MEMORANDUM OF DECISION AND ORDER

Background:

This case is before the Court on petition of Impartial Umpire, Sam Kagel, selected by the Union and Employer Trustees of a Trust designated as the Operating Engineers and Participating Employers Pre-Apprentice, Apprentice and Journeyman Affirmative Action Training Fund. A dispute between the Trustees was submitted to the Umpire for decision. The issues presented were (1) whether the purposes of the Trust were valid, “and more particularly whether the phrase 'defraying costs of apprenticeship or other training program’ 29 U.S.C. § 186 (c) (6) includes expenditure of trust funds” for the purposes of the Trust Fund; (2) or whether issue (1) should in the first instance be submitted to the United States District Court under 29 U.S.C. § 185 or 29 U.S.C. § 186 , or both for a decision on issue (1). If the Umpire decided that issue (1) should be referred to the District Court the Trustees authorized him to petition the Court in their behalf.

The Umpire’s decision was “[t]hat such judicial determination is necessary to ascertain the validity of the Trust and the proposed implementing Memorandum of Agreement [of the Trust] in light of the federal labor laws.”

*1128 Court Jurisdiction:

In response to the Umpire’s Petition, appearances were entered by the Union, three Employer Associations and the Trustees. The Court found that the record as it then existed presented a controversy concerning the validity of the trust purposes and the effect of Section 302 of the Taft-Hartley Act ( 29 U.S.C. § 186 ) thereon. As such, judicial determination of the questions raised is proper. See International Longshoremen’s Association v. Seatrain Lines, 326 F.2d 916 (2d Cir. 1964).

The Trust:

Collective bargaining agreements between the Union, Operating Engineers Local 3 and Employer Associations whose members employ operating engineers provide for contributions by the Employers of 5 cents per man hour effective June 15, 1968, 9 cents per hour effective July 1, 1969 and 14 cents per hour effective a year thereafter. It is expected that contributions to this Trust over the next 3 years could total approximately nine million dollars.

The Trust provides for administration by an equal number of Employer-appointed and Union-appointed Trustees; for deadlocks to be broken by an impartial Umpire agreed to by the Trustees for such purposes; for petition to the United States District Court in the event that an Umpire cannot be agreed to; and contains provisions for annual audits, the results of which are available for inspection by all interested persons.

Implementing Agreement:

This Agreement between the parties provides that the implementation of the Trust purposes will be in part carried out through Job Placement Centers. The Union as such will directly provide a number of these services.

The Law Questions:

Whether the Employer contributions to the Fund are for the purposes of a Trust that comes within the stated exception of Section 302(c) (6) of “defraying costs of apprenticeship or other training program.”

WTiether Trust Fund monies can be used to defray expenses incurred by the Union in carrying out the purposes of the Trust at the request of the Trustees.

The Trust Purposes:

Generally the Trust was established to provide training and retraining of employees now in the industry and working in the job classifications included in the collective bargaining agreements. The great advance in technology in the construction industry requires greater skills of present and prospective employees.

Of equal importance is the training and education of individuals, particularly disadvantaged persons, as new additions to the work force.

Accordingly, the parties agreed to establish a Trust Fund for the following purposes:

Section 302:

Section 302 of the Taft-Hartley Act outlaws payments from employers to union representatives (including payments into trust funds on which sit Union-appointed trustees) except under certain circumstances. Section 302 provides in pertinent part:

Section 302 (c) (5) (B) referred to in the above-quoted section reads:

Section 302(c) (6) and the Trust Purposes:

The basic question presented is whether the purposes of the trust come within the stated exception of Section 302(c) (6) — “defraying costs of apprenticeship or other training programs.”

The purposes of Congress in adding Section (c) (6) to Section 302 were expressed as follows:

Since that amendment federal legislation, executive orders and adminstrative regulations bearing on the problem of training, including training of disadvantaged individuals to facilitate such persons’ entry into the construction industry, have been promulgated. See, e. g., Housing and Urban Development Act of 1968, Section 3, P.L. 90-448 (1968), Executive Order 11246, Section 202 (1965) as amended by E.O. 11375 (1967), Federal Highway Administration order Interim 7-2(1), March 17, 1969.

The result has been that now “affirmative action” is required in recruiting such persons and providing them with supplementary education as “pre-apprentices” to allow them to then enter apprentice training on an equal footing with all applicants for apprenticeship.

