more mysterious than that; and except as establishing that, "relates to" is irrelevant.
Briefs of amici curiae urging affirmance were filed for Associated Builders and Contractors, Inc., et al. by Mark R. Thierman; and for Signatory Members of the Coalition to Preserve ERISA Preemption by Maurice Baskin.
Briefs of amici curiae were filed for the American Association of Retired Persons et al. by Mary Ellen Signorille, Cathy Ventrell-Monsees, Melvin Radowitz, and Daniel Feinberg; for the Associated General Contractors of America, San Diego Chapter, Inc., et al.by John G. Roberts, Jr., Michael E. Kennedy, William G. Jeffery, and David P. Wolds; for the California Apprenticeship Coordinators Association et al. by James P. Watson; and for the Chamber of Commerce of the United States et al. by Timothy B. Dyk, Daniel H. Bromberg, Stephen A. Bokat, Mona C. Zeiberg, Jan S. Amundson, and Quentin Riegel.