Idaho Building & Construction Trades Council, AFL-CIO v. Inland Pacific Chapter of Associated Builders & Contractors, Inc.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

IDAHO BUILDING AND No. 11-35985

CONSTRUCTION TRADES COUNCIL,

AFL-CIO; SOUTHWEST IDAHO D.C. No.

BUILDINGS AND CONSTRUCTION 1:11-cv-00253-

TRADES COUNCIL, AFL-CIO, BLW

Plaintiffs-Appellees,

v.

INLAND PACIFIC CHAPTER OF

ASSOCIATED BUILDERS AND

CONTRACTORS, INC.,

Applicant-in-Intervention–

Appellant,

v.

LAWRENCE G. WASDEN, in his

official capacity as Attorney General

of the State of Idaho; TIM MASON, in

his official capacity as Administrator

of the Division of Public Works,

Defendants-Appellees.

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IDAHO BUILDING AND No. 12-35051

CONSTRUCTION TRADES COUNCIL,

AFL-CIO; SOUTHWEST IDAHO D.C. No.

BUILDINGS AND CONSTRUCTION 1:11-cv-00253-

TRADES COUNCIL, AFL-CIO, BLW

Plaintiffs-Appellees,

v. OPINION

LAWRENCE G. WASDEN, in his

official capacity as Attorney General

of the State of Idaho; TIM MASON, in

his official capacity as Administrator

of the Division of Public Works,

Defendants-Appellants.

Appeal from the United States District Court

for the District of Idaho

B. Lynn Winmill, Chief District Judge, Presiding

Argued May 6, 2013

Submitted September 16, 2015

Portland, Oregon

Filed September 16, 2015

Before: Stephen Reinhardt, Marsha S. Berzon,

and Andrew D. Hurwitz, Circuit Judges.

Opinion by Judge Berzon;

Concurrence by Judge Berzon

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SUMMARY*

Labor Law

Affirming in part and vacating in part the district court’s

summary judgment, the panel held that Idaho’s “Fairness in

Contracting Act” was preempted by the National Labor

Relations Act.

The Idaho Act banned “job targeting” or “market

recovery” programs under which construction unions collect

funds from workers they represent and use those funds to

subsidize bids by union contractors. Deferring to the

interpretation of the National Labor Relations Board, the

panel concluded that it was well settled that most of the

conduct prohibited by the Act was protected by the NLRA,

and thus that Garmon preemption applied. The panel held

that the Act’s prohibition against the use of job targeting

funds derived in part from wages earned on federal projects

governed by the Davis-Bacon Act was likely preempted by

Davis-Bacon itself. In addition, decisions of the NLRB made

clear that the distribution of funds derived in part from Davis-

Bacon wages was at least arguably protected by the NLRA,

and so preempted under Garmon.

Concurring, Judge Berzon wrote that, as explained in the

main opinion, the Idaho Act was not saved from NLRA

preemption by the line of precedent holding that collection of

*

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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Davis-Bacon wages for job targeting programs violates the

Davis-Bacon Act. Judge Berzon wrote that those cases, and

in particular Int’l Bhd. of Elec. Workers, Local 357, AFL-CIO

v. Brock, 68 F.3d 1194 (9th Cir. 1995), were, in her view,

wrongly decided.

COUNSEL

Judd H. Lees (argued), Williams, Kastner & Gibbs PLLC,

Seattle, Washington, for Applicant-in-Intervention–

Appellant.

James M. Piotrowski (argued), Alan Herzfled, and Marty

Durand, Herzfeld & Piotrowski LLP, Boise, Idaho; Terry R.

Yelling, Victoria L. Bor, and Esmerelda Aguilar, Sherman,

Dunn, Cohen, Leifer & Yellig, P.C., Washington, D.C., for

Plaintiffs-Appellees.

Clay R. Smith, Deputy Attorney General (argued), Steven L.

Olsen, Chief of Civil Litigation, Brian P. Kane, Assistant

Chief Deputy Attorney General, and Lawrence G. Wasden,

Attorney General, Boise, Idaho, for Defendants-

Appellants/Defendants-Appellees.

Judd H. Lees (argued), Williams, Kastner & Gibbs PLLC,

Seattle, Washington; Maurice Baskin, Venable LLP,

Washington, D.C., for Amici Curiae Associated Builders and

Contractors, Inc. and Inland Pacific Chapter of the Associated

Builders and Contractors, Inc.

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William L. Messenger, National Right to Work Legal

Defense Foundation, Springfield, Virginia, for Amicus Curiae

National Right to Work Legal Defense Foundation.

OPINION

BERZON, Circuit Judge:

Idaho has banned “job targeting” or “market recovery”

programs. Construction unions have developed such

programs to increase their members’ access to work and stem

the long-term decline in the percentage of construction

workers represented by unions. Under such programs, a

union collects funds from workers it represents and then uses

those funds to subsidize bids by union contractors, allowing

the contractors to lower their labor costs and so more

effectively compete with non-union contractors. The

plaintiffs, two Idaho unions, brought suit to enjoin the statute

as preempted by the National Labor Relations Act (“NLRA”),

29 U.S.C. § 151 et seq. The district court preliminarily

enjoined Idaho’s statute and then granted summary judgment

to the unions.

It is well settled that most of the conduct prohibited by

Idaho’s statute is protected by the NLRA. As to the balance

of the prohibited conduct — namely, the use of job targeting

funds derived in part from wages earned on federal projects

governed by the Davis-Bacon Act, 40 U.S.C. § 3141 et seq.

— Idaho’s proposed enforcement of federal rules governing

wages on federal projects, including criminal penalties more

onerous than the federal statute’s own civil and

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administrative enforcement provisions, is likely preempted by

Davis-Bacon itself. In any event, the decisions of the

National Labor Relations Board (the “NLRB” or “Board”)

make clear that the distribution of funds derived in part from

Davis-Bacon wages is at least arguably protected by the

NLRA, and so preempted under one strain of NLRA

preemption law. We therefore affirm in relevant part.

I.

The Idaho “Fairness in Contracting Act” (“the Act”)

provides in relevant part that:

(2) No contractor or subcontractor may

directly or indirectly receive a wage subsidy,

bid supplement or rebate on behalf of its

employees, or provide the same to its

employees, the source of which is wages, dues

or assessments collected by or on behalf of

any labor organization(s), whether or not

labeled as dues or assessments.

(3) No labor organization may directly or

indirectly pay a wage subsidy or wage rebate

to its members in order to directly or

indirectly subsidize a contractor or

subcontractor, the source of which is wages,

dues or assessments collected by or on behalf

of its members, whether or not labeled as dues

or assessments.

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(4) It is illegal to use any fund financed by

wages collected by or on behalf of any labor

organization(s), whether or not labeled as

dues or assessments, to subsidize a contractor

or subcontractor doing business in the state of

Idaho.

Idaho Code § 44-2012(2)–(4). A violation of the Act is a

misdemeanor punishable by a fine of up to $10,000 for a first

violation, $25,000 for a second violation, and $100,000 for

each additional violation. Id. § 44-2012(5). The Act also

establishes a private cause of action available to a range of

parties, including any interested taxpayer, to civilly enforce

the Act. Id. § 44-2012(6).

