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Board upheld in denying practice exclusivity to licensees based on FTC v. North Carolina Dental Examiners

The practice of installing laboratory fume hoods was not within the exclusive practice of the state's Board of HVACR Contractors' own licensees, a New Jersey appellate court held June 2.

Eric Shea,

(In re New Jersey State Board of Examiners of Heating, Ventilating, Air Conditioning and Refrigeration Contractors)

Eric Shea,

The case is part of a years-long dispute between the trade and labor groups representing sheet metal workers and carpenters in New Jersey. In 2016, the named party, a board licensee, asked the board to state whether a HVACR contractor license is required for the installation of laboratory fume hoods.

The board returned a cagey answer, saying only that such installations “remain[] within the scope of practice for the Licensed Master HVACR Contractors,” which many people seemed to take as an affirmative.

Then, in 2017, an HVACR licensee named James Harper emailed the board, asking for a probe of unlicensed hood installations performed by a company called ScientifiX. The board’s executive director contacted the company, which responded by claiming that laboratory fume hoods are not, in fact, specified in the state’s regulatory code as being within the sole practice of HVACR licensees.

The company also noted that fume hoods are essentially just a metal box and a fan attached to laboratory furniture. While the eventual connection of the hoods to a building’s HVACR systems would require a licensee, the mere attachment of the hoods to laboratory furniture did not.

The board decided in favor of inclusiveness, stating in October 2017 that the attachment of fume hoods was within the non-exclusive scope of practice of HVACR licensees and following up with two formal decisions holding that a HVACR license is not required for the job.

In issuing that decision, the board cited North Carolina State Board of Dental Examiners v. FTC, a U.S. Supreme Court decision on antitrust issues in the context of licensing boards, and noted that the skills necessary to install the hoods are not exclusive to HVACR licensees.

The Sheet Workers Association appealed that decision, arguing that the board should have held an evidentiary hearing on the issue of fume hood installation before issuing its ruling, that the decision was more akin to a formal administrative rulemaking and required the board to adhere to processes laid out in the state’s Administrative Procedure Act, and that the question of fume hood installation was actually a labor dispute, meaning that a decision by the board was pre-empted by a federal statute prohibiting agencies from deciding jurisdiction disputes between competing labor unions.

Although state law defines the practice of HVACR contracting to include the installation of ventilation and exhaust systems—which would seem to include fume hoods—the Superior Court judges noted that the board, in rejecting exclusivity for its licensees, made a considered decision that the simple attachment of the metal hoods to lab furniture did not rise to the level of the installation of systems.

“We will not substitute our judgment for that of the Board, whose decision was not arbitrary, capricious or unreasonable, was based on considered evaluation of the substantial evidence before it and did not violate the statutory or regulatory scheme under the Act,” the judges wrote.

Regarding the licensees’ argument that the board had improperly engaged in an informal rulemaking to make an exception to its regulations, the court again disagreed, noting that the question answered by the court was brought by the licensees themselves.

“The Board did not create a statutory exception to the licensure require-ments,” the court wrote. “Instead, it interpreted the Act and the duly promulgated regulations thereunder that defined HVACR. It did so in the context of responding directly to a complaint brought by the Sheet Metal Workers as to specific construction projects.”

The court rejected the licensees’ argument that the board was required to hold an evidentiary hearing before issuing a decision. “In this case, neither side disputed before the board what fume hoods were, how they were installed, whether the Carpenters had been doing so for decades, or that HVACR-licensed contractors were required to make the actual ventilation connections.” The only question for the board was one of statutory and regulatory interpretation and did not require an evidentiary hearing.

Last, the court rejected the federal pre-emption argument, holding that the board did not decide which union was entitled to install fume hoods for a particular employer; the board was simply responding to an interpretive question prompted, again, by the licensees themselves.