The City of Los Angeles, like numerous other municipalities in California and elsewhere, regulates the ability of certain employers to summarily replace the workforce upon acquiring a new business. Is such a worker retention ordinance preempted as intruding upon either matters of health and safety already regulated by the state or matters of employee organization and collective bargaining fully occupied by federal law? We conclude it is not. As well, we conclude the challenged ordinance is fully consistent with both the state and federal equal protection clauses. As the Court of Appeal found the ordinance preempted, we reverse.
In December 2005, the City of Los Angeles (City) adopted the Grocery Worker Retention Ordinance (Ordinance). (L.A. Ord. No. 177231, adding
Plaintiff California Grocers Association (Grocers) filed a complaint against the City seeking to enjoin enforcement of the Ordinance on the grounds that it was preempted by provisions of the Health and Safety Code, the Labor Code, and federal labor law, and that it violated the equal protection provisions of the state and federal Constitutions. The Los Angeles Alliance for a New Economy, a nonprofit organization, intervened to defend the Ordinance.
After a two-day bench trial, the trial court entered a judgment enjoining enforcement of the Ordinance, declaring it void on two of the four asserted grounds. The court concluded the Ordinance affected health and sanitation standards for retail food establishments, an area fully occupied by state law, and was on that basis preempted, and further concluded the Ordinance violated equal protection because there was no rational basis for its differential treatment of grocery stores smaller than 15,000 square feet or its permitting employers and unions to contract around the Ordinance's terms.
A divided Court of Appeal affirmed. The majority agreed with the trial court that the California Retail Food Code (Retail Food Code) (Health & Saf.
We granted review to resolve significant preemption and constitutional questions placing into doubt the validity of this and other similar worker retention ordinances throughout the state.
Only the last of these bases for conflict, field preemption, is at issue here. "Local legislation enters an area `fully occupied' by general law when the Legislature has expressly manifested its intent to fully occupy the area or when it has impliedly done so in light of recognized indicia of intent." (Big Creek Lumber Co. v. County of Santa Cruz (2006) 38 Cal.4th 1139, 1150 [45 Cal.Rptr.3d 21, 136 P.3d 821].) Grocers contends the Ordinance impermissibly intrudes into an area the state has, in the Retail Food Code, expressly reserved for itself. (See Health & Saf. Code, § 113705.) Express field preemption turns on a comparative statutory analysis: What field of exclusivity does the state preemption clause define, what subject matter does the local ordinance regulate, and do the two overlap? (See, e.g., Big Creek Lumber, at
Thus, in Cohen v. Board of Supervisors (1985) 40 Cal.3d 277 [219 Cal.Rptr. 467, 707 P.2d 840], we upheld against a preemption challenge a local ordinance requiring a permit to provide an escort service. The state had impliedly occupied the field with respect to the criminalization of prostitution and sexual conduct. (See In re Lane (1962) 58 Cal.2d 99, 103 [22 Cal.Rptr. 857, 372 P.2d 897].) Although the ordinance's likely purpose was to reduce vice and deter conduct proscribed by the state, this purpose did not support preemption: "An ordinance is not transformed into a statute prohibiting crime simply because the city uses its licensing power to discourage illegitimate activities associated with certain businesses. Most licensing ordinances have a direct impact on the enforcement of state laws which have been enacted to preserve the health, safety and welfare of state and local citizens. This fact does not deprive a municipality of the power to enact them." (Cohen, at p. 299.) The ordinance in actual effect did not enter the field of criminalizing
Similarly, in Bravo Vending v. City of Rancho Mirage, supra, 16 Cal.App.4th 383, a tobacco company challenged a local ordinance forbidding vending machine cigarette sales. The tobacco company contended that, because the ordinance was intended to reduce sales to minors and the state had expressly occupied the field of penal sanctions for sales to minors, the ordinance was preempted. The Court of Appeal found no preemption. While the local ordinance was intended to make less likely violations of the laws against sales to minors, in actual effect it neither expanded upon nor detracted from the state-mandated prohibitions and sanctions for sales. (Id. at p. 412.)
More recently, in Personal Watercraft Coalition v. Marin County Bd. of Supervisors (2002) 100 Cal.App.4th 129 [122 Cal.Rptr.2d 425], the Court of Appeal rejected the argument that, because a municipality had adopted an ordinance banning the use of personal watercraft out of a concern for pollution, the ordinance was preempted by federal law prohibiting the adoption of state and local emission standards for nonroad vehicles. The Court of Appeal correctly recognized that the purpose of the federal preemption provision was only to alleviate the problems that would arise from "a multiplicity of conflicting state and local exhaust emission standards." (Id. at p. 155.) Consequently, state and local laws were preempted only to the extent they adopted such standards. Laws that simply promoted the same antipollution goals without setting pollution standards were entirely valid. (Ibid.)
In Machinists, supra, 427 U.S. 132, the United States Supreme Court considered whether labor or management self-help (economic pressure tactics such as boycotts, strikes, and lockouts used to extract concessions during the collective bargaining process), although neither protected nor prohibited by the NLRA, might nevertheless be "`deemed privileged against state regulation.'" (Machinists, at p. 141.) A union, seeking to pressure an employer to make concessions in negotiations over renewal of an expired collective bargaining agreement, urged its members to refuse all overtime work. A state labor commission, concluding the conduct was neither arguably protected nor arguably prohibited by federal labor law, enjoined the concerted activity as being in violation of state law, and the state supreme court upheld the injunction.
