11/22/07

Ninth Circuit pro-union decision under review

The U.S. Supreme Court yesterday agreed to review a Ninth U.S. Circuit Court of Appeals decision allowing California to prohibit employers from using state grant money to oppose union organizing campaigns.

The justices, without comment, granted a certiorari petition by the Chamber of Commerce of the United States, which contends the ban is preempted by federal labor law. The Bush administration last month urged the high court to take the case.

The statute, enacted in September 2000 as AB 1889, prohibits entities that receive more than $10,000 in state money from using the funds to “assist, promote, or deter union organizing,” including “any attempt of an employer to influence the decision of its employees” over whether to support or join a labor union.

Legislation Codified

The legislation is codified in the Government Code, beginning with Sec. 16645. The chamber had successfully challenged it in district court and before a Ninth U.S. Circuit Court of Appeals panel before an en banc panel upheld it in a 12-3 decision in September of last year.

The preamble to the law states:

“It is the policy of the state not to interfere with an employee’s choice about whether to join or to be represented by a labor union. For this reason, the state should not subsidize efforts by an employer to assist, promote, or deter union organizing. It is the intent of the Legislature in enacting this act to prohibit an employer from using state funds and facilities for the purpose of influencing employees to support or oppose unionization and to prohibit an employer from seeking to influence employees to support or oppose unionization while those employees are performing work on a state contract.”

Employers who violate the law are subject to disgorgement of the state funds used and a civil penalty equal to twice the amount of those funds. Suspected violators may be sued by the state attorney general or by any private taxpayer.

If an employer commingles state and other funds, the law presumes that any expenditures to assist, promote or deter union organizing derive in part from state funds.

The Ninth Circuit, in an opinion by Judge Raymond C. Fisher, said the law is not preempted by the National Labor Relations Act because “California’s refusal to subsidize employer speech for or against unionization does not regulate an activity that is actually protected or actually prohibited by the NLRA,” and does not regulate an area intended by Congress “to be controlled by the free play of economic forces.”

Chief Judge Mary M. Schroeder and Judges Stephen Reinhardt, Alex Kozinski, Michael Daly Hawkins, Sidney R. Thomas, Barry G. Silverman, M. Margaret McKeown, Kim McLane Wardlaw, Richard A. Paez, Johnnie B. Rawlinson, and Richard R. Clifton joined in Fisher’s opinion.

Court’s Opinion

Senior Judge Robert M. Beezer, who had written the panel opinion, was joined in dissent by Judges Andrew J. Kleinfeld and Consuelo M. Callahan, arguing that the law improperly forced employers to take a neutral stance in respect to union organizing drives.

In its brief to the high court, the administration cited San Diego Building Trades v. Garmon (1959) 359 U.S. 236, which forbids states from regulating activity the NLRA explicitly or arguably protects or prohibits, and Lodge 76, Int’l Ass’n of Machinists v. Wisconsin Employment Relations Comm’n, (1976) 427 U.S. 132, which bars states from regulating activity Congress intended to leave subject to the natural result of economic forces.

Congress, the administration argues, intended to permit “robust debate” during union organizing drives, as well as to grant the National Labor Relations Board the exclusive authority to regulate the actions employers may take to persuade employees to oppose unionization.

The administration also argues that the Ninth Circuit ruling conflicts with Healthcare Ass’n of N.Y. State, Inc. v. Pataki (2d Cir. 2006) 471 F.3d 87, which struck down a similar law in New York. The Second Circuit reasoned that a state “cannot leverage its money to affect” employer activity “beyond [its] dealings with the State.”

In urging the high court to resolve the asserted conflict, the administration noted that eight other states—Florida, Illinois, Maine, Massachusetts, Minnesota, North Dakota, Ohio, and Rhode Island—“have enacted laws of varying breadth that prohibit the use of state funds to encourage or discourage union organizing” and that bills patterned after the California law were introduced this year in Illinois, Massachusetts, Minnesota, Michigan, and New Jersey.

Other amici supporting the chamber include the Associated Builders and Contractors and the National Right to Work Legal Defense Foundation. The AFL-CIO and California Federation of Labor have joined Attorney General Jerry Brown in defense of the law.

Deputy Attorney General Angela Sierra authored the state’s brief to the high court.

The case is Chamber of Commerce of the United States of America v. Brown, 06-939.

(metnews.com)

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