The Act prohibits “job targeting” programs, also known

as “market recovery” programs. Unions have developed such

programs in the face of the dwindling share of the

construction market held by union contractors and the

associated decline in union membership in the construction

industry. The programs’ goal is to increase their members’

access to employment and spread the benefits of collectively-

bargained wages. See generally, Herbert R. Northrup &

Augustus T. White, Subsidizing Contractors to Gain

Employment: Construction Union “Job Targeting”,

17 Berkeley J. Emp. & Lab. L. 62 (1996).

The essentials of such job targeting programs are

straightforward. A union collects funds from workers,

generally a percentage of their wages, and then uses that

money to subsidize a union contractor’s payment of wages at

the collectively bargained rate on a project which the union

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has “targeted.” So, for example, a union might agree that a

union-affiliated contractor may submit a bid based on a

$15/hour pay rate to compete successfully against non-union

contractors on that particular project. If the contractor’s bid

is accepted, then the union will pay the difference between

the agreed-on rate and the normal union wage; in this

example, if the normal wage is $20/hour, the union would pay

$5/hour out of its job targeting fund. The result is that the

union-affiliated contractor is able to bid successfully on a

project that would otherwise go to a non-union contractor;

union members accordingly have access to the jobs on that

project, which would otherwise go to employees of non-union

companies; and the members working on those jobs are paid

the ordinary union rate, rather than the lower wage on which

the contractor based his bid.

The mechanics of job targeting programs vary, both in

how the funds are collected and how they are distributed.

Funds are typically collected by the contractor through a

mandatory or voluntary deduction from workers’ wages and

then deposited into a special job targeting fund controlled by

the union. See J.A. Croson Co., 359 N.L.R.B. No. 2,

2012 WL 5246914 (2012); Int’l Bhd. of Elec. Workers, Local

48, 332 N.L.R.B. 1492 (2000), modified 333 N.L.R.B. No.

122, enforced, 345 F.3d 1049 (9th Cir. 2003) (“Kingston

Constructors”). In some cases, however, workers pay the

funds directly to the union. See Int’l Bhd. of Elec. Workers,

Local 357 v. Brock, 68 F.3d 1194, 1201–02 (9th Cir. 1995).

As to distribution, the subsidy may be paid to the contractor,

with the contractor paying the worker the full union wage; or

the subsidy may be paid directly to the worker, with the

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contractor paying less than the ordinary union wage, and the

union’s payment making up the balance.1

II.

Before the Act went into effect, The Idaho Building and

Construction Trades Council, AFL-CIO, and Southwest Idaho

Building and Construction Trades Council, AFL-CIO

(collectively, the “Trades Councils”), brought this facial

challenge against the Attorney General of Idaho to enjoin its

enforcement.2 The district court granted a preliminary

injunction against the enforcement of the Act. The parties

then filed cross-motions for summary judgment.

The Inland Pacific Chapter of the Associated Builders and

Contractors, Inc. (“ABC”), which supported the Act’s

1

The latter practice was initially popular, but “made the union

responsible for fringe benefits, workers’ compensation, and other

supplements associated with wages and benefits, plus ‘an enormous

amount of paperwork for the union, as it had to keep track of each hour

worked by each member on a targeted job and then issue checks to each

as the work proceeded.’” White, supra at 71 (quoting Jack Metzgar,

“Buying the Job” Target Programs and the Elgin Plan, 1 Lab. Res. Rev.

51, 53 (1988)). “Now on targeted jobs, the common approach is for the

union to make a grant directly to the contractor who wins the job.” Id.

2

The Trades Councils also sought to enjoin another statute, the “Open

Access to Work Act,” Idaho Code § 44-2013. In the memorandum

disposition filed concurrently with this opinion, we hold that the unions

did not establish standing to challenge § 44-2013, vacate the district

court’s grant of summary judgment as to § 44-2013, and remand with

instructions to dismiss the portion of the Trades Councils’ complaint

challenging § 44-2013.

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passage in the legislature, sought to intervene as a defendant

in the summary judgment proceedings. The court denied the

motion to intervene but permitted ABC to appear as an

amicus curiae.

The district court granted summary judgment to the

Trades Councils and denied it to the Attorney General,

concluding that the Act was preempted by the NLRA. The

Attorney General timely appealed.3 After a limited remand

and supplemental briefing on jurisdictional issues not

pertinent to this portion of the appeal, the case was

resubmitted for disposition on the merits as to the Act.

III.

“Although the NLRA itself contains no express

pre-emption provision,” the Supreme Court has held that

“Congress implicitly mandated two types of pre-emption as

necessary to implement federal labor policy.” Chamber of

Commerce of U.S. v. Brown, 554 U.S. 60, 65 (2008). With

regard to the Act, the Trades Councils urge only one of those

two preemption strands: the theory articulated in San Diego

Building Trades Council, Millmen’s Union, Local 2020 v.

Garmon, 359 U.S. 236 (1959).4

3

ABC also timely appealed the court’s denial of its motion to intervene,

and the two appeals were consolidated. In the memorandum disposition

filed concurrently with this opinion, we affirm the district court’s decision

on the intervention issue.

4

The other major NLRA preemption theory is “known as Machinists

pre-emption” and “forbids both the . . . NLRB and States to regulate

conduct that Congress intended ‘be unregulated because left to be

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“Garmon pre-emption ‘is intended to preclude state

interference with the National Labor Relations Board’s

interpretation and active enforcement of the integrated

scheme of regulation established by the NLRA.’” Brown,

554 U.S. at 65 (quoting Golden State Transit Corp. v. City of

Los Angeles, 475 U.S. 608, 613 (1986)) (some internal

quotation marks omitted). “To this end, Garmon pre-emption

forbids States to ‘regulate activity that the NLRA protects,

prohibits, or arguably protects or prohibits.’” Id. (quoting

Wisc. Dep’t of Indus. v. Gould Inc., 475 U.S. 282, 286

(1986)).

To eliminate the “danger of conflict” and the “potential

frustration of national purposes,” Garmon provides that,

“[w]hen it is clear or may fairly be assumed that the activities

which a State purports to regulate are protected by § 7 of the

[NLRA], or constitute an unfair labor practice under § 8, due

regard for the federal enactment requires that state

jurisdiction must yield.” 359 U.S. at 244.5 The doctrine,

controlled by the free play of economic forces.’” Brown, 554 U.S. at 65

(quoting Lodge 76, Int’l Ass’n of Machinists v. Wisc. Emp’t Relations

Comm’n, 427 U.S. 132, 140 (1976)) (some internal quotation marks

omitted).

5

Section 7 of the NLRA provides, in relevant part, that “[e]mployees

shall have the right to self-organization, to form, join, or assist labor

organizations, to bargain collectively through representatives of their own

choosing, and to engage in other concerted activities for the purpose of

collective bargaining or other mutual aid or protection.” 29 U.S.C. § 157.

Section 8 defines as a prohibited “unfair labor practice,” inter alia, an

employer’s actions “to interfere with, restrain, or coerce employees in the

exercise of the rights guaranteed in section 157 of this title.” 29 U.S.C.

§ 158(a)(1).

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“based predominantly on the primary jurisdiction” of the

NLRB, was devised in light of “experience . . . that [various

alternative] methods sacrificed important federal interests in

a uniform law of labor relations centrally administered by an

expert agency without yielding anything in return by way of

predictability or ease of judicial application.” Lodge 76, Int’l

Ass’n of Machinists v. Wisc. Emp’t Relations Comm’n,

427 U.S. 132, 138–39 (1976) (quoting Amalgamated Ass’n of

Street, Elec. Ry. & Motor Coach Emps. v. Lockridge,

403 U.S. 274, 290–91 (1971)); see also Retail Prop. Tr. v.

United Bhd. of Carpenters & Joiners, 768 F.3d 938, 951 (9th

Cir. 2014).

