• Employer Speech Rights Under Federal Law Trump State Law On Union Campaigns
  • July 15, 2003
  • Law Firm: Atkinson, Andelson, Loya, Ruud & Romo, A Professional Corporation - Cerritos Office
  • California's Governor Gray Davis has signed many bills sponsored by organized labor. Unions have relied on government officials to do their work through legislation and regulations, especially lately with the declining interest of individual employees in having union representation. One such piece of legislation signed by Governor Davis is AB 1889, which took effect in 2001. By its text, AB 1889 limits the rights of employers who receive state funding to engage in activity or communications to deter union organizing activity. The thrust of the law is that if an employer receives any money from the state, it is a target for prosecution by the state if it speaks to employees about unions.

    For decades, federal law in the National Labor Relations Act (the "Act") has allowed employers to speak to their employees on union issues as long as employers do not threaten, interrogate, promise benefits, or engage in surveillance of employees in connection with union activities. Section 8(c) of the Act specifically protects and allows communications by employers. A significant conflict between federal and state law arose after AB 1889 took effect. Management groups took legal action to try to prevent enforcement of the Act. An early lawsuit was dismissed as being premature, because there was no evidence of anyone suffering actual harm from enforcement of the law.

    Once AB 1889 took effect, the Attorney General began to accept complaints from labor unions that employers faced with union campaigns were violating state law by communicating with their employees about the union. In response, employers have disputed the unions' complaints and taken the position that their communications with employees are protected by federal labor law and constitutional free speech rights. Various employer groups, including the Chamber of Commerce and the California Association of Health Facilities, filed suit in federal court in Orange County to bar enforcement of AB 1889 as a violation of federal law and constitutional free speech rights. The Attorney General and various labor groups responded in opposition to the lawsuit that the state has the right to control how its money given to these employers in state funding is spent. Furthermore, the Attorney General and the labor groups contended that AB 1889 is merely an effort to control how the state as a market participant spends its money.

    The federal court rejected the position of the Attorney General and the labor groups. A federal court order of September 16, 2002 ruled on summary judgment motion that AB 1889 improperly violates employers' federal labor law rights to communicate with employees about union issues. The court declined to address other issues such as the constitutionality of the law.

    The court rejected the Attorney General and labor groups' reliance on a United States Supreme Court decision in the Boston Harbor project labor agreement case. The Supreme Court in Boston Harbor declared that the government had the right as a market participant to allow a project labor agreement, which excluded non-union contractors in favor of only union-signatory contractors. The Court ruled that Boston Harbor was inapplicable because the project labor agreement in Boston Harbor was a special, one job arrangement, whereas AB 1889 is a pervasive statewide legislative rule applicable to all union organizing campaigns.

    In ruling that AB 1889 interfered with the free exchange of ideas on labor activity and labor disputes, the Court specifically referenced Section 8(c) of the National Labor Relations Act and relied on another Supreme Court ruling, Wisconsin v. Gould. In Wisconsin v. Gould, the Supreme Court declared invalid a Wisconsin statute that debarred from state work in Wisconsin any contractors who were found to be repeat violators of federal labor law contained in the National Labor Relations Act. The Wisconsin v. Gould court ruled that the state law improperly infringed on an area exclusively regulated by federal law.

    In ruling against AB 1889 in the current case, the court confirmed that the State of California has no right to intrude on an area regulated by federal labor law. The court acknowledged that federal law currently provides three specific limitations on employers' communications regarding union organizing issues (in the Work Force Investment Act, Head Start laws, and the National Community Service Act). Accordingly, the court found no basis to find a general federal law preclusion or policy consistent with the state's objectives set forth in AB 1889. The court recognized that if the federal government wished to regulate or limit activity or communications to deter union organizing activities by employers in AB 1889, it would have explicitly said so.

    Since the court's order in the AB 1889 case resulted from a motion for summary judgment, it is not a final order. There are other issues presented which are not resolved by the order. Specifically, there was no ruling as to AB 1889's applicability to public employers or to state contractors. Although further proceedings may take place, it is possible that the case will be dropped as to those issues so that the matter goes to a quicker appeal to the Ninth Circuit Court of Appeals, covering California.

    The future of AB 1889 is now in doubt. Employers fearful of or facing proceedings to enforce AB 1889 against them may take comfort in the trial court's order. Ultimately, however, an appeal is expected and the Ninth Circuit has proved less than sympathetic to employer interests. With what appears to be a significant conflict between state standards in AB 1889 and federal standards in the National Labor Relations Act, it seems likely that an unfavorable ruling on appeal to the Ninth Circuit may eventually warrant review by the Supreme Court in Washington, D.C. Such a review would reconcile California's unique state regulation in AB 1889 with federal labor law and constitutional rights on a national scale.

    Employers potentially covered by AB 1889 should continue to monitor developments. Regardless of how overreaching and blatantly unjust AB 1889 appears to be, the threat of its enforcement against California employers who do business with the state may not be over.