What’s Happening with Apprenticeship? – Recent Regulatory and Subregulatory Actions

Chayila Kleist: Hello and welcome this FedSoc Forum webinar call today, July 18th, 2024. We're delighted to host a discussion on what's happening in apprenticeship, recent regulatory and subregulatory actions. My name is Kayla Kleist and I'm an associate Director of Practice groups here at the Federalist Society. As always, please note that all expressions of opinion are those of the experts on today's call as the Federalist Society takes no position on particular legal or public policy issues. Now in the interest of time, I'll keep my introduction of our guest today brief, certainly more brief than their distinguished careers deserve, but if you'd like to know more, you can access their impressive full bios at FedSoc.org. Today we are fortunate to have with us Ryan Craig, who is managing director with the Chief Partners and was formerly an MD with University Ventures, Mr. Craig's commentary on where the puck is going in education and the workforce regularly appears in the biweekly gap letter Forbes and Inside Higher Education.

He's the author of several books on apprenticeship and higher education, including one published as recently as 2023, and he is the co-founder of Apprenticeships for America, a national nonprofit dedicated to scaling apprenticeships across the US economy and a senior fellow with the Progressive Policy Institute. Also joining today Professor Arum Gavoor, who is associate Dean for Academic Affairs and a professorial lecture in law at the George Washington University Law School. Previously, professor Gavoor served as Senior Council for National Security in the civil division of USDOJ as a third ranked counselor of the administrator of Office of Information Regulatory Affairs in the White House office of management and budget and a private practice. Our third panelist is the Honorable John Pallasch, who is the founder and CEO of Workforce Solutions. Before starting one workforce, he served as Senate confirmed Assistant Secretary for employment and training at the US Department of Labor.

Mr. Pallasch's appointment marked his return to the DOL where he previously served as special assistant, the assistant Secretary for the Administration of Management and Deputy Assistant Secretary in the Mine Safety and Health Administration, our fourth panelist of the Honorable Jonathan Skrmetti who currently serves as Attorney general and reporter for the state of Tennessee. Prior to his current role, General Skrmetti served as Chief counsel to Governor Bill Lee. He also previously served as Chief Deputy Attorney General to Tennessee Attorney General Herbert Slattery III. Prior to his work on behalf of the state of Tennessee General Skrmetti was partner in Butler Snow LLP in Memphis. And before joining Butler Snow, he served as a federal prosecutor for almost a decade, first in the Civil Rights Division and then as an assistant US attorney in Memphis. Lastly, and then I'll get off your screen. Joining us today is our moderator for today's conversation is Craig Lean, who is a partner in the Washington DC office of K&L Gates, where he's a member of the Labor Employment and Workplace Safety Practice Group.

Mr. Lean was formerly the director of the Office of Federal Contract Compliance Programs OFCCP at the US Department of Labor, where he reported directly to the Secretary and Deputy Secretary of Labor. Mr. Lean serves as a professor of government lawyering and a professorial lecturer in law at the George University Law School as a vice chair of the District of Columbia Advisory Committee to US Commission on Civil Rights and as a chair of the Civil and Human Rights Committee of the Bar Association in the District of Columbia. And I'll leave it there. One last note. If you have questions throughout the program, please do submit them via the question, answer feature found at the bottom news zoom screen so it'll be accessible when we get to that portion of today's webinar. With that, thanks all for joining us today, Mr. Lean, the floor is yours.

Craig E. Leen: Thank you so much, Chayila. Thank you for those very generous introductions. It is a real honor to be on this panel today to be with these outstanding panelists who know a lot about apprenticeship and I would say at the beginning we have the attorney general here and I wanted to just let everyone know that he has told this very graciously that we can call him Jonathan today, but typically we would call him General. So thank you Jonathan, and it's a pleasure to be here with all of you. So the reason why I helped create this panel and the reason was when I was at the Department of Labor and I was in the civil rights contractor area, apprenticeship was probably the biggest thing going on at DOL, and this was in the Trump administration. And you know what? Apprenticeship is still a big deal in the Biden administration, and apprenticeship is a way to greatly increase the workforce, to get people skilled, the skills they need to do the jobs that we need for this economy.

It is something that's really important and it's bipartisan in the sense that everyone thinks apprenticeship is important. What's amazing though, and why I want to do this panel is that there are tremendously different approaches to apprenticeship between the Trump administration and the Biden administration, and a lot of that is based on Subregulatory guidance, different approaches. The law itself hasn't changed the statute, but a lot of this is these different approaches to interpreting the statute to subregulatory guidance. The idea of how much administrative deference should be given comes in here, particularly after the Loper Bright and Relentless decisions ending Chevron deference. This is a really interesting area, but not only is it an interesting area legally, it has a huge impact on the economy. One other area you've seen a big focus on apprenticeship is under the Inflation Reduction Act related to green energy tax credits.

And that's another area where there's been a lot of subregulatory guidance, a lot of debate about how to approach that, whether new apprenticeship fields and occupations are going to be recognized or not or to talk about all that today. One last thing that's come in with these apprenticeships with the Biden administration's apprenticeship approach and some new regulations that they have put out there as proposed rules as a proposed rule and notice a proposed rulemaking is that they've included in there a number of equity requirements, equity obligations. Those may or may not be consistent with Supreme Court precedent and the idea that you cannot have preferences or quotas or things like that based equal employment opportunity requirements, which I know a lot about because I used to work at OCCP, we're very fortunate because Jonathan is actually very involved in that area and he has some thoughts on that too, and we're going to talk about those equity requirements adding additional requirements to apprenticeships.