With one notable exception addressed to the facial nature

of this challenge, the Attorney General does not contest that

the Act is Garmon preempted. With good reason. The

NLRB has repeatedly held that job targeting programs are

actually protected under § 7 of the NLRA. See J.A. Croson

Co., 2012 WL 5246914 at *5; Kingston Constructors,

332 N.L.R.B. at 1496–97; Assoc’d Builders & Contractors,

Inc., 331 N.L.R.B. 132, 137 (2000), modified as to remedy,

333 N.L.R.B. 955 (2001); Manno Elec., Inc., 321 N.L.R.B.

278, 298 (1996). Most recently, the Board reaffirmed its

earlier cases by explaining that “the objectives of job

targeting programs fall squarely within the ambit of Section

7 of the Act,” which “protects concerted employee activities

engaged in ‘for the purpose of collective bargaining or other

mutual aid or protection.’” J.A. Croson Co., 2012 WL

5246914 at *6 (quoting Eastex, Inc. v. NLRB, 437 U.S. 556,

565–66 (1978)).

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We “defer to the NLRB’s interpretation of the NLRA”

where, as here, “its interpretation is rational and consistent

with the statute.” SEIU, United Healthcare Workers-W. v.

NLRB, 574 F.3d 1213, 1214 (9th Cir. 2009) (internal

quotation marks omitted) (quoting UFCW, Local 1036 v.

NLRB, 307 F.3d 760, 766 (9th Cir. 2002)). The Board’s

interpretation of the NLRA on this score is eminently rational

and consistent with the statute. “It is settled that [§ 7’s]

protections encompass employee attempts ‘to improve terms

and conditions of employment’ with their employer as well

as attempts to otherwise ‘improve their lot . . . through

channels outside the immediate employee-employer

relationship.’” J.A. Croson Co., 2012 WL 5246914 at *6

(quoting Eastex, Inc., 437 U.S. at 565–66). As the Board has

explained:

The job targeting program is effectively a

union’s agreement with an employer to accept

a pay cut in order to avoid layoffs or expand

job opportunities for represented employees

— a bargain that surely lies at the heart of

activity protected by Section 7 of the Act. But

in the construction industry, an employer

often cannot guarantee that it can comply with

its end of such a bargain because it must

ordinarily bid for work through a competitive

process. A union might agree to a pay cut on

some jobs in order to secure its members

employment on others only to have the

employer fail to obtain the work. The job

targeting program solves that unique problem

by allowing the union to hold the wages

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donated by employees specifically for this

purpose until the employer secures the

additional work. The strategy of job targeting

to preserve and expand employment

opportunities for represented employees thus

plainly seeks to further legitimate goals under

Section 7.

Id. We agree with the Board that, as a general matter, job

targeting programs are a form of collective action aimed at

increasing opportunities for union members and so fall within

the scope of § 7.

While the Attorney General declines to offer a wholesale

defense of the Act, amici contend that the Act, in all its

applications, escapes preemption notwithstanding the

protections accorded by § 7 of the NLRA. We address, and

reject, these broad arguments before turning to the Attorney

General’s more limited contention.

ABC argues that the Act is saved from preemption by

§14(b) of the NLRA, 29 U.S.C. § 164(b). Section 14(b)

provides that,“Nothing in this subchapter shall be construed

as authorizing the execution or application of agreements

requiring membership in a labor organization as a condition

of employment in any State or Territory in which such

execution or application is prohibited by State or Territorial

law.” Id. Section 14(b) thus allows states to enact bans on

certain agreements between unions and employers — ones

requiring membership in labor organizations as a condition of

employment. See Oil, Chem. & Atomic Workers Int’l Union

v. Mobil Oil Corp., 426 U.S. 407, 409 & nn.1 & 2, 416–17

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(1976). Idaho has enacted such a law. Idaho Code § 44-

2003(2).

Idaho codified the Fairness in Contracting Act under the

heading “Right to Work,” see Idaho Code §§ 44-2001 et seq.,

alongside § 44-2003(2), a provision that bans precisely the

types of agreements covered by §14(b). Consequently, ABC

contends, the Act is blessed by § 14(b) and freed from

preemption.

ABC overreads the scope of § 14(b), which “does not

protect a state statute which is so broadly stated or

construed.” NLRB v. Tom Joyce Floors, Inc., 353 F.2d 768,

770 (9th Cir. 1965). Section 14(b) refers only to certain

labor-management agreements — those requiring

membership in a labor organization. As the Supreme Court

has made clear, § 14(b) does not allow states to ban

agreements other than those described in the statute: “There

is nothing in either § 14(b)’s language or legislative history

to suggest that there may be applications of right-to-work

laws which are not encompassed under § 14(b) but which are

nonetheless permissible.” Oil, Chem. & Atomic Workers,

426 U.S. at 413 n.7. Because no agreement of the sort

specifically covered by § 14(b) is at issue in this case, and

because Ҥ 14(b) should not be read as granting states . . .

general power to supplant federal labor law,” NLRB v. Pueblo

of San Juan, 276 F.3d 1186, 1200 (10th Cir. 2002), we

conclude that § 14(b) has no bearing on this case.

We likewise reject the argument of a second amicus, the

National Right to Work Legal Defense Foundation (“RTW”),

that the Act escapes preemption because it is simply a

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regulation of the “monies and substantive benefits that may

be exchanged between employers and employees.”

For one thing, RTW’s argument is not responsive to the

kind of preemption at issue in this case, namely Garmon

preemption. Under a Machinists analysis, see supra note 4,

the NLRA does not ordinarily preempt state laws of general

applicability governing the “particular substantive terms” that

might be the subject of collective bargaining. Metro. Life Ins.

Co. v. Massachusetts, 471 U.S. 724, 753 (1985). Thus, for

example, the Court has upheld state statutes of general

applicability establishing minimum labor standards. See id.

at 755; Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 19–23

& n.15 (1987); see also Assoc. Builders & Contractors of S.

Cal., Inc. v. Nunn, 356 F.3d 979, 989 (9th Cir.) (noting that

“state minimum benefit protections have repeatedly survived

Machinists preemption challenges”) (quoting Nat’l Broad.

Co. v. Bradshaw, 70 F.3d 69, 71 (9th Cir. 1995) (internal

quotation marks omitted))), amended by, 2004 WL 292128

(9th Cir. 2004). Garmon preemption is an entirely distinct

doctrine, however, focused mainly on protecting the NLRB’s

primary jurisdiction. If in particular circumstances the

application of such general labor standards would be actually

or arguably protected or prohibited, the Metropolitan Life line

of cases does not preclude Garmon preemption.

Moreover, the Act is completely unlike the even-handed

requirements permitted in the cases upon which RTW relies.

It does not establish a rule regarding substantive protections

for employees generally, union and nonunion. Instead, it

facially singles out unions, seeking to ban a particular

strategy they employ “to avoid layoffs or expand job

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opportunities for represented employees.” J.A. Croson Co.,

2012 WL 5246914 at *6. That the unions’ strategy for

effectuating their “legitimate goals under Section 7” of the

NLRA, id., happens to involve, in some instances, providing

higher wages and benefits to employees than would otherwise

be the case, is of no import. Because “the objectives of job

targeting programs fall squarely within the ambit of Section

7,” id., the Act cannot escape preemption as a purportedly

even-handed wage regulation.

IV.

We arrive at the crux of this case. The Attorney General

contends that this facial challenge must fail, even though the

Act is largely preempted, because it is not entirely so. There

are some legitimate applications of the Act, he contends,

because the NLRA does not actually or arguably protect job

targeting programs funded through wages paid on jobs

subject to the requirements of the Davis-Bacon Act,

40 U.S.C. § 3141 et seq.6 Because, he argues, the Trades

Councils cannot establish “that no set of circumstances exists

under which the Act would be valid,” United States v.