In subsequent years, the United States Supreme Court has extended Machinists principles to other instances in which, from the text or structure of the NLRA, it could infer Congress intended the subject matter to be free from state or municipal regulation. Thus, in Golden State Transit Corp. v. Los Angeles (1986) 475 U.S. 608, 618 [89 L.Ed.2d 616, 106 S.Ct. 1395], again addressing regulation of economic weapons in the bargaining process, the United States Supreme Court concluded the City of Los Angeles was preempted from conditioning renewal of a taxicab company's operating license on the company's settling a labor dispute. The taxi drivers were permitted under the NLRA to strike to pressure the taxi company, and the taxi company was permitted to resist that pressure and seek to outlast the drivers. The city, by requiring the taxi company to settle in order to keep operating, was effectively placing a time limit on the company when none was contemplated, thereby interfering with its use of permitted economic weapons, and was imposing an obligation to agree where the text and legislative history of the NLRA contemplated only an obligation to bargain. (Golden State Transit, at pp. 615-617.)
Most recently, in Chamber of Commerce of United States v. Brown (2008) 554 U.S. 60 [171 L.Ed.2d 264, 128 S.Ct. 2408], the United States Supreme Court concluded California could not prohibit employers who received state funding from using those funds to influence support for or opposition to union organizing. (See Gov. Code, §§ 16645.2, 16645.7.) Reviewing the history of federal labor regulation, the court noted Congress had "expressly preclude[d] regulation of speech about unionization `so long as the communications do not contain a "threat of reprisal or force or promise of benefit."'" (Brown, at p. 68; see 29 U.S.C. § 158(c).) As well, Congress could have included in section 8(a) and (b) of the NLRA (see 29 U.S.C. § 158(a), (b)) further limits on pro- and anti-unionization advocacy; the limits it chose to
The foregoing cases each dealt with circumstances where, from the structure of the NLRA, it was evident Congress had spoken to a particular topic and no state interference could be countenanced. A second line of post-Machinists decisions, by contrast, has articulated significant limits on the scope of Machinists preemption arising from the fact the NLRA is a regulation of process, not substance.
The NLRA was enacted "to remedy `[t]he inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract, and employers who are organized in the corporate or other forms of ownership association.'" (Metropolitan Life Ins. Co. v. Massachusetts (1985) 471 U.S. 724, 753 [85 L.Ed.2d 728, 105 S.Ct. 2380] (Metropolitan Life), quoting 29 U.S.C. § 151.) "One of the ultimate goals of the Act was the resolution of the problem of `depress[ed] wage rates and the purchasing power of wage earners in industry,' 29 U.S.C. § 151, and `the widening gap between wages and profits,' 79 Cong. Rec. 2371 (1935) (remarks of Sen. Wagner), thought to be the cause of economic decline and depression." (Metropolitan Life, at p. 754.) Congress addressed this problem not by directly dictating particular wage levels, but by establishing procedures for employee organization and collective bargaining that, it hoped, would result in fairer negotiations and higher wages. (Ibid.) The resulting law was "concerned primarily with establishing an equitable process for determining terms and conditions of employment, and not with particular substantive terms of the bargain that is struck when the parties are negotiating from relatively equal positions." (Id. at p. 753.)
The United States Supreme Court in Metropolitan Life analyzed whether the process-oriented NLRA was intended to have any effect on local employment laws of general application. A Massachusetts law required that employee health care plans include certain minimum benefits, a subject that otherwise might have been addressed in collective bargaining. Rejecting the argument that Machinists preemption applied, the Supreme Court drew a line between laws that regulate process and those that regulate substance: "No incompatibility exists . . . between federal rules designed to restore the equality of bargaining power, and state or federal legislation that imposes minimal substantive requirements on contract terms negotiated between parties to labor agreements, at least so long as the purpose of the state legislation is not incompatible with these general goals of the NLRA." (Metropolitan Life, supra, 471 U.S. at pp. 754-755.) While the NLRA facilitates collective bargaining over the terms of employment, it does not dictate—nor does it preclude states from dictating—any particular substantive terms of employment.
In Fort Halifax Packing Co. v. Coyne (1987) 482 U.S. 1 [96 L.Ed.2d 1, 107 S.Ct. 2211] (Fort Halifax), the United States Supreme Court extended these principles to a state law guaranteeing employees a severance payment in the event of a plant closing. The high court reiterated that "the NLRA is concerned with ensuring an equitable bargaining process, not with the substantive terms that may emerge from such bargaining." (Id. at p. 20.) States may regulate what might otherwise be the subject of negotiation: "`[T]here is nothing in the NLRA . . . which expressly forecloses all state regulatory power with respect to those issues . . . that may be the subject of collective bargaining.'" (Id. at pp. 21-22.) Given that "`Congress developed the framework for self-organization and collective bargaining of the NLRA within the larger body of state law promoting public health and safety . . .'" (id. at p. 22), Maine could by statute provide employees some minimal economic security, in the event of a plant closing, without running afoul of the NLRA.
Our own decision in Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690 [166 Cal.Rptr. 331, 613 P.2d 579] presaged the high court's later recognitions of the power of localities to promote public health and safety through regulation of the employer-employee relationship without falling prey to Machinists preemption. We considered there whether federal preemption precluded the state Industrial Welfare Commission from issuing wage orders regulating the minimum wages, maximum hours, and conditions of employment for employees in a range of industries. We rejected the argument out of hand, relying on what we viewed as settled precedent that "the federal labor laws do not `preempt . . . the field of regulating working conditions. . . .'" (Industrial Welfare Com., at p. 728, fn. 16, quoting Terminal Assn. v. Trainmen (1943) 318 U.S. 1, 7 [87 L.Ed. 571, 63 S.Ct. 420].) Instead, we recognized preemption was confined to circumstances in which local regulation interfered with the process of organizing and bargaining,
Given that Congress's purpose was to regulate the process of establishing terms of employment, not the content of those terms (Metropolitan Life, supra, 471 U.S. at p. 753; Fort Halifax, supra, 482 U.S. at p. 20), it follows that the areas Congress intended to leave free of local regulation are those relating to the process by which an employment agreement is reached: matters of self-organization and collective bargaining. (See Metropolitan Life, at p. 751.) In sharp distinction, because the NLRA is not a federal code of employment law, Machinists preemption does not extend to local establishment of substantive employment terms: "Such regulation provides protections to individual union and nonunion workers alike, and thus `neither encourage[s] nor discourage[s] the collective-bargaining processes that are the subject of the NLRA.'" (Fort Halifax, at pp. 20-21; see also Southern California Edison Co. v. Public Utilities Com. (2006) 140 Cal.App.4th 1085, 1100 [45 Cal.Rptr.3d 485] [Local employment regulation is permitted "as long as the purpose of the law or regulation is not incompatible with the general goals of the NLRA to restore the equality of bargaining power and resolve the problem of depressed wages."].)
