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Employers can use state funds to fight unions
September 06, 2005 by Ross Runkel at LawMemo
California ties a string to state-funds grants over $10,000: Private employers can't use the money "to assist, promote, or deter union organizing."
The 9th Circuit, after a rehearing, ruled that the NLRA preempted the statute. Chamber of Commerce of the United States v. Lockyer (9th Cir 09/06/2005) (2-1).
California Gov't Code Section 16645.2(a) bars private employers who are "recipient[s] of a grant of state funds" from "us[ing] the funds to assist, promote, or deter union organizing." Similarly, Section 16645.7(a) bars "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 such funds "to assist, promote, or deter union organizing."
The 9th Circuit held that these provisions are preempted by the National Labor Relations Act (NLRA) under both the "Machinists" preemption doctrine (Lodge 76, International Association of Machinists & Aerospace Workers v. Wisconsin Employment Relations Commission, 427 US 132 (1976)) and the "Garmon" preemption doctrine (San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959)).
The majority opinion said that the California statute
"chills employers from exercising their free speech rights that are explicitly protected by Congress under the National Labor Relations Act. In doing so, the statute undermines the delicate balance established by Congress as between labor unions and employers. In addition, the California statute interferes with the National Labor Relations Act’s extension of exclusive jurisdiction to the National Labor Relations Board (“NLRB”) for the adoption and enforcement of representation election rules."
My view: The second opinion is considerably more persuasive than the original opinion, but probably wrong.
California law does not limit employers' ability to express their opinions; it merely says they can't spend state money to do so. Whatever employers could say before the statute they can still say. It's just that state money must be spent on other things. Hence, in my view, no real interference with Congress's policies, and no preemption.
Stephen F. Befort (law prof at University of Minnesota Law School) and Bryan N. Smith have written a great article about this case - At the Cutting Edge of Labor Law Preemption: A Critique of Chamber of Commerce v. Lockyer, with lots of background and lots of opinions. Oh, yes, they agree with me. Or I agree with them.
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Editor: Ross Runkel, Professor of Law Emeritus. email Ross@LawMemo.Com, Phone 503-399-8028. Copyright LawMemo, Inc.
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