Salerno, 481 U.S. 739, 745 (1987), the Act is facially valid.

The parties agree that we should apply the Salerno

standard.7 Applying it, without deciding whether it is the

6

Davis-Bacon was previously codified at 40 U.S.C. § 276a et seq.

7

See Sprint Telephony PCS, L.P. v. Cnty. of San Diego, 543 F.3d 571,

579 & n.3 (9th Cir. 2008) (en banc); but see United States v. Arizona,

641 F.3d 339, 345 n.3 (9th Cir. 2011), aff’d in part, rev’d in part, 132 S.

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proper standard, we conclude that the Act is facially invalid

because it is preempted by the NLRA.

A.

The Davis-Bacon Act requires that the bid specifications

for certain federal public-works projects provide that workers

be paid at least the “prevailing wage,” as determined by the

Secretary of Labor, for similar work in the relevant state.

40 U.S.C. § 3142(a)–(b). The Act further provides that:

the contractor or subcontractor shall pay all

mechanics and laborers employed directly on

the site of the work, unconditionally and at

least once a week, and without subsequent

deduction or rebate on any account, the full

amounts accrued at time of payment,

computed at wage rates not less than those

stated in the advertised specifications,

regardless of any contractual relationship

which may be alleged to exist between the

contractor or subcontractor and the laborers

and mechanics.

Id. § 3142(c)(1). “The Davis-Bacon Act was intended as a

general prohibition or command to a federal agency to require

minimum wage stipulations for federal government work

contracts.” Operating Eng’rs Health & Welfare Trust Fund

v. JWJ Contracting Co., 135 F.3d 671, 676 (9th Cir. 1998)

Ct. 2492 (2012); see also City of Los Angeles v. Patel, 135 S. Ct. 2443,

2451 (2015).

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(internal quotation marks omitted); see also Univs. Research

Ass’n, Inc. v. Coutu, 450 U.S. 754, 771–72 (1981). The

Department of Labor (“DOL”) regulations promulgated to

effectuate Davis-Bacon provide that some deductions from

the wages due the employees, such as those made for

purposes of income tax withholding or as contributions to a

retirement account, are permissible. 29 C.F.R. § 3.5.8

Deductions not specifically permitted are prohibited.

29 C.F.R. § 3.9.

Several cases have held that collecting funds for job

targeting programs from wages earned on Davis-Bacon jobs

violates the Davis-Bacon Act. See Brock, 68 F.3d at 1201; In

re Bldg. & Constr. Trades Unions Job Targeting Programs,

Case No. 90-02, 1991 WL 494718 (Wage App. Bd. June 13,

1991) (“Building Trades”), aff’d sub nom. Bldg. & Const.

Trades Dep’t v. Reich, 40 F.3d 1275, 1277 (D.C. Cir. 1994).9

The Attorney General leans on this line of authority,

arguing that it establishes that job targeting programs are

8

The regulations also allow certain deductions with the permission of

the Secretary of Labor. 29 C.F.R. § 3.6.

9

Building Trades was decided by the Wage Appeal Board, which DOL

replaced with the Administrative Review Board in 1996. Establishment

of the Administrative Review Board, 61 Fed. Reg. 19982-01, 19982 (May

3, 1996). Under current regulations, the Secretary of Labor has delegated

to the Administrative Review Board the authority “to hear and decide in

its discretion appeals concerning questions of law and fact” regarding,

among other things, “[w]age determinations issued under the Davis-Bacon

Act.” 29 C.F.R. § 7.1(b). We refer to both boards, and the department

itself, as “DOL.”

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generally illegal under Davis-Bacon and therefore are not

arguably protected under § 7 of the NLRA. We disagree for

two reasons. First, the only applications of the statute which

the Attorney General defends are those that amount, in

essence, to state enforcement, with criminal sanctions, of

Davis-Bacon; any such enforcement would most likely be

preempted by Davis-Bacon itself, and so cannot qualify as a

“set of circumstances . . . under which the Act would be

valid.” Salerno, 481 U.S. at 745. Second, in any event, the

NLRB’s precedents regarding job targeting programs and

Davis-Bacon establish that the conduct at issue is at least

arguably protected by the NLRA.

B.

Davis-Bacon governs wages on federal public works

contracts. The application of Idaho’s statute to situations in

which Davis-Bacon wages are involved, because the use of

Davis-Bacon wages for such programs is purportedly in

violation of the Davis-Bacon Act, would amount to the

enforcement of the federal Davis-Bacon Act by the State of

Idaho. Idaho can, however, point to no legitimate state

interest in enforcing the federal government’s wage rules with

regard to federal projects and contracts.

Rather, it is for the federal government (and, at least in

some situations, the affected workers) to decide if, when, and

how to enforce the provisions of Davis-Bacon. To that end,

the Davis-Bacon Act provides for civil and administrative

remedies against contractors that violate the its provisions.

So, for example, each contract governed by Davis-Bacon

must provide that, upon discovering a Davis-Bacon wage

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violation, “the Federal Government . . . may terminate the

contractor’s right to proceed with the work or the part of the

work as to which there has been a failure to pay the required

wages,” and the contractor and its sureties are liable for extra

costs the government thereby incurs. 40 U.S.C. § 3143.

Likewise, the Davis-Bacon Act establishes a list of persons

who have “disregarded their obligations to employees and

subcontractors,” and are therefore barred from receiving

federal contracts for three years. Id. § 3144(b). DOL’s

regulations also provide for administrative enforcement of the

Davis-Bacon Act. See, e.g., 29 C.F.R. §§ 5.6, 5.7, 5.9, 5.11,

5.12.

Federal law does not establish criminal penalties for

violations of Davis-Bacon. See United States v. Clark,

787 F.3d 451, 458 (7th Cir. 2015) (noting, in case involving

charges of making false statements, that “Davis-Bacon Act

violations are not themselves criminal”). The Copeland Act,

18 U.S.C. § 874, provides criminal penalties for conduct

related to Davis-Bacon — but only for “forcing employees to

‘kickback’ wages to their employer.” Brock, 68 F.3d at 1198

(emphasis added); see also Reich, 40 F.3d at 1279. Davis-

Bacon, by contrast, prohibits “a broader array of practices[,]

including but not limited to kickbacks.” Brock, 68 F.3d at

1199. There is no criminal penalty for violations of that

broader range of conduct proscribed by Davis-Bacon.

The Attorney General’s proposed application of the Act

would amount to state enforcement of a federal statute

governing the federal government’s proprietary affairs. In

other words, the Act “adds a state-law penalty for conduct

proscribed by federal law.” Arizona v. United States, 132 S.

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Ct. 2492, 2501 (2012). Further, the penalty Idaho seeks to

impose — a misdemeanor criminal conviction resulting in

fines of up to $100,000 per violation, Idaho Code § 44-

2012(5) — goes far beyond the civil and administrative

responses provided by federal law. Not only does the state of

Idaho propose to enforce a statute which it has no business

enforcing, but it seeks to do so with criminal penalties far

more severe than the non-criminal remedies of federal law.

In this respect, the Attorney General’s proposed

application of the Act is reminiscent of the state criminal

penalty for failure to register as a noncitizen held preempted

by the Supreme Court in Arizona. Here, as in Arizona, “[t]he

federal statutory directives provide a full set of standards . . . ,

including the punishment for noncompliance,” such that

“even complementary state regulation is impermissible.”

132 S. Ct. at 2502. “If [the Act] were valid, every State could

give itself independent authority to prosecute federal [Davis-

Bacon] violations, ‘diminish[ing] the [Federal Government]’s

control over enforcement’ and ‘detract[ing] from the

integrated scheme of regulation created by Congress.’” Id.