With these principles in mind, we consider whether the text or structure of the NLRA evidences any intent to preclude worker retention ordinances such as the one at issue here.
This silence leaves unrebutted the initial presumption that Congress did not intend preemption. The NLRA's statutory text does not disturb state and local authority to address, as these entities see fit, matters of hiring and firing, authority traditionally recognized as a core incident of their police power. (See De Canas v. Bica (1976) 424 U.S. 351, 356 [47 L.Ed.2d 43, 96 S.Ct. 933] ["States possess broad authority under their police powers to regulate the employment relationship to protect workers within the State."].) Thus it is that states and localities have long been permitted to provide common law wrongful discharge remedies (e.g., Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167 [164 Cal.Rptr. 839, 610 P.2d 1330]) and enact statutes of general application regulating hiring and firing (e.g., Gov. Code, § 12900 et seq. [Cal. Fair Employment and Housing Act]) without intruding upon the NLRA's narrowly tailored concerns.
The congressional silence concerning the subject matter of the Ordinance distinguishes this case from those where the United States Supreme Court has found Machinists preemption. (See Machinists, supra, 427 U.S. 132.) Without exception, preemption in each was traceable in part to specific statutory language evincing a congressional intent to regulate only at the federal level. (See Chamber of Commerce of United States v. Brown, supra, 554 U.S. at pp. 67-69 [preempting a statute that effectively limited employer speech about union organizing, where Congress in §§ 7, 8(a), 8(b), and 8(c) of the
While recognizing that the Ordinance on its face does not regulate organizing or bargaining, Grocers contends it is nevertheless preempted because of its indirect effects on those subjects. Grocers's principal argument, accepted by the Court of Appeal majority, is that the Ordinance alters how the NLRB would decide successorship questions, i.e., whether and to what extent labor liabilities and bargaining or contractual obligations should follow when ownership of a unionized business is transferred from one entity to another.
The NLRA does not speak to successorship. Consequently, successorship questions are governed by federal common law. (Howard Johnson Co. v. Hotel Employees (1974) 417 U.S. 249, 255-256 [41 L.Ed.2d 46, 94 S.Ct. 2236].) In a trilogy of cases (John Wiley & Sons v. Livingston (1964) 376 U.S. 543 [11 L.Ed.2d 898, 84 S.Ct. 909]; NLRB v. Burns Security Services (1972) 406 U.S. 272 [32 L.Ed.2d 61, 92 S.Ct. 1571]; Howard Johnson Co., supra, 417 U.S. 249), the United States Supreme Court outlined the circumstances
A premise of Grocers's general argument is that these cases ratify a new owner's right, untouchable by state or local regulation, not to hire its predecessor's employees upon acquiring a new store. The Court of Appeal majority agreed; reversing the trial court on this point, it embraced the existence of such a right as a basis for federal preemption. Upon close examination, these authorities do not support Grocers's claim.
The language Grocers and the Court of Appeal majority rely upon traces to NLRB v. Burns Security Services, supra, 406 U.S. 272. In the course of analyzing a new employer's legal obligations, the United States Supreme Court explained: "The [NLRB] has never held that the National Labor Relations Act itself requires that an employer who submits the winning bid for a service contract or who purchases the assets of a business be obligated to hire all of the employees of the predecessor though it is possible that such an obligation might be assumed by the employer." (Id. at p. 280, fn. 5, italics added.) The Supreme Court reiterated the point the following year, noting that "the purchaser [of a business] is not obligated by the Act to hire any of the predecessor's employees. . . ." (Golden State Bottling Co. v. NLRB (1973) 414 U.S. 168, 184, fn. 6 [38 L.Ed.2d 388, 94 S.Ct. 414], italics added, citing Burns, at p. 280, fn. 5.)
Notwithstanding these statements, the petitioner union in Howard Johnson Co. v. Hotel Employees, supra, 417 U.S. 249, contended federal common law and the existing collective bargaining agreement should be interpreted so that "`the successor does not have the right not to hire. . . .'" (Id. at p. 261, fn. 7.) The Supreme Court rejected the argument: "What the Union seeks here is completely at odds with the basic principles this Court elaborated in Burns. We found there that nothing in the federal labor laws `requires that an employer . . . who purchases the assets of a business be obligated to hire all of the employees of the predecessor though it is possible that such an obligation might be assumed by the employer.'" (Id. at p. 261, quoting NLRB v. Burns Security Services, supra, 406 U.S. at p. 280, fn. 5, and citing Golden State Bottling Co. v. NLRB, supra, 414 U.S. at p. 184, fn. 6.) The
That the United States Supreme Court was using "right" in this instance in the sense of a Hohfeldian privilege
The successorship inquiry is highly fact dependent, to be decided on a case-by-case basis after consideration of numerous factors. (See Fall River Dyeing & Finishing Corp. v. NLRB, supra, 482 U.S. at p. 43; Howard Johnson Co. v. Hotel Employees, supra, 417 U.S. at p. 256.) The United States Supreme Court has not had occasion to consider whether in assessing business continuity for successorship purposes a temporary, involuntary retention of a workforce is materially different from a permanent, voluntary retention, but language in the court's opinions supports the view that it is. (See Fall River Dyeing, at p. 41 [considering as relevant to successorship whether a "new employer makes a conscious decision" to retain employees, because it demonstrates "the employer intends to take advantage of the trained work force of its predecessor"]; NLRB v. Burns Security Services, supra, 406 U.S. at p. 278 [upholding the imposition of a duty to bargain based in part on the fact a successor employer had "selected as its work force the employees of the previous employer"].)
