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Joint Apprenticeship and Training Committee of Local Union No. 36 v. Weddle

United States District Court, E.D. Missouri, Eastern Division

November 1, 2016

JOINT APPRENTICESHIP AND TRAINING COMMITTEE OF LOCAL UNION NO. 36, affiliated with INTERNATIONAL ASSOCIATION OF SHEET METAL, AIR, RAIL AND TRANSPORTATION WORKERS and INTERNATIONAL TRAINING INSTITUTE FOR THE SHEET METAL AND AIR CONDITIONING INDUSTRY, Plaintiffs,
v.
MITCHELL L. WEDDLE, Defendant.

          MEMORANDUM OPINION AND ORDER REMANDING ACTION TO STATE COURT

          DAVID D. NOCE, UNITED STATES MAGISTRATE JUDGE

         Before the court are the motions of defendant to dismiss for failure to state a claim upon which relief can be granted (ECF No. 8) and of plaintiffs to remand the action to the Missouri circuit court (ECF No. 17). The parties consented to the exercise of plenary authority over this action by the undersigned United States Magistrate Judge under 28 U.S.C. § 636(c).

         The court heard oral argument on these motions on October 18, 2016. For the reasons stated below, plaintiffs' motion to remand is sustained and defendant's motion to dismiss is deferred to the state court.

         I. BACKGROUND

         Plaintiff Joint Apprenticeship and Training Committee of Local Union No. 36 (JATC) is a joint labor management committee established under a union agreement between the St. Louis Chapter of the Sheet Metal Air Conditioning Contractors National Association and the International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART). The JATC operates certain training and apprenticeship programs.

         On July 22, 1999, the Department of Labor's Bureau of Apprenticeship and Training approved JATC's proposed apprenticeship program standards. (ECF No. 18, Ex. 4, at 13). These standards included an addendum titled “Appendix A, Selection and Admission of Apprentices, ” which provides in part:

The applicant should understand and agree that the local Joint Apprenticeship and Training Committee and National Training Fund will provide various work books, text books and other training materials and expend significant sums of money for the training of the Apprentice in the specialized skills necessary for employment in the Sheet Metal Industry; which will result in a substantial direct benefit, as well as substantial indirect and intangible benefits, to the Apprentice from this training which has significant value. The applicant should further understand that these considerable expenditures will be repaid to the National Training Fund and the Local Joint Apprenticeship and Training Committee by the Apprentice working in the Sheet Metal Industry resulting in contributions being made to the National Training Fund and Local Joint Apprenticeship and Training Committee pursuant to Collective Bargaining Agreements.
The Apprentice agrees that he or she will neither seek nor accept employment from an Employer engaged in, nor become an Employer engaged in, any general, mechanical sheet metal, testing and balancing, roofing, residential, sign or food service work or any other work covered by the Constitution of the Sheet Metal Workers' International Association unless such employment is performed under the terms of a Collective Bargaining Agreement that provides for the payment of contributions by such Employer to the National Training Fund or to the Local Joint Apprenticeship and Training Committee or to another Joint Apprenticeship and Training Committee sponsored by or affiliated with a local Union of the International Union.
If the Apprentice breaches this Agreement, all amounts due and owing on the Scholarship Loan reduced by any credit received by the Apprentice, or any cash payments made, will become immediately due.

(Id.)

         The apprenticeship programs are funded by the SMART Local 36 Apprenticeship and Training Fund (Local Fund) and the International Training Institute of the Sheet Metal and Air Conditioning Industry (ITI). (ECF No. 18, Ex. 3, at 3). ITI provides the training materials and curriculum for the apprenticeship program, while both ITI and the Local Fund pay any remaining expenses. (Id. at ¶ 7). Both the Local Fund and ITI have their own boards of trustees and trust agreements and are funded by contributions from signatory employers under the terms of collective bargaining agreements. (Id.) The JATC does not directly receive employer contributions. (Id.). The monies contributed by signatory employers to ITI and the Local Fund may only be used to train apprentices who will work for signatory employers. (Id. at Ex. 6, at 2, § 3). Accordingly, the scholarship loan program requires apprentices to repay the cost of any training they have received if they leave. (Id.) In exchange for the use of its materials and programs, ITI requires JATC to use the scholarship loan agreements. (Id.) (“If a Local J.A.T.C. does not implement the Scholarship Loan Agreement, the Local J.A.T.C. shall be prohibited from utilizing International Training Institute materials and programs”).

