The Air Conditioning Trade Association (ACTA) filed a lawsuit in January that alleges the California Apprenticeship Council (CAC) is imposing unconstitutional restrictions on the opening of new apprentice programs for crafts and trades.

The lawsuit targets California Labor Code section 3075, which the plaintiffs claim prohibits an apprenticeship program from opening up or expanding into a new part of the state unless given permission by existing apprenticeship programs.

According to Section 3075, the state’s Division of Apprenticeship Standards (DAS) and the California Apprenticeship Council (CAC) must determine that the training needs of the geographical area justify the establishment of additional programs (see sidebar on page 18).

The CAC is a 17-member council that sets policy for the DAS. In her capacity as CAC administrator of apprenticeship, Christine Baker has been named the lead defendant in the case.

The defendants are contending that there is no requirement that an apprenticeship program obtain state approval to operate or train apprentices. Defendants further contend that state approval merely provides benefits including state subsidies for training, and the ability for apprentices to work at lower wage rates on state public work.

The case is expected to be heard during the month of May.

The Plaintiffs’ Case

Timothy Sandefur, Pacific Legal Foundation attorney representing ACTA, contends that under the code, the DAS and CAC could rule that there is no need for a new program and prohibit the creation of any new apprenticeship programs, thus limiting the growth of certain trade and craft trades statewide.

“This law basically says that if you want to run an apprenticeship program, you first have to get permission from the state’s existing apprenticeship programs,” said Sandefur. “Existing apprenticeship programs are given a special privilege of blocking any new company from opening or expanding and competing against them. Imagine if Target could legally prohibit any new Walmart from opening up. That’s what this law does for apprenticeship programs.”

Pacific Legal Foundation’s lawsuit argues that these restrictions violate constitutional due process and equal protection principles by prohibiting the opening or expansion of businesses for no legitimate regulatory purpose. Rather than promoting public health and safety — the accepted reasons for government regulation — the restrictions on new apprenticeship programs actually serve the private interests of established programs, and undermine the interests of consumers, job seekers, and employers by limiting marketplace competition and consumer choice.

“It’s truly a sad day when all you want to do is train tomorrow’s workforce and you are told you cannot because they want to limit contractors’ options,” said Jill Mojica, executive director of ACTA.

In 1993, ACTA began an apprenticeship program specifically designed to train sheet metal workers. Through state rules, ACTA’s recruiting ability has been limited to students living in Mariposa, Merced, Stanislaus, and Tuolumne Counties. In 2008, ACTA applied for permission to expand its recruiting operations to include the remainder of the state’s counties, but the request was denied by the CAC on the heels of complaints filed by existing apprenticeship programs. Regulators declared there was no “public need” for ACTA to expand its reach.

In 2007, the U.S. Department of Labor declared that the California “public need” law conflicted with federal law, and revoked the state’s authority to qualify apprentices for work on federal projects. But, the state still imposes the “need” test on new apprentice programs that would train workers for state, local, and private projects in California.

“As long as California enforces this ‘needs’ test, the federal government will not give any recognition to the state’s apprenticeship programs,” said Sandefur. “In other words, the California Department of Labor is so insistent on enforcing this anti-competitive ‘needs’ test that it ignores the best interests of the state’s blue-collar workers.”

Mojica added, “Contractors should have a choice of what apprenticeship training program they would like to use. It is ACTA’s hope that this lawsuit will provide California contractors with more apprenticeship opportunities.”

The Defendants’ Case

Greg Vincelet, training coordinator, Local 442, Modesto, Calif., and CAC air conditioning and refrigeration Central California regional representative, believes that limiting apprenticeship programs doesn’t necessarily reduce job opportunities.

“Just because you receive training, that doesn’t guarantee a job,” said Vincelet. “It seems a lot of HVAC schools want to collect $10,000 to $15,000 for training and then let the trainee find a job. Apprentice programs are set up with employer input; why would you train someone when a job doesn’t exist? That’s why it is important to have employer feedback on what the industry is doing so the programs are able to plan ahead and meet the needs of the industry.

“Is this an advantage to the industry? Yes, and to the individuals not getting unneeded and expensive training, yes, this is beneficial to them as well.”

The State Building and Construction Trades Council of California, AFL-CIO, has proposed to intervene in the case on behalf of the CAC.

According to the State Building Trades’ attorney, Scott Kronland, “The plaintiffs’ lawsuit is premised on a mistake about California law. There is no requirement that an apprenticeship program obtain state approval to train workers in California.

“The state spends money to oversee and subsidize state-approved programs, and apprentices in those programs can be hired at special wage rates on state public works projects, but applying for state approval is voluntary.

“The state has high standards for approving new programs because it does not want to use public resources to subsidize apprenticeship training for jobs that will not exist in the future. That is perfectly legitimate.”

Kronland added, “It would be a cruel hoax for the state to endorse and subsidize new apprenticeship programs in an occupation unless there will be jobs for those apprentices when they graduate. Plaintiffs are free to expand their program without state approval, but they cannot force the state to subsidize their program.”

Sidebar: California’s Code

California Labor Code section 3075 states:

“The apprentice training needs in the building and construction trades shall be deemed to justify the approval of a new apprenticeship program only if any of the following conditions are met: There is no existing apprenticeship program approved under this chapter serving the same craft or trade and geographic area. Existing apprenticeship programs approved under this chapter that serve the same craft or trade and geographic area do not have the capacity, or neglect or refuse, to dispatch sufficient apprentices to qualified employers at a public works site who are willing to abide by the applicable apprenticeship standards. Existing apprenticeship programs approved under this chapter that serve the same trade and geographic area have been identified by the CAC as deficient in meeting their obligations under this chapter.

“Notwithstanding subdivision, the CAC may approve a new apprenticeship program if special circumstances, as established by regulation, justify the establishment of the program.”

Publication date: 05/28/2012