Ninth Circuit Overturns Law Designed to Protect Union Organizing
By KENNETH OFGANG, Staff Writer/Appellate Courts
A California law prohibiting recipients of state contracts from seeking to encourage or discourage union activity is preempted by the National Labor Relations Act, the Ninth U.S. Circuit Court of Appeals ruled yesterday.
In a victory for business groups, particularly those representing the healthcare industry, the panel said the Legislature had “acted in such a way as to undermine federal labor policy by altering Congress’ design for the collective bargaining process” when it passed AB 1889 four years ago.
The legislation bars private employers who are recipients of $10,000 or more in state funds in any calendar year from using that money “to assist, promote, or deter union organizing,” such as by seeking to influence the employees’ decision on whether to support unionization of their workplaces.
The plaintiffs, led by the Chamber of Commerce of the United States, filed suit against the state in April 2002, seeking declaratory and injunctive relief from the statute. They contended that it conflicted with Sec. 8(c) of the National Labor Relations Act, which allows an employer to speak to employees about the benefits and drawbacks of unionization.
The AFL-CIO and others intervened in order to defend the law.
U.S. District Judge Gary L. Taylor of the Central District of California granted an injunction in January of last year barring enforcement of the law. He noted that the NLRA provides that “the expressing of any views, argument, or opinion, or the dissemination thereof—shall not constitute or be evidence of an unfair labor practice—if such expression contains no threat of reprisal or force or promise of benefit.”
Judge Raymond C. Fisher, writing for the Ninth Circuit, said Taylor was correct. He rejected the state’s argument that it was acting as a “market participant” and was thus exempt from NLRA preemption in this instance.
The exception, Fisher explained, permits a public entity to promote good labor relations on government projects in order to protect the public interest. The judge cited a U.S. Supreme Court ruling upholding a Massachusetts requirement that contractors working on the clean-up of Boston Harbor agree to the terms of a project labor agreement negotiated between the state’s project manager and a union.
Fisher also cited the Ninth Circuit’s own ruling allowing the City of Oakland to cancel its subscription to the Oakland Tribune and remove its advertising during a strike.
The state’s enactment of AB 1889 is different, the judge says, because the state enacted it as a regulator, not a proprietor. He compared the law to a Wisconsin statute, struck down by the U.S. high court on NLRA preemption grounds, curtailing state purchases from vendors who had been previously found to have violated labor laws on multiple occasions.
“The combined teaching of these cases is that when a state uses its spending power to shape the overall labor market in a manner that is essentially nonproprietary, the market participant exception will not apply and the state action may be subject to NLRA preemption,” the judge wrote, joined by Senior Judge Robert Beezer and U.S. District Judge Morrison B. England Jr. of the Eastern District of California, sitting by designation.
The case is Chamber of Commerce of the United States v. Lockyer, 03-55166.
Copyright 2004, Metropolitan News Company