The NLRB likewise has not formally spoken to the effect of a 90-day retention ordinance on the successorship inquiry, but several of the agency's administrative law judges (ALJ's) have. In U.S. Service Industries, Inc. (NLRB, Dec. 13, 1995, No. 5-CA-24575) 1995 N.L.R.B. Lexis 1151, pages *11-*13, an ALJ imposed a bargaining obligation on a new employer because there was substantial business continuity, as the employer had conceded. But notwithstanding that concession, the employer argued it should not succeed to the predecessor's bargaining obligation because its initial hiring was dictated by a temporary retention ordinance. Because the NLRB had not as yet formally differentiated between voluntary and involuntary initial hiring, the ALJ, not feeling at liberty to establish new precedent, rejected the argument. (Id. at p. *12.)
More helpful in discerning the current federal rule is M&M Parkside Towers LLC (NLRB, Jan. 30, 2007, No. 29-CA-27720) 2007 N.L.R.B. Lexis 27. There, an ALJ found an obligation to bargain where the new employer was running the same business with the same employees, who had been initially hired pursuant to a 90-day retention ordinance but thereafter retained voluntarily based on their satisfactory performance. (Id. at pp. *11-*14.) Although
Of significance, the ALJ embraced the NLRB general counsel's argument that the obligation to bargain as a successor arose only after expiration of the initial 90-day period. During the temporary retention period, whether the new employer would ultimately retain a majority, or indeed any, of the predecessor workforce was unclear. Only on day 113—when the new employer was free of any retention ordinance restrictions, had evaluated each employee's performance, had judged each satisfactory, and had voluntarily extended to each an offer of permanent employment—did a bargaining obligation attach. (M&M Parkside Towers LLC, supra, 2007 N.L.R.B. Lexis 27 at pp. *6-*8, *15-*18.)
Grocers posit the hypothetical of a union organizing and being named bargaining representative for the workplace within the first 90 days, then filing an unfair labor practice charge if many or most of the employees are discharged and the new employer refuses to recognize the union. They do not explain how this scenario is a particular risk occasioned by the Ordinance. If the retained workers were already represented by a union, there would be no occasion for an immediate organizing drive, while if they were not, a union could mount the very same organizing drive absent the Ordinance and would be as likely to file the very same unfair labor practice charge if the response was to dismiss employees en masse.
We are not the first court to consider these questions. The City is not unique in California in enacting a worker retention ordinance, nor is California alone in having its municipalities do so.
Subject to a union's and an employer's ability to opt out through collective bargaining (L.A. Mun. Code, § 181.06), the Ordinance applies to retail stores over 15,000 square feet in size that primarily sell household food for offsite consumption—in other words, large grocery stores (id., § 181.01, subd. E; see also id., § 12.24, subd. U. 14(a) [excluding membership stores]). Grocers take issue with four distinctions implicit in this scope: (1) between nonmember grocery stores and membership stores; (2) between grocery stores more than and less than 15,000 square feet in size; (3) between grocery stores and restaurants; and (4) between grocery stores where a unionized workforce has agreed to different terms and those where it has not.
Here, the City elected to impose temporary job retention requirements on large grocery stores, but not on, e.g., restaurants or membership clubs that also sell food. (See L.A. Mun. Code, §§ 12.24, subd. U. 14(a), 181.01, subd. E.) The City believed supermarkets function as community anchors, a judgment it is not our role to question. (See id., § 181.00 ["Supermarkets and other grocery retailers are the main points of distribution for food and daily necessities for the residents of Los Angeles and are essential to the vitality of any community."].) Given their perceived significance, the City rationally could conclude it was more important to ensure stability and continuity at such entities than at restaurants or members-only stores that arguably do not serve a similarly crucial function. The trial court correctly rejected Grocers's equal protection argument on these grounds.
For the foregoing reasons, we reverse the Court of Appeal's judgment and remand this case for further proceedings consistent with this opinion.
Cantil-Sakauye, C. J., Kennard, J., Baxter, J., Chin, J., and Corrigan, J., concurred.
I respectfully dissent, finding City of Los Angeles Ordinance No. 177231 is preempted by the National Labor Relations Act (NLRA) (29 U.S.C. § 151 et seq.).
In my view, the ordinance intrudes on the collective bargaining process in an extraordinary and fundamental way, at its very source. It determines the individual workers who will comprise a new employer's workforce for the first 90 days of its operation. During those 90 days, the new employer must provide employment to a group of workers it did not choose. In addition, the new employer must provide to this mandated workforce specified benefits (such as termination for cause only) for which the workers did not bargain and to which the new employer did not agree. I recognize that governments,
The point—that the NLRA does not interfere with an employer's selection of its workforce—has been reiterated many times by the high court in NLRB v. Burns Security Services (1972) 406 U.S. 272, 294 [32 L.Ed.2d 61, 92 S.Ct. 1571] (Burns) (an employer "is ordinarily free to set initial terms on which it will hire the employees of a predecessor"); Howard Johnson Co. v. Hotel Employees (1974) 417 U.S. 249, 262 [41 L.Ed.2d 46, 94 S.Ct. 2236] (Howard Johnson) "Clearly, Burns establishes that [the new employer] had the right not to hire any of the former [employer's] employees, if it so desired"; and Fall River Dyeing & Finishing Corp. v. NLRB (1987) 482 U.S. 27, 40 [96 L.Ed.2d 22, 107 S.Ct. 2225] (Fall River Dyeing) ("[w]e further explained [in Burns] that the successor is under no obligation to hire the employees of its predecessor ...").
