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Donald J. Siegel, Esq.
Elizabeth A. Sloane, Esq.
Segal, Roitman & Coleman
11 Beacon Street, Suite 500
Boston, MA 02108
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2003-06A
ERISA Sec. 3(1)
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Dear Mr. Siegel and Ms. Sloane:
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This is in reply to your request for an advisory
opinion regarding the applicability of Title I of the Employee Retirement
Income Security Act of 1974, as amended (ERISA). Specifically, you ask
whether the Labor Management Construction Safety Alliance, Inc. (LMCSA) is
an “employee welfare benefit plan” within the meaning of section 3(1)
of Title I of ERISA.
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You state that LMCSA was established in 1998 as a non-stock, non-profit
corporation under the laws of the Commonwealth of Massachusetts. LMCSA’s
Articles of Organization state that it is intended to be a labor-management
cooperative organization under section 302(c)(9) of the Labor Management
Relations Act (LMRA) and under section 6 of the Labor Management Cooperation
Act of 1978. Membership in LMCSA is open to state and local building trades
councils and their affiliated local unions (Unions), employers engaged in
work that is within the jurisdiction of a local union affiliated with such
councils and signatory to a collective bargaining agreement with such local
union (Employers), trade associations representing such employers
(Associations), and such other organizations or individuals having a mutual
interest in advancing LMCSA’s purposes including, but not limited to,
construction users, industry coalitions, industry promotion funds, joint
labor management trust funds, federal, state or local government agencies,
insurance companies and other providers of support services to the area
construction industry, and research institutions.
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The activities and affairs of LMCSA are managed by a board of directors
(Board) who are empowered to appoint, hire or contract with an executive
director to perform such administrative and managerial duties and
responsibilities, with respect to LMCSA, as the Board may consider necessary
or appropriate. According to Article IV of LMCSA’s By-Laws, the Board
shall be comprised of no less than sixteen directors, and shall have equal
numbers of Union directors and Employer/Association directors. LMCSA is
supported by grants from government and private foundations, including the
Federal Mediation and Conciliation Service, membership dues, revenues
generated from seminars and programs sponsored by LMCSA, and donations from
industry promotion funds and other labor-management funds.
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LMCSA’s purposes are stated in section 2.02(c) of its
Articles of Organization. Those purposes are to:
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Improve communications between
representatives of labor and management and to provide a forum for
discussion of occupational safety and health matters of mutual
concern;
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Promote the health and safety of
individuals employed in the construction industry and their families,
as well as the health and safety of the public affected by the area
construction industry;
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Conduct research, perform studies,
collect information, develop procedures and otherwise act to minimize
hazards in the construction industry and to improve the
competitiveness of employers in the area construction industry;
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Promote the establishment and
maintenance of quality safety and health education programs for
individuals employed or to be employed in the area construction
industry;
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Establish and maintain mechanisms
for monitoring and enforcing compliance with federal, state and local
laws, rules, regulations and standards governing safety and health in
the area construction industry;
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Communicate with the public about
safety and health issues of concern to the area construction industry;
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Establish standards for safety and
health practices within the area construction industry;
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Study and otherwise facilitate
resolution of safety and health problems and matters affecting the
area construction industry;
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Cooperate with other organizations,
trusts, programs and groups to advance mutual interests relating to
the area construction industry;
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Cooperate with and support,
financially and otherwise, other labor-management cooperative
committees for one or more of the purposes listed in LMCSA’s
Articles of Organization;
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Encourage free collective bargaining
between the affiliates of the Massachusetts Building Trades Council
(Council) and employers engaged in work coming within the jurisdiction
of local unions affiliated with the Council;
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Solicit and otherwise raise funds to
finance LMCSA’s activities from any and all lawful sources,
including employers, unions and their members, employee benefit plans,
labor-management cooperation organizations, private foundations, and
federal, state and local governments; and
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Otherwise implement the purposes and
provisions of the Labor-Management Cooperation Act of 1978.
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LMCSA’s activities include conducting safety and
health education outreach programs. Individuals who have received training
at the National Resource Center for OSHA Training lead these programs for
union workers and management personnel in the construction industry. The
programs range from ten to thirty hours in length. You represent that
LMCSA’s health and safety educational programs do not include job
training or apprenticeship benefits, but rather are limited to providing
workers with information about how to avoid jobsite dangers and workplace
accidents. The education outreach programs focus on safety and health
awareness topics required and recommended by OSHA. The programs include,
for example, sessions on “Introduction to OSHA,” “Tool Safety,”
“Electrical Safety,” “Scaffold Safety,” “Hazard Communication,”
“Materials Handling,” and “Fall Protection.”