(some alterations in original) (quoting Gould, 475 U.S. at

288–89) (some internal quotation marks omitted) .

Indeed, “[w]ere [the Act] to come into force, the State

would have the power to bring criminal charges against

individuals for violating a federal law even in circumstances

where federal officials in charge of the comprehensive

scheme determine that [enforcement] would frustrate federal

policies.” Id. at 2503. DOL certainly has discretion to

determine which Davis-Bacon violations it pursues for

enforcement, and has specifically indicated that it “would not

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take exception” to certain job targeting programs. Brock,

68 F.3d at 1202 n.6 (quoting a letter from the Administrator

of DOL Wage and Hour Division) (internal quotation marks

omitted). The Act, however, would prohibit and penalize the

very programs as to which DOL has decided not to pursue

enforcement. Moreover, “[e]ven where federal authorities

believe [enforcement] is appropriate, there is an inconsistency

between [the Act] and federal law with respect to penalties,”

as the former provides for large criminal fines while the latter

does not. Arizona, 132 S. Ct. at 2503.

We need not decide any precise contours regarding the

scope of Davis-Bacon preemption. Suffice it to say that the

applications of the Act on which the Attorney General relies

would most likely be preempted by Davis-Bacon. We

therefore cannot agree that they amount to a “set of

circumstances . . . under which the Act would be valid.”

Salerno, 481 U.S. at 745.

C.

Moreover, even restricting our inquiry to the NLRA itself,

we conclude that the Act is wholly preempted. The question

presented by the Attorney General’s argument is whether “the

NLRA . . . arguably protects” the job targeting programs

banned by the Act if those programs are funded in part from

wages earned on Davis-Bacon jobs. Brown, 554 U.S. at 65

(internal quotation marks omitted). If such programs are

arguably protected, then Idaho “must defer to the exclusive

competence of the [NLRB] if the danger of state interference

with national policy is to be averted.” Garmon, 359 U.S. at

245. To prevail, “a party asserting pre-emption” under

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Garmon’s “arguably” standard need only “advance an

interpretation of the Act that is not plainly contrary to its

language and that has not been ‘authoritatively rejected’ by

the courts or the Board.” Int’l Longshoremen’s Ass’n v.

Davis, 476 U.S. 380, 395 (1986) (quoting Marine Eng’rs v.

Interlake S.S. Co., 370 U.S. 173, 184 (1962)).10

Because Garmon preemption turns on what the NLRA

actually or arguably requires (or prohibits), we do not look,

in the first instance, to authority interpreting Davis-Bacon,

such as that cited by the Attorney General. Instead, we look

principally to the decisions of the NLRB to decide whether

Garmon preemption applies.

Job training programs involve two components: funds are

collected, in a variety of ways, from workers’ wages, and

funds are then distributed, also in various ways, to subsidize

union wages on targeted projects. The NLRB has held that,

because “requiring the payment of [job targeting] dues as a

condition of employment on Davis-Bacon projects” violates

Davis-Bacon, such collection of funds “is inimical to public

policy.” Kingston Constructors, 332 N.L.R.B. at 1500.11

10

In cases, unlike this one, involving the potential application of the Act

to specific factual situations, the party asserting preemption “must then put

forth enough evidence to enable the court to find that the Board reasonably

could uphold a claim based on such an interpretation.” Davis, 476 U.S.

at 395.

11

The Supreme Court has observed that the NLRB must, at times,

accommodate federal statutes beyond the NLRA. “Frequently the entire

scope of Congressional purpose calls for careful accommodation of one

statutory scheme to another, and it is not too much to demand of an

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Therefore, Kingston Constructors concluded, the union at

issue in that case could not lawfully require its members to

pay the challenged job targeting dues.

But the Idaho Act at issue in this case does not address

itself to a union’s collection of funds. Rather, the Act

prohibits contractors from “receiv[ing] a wage subsidy, bid

supplement or rebate”; prohibits unions from “pay[ing] a

wage subsidy or wage rebate”; and prohibits, generally, the

“use” of funds collected by or on behalf of a union “to

subsidize a contractor or subcontractor.” Idaho Code

§ 44-2012(2)–(4) (emphasis added). The Act stipulates that

all such actions are prohibited only with regard to funds “the

source of which is wages, dues or assessments collected by or

on behalf of any labor organization(s).” Idaho Code

§ 44-2012(2). Still, the actions prohibited by the Act are the

distribution of funds, not their collection.

No NLRB case has held collective action by employees

to subsidize wages on non-Davis-Bacon jobs by distributing

funds to the workers or employers on those jobs is not

protected concerted activity under § 7 because of the source

of those funds. As to distribution of funds derived from

Davis-Bacon wages, the NLRB, far from holding that the use

of funds collected from Davis-Bacon wages is unprotected

under § 7 of the NLRA once held that use protected in some

administrative body that it undertake this accommodation without

excessive emphasis upon its immediate task.” S. S.S. Co. v. NLRB,

316 U.S. 31, 47 (1942); see also Hoffman Plastic Compounds, Inc. v.

NLRB, 535 U.S. 137, 142–44 (2002).

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circumstances and, more recently, has specifically reserved

the question.

In Re Can-Am Plumbing, Inc., 335 N.L.R.B. 1217, 1217

(2001) (“Can-Am I”), petition granted, 321 F.3d 145 (D.C.

Cir. 2003) (“Can-Am II”), held that “prosecut[ing] a state

court lawsuit against [a] competitor employer . . . for

accepting job targeting program funds” from a union was an

unfair labor practice under § 8, because the program itself

was protected under § 7. That was so despite “[t]he Board’s

recent holding in Kingston Constructors that unions may not

lawfully exact dues from employees working on Davis-Bacon

projects to support job targeting programs.” Id. (citation

omitted). Can-Am I went on to explain that the targeted job

was not a Davis-Bacon project and that the challenged

contractor had never worked on a Davis-Bacon project. Id.

Furthermore, the NLRB noted, only 2–3% of the union’s job

targeting funds came from federal or state prevailing-wage

jobs. Id. In sum, Can-Am I held the distribution of those

funds actually protected under the NLRA, despite the fact that

some small portion of them was apparently derived from

Davis-Bacon wages.

The D.C. Circuit granted a petition for review of Can-Am

and remanded the matter back to the NLRB. Can-Am II,

321 F.3d at 147. Can-Am had offered essentially the same

argument urged by the Attorney General in this case,

“contend[ing] that because the [NLRA] does not protect [job

targeting programs] that offend public policy, and the

Union’s [program] is contrary to both federal and state

Davis-Bacon laws, Can-Am’s lawsuit is not preempted under

Garmon.” Id. at 151. After examining at length the cases

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regarding the collection of funds on Davis-Bacon jobs,

Can-Am II held that “[t]he Board’s conclusory findings that

these moneys did not taint the job targeting program are

inadequate to support its determination that the operation of

the program as a whole was protected conduct under section

7.” Id. at 147. The court noted, specifically, that the NLRB

did not “explain why the Davis-Bacon moneys did not affect

the [job targeting program’s] legality or why the Union’s

conduct in that regard was excusable,” and went on to

observe that “[n]o court or administrative decision of the

Board has yet defined precisely how much Davis-Bacon

money may flow into a [job targeting program] before the

program violates public policy.” Id. at 153. Can-Am II

therefore remanded the matter for further consideration,

noting that, after accepting additional evidence, “the Board on

remand may yet determine that the [job targeting program] is

protected under section 7.” Id. at 154.