The majority says these high court precedents establish only a principle of federal common law, and have no bearing on the authority of state and local governments to require the hiring for 90 days of a particular bloc of workers. With this I cannot agree. Under the preemption doctrine established in Machinists v. Wisconsin Emp. Rel. Comm'n (1976) 427 U.S. 132 [49 L.Ed.2d 396, 96 S.Ct. 2548] (Machinists) and its progeny, the salient inquiry is "whether Congress intended that the conduct involved be unregulated because left `to be controlled by the free play of economic forces.'" (Id. at p. 140.) The implicit right of the employer to select its employees in the first instance—recognized by the high court since 1937—is, it seems to me, as fundamental to the structure of the NLRA as is the correlative express right of those selected employees to organize to secure the redress of grievances and to promote agreements with the employer on working conditions. (See Jones & Laughlin, supra, 301 U.S. at pp. 43-44.) State or municipal regulation that directly interferes with that right is preempted by the NLRA under Machinists doctrine as surely as is regulation that is directed at the collective bargaining process itself. And, even if we ignore the employer's
The City of Los Angeles (City) adopted the Grocery Worker Retention Ordinance in 2005. (L.A. Ord. No. 177231, adding ch. XVIII, § 181.00 et seq. to the L.A. Mun. Code.) The ordinance is described fully in the majority opinion. In brief, it applies to grocery stores exceeding a specified size that undergo a change of ownership. It gives nonmanagerial employees of the former owner who have worked for that owner for at least six months the right to demand employment by the new owner: the new employer must select its employees from among that group, by seniority, and must retain them for 90 days, discharging them only for cause. After 90 days, the new employer must prepare a written performance evaluation for each such employee and consider offering continued employment to those with satisfactory evaluations. As the majority notes, other municipalities in California and elsewhere have adopted similar ordinances.
The NLRA "is a comprehensive code passed by Congress to regulate labor relations in activities affecting interstate and foreign commerce. As such it is of course the law of the land which no state law can modify or repeal." (Nash v. Florida Industrial Comm'n. (1967) 389 U.S. 235, 238 [19 L.Ed.2d 438, 88 S.Ct. 362].) The NLRA declares the policy of the United States: "to eliminate ... obstructions to the free flow of commerce ... by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection." (29 U.S.C. § 151.)
The need for the NLRA flowed from a free market economy in which equality of bargaining power did not exist. Employers were (and are) "organized in the corporate or other forms of ownership association" and employees "[did] not possess full freedom of association or actual liberty of contract...." (29 U.S.C. § 151.) Congress found it unnecessary to say in the NLRA that the composition of an employer's workforce is a matter of the employer's choice, but in our country, hiring has always occurred on an individual basis, one employee at a time: the employer advertises, prospective workers apply, and the employer selects.
Thus, the very foundation of the NLRA lies in a workplace composed of individuals selected by the employer. The NLRA protects the rights of those individuals whom the employer has chosen to hire, to associate with each other, to organize themselves, and to designate representatives of their choosing to negotiate the terms and conditions of their employment. (29 U.S.C. § 151.) If the workers vote to select a union to represent them, the employer must negotiate with the union in a good faith effort to reach agreement on wages, hours and other terms of employment. The NLRA does not mandate that the parties reach agreement, only that they try to agree. If they cannot agree, the NLRA establishes the rules of the battleground, protecting certain pressure tactics and prohibiting others, to keep the process fair.
The NLRA specifies the single circumstance under which the NLRB may interfere with the employer's selection of its workers: the employer cannot hire or fire based on union membership. The NLRA specifies that an employer commits an unfair labor practice "by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization...." (29 U.S.C. § 158 (a)(3).) Jones & Laughlin, after stating that the NLRA does not interfere with the employer's right to select or discharge its employees, tells us that "[t]he employer may not, under cover of that right, intimidate or coerce its employees with respect to their self-organization and representation, and, on the other hand, the Board is not entitled to make its authority a pretext for interference with the right of discharge when that right is exercised for other reasons than such intimidation and coercion." (Jones & Laughlin, supra, 301 U.S. at pp. 45-46.) Twelve years after deciding Jones & Laughlin, the high court announced the corollary principle that states may prohibit discrimination in hiring and firing against nonunion workers. (Lincoln Union v. Northwestern Co. (1949) 335 U.S. 525, 537 [93 L.Ed. 212, 69 S.Ct. 251]
The majority is mistaken in saying I have expressed here the view that the NLRA was founded on an employer's absolute right to select its employees. Plainly, the NLRA was not founded on an employer's liberty to discriminate against either union or nonunion members because they are such. In my view, regulations prohibiting unlawful discrimination and imposing minimum employment standards in no way undermine the foundation of the NLRA that each workplace may be composed of individuals selected by the employer for reasons other than discrimination.
The NLRA does not transform the fundamentally individual nature of the employment relationship. Its focus is on the right of individual workers to band together, if they so choose, and to select representatives of their own choosing, to bargain with the employer who has hired them. This is the base upon which the NLRA is constructed and from which all of its provisions flow. Just as Jones & Laughlin made it clear that Congress did not intend in the NLRA to change the fundamental, individual nature of the employer-employee relationship, including "the right of the employer to select its employees" (Jones & Laughlin, supra, 301 U.S. at p. 45), I conclude it necessarily follows that Congress did not intend to allow any other governmental entity to do so either. To permit a city to mandate that a new employer hire the predecessor's employees as a group violates the fundamental structure of the NLRA and necessarily hands weapons of economic power to a group the employer did not choose to hire. It is preempted under the doctrine established in Machinists and its progeny, to which I now turn.
