Advisory Opinion |
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April 25, 2003 |
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Donald J. Siegel, Esq. |
2003-06A |
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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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:
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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:
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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, |
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