So I've talked enough, let's get right to the discussion today and again to my co-panelists, it's an honor to be here with all of you. So the first question I want to pose to John and Ryan, what have been the different approaches by, oh, actually before we do that, I want each of you to be able to speak a couple minutes, so excited to get into the questions. So why don't we have each of you speak for two to three minutes about why you're on the panel, your involvement with apprenticeship, and then we'll get to the questions. But you already know what question I'm going to ask, Ryan, why don't we start with you?

Ryan Craig: Sure. Well, it's an honor to be here with all of you. My name is Ryan Craig and I'm managing director at Achieve Partners. Achieve is the leading investment fund investing at the intersection of education and employment, and we have a workforce fund that is building apprenticeship programs. Specifically what we do is we target sectors of the economy where there's a talent gap and we buy business services companies in those sectors and then transform them into talent engines for those sectors. Specifically hire trained, deploy models in areas like cybersecurity, healthcare IT, data analytics, software development, Salesforce, Workday, SAP, et cetera, mostly Tech One healthcare company as well. And it was that experience that I'm not a workforce policy guy, never had a job outside the private sector, but I write a lot about the future of education and work. And about four years ago began to turn my attention to apprenticeship and just with an outsider's perspective on what was happening, it became clear to me that we were going about this completely the wrong way from a public policy standpoint, and that was what produced Apprentice Nation, the book that I published last year, been read by quite a few folks in DC.

It doesn't get into I'd say a level of depths from a regulatory standpoint, but very high level view on what America is doing in our approach versus countries that are lapping us on apprenticeship like Germany, Austrian, Switzerland, and countries that you don't necessarily think of as apprenticeship leaders but are now eight to 10 x where we are on an apprentice per capita basis. Countries like the UK, France, Australia, and Canada, what have they done over the past 20 plus years that we haven't done where in those countries now it's very common to launch career outside the building trades in sectors like healthcare, tech, financial services as an apprentice, whereas in the US it's still exceedingly rare. So hope to be able to get into that today.

Craig E. Leen: Thank you, Ryan. We're looking forward to that. We will get into that. John,

Hon. John Pallasch: Thanks and I appreciate the opportunity to be here as well. My journey, this conversation started when I was running the state workforce agency in Kentucky. At the time, I was responsible for about a hundred million dollars in workforce development funding and could not for the life of me figure out how we couldn't serve and put more people to work with a hundred million dollars. That frustration and confusion only grew when I went to DC and ran the employment training administration where I was responsible for $10 billion and yet we still couldn't put people to work. And I fundamentally couldn't understand this. I think we all agree that in theory the apprenticeship model is an excellent job attached training model. So why it hasn't picked up the level of attention and the level of usage that we would hope is again, something that just frustrates me. It confuses me.

I don't understand the hurdles that we place in front of this, but I think the more we talk about this and the more we identify what some of the challenges are, what some of the realities are, and I'll try not to put my DC hat on because even though I'm a creature of DC, we often tend to think that DC has the answer and if DC could just do something, then the rest of the country would follow it. And we know that's not true. So I'll try to keep us tethered to the fact that this is really a local issue. This is really an employer issue. This is not a United States Congress or even an employment training administration slash DOL issue. So hopefully I can interject some of that and some of my experiences and quite frankly, some of my failures at the local, state and federal level to fix the workforce system.

Craig E. Leen: John, I had the privilege of working with John at Department of Labor and you were a great colleague and looking forward to your remarks today. Now another colleague of mine at George Washington Law School, Aram Gavoor, Dean, professor Aaron, what are your thoughts, my friend?

Prof. Aram A. Gavoor: So thanks so much to the Federalist Society for having me on Craig as well for organizing this. My vector for this subject matter area is an administrative law, federal courts constitutional law generalist. It's a great thing that both sides of the political spectrum, they're all pro apprenticeship, but there's some pretty distinct differences between the approaches that each of the sides are taking. And just because you asked Craig, I'll sort of lay out some of the doctrinal issues at play here. So first, following the Supreme Court's issuance of its opinion in Students for Fair Admissions last year, there's a substantially different landscape with regard to affirmative action, a different landscape with regard to the equal protection clause of the 14th Amendment as applied through reverse incorporation, the federal government, and then also with regard to the Civil Rights Act. So these are the things that are the backdrop of perhaps the aspects of the discussion that Jonathan will reference today.

And I'm not going to steal too much of his thunder because he is the one who put a lot of the time in to look at that. But with regard to administrative deference, we're in an environment now following Loper Bride and Relentless where the Supreme Court, at least in my view, took action to really doctrinally revise the framework for administrative law. Deference that it had largely been applying for the past six years hasn't really been granting Chevron deference to any agency. There's the enlargement of the major questions doctrine as a significant speed bump or release speed limit to regulatory largess, and then from 2019 onward in Kisor versus Wilkie which I think is really the germane case for this circumstance. Subregulatory guidance that agencies issue, and even the deference to guidance for ambiguous regulations that is largely not deferred to anymore. So when there are something close to half of the state's attorney's general voicing concern over any sort of policy, that makes me a little concerned. As a general matter, regardless of political party, that maybe the primary goal of just apprenticeships isn't moving in the best direction on a consensus basis. I will say though, from an administrative law perspective, the application of additional burdens for data collection, data transmittal secondary plans to ensure certain social outcomes regardless of the value of those do take time and effort. So my concern with regard to having a maximum apprenticeship outcome for policies is that having that type of practice can be somewhat muted.