Machinists examined the history of labor law preemption under the NLRA and identified two lines of preemption analysis. The first is based on the primary jurisdiction of the NLRB to regulate conduct that is a protected right under section 7 (29 U.S.C. § 157) or conduct that is an unfair labor practice in violation of section 8 of the NLRA (29 U.S.C. § 158). State regulation of conduct that is protected under section 7 or an unfair labor practice under section 8 is preempted under what is now called the Garmon preemption. (San Diego Unions v. Garmon (1959) 359 U.S. 236, 244 [3 L.Ed.2d 775, 79 S.Ct. 773].) Because the City's ordinance does not "`regulate activity that the NLRA protects, prohibits, or arguably protects or prohibits'" (Chamber of Commerce of United States v. Brown (2008) 554 U.S. 60, 65 [171 L.Ed.2d 264, 128 S.Ct. 2408] (Brown)) under sections 7 and 8, there is no Garmon preemption.
Under Machinists, "congressional intent to shield a zone of activity from regulation is usually found only `implicit[ly] in the structure of the Act,' [citation], drawing on the notion that `"[w]hat Congress left unregulated is as important as the regulations that it imposed,"' [citation]." (Brown, supra, 554 U.S. at p. 68.) This is just such a case. An employer's right to select the members of the workforce with whose representatives it will be required to bargain, if they so choose, is the foundation on which the NLRA was built, unstated but implicit in its structure. This is a paradigm of the principle that what Congress left unregulated is fully as important as the regulations it imposed. In my view, this alone is reason enough to conclude the City's ordinance, which stands in direct contradiction to one of the building blocks of the NLRA, cannot stand.
Machinists arose from the collective bargaining process itself and the pressure tactics employed by both sides during that process. In Machinists, the court found the state could not enjoin a union and its members from refusing to work overtime as part of a union effort to put economic pressure on the employer during contract negotiations. (Machinists, supra, 427 U.S. at p. 133.) The court observed that many of its past decisions concerning conduct "left by Congress to the free play of economic forces" (id. at p. 147) involved union and employee activities, but that "self-help is of course also the prerogative of the employer because he, too, may properly employ economic weapons Congress meant to be unregulable." (Ibid.) Thus, "`[r]esort to economic weapons'" was the right of both employer and employee, "and the State may not prohibit the use of such weapons or `add to an employer's federal legal obligations in collective bargaining' any more than in the case of employees." (Ibid.) So, "[w]hether self-help economic activities are employed by employer or union, the crucial inquiry regarding preemption is the same: whether `the exercise of plenary state authority to curtail or entirely prohibit self-help would frustrate effective implementation of the Act's processes.'" (Id. at pp. 147-148.) Congress meant that these activities "were not to be regulable by States any more than by the NLRB" (id. at
The majority concludes from Machinists and subsequent cases that the areas Congress intended to leave free of local regulation are confined to those relating to the process by which an agreement is reached on the terms of employment and not on the substance of those terms. Certainly, it is true that the NLRA is not concerned with the substance of the parties' agreement, and cases since Machinists have made it clear that state or federal regulations establishing minimum terms of employment that protect union and nonunion workers alike "`neither encourage[] nor discourage[] the collective-bargaining processes that are the subject of the NLRA'" and are not preempted. (Fort Halifax Packing Co. v. Coyne (1987) 482 U.S. 1, 21, 23 [96 L.Ed.2d 1, 107 S.Ct. 2211] (Fort Halifax) [Me. statute requiring employers to provide a one-time severance payment to employees in the event of a plant closing was not preempted; "establishment of a minimum labor standard does not impermissibly intrude upon the collective-bargaining process"]; see also Metropolitan Life Ins. Co. v. Massachusetts (1985) 471 U.S. 724, 757, 758 [85 L.Ed.2d 728, 105 S.Ct. 2380] (Metropolitan Life) ["[w]hen a state law establishes a minimal employment standard not inconsistent with the general legislative goals of the NLRA, it conflicts with none of the purposes of the Act"; state law requiring that minimum mental health benefits be provided under certain insurance policies was not preempted].)
But in my view, the ordinance profoundly interferes with the collective bargaining process. We are not here concerned with local regulation "establishing minimum terms of employment." (Metropolitan Life, supra, 471 U.S. at p. 754.) Nor are we concerned with state regulations "prescribing the minimum wages, maximum hours, and standard conditions of employment...." (Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 698 [166 Cal.Rptr. 331, 613 P.2d 579].) The ordinance does not merely impose a term or condition of employment, in the sense of requiring mental health insurance coverage as in Metropolitan Life, or a severance payment in the event of a plant closing as in Fort Halifax, or minimum wages and maximum hours as in Industrial Welfare Com.—benefits that apply across the board to every individual employee among the employer's selected workforce.
We are concerned with a local regulation that creates employment by dictating which individuals the new grocery owner must hire, and then
As the majority points out, the ordinance does not, on its face, regulate organizing or bargaining. But the ordinance does indeed regulate the economic contest, in at least two basic ways. (See Machinists, supra, 427 U.S. at p. 150 [state regulation of economic pressure, deemed by the NLRA to be left to the free play of contending economic forces, is "`denying one party to an economic contest a weapon that Congress meant him to have available'"].)
