Chamber of Commerce v. Brown--and preemption of NLRA

Very few people really understand this case, and I am not sure that I am one of them. There will be a decision, of course, and that decision will be the law of the land, but let me explain if I can in this essay why confusion reigns here. At first blush the law looks harmless enough, but then when you think of it for a little while, problems arise. When you consider, then, the torturous history of the litigation and then at the issue being considered by the Court, you, too can join in the great company of confused people. Let me see if I can explain the confusion clearly.

The Law at Issue

On Sept. 28, 2000, CA enacted Assembly Bill 1889. The preamble of the statute declared:

"It is the policy of the state not to interfere with an employee's choice about whether to join or to be represented by a labor union. For this reason, the state should not subsidize efforts by an employer to assist, promote, or deter union organizing. It is the intent of the Legislature in enacting this act to prohibit an employer from using state funds and facilities for the purpose of influencing employees to support or oppose unionization and to prohibit an employer from seeking to influence employees to support or oppose unionization while those employees are performing work on a state contract."

Two provisions of this law, sections 16645.2 and 16645.7, are at issue here. The former bars private employers who are "recipients of a grant of state funds" from "using the funds to assist, promote, or deter union organizing." The latter section forbids "a private employer receiving state funds in excess of $10,000 in any calendar year on account of its participation in a state program" from using program funds "to assist, promote, or deter union organizing."

The fundamental question is whether these provisions of law put a burden on employers that is so onerous that it either violates their First Amendment speech rights or violates the intent of the National Labor Relations Act of 1935--which attempted to "level the playing field" between labor and management in union representation issues. Because the law passed in CA was strongly promoted by Union interests, there is the sense that the history of litigation after 2000 is just the continuation of the legislative fight lost by the Chamber of Commerce in that year--but a continuation in the courts.

The Course of Litigation

After passage of the law in 2000, the Chamber of Commerce and others filed suit in 2002, claiming, among other things, that the law was preempted by the NLRA. The US District Court concluded in 2002 that the CA law under consideration was pre-empted by what is known as the Machinists doctrine (Lodge 76 Int'l Association of Machinists v. Wisconsin, 427 US 132 (1976)--a case interpreting the NLRA) because these provisions "regulate employer speech about union organizing under specified circumstances, even though Congress intended free debate." Then, a three judge panel of the Ninth Circuit affirmed the district court. But then it withdrew its opinion upon granting rehearing to the case. On rehearing, a divided panel issued a second opinion contrary to the first. The court then vacated this opinion and decided to take up the issue en banc. When the court took up the issue as an entire court in 2006, it reversed the district court (and itself) and held that the NRLA doesn't preempt the CA statute, and that the law bolded above is constitutional. Got it?

Understanding a Few of the Issues

Legal scholar Stephen Befort has argued as follows:

"The topic of federal labor law preemption presents one of the densest thickets in all of labor and employment law. The Supreme Court, for example, has decided more cases touching on federal preemption than on any other legal issue in the field of collective bargaining. These cases have yielded two distinct theories of labor law preemption. The Garmon strand of preemption precludes the states from regulating conduct that is arguably protected or prohibited by the National Labor Relations Act (NLRA). The Machinists strand, meanwhile, preempts state law that intrudes on areas that Congress intended to leave to the free play of economic forces. These preemption theories, in turn, are subject to a dizzying variety of exceptions. The resulting legal landscape is meandering at best. As Justice Frankfurter once remarked, the contours of labor law preemption are “of a Delphic nature, to be translated into concreteness [only] by the process of litigating elucidation.”

As Befort goes on to argue, this piece of litigation implicates both theories of NLRA preemption, as well as what is called the "market participant exception" to preemption.

The Issue Before the Supreme Court

The petition for certiorari stated the issue so simply:

"Is the State of California's regulation of noncoercive employer speech about union organizing, California Assembly Bill 1889, Cal. Gov't Code §§ 16645.2, 16645.7, preempted by federal labor law?"

Twelve 9th Circuit judges said that it wasn't. The $10,000 limit didn't implicate employer speech; indeed, if an employer wanted to affect the result of a union representation election it could simply use its own money, rather than state money, to oppose the union election. But the dissenters (three judges) suggested that the record-keeping requirements of the statute are so onerous, the 'private attorney general' provision so generous (anyone could sue if a violation was alleged) and the scope of the prohibition so intimidating that it amounted to an impermissible restriction on speech and a violation of the two preemption doctrines mentioned briefly above.

The current US Supreme Court isn't a very "pro-union" Court, and thus I think it is accurate to say that at least four of the judges will be inclined to think negative thoughts about the CA law. And the shape of the pre-emption doctrine is so vague and imprecise that the Court might have ample grounds to find that the law upsets the "delicate balance" between employer and employee. I don't know what the Court will do, but I wouldn't be surprised if reversal is in store...

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