Craig E. Leen: Aram, you know, when we're talking about apprenticeship, we're talking about a statute that's almost a hundred years old, which almost everything is governed by regulations and subregulatory guidance. So this will be very interesting today. And then finally, General Skrmetti. Jonathan, it's an honor to have you take it away.

Hon. Jonathan Skrmetti: Sure. So first thing I want to say is apprenticeship is wonderful. I worked for a Governor when I was his counsel and he's still a client who is deeply invested in the trades, who views apprenticeship as a leg up for a lot of people who would not have opportunities for that kind of prosperity otherwise. And for democracy, it's important that people have avenues to prosper. We can't have a permanent underclass, and so apprenticeship is a great vehicle for creating opportunities for people. I have no problem with that. I don't think anybody does. The issue here is twofold. First, there's this legal issue involving the equity requirement, and I'll talk about the details a little bit more later, but the gist of it is there is a race-based approach to some of these apprenticeship decisions under the most recent proposed rule that creates significant legal concern after Students for Fair Admissions in the Sixth Circuit.

There are some other cases that create additional cause for concern there. The idea being you can't treat people differently based on the color of their skin no matter what the context. It's a fundamental American principle, and it's an issue here separately because a lot of this money flows through the states. This is not just an academic concern. We have to defend the state. I have limited resources. And so purely from a selfish perspective, I don't want the state to be forced into an illegal posture as a result of getting this federal money. We want this program to succeed, we want this program to thrive. We want to create opportunities for a great many Tennesseans, but because of the legal problems here, because of the onerous and likely illegal requirements, we don't want the state to get dragged into litigation that inhibits the ability of the apprenticeship program to help people succeed. So those are my concerns and I look forward to elaborating on them a little bit more.

Craig E. Leen: Got it. Those were great introductions. Let's get right to the question. So the first question, which I would pose to John and to Ryan, but then Aaron and Jonathan, if you want to provide your input, please do. What have been the different approaches by the Biden and Trump administrations to apprenticeship, including the different positions on industry recognized apprenticeships, and for those in the audience industry recognized apprenticeships were created in the Trump administration and they were rescinded, they were eliminated in the Biden administration. So this is a big issue where there was a flip flop. And as part of that, if you can work it in, we did get a question from the audience isn't the idea, and I'm going to ask it now just because it informs what is apprenticeship and what's the purpose of it? Isn't the idea of getting a high school diploma outdated and that young people should be able to exit the K 12 system to pursue an apprenticeship as early as 14? And there's full disclosure, this is from a homeschool parent and a big fan of early career and college pursuit outside the system. So those are the questions. John and Ryan, take it away.

Ryan Craig: John, you go ahead first and then I'll comment.

Hon. John Pallasch: So there's been a vastly different approach at the granular level, but I want to start at the highest level first. Again, as I said in the beginning, I think everybody supports the apprenticeship model, the idea that an individual can earn and learn as we like to say or use job attached training. I think everybody supports that.

Craig E. Leen: John, forgive me real fast. Would you talk a little closer to the mic because it's going in and out a little bit?

Hon. John Pallasch: Yeah. Actually, Ryan, I'm going to disconnect my earbuds. If you want to go, then I'll jump in.

Craig E. Leen: Thank you,

Ryan Craig: Ryan. I was going to go second because my view is that the differences pale in comparison to what they have in common, which is they're missing the forest for the trees, which is to say where both Democrats and Republicans are focused on apprenticeship as a training program and funding it in that way and regulating it in that way. But apprenticeships, as we all know, are jobs. And the reason we lag other countries, including the UK and Canada, France and Australia on apprenticeship, is that we haven't recognized that the reason, the key element to launching apprenticeship and getting more apprenticeship started is convincing an employer to hire a worker who's not yet productive and pay that worker. In other countries, they've leapfrogged us because they recognize that employers don't do that themselves. For the most part, it's intermediaries who do that work.

They can be for-profit companies, they can be nonprofits, but these are organizations that do the heavy lifting of setting up and running apprenticeship programs. Apprenticeship programs thrive in Germany, Austria, and Switzerland, because it's government in combination with the chambers of commerce and unions who play that role. We don't have that infrastructure here, but neither did the UK or Australia 30 years ago. What they did is incentivized intermediaries to do this work, do this heavy lifting, and they essentially funded pay per apprentice or pay for performance funding for apprenticeship. And so in the UK today, you have this robust ecosystem of 1200 apprenticeship service providers running around to every employer in the country knocking on their doors, offering to set up and run apprenticeship programs for them. That doesn't exist here, and it doesn't exist here because we're not funding apprenticeship enough and we're funding it wrong, which is to say the Department of Labor in both the Trump and Biden administrations have had grant programs,

funding has increased, but they're trying to pick winners. They're awarding grants primarily to workforce boards and community colleges that wouldn't know an apprentice if an apprentice knocked on the door because they don't hire apprentices or actually create apprenticeship programs. It's employers who do. So in other countries, they're funding intermediaries. Intermediaries that have high intervention models that do provide turnkey apprenticeship programs are the most effective. We don't fund them here. So my firm Achieve, we build these turnkey hire trained, deploy programs. Not one of them is receiving public funding for it. We just we're able to do it because we're focused. We're cherry picking in the highest value areas. So that's the biggest issue. I think that where the administrations differ, they're differing around the edges. They're not focused on the core reason we're way behind on apprenticeship.

Craig E. Leen: Thank you, Ryan. What do you think, John?

