California Div. of Labor Standards Enforcement v. Dillingham Constr., N. A., Inc., 519 U.S. 316 (1997)

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316

OCTOBER TERM, 1996

Syllabus

CALIFORNIA DIVISION OF LABOR STANDARDS ENFORCEMENT et al. v. DILLINGHAM CONSTRUCTION, N. A., INC., et al.

certiorari to the united states court of appeals for the ninth circuit

No. 95-789. Argued November 5, 1996—Decided February 18, 1997

California requires a public works project contractor to pay its workers the prevailing wage in the project's locale, but allows payment of a lower wage to participants in a state-approved apprenticeship program. After respondent Dillingham Construction subcontracted some of the work on its state contract to respondent Arceo, doing business as Sound Systems Media, the latter entered a collective-bargaining agreement that included an apprenticeship wage scale and provided for affiliation with an apprenticeship committee that ran an unapproved program. Sound Systems Media thereafter relied on that committee for its apprentices, to whom it paid the apprentice wage. Petitioner California Division of Apprenticeship Standards issued a notice of noncompliance to both Dillingham and Sound Systems Media, charging that paying the apprentice wage, rather than the prevailing journeyman wage, to apprentices from an unapproved program violated the state prevailing wage law. Respondents sued to prevent petitioners from interfering with payment under the subcontract, alleging, inter alia, that 514(a) of the Employee Retirement Income Security Act of 1974 (ERISA) preempted enforcement of the state law. The District Court granted petitioners summary judgment, but the Ninth Circuit reversed, holding that the apprenticeship program was an "employee welfare benefit plan" under ERISA 3(1), and that the state law "relate[d] to" the plan and was therefore superseded under 514(a).

Held: California's prevailing wage law does not "relate to" employee benefit plans, and thus is not pre-empted by ERISA. Pp. 323-334. (a) A state law "relate[s] to" a covered employee benefit plan for 514(a) purposes if it (1) has a "connection with" or (2) "reference to" such a plan. E. g., District of Columbia v. Greater Washington Bd. of Trade, 506 U. S. 125, 129. A law has the forbidden reference where it acts immediately and exclusively upon ERISA plans, as in Mackey v. Lanier Collection Agency & Service, Inc., 486 U. S. 825, or where the existence of such plans is essential to its operation, as in, e. g., Greater Washington Bd. of Trade, supra, and Ingersoll-Rand Co. v. McClendon, 498 U. S. 133. To determine whether a state law has a connection with

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