First, the fact that the employer's choice of employees who will comprise its workforce necessarily precedes any "`"union organization, collective bargaining, and labor disputes"'" (Brown, supra, 554 U.S. at p. 65) does not reduce the significance of that choice to the regulatory scheme Congress fashioned in the NLRA, which was created to provide "a framework for self-organization and collective bargaining." (Metropolitan Life, supra, 471 U.S. at p. 751.) The people who comprise the workforce are an integral part of that framework, and the employer's right to select its employees, one by one, was left undisturbed in the NLRA, as Jones & Laughlin explicitly tells us. So, I cannot accept the notion that states are left free to do what the NLRA does not do simply because the conduct in question—hiring the employees who will launch the new employer's grand opening—precedes the collective bargaining process.
Second, while the City's ordinance is not expressly aimed at the collective bargaining process, I think it is fair to say that the ordinance itself is an economic weapon—not a weapon wielded by either of the parties to a labor dispute, but one superimposed by the City that necessarily "`upset[s] the balance that Congress has struck between labor and management in the collective-bargaining relationship.'" (Metropolitan Life, supra, 471 U.S. at p. 751.) An ordinance that dictates whom a new employer must hire denies that new employer the ability to choose the employees it deems most suited to ensuring the success of its enterprise, and does so during the critical first 90 days of its operation. This is a matter of considerable moment to new owners with their own management styles, the implementation of which depends on selecting employees one by one.
The trial testimony demonstrates this point, showing that the first 90 days of a new grocery owner's operation are the most important to establish the
The economic pressure is not imposed by the employees as union members during collective bargaining, but it is government imposed on their behalf during a time when they are free to engage in the process of self-organization governed by the NLRA. The ordinance mandates which individuals are to comprise the workforce that will decide how or whether to bargain with the employer. To deny that an economic weapon is in play between contending economic forces as a result of the ordinance is to ignore the fundamental relationship between labor and management upon which the NLRA is constructed. The requirement to hire a specific bloc of employees, it seems to me, necessarily "has altered the economic balance between labor and management." (New York Tel. Co. v. New York Labor Dept. (1979) 440 U.S. 519, 532 [59 L.Ed.2d 553, 99 S.Ct. 1328]; see also Burns, supra, 406 U.S. at p. 288 ["The congressional policy manifest in the Act is to enable the parties to negotiate for any protection either deems appropriate, but to allow the balance of bargaining advantage to be set by economic power realities."].) Workforce selection is perforce one of the most basic "economic power realities."
The majority's view is that the ordinance is of a piece with other state and local regulations broadly regulating hiring and firing, and that it does not regulate bargaining or speak directly to the process of organizing; instead the ordinance temporarily preserves the status quo, whatever that
In the end, the majority frames the question as whether there is evidence that Congress affirmatively intended to leave the subject of employee "retention" during ownership transitions unregulated by states and municipalities, and finds the NLRA "resoundingly silent." (Maj. opn., ante, at p. 198.) In my view, this misstates the question, which is whether Congress intended to leave unregulated the employer's initial selection—not the retention—of its workforce. And the NLRA is indeed silent on both questions; there is nothing in the text of the NLRA about hiring or firing (except to prohibit doing either based on union affiliation). But the silence is hardly surprising; the high court has told us that congressional intent to shield a zone of activity from regulation in most cases is found "only `implicit[ly] in the structure of the Act'" (Brown, supra, 554 U.S. at p. 68), not in its text. The NLRA was founded on, and everything in it assumes, the existence of a freely formed employer-employee relationship. (Jones & Laughlin, supra, 301 U.S. at p. 45.) It would be anomalous to conclude that, despite this foundation, Congress did not intend to prevent states and localities from doing the very thing that it declined to do: interfere with an employer's selection of the people who will conduct its business.
For the foregoing reasons alone, I would find the City's ordinance preempted. But there is more, because the ordinance does have a direct impact on the collective bargaining process. The ordinance's requirement that the new owner hire the predecessor's workforce necessarily influences whether or not the new employer will be considered a successor to the former employer, and thus bound to bargain with the union selected by the predecessor's employees—a direct intrusion on the collective bargaining process.
If a new employer is deemed a successor of the old employer and hires a majority of its employees from the predecessor's workforce, the new employer has a duty to recognize and bargain with the union representing the predecessor's employees. This "successorship doctrine" developed through several high court cases. The first of these, John Wiley & Sons v. Livingston (1964) 376 U.S. 543 [11 L.Ed.2d 898, 84 S.Ct. 909] (John Wiley), involved the disappearance by merger of a corporate employer and the wholesale transfer of its employees to the company into which the corporate employer merged. The union representing the predecessor's employees asserted that the new employer (Wiley) was obligated to recognize certain rights of the employees under its collective bargaining agreement with Wiley's predecessor; Wiley asserted the merger terminated the collective bargaining agreement for all purposes; and the union sought to compel arbitration. (Id. at pp. 545-546.)
The high court first observed that "[f]ederal law, fashioned `from the policy of our national labor laws,' controls." (John Wiley, supra, 376 U.S. at p. 548.) It then held that the disappearance by merger of a corporate employer that had entered into a collective bargaining agreement did not automatically terminate all rights of the employees covered by the agreement, and that, "in appropriate circumstances, present here, the successor employer may be required to arbitrate with the union under the agreement." (Ibid.) The court elaborated: "The objectives of national labor policy, reflected in established principles of federal law, require that the rightful prerogative of owners independently to rearrange their businesses and even eliminate themselves as employers be balanced by some protection to the employees from a sudden change in the employment relationship. The transition from one corporate organization to another will in most cases be eased and industrial strife avoided if employees' claims continue to be resolved by arbitration rather than by `the relative strength ... of the contending forces,' [citation]." (Id. at p. 549.)