Hon. John Pallasch: I tend to agree with the first part of what Ryan was saying. I do think we missed the forest for the trees, and I think that's nowhere more apparent than if we look at the National Apprenticeship Act of 1937, I believe it was around 400 words of law. If we look at the most recent rule put up by the Department of Labor, it takes up 181 pages in the federal register. So we're really missing the boat here if we think that we want to simplify and encourage employers to take advantage of apprenticeships by putting more and more compliance reporting and other burdens in front of them. So I do agree with Ryan that at the end of the day, this is a job. I will disagree with Ryan because employers hire unskilled unqualified people every single day because we have 8.1 million open jobs in this country.

We can't find people. And I can tell you from my time in Kentucky and my time in DC, the number of employers who said, give me somebody who will pass a drug test and show up on the first day and I'll teach 'em everything they need to know. Now, that's not to say that applies to every single job, but this notion that an employer's running away from apprenticeships because they're afraid that the individual can't do the job right now, I don't think that's the case. They're running away from it because it's simply too complicated. There's too many burdens. There's too many hoops that I have to jump through in order to try to get a gold star that says, I'm a registered apprenticeship program. Great. What does that really get me? I need skilled workers. So if we could come together as a workforce system and create a pipeline that employers could trust based upon what they're telling us the employee needs to do down the road and we say, "Hey, we've got a model that can do that work with us, we'll help you.

We'll provide some of the funding along the way." I think uptake would increase significantly, but it's not an issue of the employee can't do the job. And again, Ryan knows this because we've disagreed a lot on this. It's not an issue of funding. The funding. The major federal workforce development program called WEOA is a little over $3 billion. With that $3 billion, the last annual report that the Department of Labor put out, the local workforce boards across the country used it to train 2200 apprentices for $3 billion. So this is not a funding issue. It's an issue of we have a model that, again, in theory people like, but then they attempt to use it and they realize, "Wow, this is just way too complicated. I'm going to do it on my own." And we know this because when I was in DC, we were trying to determine how many employers had what we called little a apprenticeship programs, which is how many employers had an apprenticeship program that wasn't blessed by the Department of Labor.

They didn't really care if we blessed it, but they had a process whereby they brought in a junior employee, they paired them up with a more senior employee, they brought them along and they allowed them to move through the progression. And our supposition is that it far outweighs the number of registered apprenticeship programs that have been blessed by the Department of Labor. So again, that tells us the model works. We're just missing the mark from a public workforce standpoint by trying to force more regulation, more requirements, more hurdles down the throat of business and saying, "Hey, use this great model, but by the way, here's a 64 page application you have to fill out to do it". And the employer says, "Well, I can stand up this program on my own without your 64 page program. So thanks a lot, goodbye." And I think we need to be cognizant of that.

Ryan Craig: I agree a hundred percent with what John is saying about the barriers and burdens. Apprenticeships for America has two goals. One is to increase the incentives to apprenticeship creation. Two is to reduce the barriers. The barriers are way too high, particularly given that the incentives are nil effectively today. So that is an issue. But the fact remains that if you compare where the US is to other countries, the big difference is that other countries have separate funding streams for apprenticeship programs. John, as he said, our funding stream is, and this is the single biggest mistake that we make, which is conflating apprenticeship with workforce training. Workforce training is a mishmash of largely ineffective programs. I call them train and pray programs. Apprenticeship is the opposite. Apprenticeship programs are jobs that build in training, and that's why other countries have built out completely separate funding mechanisms and streams outside of workforce development, outside of workforce training, in our case, outside of WIOA to fund apprenticeship programs. And if we had that, we'd be a lot closer to where Canada and France and England are today.

Craig E. Leen: I'll tell you one thing I really liked about industry recognized apprenticeships was that it did seem that they were easier to put together and that it would lead to an expansion. And the registered apprenticeships I had always heard, and now I advise companies in putting them together that there's a lot of record keeping obligations. As you mentioned, the proposed regulations provide even more record keeping obligations, and they also add a new equity requirement, which I think a lot of companies are going to want to be very careful about because they don't want to do something that's going to cause them liability. Everyone supports increasing equal opportunity, increasing diversity through increasing equal opportunity. But what they don't support and what is now no longer lawful is preferences or quotas or something that could be considered like that. And under Title VII, those have not been lawful for a long time, but I think a lot of them may have been done nonetheless because of some of the precedents in the higher education area. Now, the Supreme Court's spoken pretty clearly on that. So let's talk about that obligation. And Jonathan, I'd like to pose this question to you and Aaron, you as well, starting with Jonathan, the new proposed registered apprenticeship regulations and there's significant inclusion of a DEI equity component. What does that mean in terms of potential legal challenges? What do you think about that? Everyone wants to increase opportunity. That's why apprenticeships exist. What about the inclusion of an equity component? What do you think about that?

Hon. Jonathan Skrmetti: Well, there's a legal problem there. I think everybody wants to see underserved communities and disadvantaged Americans have opportunities to prosper, but there's two problems. The first is the Constitution prohibits the use of race in decision making where you can't treat two people differently solely based on the color of their skin. Students for fair admissions emphatically states that, and it says that our civil rights laws, including Title VII, have the same underlying principle involved. So the court hasn't spoken to it, but I think any reasonable person looking at the opinion has to expect that when Title VII goes up on a race preferences case, we've got a pretty good idea that the court is not going to allow people to be treated differently based on race. The other issue is, and I think it ties into the court's reasoning, race is an increasingly poor proxy for disadvantage, and that's a good thing.

