Supremes smack down state favoritism

Union ownership of state legislatures devalued?

In recent years, the union movement has been increasingly turning to sympathetic state legislatures for help in battling against non-union employers.

But that strategy has been dealt a major setback by the U.S. Supreme Court. In overturning a California law last month, the high court severely limited the ability of states to regulate anti-union activity, experts say. The June 19 ruling will likely have far-reaching effects nationwide, they say.

The law in California, adopted in 2000 but not yet put into effect, declared that companies receiving state money could not use that money to fight unionization efforts. Unions organizing health care workers in the state had complained that many hospitals -- which receive state Medicare and Medicaid -- were using state money to pressure employees to remain union-free.

The law would have primarily affected not only hospitals and nursing homes, but all companies that do business with the state, such as those contracted to provide janitorial, road-paving or engineering services.

While companies could use their own money to oppose unions, business groups in California argued that provisions in the law made that virtually impossible -- so that essentially, any organization receiving state money could not speak out against unions.

The Supreme Court ruled that the California law was invalid because it would have pre-empted federal law -- that the state went too far in regulating labor relations, says Michael J. Lotito, a workplace-law expert and partner in the law firm Jackson Lewis. Lotito, who is based in San Francisco, represented employer groups before the Supreme Court.

As many as 20 other states have passed or are considering similar legislation, as part of an effort by unions to create a favorable environment for labor organizing, says Lotito. With the Supreme Court dealing a serious blow to that effort, he says, the union movement "will now push even harder" for the federal Employee Free Choice Act, intended to make it easier to organize employees. That bill has been passed by the House, but so far does not have enough support in the Senate, says Lotito.

The Supreme Court's ruling, he says, means that "you're not going to be able to change rules on a state-by-state basis. If you're going to change the rules, it has to be on a nationwide basis."

Tim Ryan, a senior partner with Morrison and Foerster who is based in Los Angeles, says unions will likely continue to press state legislatures for favorable laws. However, he says, in order to pass muster before the Supreme Court, such laws are likely to be much less potent than in the past.

However, he says, the high court ruling "was a shot across the bow of unions' legislative strategy."

According to Ryan, the California law said that if companies wanted to speak out against unions, they would have to segregate the money received from the state -- and demonstrate that none of it was used for anti-union activity. But because of the complexity of the law, that kind of proof would have been virtually impossible to provide, he says.

"What you really should do if you're an employer is shut your mouth," he says.

John Borsos, the administrative vice president of United Health Care Workers West -- the union whose organizing efforts sparked the law -- agrees that the Supreme Court ruling will likely move the battleground to the federal level. And, because there will now be so much effort focused on the Employee Free Choice Act, the bill may have a much better chance of passing than before.

The law might be onerous, he says, but "if you don't want to do business with the state because the rules are too onerous, don't do business with the state."

In the Supreme Court's majority opinion, Justice Paul Stevens wrote that the California law would have impeded "free debate" in labor relations, something guaranteed by federal law. Stevens cited previous high court rulings that federal law favors "uninhibited, robust, and wide-open debate in labor disputes," particularly the "freewheeling use of the written and spoken word."


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