Super. Ct. No. CPF-10-510485) Trial Court: San Francisco City and County Superior Court Trial Judge: Hon. Ernest H. Goldsmith
The opinion of the court was delivered by: Margulies, J.
CERTIFIED FOR PUBLICATION
(San Francisco City & County
Appellants Southern California Cement Masons Joint Apprenticeship Committee and San Diego County Cement Masons Joint Apprenticeship Committee (hereafter the Existing Committees) operated the only state-approved apprenticeship training programs for cement masons in Southern California. In December 2008, real party in interest Southern California Laborers Cement Masons Joint Apprenticeship Committee (hereafter Laborers Committee) applied for approval of its own cement mason apprenticeship program. Once an apprenticeship program has been approved for a particular trade in a particular area, however, respondent California Apprenticeship Council (Council) can approve a new program only if the existing approved program has been found deficient or lacks the capacity or has neglected or refused to dispatch sufficient apprentices to public works contractors in the area.
The sponsors of the proposed new program submitted evidence that (1) public works contractors in Southern California employed cement mason apprentices at a lesser rate than required by the prevailing wage law, with many employing no apprentices at all; and (2) the existing approved programs were graduating journeypersons at a rate insufficient to meet the state's estimate of demand for new cement masons in the area. Although the operators of the existing approved programs demonstrated they dispatched apprentices to local contractors whenever requested, they had taken little or no action to address the underemployment of apprentices in their area. On this evidence, the Council granted the application for approval, finding the existing approved programs both lacked the capacity and neglected to dispatch sufficient apprentices to local public works contractors. The trial court denied a petition for writ of mandate filed by the operators of the existing approved programs challenging the Council's grant of the application for approval. We affirm.
California regulates programs for the training of apprentices in the construction trades under the Shelley-Maloney Apprenticeship Labor Standards Act of 1939 (Act). (Lab. Code,*fn1 § 3070 et seq.; see Southern Cal. Ch. of Associated Builders etc. Com. v. California Apprenticeship Council (1992) 4 Cal.4th 422, 428-429, 433 (Southern Cal.).) Oversight of apprenticeship programs is vested in the Division of Apprenticeship Standards (DAS), one of five divisions within the Department of Industrial Relations (Department). (Southern Cal., at p. 433; §§ 56, 3070, 3073.) The Council is a public body consisting largely of DAS officials and industry and trade union representatives appointed by the Governor. The Council's purpose is to "aid the Director of Industrial Relations in formulating policies for the effective administration" of the laws governing apprenticeship, including through the formulation of regulations establishing standards for apprentice working conditions and assuring equal opportunities in apprenticeship programs. (§§ 3070, 3071; Southern Cal., at p. 433.)
The Act encourages construction industry trade unions and employers to create programs to train and regulate the employment of apprentices.*fn2 (§§ 3075, subd. (a), 3076.) Such an apprenticeship program can apply for official approval by the DAS. (§ 3075, subd. (a).) Although DAS approval is not required for the operation of a program, "strong financial incentives" and other advantages are available to approved programs. (See Southern Cal., supra, 4 Cal.4th at pp. 428-429.) Most importantly, only apprentices from approved programs are eligible to take advantage of the opportunities for employment provided by California's prevailing wage law. Section 1777.5, the prevailing wage law provision relating to apprentice employment, requires contractors on public works to employ apprentices at a fixed ratio to journeypersons. (Id., subds. (g), (i).) Such apprentices must be paid a specially set prevailing wage applicable only to apprentices (id., subd. (b)), and only apprentices from approved programs are eligible to receive this special wage (id., subd. (c)). As a result, only apprentices from approved programs can satisfy a contractor's statutory duty to employ apprentices on public works. (See Associated General Contractors of America v. San Diego Unified School Dist. (2011) 195 Cal.App.4th 748, 761.) In addition, financial subsidies for training are provided to approved programs, and an apprentice who completes an approved program obtains a certificate of completion naming him or her a skilled journeyperson in the chosen trade, increasing his or her marketability. (Southern Cal, supra, 4 Cal.4th at pp. 428-429; § 1777.5, subd. (m); Cal. Code Regs., tit. 8, § 224.)