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You also represent that the provision in section 2.02(c) of LMCSA’s
Articles of Organization, on soliciting and raising funds to finance LMCSA’s
activities, will be amended to eliminate the reference to “employee
benefit plans.” In addition, you represent that LMCSA will not accept any
funds from employee benefit plans covered by Title I of ERISA.
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You further represent that, although LMCSA’s Articles of Organization and
By-Laws provide the Board with broad operational authority, for example, “to
take any and all actions as in its judgement are necessary or convenient to
effectuate the purposes of [LMCSA],” LMCSA was not established for the
purpose of providing any benefit described in section 3(1) of ERISA, and
there is no provision in the Articles of Organization or By-Laws that LMCSA
intends to use as a basis for providing any benefits described in section
3(1) of ERISA. You also advised that LMCSA is not requesting an advisory
opinion on whether the provision of employee benefits, such as through a
group health plan, to LMCSA’s own employees is an employee benefit plan
within the meaning of section 3(3) of ERISA.
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Section 3(1) of Title I of ERISA defines the term
"employee welfare benefit plan" to include:
[A]ny plan, fund, or program which was heretofore or
is hereafter established or maintained by an employer or by an employee
organization, or by both, to the extent that such plan, fund, or program
was established or is maintained for the purpose of providing for its
participants or their beneficiaries, through the purchase of insurance
or otherwise, (A) medical, surgical, or hospital care or benefits, or
benefits in the event of sickness, accident, disability, death or
unemployment, or vacation benefits, apprenticeship or other training
programs, or day care centers, scholarship funds, or prepaid legal
services, or (B) any benefit described in section 302(c) of the Labor
Management Relations Act, 1947 (other than pensions on retirement or
death, and insurance to provide such pensions).
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Based on the information and representations provided,
it does not appear that LMCSA provides any benefit included in section
3(1)(A). We note, in particular, that the safety awareness seminars LMCSA
sponsors do not appear to provide training specific to a particular job or
skill. Because, and to the extent that, the LMCSA safety programs are
limited to communicating safety awareness information about how to avoid
jobsite dangers and workplace accidents, and are not related to specific
job skills, it is the position of the Department that LMCSA will not
provide apprenticeship and training benefits or any other “benefit” to
participants or their beneficiaries within the meaning of section 3(1)(A).
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Further, it does not appear that LMCSA provides any
benefit included in section 3(1)(B). It is the Department's position that
section 3(1)(B) of ERISA does not incorporate as a covered benefit every
arrangement described in section 302(c) of LMRA. The Department clarified
the definition of an “employee welfare benefit plan,” in 29 C.F.R. §
2510.3-1(a)(3), with regard to benefits described in section 302(c)
of LMRA, by stating:
Section 302(c) of the LMRA lists exceptions to the
restrictions contained in subsections (a) and (b) of that section on
payments and loans made by an employer to individuals and groups
representing employees of the employer. Of these exceptions, only those
contained in paragraphs (5), (6), (7) and (8) describe benefits provided
through employee benefit plans. Moreover, only paragraph (6) describes
benefits not described in section 3(1)(A) of the Act. The benefits
described in section 302(c)(6) of the LMRA but not in section 3(1)(A) of
the Act are “ . . . holiday, severance or similar benefits.” Thus,
the effect of section 3(1)(B) of the Act is to include within the
definition of “welfare plan” those plans which provide holiday and
severance benefits, and benefits which are similar (for example,
benefits which are in substance severance benefits, although not so
characterized).
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Although this regulation was adopted prior to the amendment of section
302(c) of LMRA that added subsection 302(c)(9), the principle it articulates
remains fully applicable. Only those arrangements described in section
302(c) of LMRA that provide benefits to participants or their beneficiaries
would constitute employee welfare benefit plans.
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Accordingly, on the basis of the information submitted
and assuming adoption of the aforementioned amendments to the LMCSA’s
Articles of Organization, it is the position of the Department that LMCSA
would not be an employee benefit plan covered under Title I of ERISA.(1)
The absence of any explicit limitation in the Articles of Organization and
By-Laws that would prevent LMCSA from providing welfare or pension
benefits to participants or beneficiaries precludes us from assuring you
that LMCSA will not be an employee benefit plan if, as is apparently
permitted under the above noted grant of broad authority in the articles
and by-laws, it is operated so as to provide a benefit within the meaning
of Title I of ERISA.
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This letter constitutes an advisory opinion under ERISA
Procedure 76-1. Accordingly, it is issued subject to the provisions of
that procedure, including section 10 thereof relating to the effect of
advisory opinions.
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Sincerely,
John J. Canary
Chief, Division of Coverage, Reporting and Disclosure
Office of Regulations and Interpretations
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There is no indication in the
submission that LMCSA is an employee pension benefit plan within the
meaning of section 3(2) of Title I of ERISA.
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