Federally funded equal-opportunity training program outside ERISA

P/OPINION 75-04


                                                                3(1)


                         August 6, 1975


Dear              :

This is in response to your letter of June 27, 1975,
in which you inquired whether an incorporated voluntary
affirmative action program in          known as "
Inc." constitutes an employee welfare benefit plan
within the meaning of section 3(1) of the Employee Retirement
Income Security Act of 1974 (the Act).

In your letter and the attached material the following
representations are made:

          has been formed under the Comprehensive Employment
and Training Act of 1973 (CETA), pursuant to an agreement
executed on June 23, 1975 between representatives of employers
and employee organizations in the [city] area construction
industry and [city] area organizations involved in the promotion
of equal employment opportunity for minority persons and women.
The corporation's primary responsibility will be to promote,
develop and encourage the participation of minority persons and
women in apprenticeship and similar training programs
of the construction industry and other industries requiring
skilled labor in         . For the foreseeable future,
          will be federally funded with           County
acting as the Prime Sponsor in accordance with section 102
of CETA. However, it is possible that at some future date
employers and employee organizations participating in the
          program may make contributions towards its funding.

The          program will recruit minority persons and women
as participants and provide them with career counseling and
guidance. It may also furnish some generalized training and
education. Participants will then be channeled into appropriate
apprenticeship or similar training programs maintained by employers,
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P/OPINION 75-04


employee organizations, or both. In addition,           may
provide counseling or even supplemental educational assistance
such as tutoring to participants who have already entered
apprenticeship programs.

On the basis of these representations, we have concluded
that          is not an employee welfare benefit plan within
the meaning of section 3(1) of the Act. Although section 3(1)
includes "apprenticeship or other training programs" within
the definition of "employee welfare benefit plan,"
is not an apprenticeship or other training program of the
kind contemplated by Congress in that section.           is
not a substitute for apprenticeship and other training programs
which are subject to Title I of the Act: such training as may
be provided through         is incidental to its primary
purpose of increasing the representation of minority persons
and women in the construction industry and other industries
requiring skilled labor in the           area. This purpose
is less closely associated with the relationship between
employers and employees, which is the primary Congressional
concern embodied in the Act, than with civil rights and equal
employment opportunity, which are dealt with through other
laws and governmental programs. Eligibility for participation
in the          program is geared to an individual's status
as a minority person or woman, not to an employer-employee
relationship. As a program oriented towards civil rights
and equal employment opportunity,        is designed to
implement a national and local government policy, rather
than to fulfill the immediate manpower needs of employers
in private industry. In keeping with             's role in
implementing a governmental policy, there is a significant
degree of governmental involvement in            , both at the
local and national levels. This governmental involvement
ensures that the goal of protecting              's funds against
abuse will be met quite apart from those provisions of the
Act which are designed to ensure such protection. Moreover,
          is   subject to extensive regulations (29 CFR Part 98)
issued under the authority of CETA, so that the requirements
of ERISA, had they applied, would to a large measure have
duplicated already existing federal controls.
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P/OPINION 75-04


In your letter you raised an additional question as to
whether         must be brought into compliance with
Title I of the Act immediately because of the possibility
that at some future date, employers and employee organizations
may make contributions towards the funding of           .
Since        is at present wholly federally funded (with some
involvement in the distribution of funds on the part of
          County), it is not subject to the provisions of
the Act. If different funding arrangements are made in
the future, the status of the program should then be re-
evaluated in light of the specific arrangements proposed.

Sincerely,