Labor Law

The Robert Court’s decision in U.S. Chamber of Commerce v. Brown[1] expansively construed implied preemption in Section 301 of the NLRA, preempting California’s rule banning recipients of state grants from using grant money “to assist, promote, or deter union organizing" Under the so-called Machinist preemption doctrine, the underlying purpose of Section 301 is to insure that the struggles of labor and management for bargaining advantage are to be “unregulated and to be controlled by the free play of economic forces,” except to the extent that tactics constitute “unfair labor practices” under the federal statute.[2] Because (as construed by the Court’s Machinist decision) Section 301 allows each side of the bargaining process to use any “economic weapons” permitted by the National Labor Relations Board to improve their bargain—strikes, lockouts, replacement of workers, and so forth; state laws’ forbidding such “economic weapons” would frustrate the implied purpose of the NLRA.

But does such preemption apply to states’ placing conditions on private access to state revenue? The Court’s answer has been ambiguous: when states’ conditions on revenue resemble private actors’ buying or selling goods or services, then such “market participation” is deemed not to be preempted.[3] When states’ conditions on their revenue exert regulatory pressure on private parties, then the Court has found the conditions to be preempted.[4]

Brown found that California’s rule banning grant recipients from using state funds for discouraging or promoting unions constituted “regulation” rather than “market participation.” Brown rested this holding on the breadth of the state law (noting that the measure “is neither ‘specifically tailored to one particular job’ nor a ‘legitimate response to state procurement constraints or to local economic needs’ ”[5]) as well as its bias in favor of union speech (because it exempted some forms of collective bargaining from the scope of its prohibition). The distinction between acting as a “market participant” or a “regulator,” however, has a flabby and manipulable quality. The Court has elsewhere suggested that states enjoy broad discretion to tailor purchasing decisions to favor broad environmental goals, free from federal preemption that would otherwise apply to states’ regulation of private interests.[6] Why not allow states to enjoy similar latitude in promoting unionization goals?

The answer may be that federal statutes defining the framework for collective bargaining are quintessentially commercial policies designed to facilitate efficient deal making. Being ostensibly agnostic about the outcome of the bargaining process, such policies seem less regulatory than federal environmental laws. The same judicial impulse that leads the Court to construe the FAA broadly in order to preempt state interference with arbitration in the name of “streamlining” litigation also may lead the Court to construe Section 301 preemption broadly in order to preempt state interference with a “neutral” framework for resolving labor-management disputes.

  • [1] 554 U.S. 60 (2008).
  • [2] Lodge 76, Int’l Ass’n of Machinists & Aerospace Workers v. Wis. Emp’t Relations Comm’n, 427U.S. 132, 144 (1976) (holding that a Wisconsin employment relations board could not find a refusalto work overtime, an action that did not violate the NLRA., an unfair labor practice).
  • [3] Bldg. & Constr. Trades Council v. Associated Builders, 507 U.S. 218, 229-32 (1993) (“whenthe [state agency], acting in the role of purchaser of construction services, acts just like a privatecontractor would act, and conditions its purchasing upon the very sort of labor agreement thatCongress explicitly authorized and expected frequently to find, it does not 'regulate’ the workings ofthe market forces that Congress expected to find; it exemplifies them”) (quoting Associated Builders& Contractors v. Mass. Water Res. Auth., 935 F.2d 345, 361 (1991)).
  • [4] Wis. Dep’t of Indus. v. Gould Inc., 475 U.S. 282 (1986) (striking down Wisconsin statute debarring persons or firms that had violated the NLRA. three times within a five-year period from sellingproducts to the state).
  • [5] Brown, 554 U.S. at 70-71 (2008) (quoting Gould, 475 U.S. at 291).
  • [6] Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist., 541 U.S. 246, 258 (2004).
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