In this context, including the fact that apprenticeship and other training programs are proper subjects of employer-union trusts, the purposes of the Trust as stated therein meet the definition of “defraying costs of apprenticeship and other training programs” as stated in Section 302(c) (6). Furthermore, the stated purposes of the Trust conforms to the stated objective of legislation which deals with the problems of disadvantaged persons.

Purposes 1 through 3 pose no problem concerning their inclusion in the exception of Section 302(c) (6). The training programs allowed under that exception include both present and prospective employees. Section 302(c) (6) is not limited by its terms only to present “employees.” Moreover, not only was such a limitation as found in initial bills eliminated in the final enactment of the Section 302(c) (6), (Legislative History, supra, pp. 54, 141, 365, 545, 971), but to *1131 judicially create that limitation would be an unjustified hampering of the later enacted legislative, executive and administrative policy. See Garvison v. Jensen, 355 F.2d 487 (9th Cir. 1965), Blassie v. Kroger Co., 345 F.2d 58 (8th Cir. 1965).

Purposes 4 through 8 are not only complementary but necessary for the training programs to be any more than fruitless tokens. These purposes, being limited to aiding trainees, represent the necessary attempts to fulfill trainees’ “rising expectations” and to insure that an individual who trains or retrains is doing so to fill a need. It should be unnecessary to state that it makes no sense to train persons to fill jobs that are already filled or for which there are no opportunities for employment. Consequently, purposes 4 through 8 must be accepted as part of the “costs” of even the most minimally adequate “apprenticeship or other training programs” provided for by Section 302(c) (6).

Purposes 4 through 8 as written are limited to affecting job opportunities for pre-apprentices, apprentices and journeymen trainees. As such they are not on their face prohibited “industry-promoting” trust funds. See Local No. 2 of Operative Plasterers, etc. v. Paramount Plastering, Inc., 310 F.2d 179 (9th Cir. 1962), Mechanical Contractors Assn. of Philadelphia v. Local Union 420, 265 F.2d 607 (3d Cir. 1959), Sheet Metal Contractors Assn. v. Sheet Metal Workers, 248 F.2d 307 (9th Cir. 1957), Conditioned Air & Refrig. Co. v. Plumbing and Pipefitting, etc., 159 F.Supp. 887 , (N.D.Calif. 1956) aff’d 253 F.2d 427 (9th Cir. 1958). They appear to be part and parcel of any meaningful training program.

Section 302(c) (5) (B):

Even if a trust fund is for purposes authorized in Section 302(c) (6), it still must meet the requirements of Section 302(c) (5) (B). The Trust, as outlined above meets these requirements.

Implementing Memorandum Agreement:

A final question concerns a proposed memorandum to be entered into by the Trustees and the Union that would result in compensating the Union for services rendered to the Trust. That Memorandum Agreement provides in pertinent part:

This Agreement is to be entered into because the Union is in a position to provide services to the Trust with respect to job opportunities and training programs for pre-apprentices, apprentices and journeyman trainees, and because such services could increase the Union’s costs. In Ware v. Adams, 53 LRRM 2290 (S.D.Calif. No. 1486-61, 1963) the Court found that payments by an otherwise valid trust fund to a Union represented on the trust for services rendered for data processing, mail handling and telephone services did not violate Section 302. There, as in this case, where such services are paid for at their fair value and independent accounting was provided for, no violation of the Section 302 was found. Moreover, the parties here have already appointed an Impartial Umpire who shall make a final decision on any points of difference that may develop between the Trustees as to the sums to be paid the Union.

Findings:

It is, therefore, found that the purposes of the Trust as stated in the Trust instrument are valid within the terms of applicable law. And it is found that Trust Fund monies may be used to defray expenses incurred by the Union in properly carrying out the purpose of the Trust.

Decision and Order:

The Trust Agreement and its proposed implementing Memorandum Agreement are lawful and not, in violation of Section 302 of the Labor Management Relations Act, as amended, 29 U.S.C. § 186 .

The Court having found the Trust Agreement and its proposed implementing Memorandum Agreement to be lawful, wishes it to be clearly and emphatically understood by all parties that it is one thing for a Union and the Employers to agree to the commendable purposes incorporated in this Affirmative Action Training Fund, and another thing to affirmatively carry out such purposes. It is to be expected, and it is a proper continuing concern of the Court, that the purposes of the Trust uáll be vigorously and completely carried out by the Union and the Employers.