America has been a successful experiment. There are still disparities out there in a variety of axes, but you are less and less and less able to define someone's role in society based on their race. You have very successful people of races that have not traditionally been as successful. You have very unsuccessful poor people from races that are alleged to have privileges. In Tennessee, for instance, we have Memphis where there are significant pockets of poverty, there are significant pockets of black poverty, and if someone wanted to go into one of those neighborhoods and create additional opportunities, that would be a wonderful thing. But we have pockets of poverty in Appalachia where the skin color of the people affected is different, but they're dealing with the same challenges of poverty and to deprive them of opportunities solely because they belong to a group that's allegedly privileged is just anathema to what America is all about.

So I anticipate we'll see more and more legal challenges. There's been some momentum growing. You've seen the law firms targeted. There's case law developing. People are starting to get nervous. HR departments are revisiting some of the decisions that they made in the past. But I anticipate we'll see a substantial increase in litigation in this area as people start to win, as attorneys start to see opportunities to make money with these cases. And so I think you see hesitation here because there is a clear avenue to liability. The other issue is it's a spending clause issue. This is money coming from the federal government through the states. The states did not agree to racial preferences when they agreed to take the money. That is a significant deviation from the statute, which only addresses the welfare of apprentices. And so there's a separate constitutional basis for thinking that the strings related to race preferences may not survive litigation. So I think it's important that we have an apprenticeship program that people can unreservedly buy into, and that means we need to make sure that there aren't these pieces of litigation bait hanging out there that add an unnecessary and contentious political element to something that should be purely targeted at creating opportunity for people who otherwise would not have it.

Craig E. Leen: And Aaron, I'd like your thoughts on this too. I think one of the issues here is that classic affirmative action for a federal contractor doesn't involve preferences or quotas at all. It's based on determining availability. And if you see that you are underrepresented, it requires you to do more outreach and recruitment, but you're not allowed to set, you can set long-term goals, but you can't set anything that would be similar to a quota or preference. I think the concern here, as you've articulated extremely eloquently, but I think the concern here is that this may go beyond that in addition to being a spending clause issue, this may be requiring them to actually set goals that are more than long-term goals because you have demonstrated underrepresentation. If you don't have demonstrated underrepresentation, you shouldn't be setting goals. That's one the underlying issues, at least for classic affirmative action. Aaron, what do you think?

Prof. Aram A. Gavoor: Sure. So happy to opine on this and having read the state AG's letter that the state of Tennessee led with 23 state AG's signing it, I agree that the spending clause authority is probably the strongest argument against the proposed regulatory changes. And also having just read very carefully the document from the Department of Labor that they did their best to, as in the Biden administration, to not offend the Students for Fair Admissions directly, but there's a lot of secondary or consequential issues that do present some level of litigation exposure, a pretty significant amount, undoubtedly decision was made to press forward. Regardless of that, and this just sort of reminds me of my time in the federal government having served under both Republican and presidential administrations in politically career detailed positions, I would always ask, what is your objective for this regulation? Are you looking for behavioral change?

Are you looking to sort of score points for the base or achieve some broader goal that's not directly based on the behavior you're looking to change, at least in the text of the regulation? This sort of looks like a category two where it's more of, I think it has very strong fidelity to the broader whole of government equity approach that the Biden administration has championed and what President Biden ran on honestly in 2020. But the legal risks are there, and I won't step further into Jonathan's space, but from a business perspective, do you want to invest in a burdensome, complex regulatory scheme that ultimately exposes you to litigation liability possibly by your own state and your own employees? That's not a great recipe for achieving the goal of having enlargement of apprenticeships in the United States. So that's my vector of concern with this, and I just wanted to socialize that.

Craig E. Leen: Lemme ask John and Ryan, do you have any thoughts? One issue that occurs to me is having been an O-F-C-C-P director and advising a lot of federal contractors and non-federal contractors, the decision whether to have an affirmative action program and become a federal contractor is a big decision. A lot of companies won't do it, and sometimes they're concerned about legal liability. They might be concerned about record keeping obligations and expense and burden, and some want to do it and they embrace it. There's different approaches. The one issue I see here though is that apprenticeship generally is a very positive thing for equal employment opportunity. You're getting people who don't necessarily have the skills and they're getting the skills. You're helping underutilized parts of the population, underutilized groups be able to get jobs. That's the purpose of apprenticeship. And it often has a very positive socioeconomic impact adding these sort of obligations that are not really focused on apprenticeship. There are additional obligations, whole of government approach. We want to include these equity obligations. We want to include an affirmative action program, whatever it might be. How could that impact apprenticeship? Is that an issue? Is that a concern?

Ryan Craig: It is absolutely crazy. They have proposed these rules. Apprenticeships for America had six different feedback sessions and I think three or 400 participants in the current apprenticeship registered apprenticeship system participated. The feedback was almost unanimously negative on these apprenticeships are the most at equitable pathway to career launch in this country. And it's not just equity that these new rules are focused on. It's also, I'd say consumer protection with the somehow believing that there are sort of unethical players out there looking to prey upon poor apprentices in the same way that they view for-profit colleges preying upon poor unsuspecting students. But apprenticeships are an entirely different genus, right? Apprenticeships are jobs where you have a employer willing to pay you a living wage and train you as well. So the idea that somehow apprenticeships need more equity or need more consumer protection is crazy and is just going to inhibit the apprenticeship creation that we desperately need.

We don't have as a nation, other countries have built a pretty substantial earn and learn career launch infrastructure. We are way over indexed, over invested in tuition-based debt-based career launch infrastructure, we're way under invested in earn and learn career launch infrastructure. And that is really bad in an era where the skills that employers are most looking for are actually easier to learn on a job in a job than they are in a classroom. And when AI is about to transform entry level, entry level jobs, what used to be entry level jobs into jobs that require a year or two or three of real relevant work experience, it's going to be very, very hard for career launch unless we can build this, earn and learn career launch infrastructure and on equity and consumer protection, more of that by regulation is antithetical to our goals.