On remand, the NLRB determined that Can-Am had

waived the remanded issue by not previously contending that

the inclusion of monies derived from Davis-Bacon wages

rendered the program unprotected. Can-Am Plumbing, Inc.,

350 N.L.R.B. 947, 949 (2007) (“Can-Am III”). In the

process, the Board provided an important gloss on its earlier

decision:

Of course, [the Board’s prior discussion of the

inclusion of a small amount of Davis-Bacon

wages in the job targeting program at issue in

that case] should not be interpreted to mean

that the inclusion of contributions from wages

earned on Davis-Bacon projects would be

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unlawful. The Board has not ruled on that

question and it is not raised here.

Id. (emphasis added). The Board quite pointedly, then, left

the issue presented in this case open.

The NLRB has not revisited the matter since the Can-Am

Plumbing litigation. The closest it has come was J.A. Croson

Co., 2012 WL 5246914. Contrary to the Attorney General’s

suggestion, that case did nothing to undermine the arguable

protection of the conduct regulated by the Act, and indeed

underscored it.12

Croson, a non-union contractor, sued J.A. Guy, Inc., a

union contractor, in Ohio state court, alleging that Guy’s

deduction of a job targeting assessment from its employees’

wages violated Ohio’s statutes and regulations requiring

prevailing wages on public works projects, a type of law

12

The Supreme Court has held that two of the four Board members who

decided J.A. Croson Co., Members Griffin and Block, were not validly

appointed by the President. NLRB v. Noel Canning, 134 S. Ct. 2550,

2557, 2578 (2014). Although J.A. Croson Co. was extensively discussed

in the parties’ briefing, no party in this case has raised the precedential

viability of J.A. Croson Co. in light of Noel Canning. In any event, the

principal significance of J.A. Croson Co. to this case is the light it sheds

on whether the conduct proscribed by the Act is arguably protected.

Whether J.A. Croson Co. remains good law, or is only a non-authoritative

statement from two Board members and two putative Board members,

does not much matter for the purposes of deciding whether distribution of

job targeting funds derived in part from Davis-Bacon wages — a matter

that, as we shall explain, was not at issue in J.A. Croson Co. — is

arguably protected. With this caveat, we refer to the decision in J.A.

Croson Co. as the opinion of the NLRB.

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known as a “Little Davis-Bacon.” Id. at *2. The Ohio

Supreme Court held the lawsuit preempted by the NLRA.

J.A. Croson Co. v. J.A. Guy, Inc., 691 N.E.2d 655, 665 (Ohio

1998). Guy then filed a charge with the NLRB, alleging that

Croson’s maintenance of the suit was prohibited by § 8

because the job targeting program was protected by § 7. J.A.

Croson Co., 2012 WL 5246914 at *4. The NLRB held that,

despite a determination from the Ohio Department of

Industrial Relations that Guy had violated the Little Davis-

Bacon statute, the job targeting program was actually

protected and so the suit was an unfair labor practice. Id. at

*5, 6.

The Board took pains to emphasize that no federal Davis-

Bacon issue was presented in J.A. Croson Co. See id. at *8;

see also id. at *7 n.20. But the Attorney General suggests

that, by seizing on the federal-state distinction in J.A. Croson

Co., the NLRB indicated that such programs are protected

when only state wages are involved and are not protected

when federal Davis-Bacon wages are used.

We do not read J.A. Croson Co. that way. In that case, as

in Kingston Constructors, the underlying conduct was the

collection of funds. See id. at *2, 7–8; see also id. at *18 n.7

(Member Hayes, dissenting). And, as we have already

explained, Kingston Constructors held, in deference to the

DOL and two circuit courts, that the collection of such funds

from federal Davis-Bacon wages was inimical to public

policy. It therefore makes sense that J.A. Croson Co. would

distinguish between federal and state funds in determining

whether the collection of monies for job targeting programs

is protected. J.A. Croson Co. did not decide the question

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reserved in Can-Am III, namely whether the distribution of

those funds is protected.

Moreover, J.A. Croson Co. suggests that, if the issue were

squarely presented, the NLRB might hold the payment of

funds derived from Davis-Bacon wages actually protected

under § 7. First, the NLRB notably took the “opportunity”

afforded by J.A. Croson Co. to reiterate yet again that job

targeting programs are generally protected by the NLRA, and

gave its most full-throated defense to date of the protected

nature of such programs in general. Id. at *6.

Second, J.A. Croson Co. emphasized the extent to which

Kingston Constructors was, with regard to Davis-Bacon,

based on deference to the DOL. See id. at *7.13 We read J.A.

13

It is doubtful that the DOL would have the authority directly to

regulate the distribution of funds derived from Davis-Bacon wages to

contractors not working on Davis-Bacon jobs. Cf. Reich, 40 F.3d at 1288

(Edwards, C.J., dissenting) (noting that “[e]ven the Labor Department’s

Wage and Hour Administrator admits that wage deductions on [non-

Davis-Bacon] projects are beyond the scope of the Department’s

authority”). Neither the Davis-Bacon Act nor the associated regulations

mention such distribution. Cf. Building Trades, 1991 WL 494718 at *5–6.

Some of the opinions we have discussed include broad language which

can be read to suggest that distribution of funds derived from Davis-Bacon

wages to non-Davis-Bacon contractors might be a violation of the Davis-

Bacon Act. See Brock, 68 F.3d at 1201; Reich, 40 F.3d at 1280; Building

Trades, 1991 WL 494718, at *6. As noted, however, the distribution of

funds was not the issue in any of those cases. Furthermore, insofar as

such broad statements indicate concern about the potential job targeting

programs have for warping future prevailing wage determinations, we note

that the method by which the DOL determines the prevailing wage is not

prescribed in the Davis-Bacon Act. Nothing in Davis-Bacon precludes

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Croson’s emphasis on the role of deference in Kingston

Constructors as an indication that, were the issue in this case

presented to the NLRB, it might well hold the distribution of

job targeting funds, even if some were derived from Davis-

Bacon wages, is protected as a form of employee concerted

activity not in violation of any public policy firmly

established by another statute.

In asserting Garmon preemption, the Trades Councils

bear the burden “to demonstrate that [this issue] is one that

the Board could legally decide in [their] favor.” Davis,

476 U.S. at 395. This is not a demanding standard; the

Trades Councils need not, for example, show that the Board

will or is even likely to ultimately agree with their position.

Rather, they need only “advance an interpretation of the

[NLRA] that is not plainly contrary to its language and that

has not been authoritatively rejected by the courts or the

Board.” Id. (internal quotation marks omitted).

The Trades Councils have met this burden. The NLRB’s

decisions in the Can-Am litigation, as well as its recent

discussion in J.A. Croson Co., convince us that the Trades

Councils’ interpretation of § 7, as protecting the distribution

of funds contributed to job targeting programs when some of

the contributions are traceable to wages employers earned on

Davis-Bacon covered projects, is, at the very least, arguable.

DOL from requiring disclosure of data on job targeting spending, to

ensure that future prevailing wage determinations are accurate.

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V.

The Attorney General and ABC contend that, even if the

use of funds derived from Davis-Bacon wages is arguably

protected, preemption is nonetheless inappropriate. Their

arguments are meritless.

ABC argues that the Act escapes preemption because

“there is a sufficiently deeply rooted state interest in

proscribing the collection and use of employee monies to

undermine free and fair competition,” as evidenced by

Idaho’s expansive right-to-work legislation. Garmon’s

exception for cases in which “the regulated conduct touche[s]

interests . . . deeply rooted in local feeling and

responsibility,” 359 U.S. at 244, does not, however, extend to

local interests in labor policy, except to the extent permitted

by § 14(b). On the contrary, the NLRA “replaced” local

labor policy with “an unequivocal national declaration of

policy establishing the legitimacy of labor unionization and

encouraging the practice of collective bargaining.” Sears,

Roebuck & Co. v. San Diego Cnty. Dist. Council of

Carpenters, 436 U.S. 180, 190 (1978). No matter how deeply

rooted in local feeling Idaho’s views on labor relations may

be, they do not for that reason escape preemption.

