Metropolitan News-Enterprise


Wednesday, August 24, 2016


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Panel Upholds L.A. Hotel Worker Minimum Wage Law




The citywide minimum wage law for Los Angeles hotel workers is not preempted by the National Labor Relations Act, the Ninth U.S. Circuit Court of Appeals ruled yesterday.

The panel affirmed a ruling by U.S. District Judge Andre Birotte Jr. of the Central District of California, denying a preliminary injunction sought by two organizations of hotel owners.

The October 2014 ordinance replaced the Airport Hospitality Enhancement Zone Ordinance enacted in February 2007. The more limited ordinance had survived a preemption challenge in federal court, as well as a state court challenge to the city’s authority to enact the ordinance without voter approval after a similar enactment was blocked by a referendum petition.

Council Findings

In approving the new law, the council found that the earlier legislation, known as the AHEZ Ordinance, “has resulted in higher pay and real benefits for low-income families, and the hotels around LAX have thrived.” The citywide minimum wage for covered hotels is $15.37 per hour.

Hotels with 300 rooms have been subject to the law since July 1 of last year; those with 150-299 rooms became subject to it last month, although a one-year hardship waiver is available under some circumstances. The previous law applied to hotels in the AHEZ with at least 50 rooms.

The hotel-owner plaintiffs argued in support of their motion for preliminary injunction that the ordinance violates the National Labor Relations Act by improperly aiding a union in its efforts to organize employees. Birotte denied the motion last May, saying the plaintiffs were unlikely to succeed on the merits.

Senior Judge Harry Pregerson, writing yesterday for the appellate panel, agreed.

Pregerson’s Reasoning

The jurist explained that while the NLRA contains no express preemption clause, the courts have recognized two types of state law that are preempted—those that regulate activity that Congress expected the NLRA to protect or prohibit, and those that prohibit states from restricting a “weapon of self-help” such as a strike or lockout.

The latter type of preemption is called Machinists preemption, after Int’l Ass’n of Machinists v. Wis. Emp’t Relations Comm’n (1976) 427 U.S. 132. 

Pregerson explained:

“Minimum labor standards, such as minimum wages, are not subject to Machinists preemption....Such minimum labor standards affect union and nonunion employees equally, neither encouraging nor discouraging the collective bargaining processes covered by the NLRA….Minimum labor standards do technically interfere with labor–management relations and may impact labor or management unequally, much in the same way that California’s at-will employment may favor employers over employees. Nevertheless, these standards are not preempted, because they do not ‘regulate the mechanics of labor dispute resolution.’”

Minimum Labor Standard

The Los Angeles ordinance is a minimum labor standard that does not alter the mechanics of collective bargaining, and is thus not preempted, the judge concluded.

He also rejected the plaintiffs’ contention that the provision of the ordinance allowing hotels and unions to opt out of the law through collective bargaining is preempted even if the entire ordinance is not. Similar opt-outs have been upheld by the Supreme Court, he noted.

Pregerson was joined by Judges Kim M. Wardlaw and Andrew D. Hurwitz.

American Hotel and Lodging Association v. City of Los Angeles, 15-55909, was argued in the Ninth Circuit by New York lawyer Michael Starr for the hotel owners, Deputy City Attorney Sara Ugaz for Los Angeles, and San Francisco attorney Paul L. More for UNITE HERE Local 11, an intervenor.


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