Craig E. Leen: Thank you, Brian. John?

Hon. John Pallasch: I agree with most of what Ryan said. He mentioned earlier this notion of picking winners. I never thought our job in DC is to pick winners. I thought our job was to create the environment and to incentivize the type of behavior that we wanted to see. That's what we did. When we rolled out the industry recognized apprenticeship program in practice, what we were doing was seeding control, seeding authority from the Department of Labor to what we were calling standard recognition entities or SREs, saying, Hey, you know what's best in your area and in your industry, you go ahead and do this. We don't. Why are we going to have some bureaucrat, whether that's John Pallasch or somebody else sitting in Washington DC saying, "Yes, we believe that solar voltaic is important in Arizona, but it's not important in Nevada." That's silly. We in DC are supposed to create an environment that encourages growth, that encourages innovation.

And what you see in this rule and what you see from this administration, unfortunately when they rolled back, the IRAP rule was just the opposite. It's very much a prescription of what you must do to get through the gate. "And oh, by the way, we're going to make the gate very, very narrow". That's not what we need. If we actually want to grow the workforce, if we want to grow skilled workers, if we want to grow apprenticeships, I think we need to go directly in the opposite direction, which is allow states to tell us and allow local areas to tell us, "Hey, this is what's important here. This is what we see coming. This is what's growing in our industry. And oh, by the way, the governor's going to be putting money behind this as well." So we in DC don't know that and no disrespect to them, but Congress is even further removed from what's happening across the country. So we're seeing this right now with the whole AI conversation, hoping that the folks in Congress understand artificial intelligence. They don't, they don't understand apprenticeships, they don't understand workforce development. So let's let the people, let's let the employers, let's let the local partners who live this world every day to Ryan's point who are hiring these individuals, let them tell us what they need.

Craig E. Leen: Jonathan, I'm going to turn this over to you to conclude this question, but you put this in your letter, and this was a red flag to me about adding these equity requirements. You put that the regulations would require prospective sponsors to articulate an equitable intentional intent, always intentional and achievable strategy for advancing the program's, recruitment, hiring and retention of individuals from underserved communities. And everyone wants to see underserved communities do better, but it would've been much better if that said to ensure equal opportunity so that underserved communities can be included, but instead it's targeting underserved communities. My concern is if you're not from what's defined as an underserved community, which may include someone who's white from a working class background, some of the individuals you talked about, will they feel like they can't go for this apprenticeship program or will they not be targeted? That's a concern I have. So let me turn over to you, Jonathan, to conclude this part. You've heard a lot of different perspectives.

Hon. Jonathan Skrmetti: Yes, that is a concern. I mean, you don't want to shut people out and underserved community in the definition in the reg includes persons of color. And of course, we want to create opportunities for everybody, whether they're persons of color or not. The other thing is because this is such a fraught environment, creating a policy that satisfies this, if you're an employer, means you're not just committing a little bit of time. It means your lawyers are going to be making bank off this because you need to thread multiple needles to put something in place hoping that you're not going to be exposing the company to significant risk. And the amount of data collection and everything creates more opportunities for litigation based on disparate racial treatment. But it also is just difficult and complicated. So the equity portion of this is itself a potential issue. And I think as we see the law further clarify in that direction, it's going to be lower hanging fruit for attorneys out there looking to make a buck. But the infrastructure surrounding it is also so complicated that it seems like it's inherently a disincentive to try to get involved in this program to begin with. So I think people would be much better served by a simpler, straightforward program that did not include any of the seemingly gratuitous mention of race. I mean, if people are disadvantaged, they're disadvantaged regardless of what color they are and a simpler program that really makes it easy for people to create these avenues of opportunity.

Craig E. Leen: I often tell employers, I tell government entities, focus on non-discrimination. It's extremely important that if a black applicant is denied the ability to participate, that's illegal, that's wrong, that's a problem. And you know what? That's still more common than a white applicant being denied and everyone agrees with that. But then why are you adding these additional requirements that are inconsistent with the law? Arguably, I'm not here to conclude that. I know you have a strong view on that, but that could be inconsistent with the law and that are causing additional burdens on a program when you could just say, don't discriminate. And if you do, we're going to get you. Okay. Let's move to the next topic. The significant reliance on subregulatory guidance in the apprenticeship. And we've talked about how it's a 400 word statute from 90 years ago. Problems this may pose based on the Supreme Court's recent decisions on administrative deference, particularly the flip-flopping and the significant reliance on FAQs by the Office of Apprenticeship both in the green energy tax credit area, by the way, but also more generally in who can have an apprenticeship. What are apprenticeable occupations? A lot of this is subregulatory or regulatory. Very little comes directly from the statute. Aaron, let's start with you.

Prof. Aram A. Gavoor: Sure. So a couple of big thoughts. First is it should never be thought that subregulatory guidance is somehow immune from litigation or accountability. The court has only expanded the accessibility of the federal courts with regard to challenging administrative behavior through Sagat, Ox Sagat with regard to what a 7 0 4 finality is under the Administrative Procedure Act has to be sufficiently final corner post from this most recent term, in my view, largely eviscerated the teeth of the statute of limitations that would otherwise be a six year statute of limitations for the APA for even old regulations. So long as you're a new firm or a firm that's being adversely affected now by something that's old or in this case new, then you can challenge it. And then with regard to the government getting its way in terms of the interpretation of an authorizing statute of regulation, really all that truly remains is the power to persuade, which is the Skidmore deference.