Moreover, the notably federal nature of the state’s

purported interest is also relevant with regard to ABC’s

argument. A purported state interest in banning job targeting

distributions because they include funds derived from Davis-

Bacon wages earned on federally funded projects, is not a

“significant state interest.” Id. at 196 (emphasis added).

Rather, as we have explained, such an interest would be

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purely federal, and therefore could not warrant an exception

to otherwise-applicable Garmon preemption.

We likewise are unpersuaded by the Attorney General’s

contention that the Trades Councils’ argument for § 7

protection as to programs which include funds derived from

Davis-Bacon wages is weak, and that therefore, even if that

protection is technically arguable, preemption is not

warranted under Sears. Sears noted that “the acceptability of

‘arguable protection’ as a justification for pre-emption in a

given class of cases is, at least in part, a function of the

strength of the argument that § 7 does in fact protect the

disputed conduct.” 436 U.S. at 203.

Initially, as we have explained, based on the NLRB’s

various decisions bearing on this case, the Trades Councils’

argument for § 7 protection has substance. It therefore does

not trigger the Sears exception relied upon. Moreover, while,

in arguing for a Sears exception, the Attorney General relies

only on his assessment of the strength of the § 7 argument,

we note that Sears was quite different from this case in

several other respects. First, unlike Sears, which involved

generally applicable trespass law, the Act is a “state law[]

regulating the relations between employees, their union, and

their employer,” a situation in which the Garmon reasoning

“has its greatest force.” Id. at 193; see also id. at 197 n.27.

Second, as we have explained, unlike the cause of action in

Sears, the Act as applied to funds derived from Davis-Bacon

projects does not regulate any “significant state interest”

“deeply rooted in local feeling and responsibility.” Id. at

195–96 (quoting Garmon, 359 U.S. at 244) (internal

quotation marks omitted). Third, unlike in Sears, it cannot be

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said that the Act would “entail[] little risk of inference with

the regulatory jurisdiction” of the NLRB. Id. at 196; see also

id. at 201. An Idaho court seeking to apply the Act to a case

involving funds derived from Davis-Bacon wages would have

to answer the “identical” question reserved in Can-Am III: Is

such a program protected by § 7? Fourth, and finally, we see

no reason to conclude that this case implicates the concerns

presented in Sears that preemption would create a

jurisdictional “no-man’s land.” Id. at 208 (Blackmun, J.,

concurring). Can-Am III declined to address the § 7

argument at issue here only because the respondent had

waived the issue. 350 N.L.R.B. at 949.

VI.

All of the conduct prohibited by the Act is either actually

or arguably protected under § 7, and no exception to

preemption applies. The Act is therefore facially preempted

under Garmon.

The Trades Councils sought a declaration and permanent

injunction, but the district court’s order did not explicitly

refer to any particular relief, stating only that the Acts were

preempted and so the Trades’ Councils’ motion for summary

judgment was granted. Confusingly, the court’s judgment

also stated that the case was “dismissed.” We remand for the

district court to award appropriate relief and enter an

appropriate judgment.

AFFIRMED IN PART, VACATED IN PART, AND

REMANDED.

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BERZON, Circuit Judge, concurring:

As the main opinion explains, the “Fairness in

Contracting Act,” Idaho Code § 44-2012, is not saved from

NLRA preemption by the line of precedent holding that

collection of Davis-Bacon wages for job targeting programs

violates the Davis-Bacon Act. See Int’l Bhd. of Elec.

Workers, Local 357, AFL-CIO v. Brock, 68 F.3d 1194,

1201–03 (9th Cir. 1995); In re Building & Constr. Trades

Unions Job Targeting Programs, Case No. 90–02, 1991 WL

494718 (Wage App. Bd. June 13, 1991) (“Building Trades”),

aff’d sub nom. Building & Const. Trades Dep’t, AFL-CIO v.

Reich, 40 F.3d 1275, 1277 (D.C. Cir. 1994). I write

separately to observe that these cases, and in particular our

decision in Brock, were, in my view, wrongly decided.

First, I see no basis to conclude that any aspect of job

targeting programs amounts to a violation of federal law. The

Davis-Bacon Act requires contractors on covered projects to

pay to workers “the full amounts accrued at time of

payment,” computed at rates not less than the advertised

rates. Those rates must be not less than prevailing wages,

“without subsequent deduction or rebate on any account.”

40 U.S.C. § 3142(c) (emphasis added). A rebate is “[a]

return of part of a payment” that has already been made.

Rebate, Black’s Law Dictionary (10th ed. 2014). A deduction

could refer to money taken out at the time the wages are paid,

but the statute specifically bans only “subsequent”

deductions. Thus, Congress was likewise referring only to

deductions made after the wages were paid, presumably from

later wage payments. We have previously examined

Congress’s concern, in amending Davis-Bacon to include the

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“subsequent deduction or rebate” language, with “the illegal

practices of exacting rebates or kickbacks.” Brock, 68 F.3d

at 1199 (quoting S.Rep. No. 1155, 74th Cong., 1st Sess. 2, at

3 (1935); H.R.Rep. No. 1756, 74th Cong., 1st Sess. 2, at 3

(1935)). Notably, both those practices involve returning

money to a contractor on the Davis-Bacon job after it was

initially paid.

How, then, did we end up concluding that job targeting

deductions made at the time a worker is paid contravene

Davis-Bacon? The Department of Labor has promulgated

regulations that bar all deductions from workers’ pay on

Davis-Bacon jobs unless those deductions are specifically

permitted by the DOL, either categorically or by individual

prior permission. 29 C.F.R. §§ 3.5, 3.6, 3.9. DOL’s decision

in Building Trades was principally an interpretation of these

regulations. See 1991 WL 494718 at *5–6. The NLRB, and

this court, subsequently deferred to DOL on the matter. See

Int’l Bhd. of Elec. Workers, Local 48, 332 N.L.R.B. 1492,

1500–01 (2000), order modified by 333 N.L.R.B. No. 122,

enforced, 345 F.3d 1049 (9th Cir. 2003); Brock, 68 F.3d at

1203. But no court has, to my knowledge, explained how the

regulations — which purport to ban, with specified

exceptions, all deductions, simultaneous or subsequent — are

anything but “inconsistent with the statute,” Barnhart v.

Sigmon Coal Co., 534 U.S. 438, 462 (2002), which bans only

subsequent deductions.

I do not mean to suggest that Congress would bless an

arrangement in which a contractor deducts a worker’s wages

as a way of sidestepping the prevailing wage requirement —

for example, a deduction for a fund to pay for the contractor’s

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summer home. Davis-Bacon is, to be sure, concerned with

ensuring that workers really received in the first place the

prevailing wages mandated by Davis-Bacon. Brock, 68 F.3d

at 1199. In other words, a worker must actually be paid the

prevailing wage; a scheme to make it look as though he had

been paid that wage, when in fact some portion of it returns

to the contractor paying him, is unacceptable.