         Defendant Mitchell L. Weddle was an apprentice in plaintiffs' apprenticeship training program. Mr. Weddle entered into three such scholarship loan agreements with the JATC and the ITI to cover the costs of his apprenticeship training in the sheet metal industry. He signed a separate agreement for each year of training. (ECF Nos. 1-1 to 1-3). These agreements provided in part that:

The Apprentice understands and agrees that [plaintiffs] will provide various workbooks, textbooks and other written material . . . expend significant sums of money for educating and training the Apprentice in the specialized skills necessary for employment in the Sheet Metal Industry. The Apprentice also understands and agrees that this training will result in a substantial direct benefit, as well as a substantial indirect and intangible benefit, to the Apprentice[.]
The Apprentice further understands that these considerable expenditures will be repaid to [plaintiffs] by the Apprentice working in “Qualifying Employment” within the “Sheet Metal Industry” . . . which will result in contributions being made to [plaintiffs] pursuant to Collective Bargaining Agreements.
***
The Scholarship Loan will be repaid by the Apprentice in full, either in cash or by in-kind credits[.] . . . An Apprentice who works in Qualifying Employment will receive a credit for each calendar year of Qualifying Employment[.]
It will constitute an immediate breach of this Agreement if the Apprentice accepts or continues in “Disqualifying Employment.” “Disqualifying Employment” is: (a) employment in the Sheet Metal Industry with an employer which does not have a Collective Bargaining Agreement . . . or (b) self-employment in the Sheet Metal Industry without having a Collective Bargaining Agreement[.]

(Id. at Ex. 1-1 at 10-11, 16-17).

[Plaintiffs] will expend significant sums of money for education and training necessary to enable [Weddle] to complete the [plaintiffs'] sponsored apprenticeship training program and/or education and training in certain advanced and/or specialized skills . . . . [Weddle] understands and agrees that receipt of this education and training . . . will result in a substantial direct benefit, as well as substantial indirect and intangible benefit, to [Weddle]. [Plaintiffs] agree that the amounts set out in Paragraph 1 below represent the costs to [plaintiffs] in providing education, training, and Training Materials and that the total of such amounts constitute a Loan to [Weddle] which, to the extent not forgiven pursuant to the terms of this agreement, is to be repaid in full with interest.
It shall constitute an immediate breach of this Agreement and immediate payment of the amount of the loan outstanding (i.e. the Loan amount less amount forgiven) shall be required if Borrower accepts or continues in employment in the Sheet Metal Industry that does not constitute Qualifying Employment.

(Id. at 22-23).

         Plaintiffs allege that Weddle failed to meet his obligations under the agreements. They allege that he left his apprenticeship training in April 2016, was terminated by his employer, refused a referral to another union employer, stated he did not want to return to the apprenticeship program, began working for a non-union employer in the sheet metal trade, and his status as an apprentice ended. (ECF No. 18, Ex. 3, ¶ 9).

         On July 12, 2016, plaintiffs brought suit in the Circuit Court of the City of St. Louis against defendant Weddle for breach of contract under Missouri law to recover $25, 041.20. (ECF No. 1-1 at 6-27).

         Defendant removed the case to this court under 28 U.S.C. § 1441(a), asserting subject matter jurisdiction under 28 U.S.C. § 1331, alleging that plaintiffs' claim is completely preempted by the federal Employee Retirement ...


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