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Chamber of Commerce v. Lockyer: California wins
September 21, 2006 by Ross Runkel at LawMemo
My prediction came true. California can prohibit employers from using state-grant funds "to assist, promote, or deter union organizing."
Chamber Of Commerce Of The US v. Lockyer (9th Cir 09/21/2006) (en banc) (12-3).
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."
A 9th Circuit panel had ruled in April 2004 that the NLRA preempted the statute, but the 15-member en banc court thought otherwise.
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."
Sitting en banc, the 9th Circuit held that these two sections (enacted as part of Assembly Bill 1889 (AB1889)) "do not undermine federal labor policy, are not preempted by the NLRA [National Labor Relations Act] and do not violate the First Amendment." The court reasoned that 1) these sections are not preempted by the NLRA under either Machinists preemption (Lodge 76, International Ass'n of Machinists v. Wisconsin Employment Relations Commission, 427 US 132 (1976)) or Garmon preemption (San Diego Building Trades Council v. Garmon, 359 US 236 (1959)); and 2) these sections do not violate the 1st Amendment, because (consistent with Rust v. Sullivan, 500 US 173 (1991)) they, "like various federal acts, require[ ] only that those who accept government grant and program funds use them for the purpose for which they were given."
Here's what I said in May 2005:
My view: The original panel decision was well written, but probably wrong.
Machinists preemption is designed to keep states from regulating certain activity that Congress wants to be unregulated by anybody. The relevant activity here is an employer (or a union) expressing its opinion either for or against union organization. That's NLRA Section 8(c).
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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