A rule barring such reductions to effectuate this

Congressional purpose cannot, however, be grounded in the

statutory provision barring “subsequent deductions.” Such

arrangements involve “contemporaneous” deductions, not a

“subsequent deduction or rebate.” Rather, I would hold that

simultaneous deductions are impermissible when they amount

to a scheme to avoid paying a prevailing wage. And I would

apply a simple presumption to rule out many deductions that

are patently consistent with Davis-Bacon: When a deduction

is authorized by law, it is not a scheme to sidestep Davis-

Bacon. Thus, for example, there is no need for specific

authorization to deduct wages as income tax withholding; or

for retirement accounts authorized by the Internal Revenue

Code; or for the various purposes authorized by the Fair

Labor Standards Act. Cf. 29 C.F.R. § 3.5. As applied here,

it would not matter whether job targeting funds are

considered union dues or not, as both job targeting funds and

dues are authorized by § 7 of the NLRA, according to the

NLRB cases discussed in the majority opinion. Therefore, I

would hold, Davis-Bacon is simply not implicated by the

collection from Davis-Bacon wages of assessments for union-

authorized job-targeting programs, whether by way of

mandatory wage deductions or otherwise. As it stands, “the

Secretary’s interpretation perverts the purpose of the Davis-

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Bacon Act, transforming a statute designed to benefit laborers

into one that bars them from benefitting themselves.” Reich,

40 F.3d at 1283 (Edwards, C.J., dissenting).

Second, even assuming that DOL is right and that

deductions for job targeting funds amount to a violation of the

Davis-Bacon Act, Brock is sorely mistaken in holding that

even direct payments from a worker to his union, with no

involvement by the employing contractor, also constitute

Davis-Bacon violations.

Davis-Bacon bars schemes in which it would appear the

worker was paid a prevailing wage but in reality he was not.

Brock, 68 F.3d at 1199. But — apart from such schemes —

the worker is otherwise fully entitled to spend his wages as he

sees fit. This observation is so obvious that it should not be

necessary to make it. Yet our opinion in Brock is

fundamentally at odds with this common sense

understanding.

Brock held that a union local’s requirement that union

members pay an assessment to support a job targeting

program was a violation of Davis-Bacon. Id. at 1196. Unlike

the employer in Reich, the employing contractor in Brock had

no involvement with the job targeting program. Id. at 1201.

Not only did that contractor not receive job targeting funds —

and, according to the union in that case, the contractor never

could receive such funds — the contractor also made no

deductions for the job targeting program. Id. at 1199, 1201.

Instead, “union members pa[id] the two percent assessment

directly to the union.” Id. at 1200. The fact that there was no

deduction in Brock, only a required payment directly to the

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union, was immaterial, this court held, as in either event “the

local union serves as an intermediary that impermissibly

effectuates the reduction of employee’s wages for work

performed on government projects to the benefit of

contractors.” Id. (emphasis added). Indeed, the court held

the same would be true “[e]ven if the Workers voluntarily

paid the two percent gross wage assessments.” Id. at 1202.

This focus on “contractors” in general is all wrong.

Davis-Bacon prevents a worker from returning part of his

wages to the particular contractor who pays him, or to an

agent or subcontractor of that contractor; it is not about

preventing workers from giving part of their wages to

contractors in general. Cf. 40 U.S.C. § 3142(c)(3) (providing

that funds may be withheld from “the contractor” to pay “the

difference between the rates of wages required by the contract

to be paid laborers and mechanics on the work and the rates

of wages received by the laborers and mechanics and not

refunded to the contractor or subcontractors or their agents”)

(emphasis added); 29 C.F.R. § 3.5(d)(3) (permitting certain

deductions, with DOL’s approval, provided that “[n]o profit

or other benefit is otherwise obtained, directly or indirectly,

by the contractor or subcontractor or any affiliated person in

the form of commission, dividend, or otherwise”) (emphasis

added); but see Can-Am Plumbing, Inc. v. N.L.R.B., 321 F.3d

145, 152 (D.C. Cir. 2003) (concluding otherwise, based in

part on Brock). On this point, I emphatically agree with

Judge Edwards’s dissent in Reich. As Chief Judge Edwards

said, the plain language of Davis-Bacon, which refers to “the

‘contractor or his subcontractor’ in the singular, not

contractors or subcontractors in the plural[,] . . . focuses the

Act narrowly on deductions taken for use by the very

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contractor or subcontractor who signs the paycheck.” Reich,

40 F.3d at 1283 (Edwards, C.J., dissenting).

Otherwise, a contractor would violate Davis-Bacon

anytime a worker uses part of his Davis-Bacon wages to pay

the contractor who is putting a new roof on his house; or uses

the wages to buy stock shares in a contractor’s company (or

a company that itself awards contracts); or, perhaps, deposits

his wages in a bank that makes loans to contractors. All of

those scenarios involve the worker’s transfer, either directly

or indirectly, for his own purposes, of funds earned on a

Davis-Bacon job to some construction industry contractor in

a way that benefits the contractor. But Davis-Bacon does not

care that workers give money to a contractor; it merely seeks

to prevent the workers’ wages redounding to the contractor

who paid them in the first place, such that, in effect, the

worker was paid less than prevailing wage.

Unless Davis-Bacon purports to establish near-plenary

regulation over what workers may do with their money after

they have been paid — a goal that makes no sense at all, even

assuming it would be permissible — it must be limited to the

actual subject-matter of the statute, namely ensuring that

workers are actually paid a prevailing wage. What workers

do with their money at that point, either individually or

collectively through a union, is of no concern to Davis-

Bacon.

That being the case, Brock was wrongly decided. If a

union’s members pool their resources to fund a job targeting

program, that may be of concern under the NLRA (if

impermissible coercion is involved, for example, see

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29 U.S.C. § 158(b)(1)), but it is of no concern under the

Davis-Bacon Act. The workers were paid a prevailing wage,

and they collectively decided to use some of that wage to

subsidize other contractors for the workers’ collective

benefit. Even more clearly, if individual workers voluntarily

pay into a job targeting fund, Davis-Bacon can have no more

objection than it can have to workers voluntarily spending

their wages at the hardware store rather than the drug store.

The workers were paid prevailing wages, so Davis-Bacon is

satisfied.

Brock concluded otherwise, contending that “there is no

tenable distinction between (1) direct deductions of employee

wages on government projects . . . and (2) union-required

employee payment of a percentage of their wages earned on

government projects,” and suggesting that “[t]o distinguish

between the two methods of JTP assessment would be to

elevate unacceptably form over substance.” 68 F.3d at

1200–01. Yet, as Chief Judge Edwards noted in his dissent

in Reich, the DOL had in that case “conceded that the

regulations do not prohibit unions from increasing their

general dues assessment and then internally allocating a

portion of that assessment to fund job targeting programs.”

Reich, 40 F.3d at 1286 (Edwards, C.J., dissenting).

I agree the distinction is ridiculous. But that is no reason

to expand the scope of Davis-Bacon to conduct that has

nothing to do with its language or purpose. Rather, the

distinction at issue — while earmarked payroll deductions to

fund job training programs are unlawful, mandatory dues

used internally to fund them are fine — is attributable to

DOL’s regulations and its interpretations of them, which

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carve out certain deductions as permitted but do not permit

workers collectively to decide to spend their own money in

this particular way. See id. (concluding that it was DOL’s

interpretation of Davis-Bacon itself that “elevates form over

substance”). The latter decision has essentially nothing to do

with the goals of Davis-Bacon.

In sum, in my view, DOL’s regulations barring such

deductions contravene the language and intent of Davis-

Bacon, and I would not defer to them. Moreover, even taking

DOL’s position on the deductions piece of this morass as

given, I would urge the court to reconsider Brock in a case in

which, unlike this case, a challenge to the ban on

contributions to union-instigated job-targeting funds traceable

to Davis-Bacon job wages is squarely presented.