Once an apprenticeship program has been approved for a particular trade in a particular area, section 3075 gives the approved program significant protection from competition by other apprenticeship programs. (See Southern Cal., supra, 4 Cal.4th at p. 452 ["the only apparent purpose of [a regulation implementing an earlier version of § 3075] is to restrict competition among apprenticeship programs"].) By statute, a new apprenticeship program can be granted approval only if "training needs justify the establishment" of the new program. (§ 3075, subd. (a).) In determining whether "training needs justify" the approval of an apprenticeship program, the DAS is guided by specific statutory criteria. (§ 3075, subds. (b)(1)-(3).) As would be expected, approval is justified if there is no approved program in the geographic area to serve the particular trade. (§ 3075, subd. (b)(1).) When an approved apprenticeship program already exists to serve the trade in the area, however, a new program can be approved only if the existing approved program has been identified as deficient by regulators or the existing program "do[es] not have the capacity, or neglect[s] or refuse[s], to dispatch sufficient apprentices to qualified employers at a public works site who are willing to abide by the applicable apprenticeship standards." (§ 3075, subds. (b)(2), (3).)
As noted above, the prevailing wage law promotes employment of apprentices by requiring contractors performing contracts awarded by public agencies to employ apprentices at a ratio of no less than one hour of apprentice work for every five hours worked by journeypersons. (§ 1777.5, subds. (d), (g); Cal. Code Regs., tit. 8, § 230.1, subd. (a).) Before beginning a public work, contractors are required to provide the local approved apprenticeship programs "an estimate of journeyman hours to be performed under the contract, the number of apprentices proposed to be employed, and the approximate dates the apprentices would be employed." (§ 1777.5, subd. (e).) If, after beginning work, a contractor is not employing sufficient apprentices to meet the required ratio, the contractor must request the dispatch of apprentices in writing from the local approved programs. (Cal. Code Regs., tit. 8, § 230.1, subd. (a).) Further, within 60 days after completing the work, "each contractor and subcontractor shall submit to the . . . apprenticeship program a verified statement of the journeyman and apprentice hours performed on the contract." (§ 1777.5, subd. (e).) "[A]ny person" may file a complaint of noncompliance with the provisions of section 1777.5 governing apprentice employment (Cal. Code Regs., tit. 8, § 231, subd. (a)), and employers found in knowing violation of section 1777.5 may be fined and temporarily barred from bidding on public works (§ 1777.7, subds. (a), (b)).
B. The Administrative Proceedings
In December 2008, the Laborers Committee, an organization sponsored by the Southern California District Council of Laborers and three construction industry employers, sought the approval of a new apprenticeship program in the cement mason trade for 12 Southern California counties, stretching from the Mexican border to Santa Barbara. As required by the Department's regulations, the Laborers Committee submitted its application for approval to the acting chief of DAS (Chief), including written program "standards," the guidelines under which the new program proposed to operate, and evidence of the committee's ability to operate the program successfully. (Cal. Code Regs., tit. 8, § 212.2, subd. (a).)
The Existing Committees, the operators of the two existing approved cement mason apprenticeship programs in the relevant geographic area (hereafter the approved programs), submitted comments in opposition to approval of the new program. (Cal. Code Regs., tit. 8, § 212.2, subd. (g); see Independent Roofing Contractors v. California Apprenticeship Council (2003) 114 Cal.App.4th 1330, 1336-1337.) The Existing Committees argued the Laborers Committee failed to demonstrate that "training needs" existed in the area to justify approval of a new program and lacked the experience and qualifications to operate an apprenticeship program in the cement masons trade.
The Laborers Committee submitted a written response to the comments, accompanied by documentary evidence. The response argued training needs justified the approval of a new program under section 3075, subdivision (b)(2) because the approved programs lacked the capacity to satisfy existing and future demand for cement masons. Based on data from the Employment Development Department (EDD), the Laborers Committee estimated there had been 142 and 188 cement mason openings on public works in Southern California in the years 2007 and 2008. In the respective years immediately prior, the approved programs had graduated 39 and 37 apprentices to fill these openings. The deficiency was even greater if private work openings were included.
The Chief approved the Laborers Committee's proposed program without any further formal action. In a decision dated September 29, 2009, the Chief found training needs existed because the approved programs lacked the capacity to supply the anticipated need for apprentices in the area over the next several years. In making this finding, the Chief rejected the Existing Committees' argument that "need" under section 3075, subdivision (b)(2) must be measured solely by capacity to supply apprentices for public projects and that the approved programs could expand to meet demand. The Chief concluded the approved programs' failure to graduate sufficient journeypersons to serve overall industry needs demonstrated they intended to ...