That's from the 1940s, which really involves the thoroughness evident and consideration the consistency with prior and later announcements, which we don't have here. And then also the fact that the interpretation of the authorizing statute is some level of Contemporanea with its bicameralism presentment and signature by the president. It's almost a hundred year old statute. So this would be the type of subregulatory guidance that falls within a relatively high risk category for litigation. And undoubtedly, that was something that the administration considered and ultimately was just comfortable accepting, putting this out. Again, my big concern with this is this does not squarely appear to be the goal of advancing apprenticeships. It's more of the goal to do other things. And it's entirely possible that the Department of Labor people who wrote this, it was substantially edited at a yra, maybe substantially edited within the department to have a very, very different consequence than what it was originally intended to be.

Craig E. Leen: If I may, thank you, Aaron. I really appreciate those insights. If I may say every panel. And Aaron, by the way, is a constitutional scholar and he knows a lot about the constitution. We should have you on every one of these, Aaron, because you provide a very helpful legal context to what we're talking about. Anyone else want to comment on that?

Hon. Jonathan Skrmetti: I mean, as somebody who has successfully challenged subregulatory guidance fairly recently, it's a lot easier to go after it if that's the way that an agency is announcing its policies and they're just not doing it through a formal process. Guidance can still be challenged. And this is one of those areas where, and there are increasingly many of them where Congress just needs to do its job. And we have a structure right now that is not working. We have a constitution that is so far removed from the way that decisions are being made and policies are being implemented that it creates problems like this where you have a hundred year old statute, it's a fairly thin statute, and you have this huge regulatory apparatus built up on it. At some point you need a firmer foundation. We see this in so many different areas of the law. I do not question the intentions of the people who are working on this. Everybody I think is trying at the highest level to make something that works and works well and helps people. But in our system, the big decisions have to be made by Congress. The agency actions have to be justified by what Congress has done, and you can only get so far afield before you start running into significant legal problems.

Craig E. Leen: Definitely. And I think that even on the equity issues, for example, and you might have some issues with it, even if it was Congress that did it because of the constitutional components, but it would be a different issue if the National Apprenticeship Act actually addressed that, but it doesn't address it. So this is all coming from regulatory agencies who are adding burdens to apprenticeship to achieve other goals. And whether those goals are laudable or not, it probably mitigating apprenticeship or making it harder for companies to form them. So I think that those are really insightful. I will say one thing about subregulatory guidance, if I may not, in its defense, I did issue quite a bit when I was OCCP director, but the subregulatory guidance I issued and a standby was guidance that would help the business community comply and it typically would decrease, and we were an enforcement agency.

It would decrease our discretion. So we would say, this is how we look at this. It almost creates an estoppel against the government, which I think is helpful. And it also says, by the way, this doesn't create any obligation. I think that the subregulatory guidance that is problematic is once that try to add obligations that are not in the statute, that are not even in a regulation and just are promulgated by the agency head. They're just like, I'm going to write this today. They put it out there even in a somewhat formal way. And now that's the law. Even if they put the disclaimer, a lot of companies are going to say, oh my gosh, we better do this. That could be a real problem because it doesn't go through the APA. It's not a statute. Anyhow, just a thought. Let me get to the last topic.

The potential growth of apprenticeship in the solar, wind, green energy areas, particularly after the Inflation Reduction Act, which of course was done under a Democratic administration by a Congress, but it was promoted by a Democratic administration, green energy tax credits, whether DOL should be creating apprenticeship programs in newer occupations or continue relying on established trades such as solar installer compared to electrician. And I bring this up because I've seen this myself advising in this area trying to get the Office of Apprenticeship to create new programs to address these opportunities for companies, solar installer, an apprenticeship program, something like that. They instead publish guidance saying, you know what? You figure out which of the established trades this is most like. And there's a real push to try to make it unionized trades like electricians for example. And by the way, this is not pro-Union or anti-Union. The issue here is there's a statute that says we want to do more green energy tax credits. Why is the Office of Apprenticeship and prevailing wage law basically from DOL Wage and Hour Division, why aren't they trying harder to get companies to create apprenticeship programs for solar installers and making it as easy as possible to know what the prevailing wage is and be compliant. Any thoughts? This is for the whole group. Anyone who has some thoughts in this issue, because it's a conundrum for me a little bit

Hon. John Pallasch: With a little reckless speculation (inaudible).

Craig E. Leen: John, could you speak a little closer to the mic? Forgive me.

Hon. John Pallasch: Sorry. Can you hear me?

Craig E. Leen: Yes. Try again.

Hon. John Pallasch: Having technical difficulty.

Craig E. Leen: It's okay, we can hear you enough. Go ahead.

Hon. John Pallasch: I'm going to engage in a little speculation here. I don't think this is an Office of Apprenticeship issue. Having worked with that office for a year and a half, I don't think the issues are coming from the office of apprenticeship. I think when we talk about apprentice ability issues, we have to be very cognizant of why any administration or in that case, any state apprenticeship agency would not want to create more occupations that are eligible for registered apprenticeships. I think we need to be honest with ourselves about what that means. And to your point, I'll say it, you didn't want to, and that's fine. I think we need to be cognizant that there are barriers to entry to this, and by not allowing business to tell us what the jobs of the future are. We love to talk about jobs of the future, but we are absolutely petrified of acknowledging that those jobs exist and that jobs we can't even think of today will exist in five years.

So we have to have a commitment from the Department of Labor, from the White House all the way down to the state apprenticeship agencies, and we're going to defer to business. And if business tells us that solar installers is an important job, we have to trust them. A state agency shouldn't be making that determination. The Department of Labor shouldn't be making that determination, the White House and Congress shouldn't because we don't know. We're not in touch with what's happening there. We're certainly not on the cutting edge of industry and where things are going. So I think to your point, I think that those that are in control need to release some of that control and allow business and industry to tell us where this process needs to go.

Craig E. Leen: John, what about you, Ryan? What do you think on this? And let me read one question we got as part of this from Tim Taylor in the IRA world, we're seeing community benefits plans, hiring plans and expectations and other nons statutory and even non-regulatory requirements being baked in via transactional documents as a condition of accessing loans or grant funds. Any thoughts on that as well? So either my question or this question as well, Ryan,

Ryan Craig: Just a general thought, which is we haven't really talked about unions, but one of the problems is that the trade unions are very happy right now with the status quo continuing to effectively control the registered apprenticeship program. And they're not thrilled about efforts to try to expand apprenticeship to other sectors because that will mean losing control of apprenticeship. So I think that a lot of what this administration has done on apprenticeship has been consistent with trade union building trade union demands.

Craig E. Leen: Thank you, Ryan. John, any final thoughts on that question from Tim?

Hon. John Pallasch: No, I think Ryan summed it up. I think

Craig E. Leen: I agree.

Hon. John Pallasch: Again, what we're trying to pick winners and losers, that's not the way to go and incentivizing one traditional program or one traditional employer over new interviews, employers, it is not the path we want to go down.

Craig E. Leen: Thank you, John. Okay, everybody. So we're done with the questions. Let me give each of you 30 seconds to a minute to say any concluding remarks you'd like. It's been a true honor to be on this call today. I'm so glad that the Federalist Society did a program on apprenticeship. Thank you to the Federalist Society. Thank you to the administrative law and regulatory group. With that, Ryan?

Ryan Craig: Well, I certainly appreciate the Federalist Society focus on reducing the barriers and regulation around apprenticeship creation. That is, as I say, one of the two challenges. I do think we ought to keep our a finger on the issue of incentives, though. We spend as a nation $500 billion of taxpayer money, federal and state on taxpayer funded higher education. So that's going to the 4,000 plus accredited colleges and universities in the country. We spend less than 400 million of taxpayer dollars on earn and learn options. If you compare an apprentice with a college student, for every dollar of public support that that apprentice is receiving, the college student is receiving $50. Every other developed country I've mentioned is higher on the apprentice side by an order of magnitude, sometimes two orders of magnitude. So we are just way out of balance. We need to develop a more balanced system, and that's going to require not only less regulation, but more incentives to apprenticeship creation.

Craig E. Leen: Thank you, Brian. John?

Hon. John Pallasch: I just think we need to be honest with ourselves, and we have to realize that the solution here is political will. We can't out of one side of our mouth today that we want to grow apprenticeships, that we want to encourage more individuals to go back to work and then out of the other side of our mouth say, but we're going to put 150 new requirements in place for that to happen. And candidly, that's what this comes down to. It comes down to the political will at the local state and the federal level for folks who I would say there's not an elected official in this country who doesn't run on the jobs for I'm the jobs governor, I'm the jobs mayor, I'm the jobs senator, I'm the jobs president. Well prove it. Put your political will behind putting more people back to work, creating more avenues to a skilled job, and don't allow special interests. Don't allow those who have been taking advantage of a system that prevents that from happening to stand in the way of that statement that you made. Thank you, John. Aram?

Prof. Aram A. Gavoor: I think it would be nice if we, as a country, depoliticized apprenticeships, this current attempt that it is not really good. It looks more like nuclear safety regulation or complex drugs, when really the barrier to entry should be remarkably low and very easy. And my bet is if you ran an economic analysis on that is you would actually see a far larger proportion, but also total number of people from underserved communities, however you define them, getting raised up by this type of policy and program. So hopefully we get it right soon.

Craig E. Leen: Mr. Attorney General, you have the final word.

Hon. Jonathan Skrmetti: I mean, the government's job is not to micromanage what businesses do. It's to make sure that people are protected from the worst abuses of chicanery and misconduct and to overcome collective action problems. And here we have a lot of people who would like to learn to work and make more money. The companies don't necessarily have as big an incentive as they should to get them there. And so the government's stepping in to help bridge that gap and make sure that we have a robust workforce and a lot of happy gainfully employed people. We don't need to inject politics into this. I agree with a hundred percent. And it's not, I mean, every aspect of what the government does needs to be depoliticized more because we don't need to be injecting ideology into what should be just basic good government infrastructure to solve a discreet problem and create opportunities for people by letting businesses create those opportunities. So in addition to sort of the broad philosophical problem with racializing, the decision-making process, just the amount of onerous regulation here is completely contrary to what would be most effective to actually help people. And I agree with the other panelists, this needs to be simplified. It's a great program. It can do good things for a lot of people. We just need to get out of the way.

Craig E. Leen: Thank you very much. This has been more than I hoped for and I hoped for a lot. So great job. Thank you so much. Apprenticeship is such an important topic. I hope people learned a lot about it today and what needs to be done in that area. Wonderful discussion. Chayila, back to you.

Chayila Kleist: Thank you so much. I'll echo that. Thanks to our panel. Really appreciate you all carving out this section of your days and sharing your valuable expertise and insight with us. Thank you also to our audience for joining and participating. We welcome listener feedback by email at [email protected]. As always. Keep an eye on our website, your emails for announcements about other upcoming virtual events, with that, thank you all for joining us today. We are adjourned.