The court found Wiley's obligation to arbitrate the dispute "in the [predecessor's] contract construed in the context of a national labor policy." (John Wiley, supra, 376 U.S. at pp. 550-551; see id. at p. 550 ["the impressive policy considerations favoring arbitration are not wholly overborne by the fact that Wiley did not sign the contract being construed"].) But the court cautioned: "We do not hold that in every case in which the ownership or corporate structure of an enterprise is changed the duty to arbitrate survives.... [T]here may be cases in which the lack of any substantial continuity of identity in the business enterprise before and after a change would make a duty to arbitrate something imposed from without, not
Next, the high court decided Burns, supra, 406 U.S. 272, holding that an employer that hired a majority of its predecessor's employees had an obligation to bargain with the union that represented those employees, but could not be required to observe the terms of the union's collective bargaining agreement with the predecessor. (Id. at pp. 278, 286-287.) In Burns there was no relationship between the new employer and its predecessor. The new employer replaced the predecessor when it bid for and obtained a service contract to provide plant protection services. (Id. at pp. 274-275.) The new employer's obligation to bargain with the union "stemmed from its hiring of [the former employer's] employees and from the recent election and Board certification." (Id. at pp. 278-279.) "[I]t would be different if Burns had not hired employees already represented by a union certified as a bargaining agent...." (Id. at p. 280.)
The Burns court noted that the NLRB "has never held that the National Labor Relations Act itself requires that an employer who submits the winning bid for a service contract or who purchases the assets of a business be obligated to hire all of the employees of the predecessor though it is possible that such an obligation might be assumed by the employer." (Burns, supra, 406 U.S. at p. 280, fn. 5.) But while the new employer had a duty to bargain, it could not be required to honor the terms of the previous employer's collective bargaining agreement. "The source of its duty to bargain with the union is not the collective-bargaining contract but the fact that it voluntarily took over a bargaining unit that was largely intact and that had been certified within the past year. Nothing in its actions, however, indicated that Burns was assuming the obligations of the contract, and `allowing the Board to compel agreement when the parties themselves are unable to agree would violate the fundamental premise on which the Act is based—private bargaining under governmental supervision of the procedure alone, without any official compulsion over the actual terms of the contract.'" (Id. at p. 287.) And, Burns said, a successor employer "is ordinarily free to set initial terms on which it will hire the employees of a predecessor...." (Id. at p. 294.)
Then came Howard Johnson, supra, 417 U.S. 249, where the court held that the new employer, who hired only a small fraction of the predecessors' employees, could not be compelled to arbitrate, under its predecessors' collective bargaining agreements, the extent of its obligations under those agreements to the predecessors' employees. (Id. at pp. 250, 264.) In Howard
The high court held that Burns principles applied. The court acknowledged some inconsistencies in reasoning between John Wiley and Burns, but found it unnecessary to decide whether an irreconcilable conflict existed, because the facts in John Wiley were entirely different from those before the court in Howard Johnson. (Howard Johnson, supra, 417 U.S. at pp. 255-256.) In addition to the fact (among others) that the seller remained a viable entity after the asset sale, "[e]ven more important, in Wiley the surviving corporation hired all of the employees of the disappearing corporation," making no substantial changes in the operation of the business. (Howard Johnson, at p. 258.) "It was on this basis that the Court in Wiley found that there was the `substantial continuity of identity in the business enterprise,' [citation], which it held necessary before the successor employer could be compelled to arbitrate." (Howard Johnson, at p. 259.)
By contrast, the new employer in Howard Johnson "decided to select and hire its own independent work force ...." (Howard Johnson, supra, 417 U.S. at p. 259.) The union's position was that the new employer was bound by the seller's collective bargaining agreement to hire all of the seller's former employees. (Id. at p. 260.) This position, the high court said, was "completely at odds with the basic principles this Court elaborated in Burns." (Id. at p. 261.) The court said: "Clearly, Burns establishes that Howard Johnson had the right not to hire any of the former [employer's] employees, if it so desired." (Id. at p. 262.) The continuity of identity in the business enterprise that John Wiley required "necessarily includes, we think, a substantial continuity in the identity of the work force across the change in ownership." (Howard Johnson, at p. 263.)
Moreover: "This interpretation of Wiley is consistent also with the Court's concern with affording protection to those employees who are in fact retained in `[t]he transition from one corporate organization to another' from sudden changes in the terms and conditions of their employment .... At the same time, it recognizes that the employees of the terminating employer have no legal right to continued employment with the new employer .... This holding is compelled, in our view, if the protection afforded employee interests in a change of ownership by Wiley is to be reconciled with the new employer's right to operate the enterprise with his own independent labor force." (Howard Johnson, supra, 417 U.S. at p. 264, italics added.)
The majority sees nothing in these successorship cases (which presented no preemption issue) to suggest that Congress intended in the NLRA to prevent states and localities from interfering with the employer's right to choose its employees. I cannot agree. From John Wiley to Fall River Dyeing, these cases show that the employer's free selection of employees has always been a fundamental part of national labor policy. John Wiley and Howard Johnson could hardly have been more clear: John Wiley tells us that the "objectives of national labor policy, reflected in established principles of federal law, require that the rightful prerogative of owners independently to rearrange their businesses" be balanced "by some protection to the employees from a sudden change in the employment relationship" (John Wiley, supra, 376 U.S. at p. 549, italics added), and Howard Johnson tells us that the high court in John Wiley was "concern[ed] with affording protection to those employees who are in fact retained in `[t]he transition from one corporate organization to another' from sudden changes in the terms and conditions of their employment ...." (Howard Johnson, supra, 417 U.S. at p. 264, italics added.)
In short, it seems to me incontrovertible that the "objectives of national labor policy," as stated by the high court, have always included the employer's prerogative to select its workforce (subject to the prohibition on discrimination on the basis of union membership). As Howard Johnson put it, "the
The City conceded in oral argument that the ordinance would be preempted by the NLRA if it expressly declared the new owner to be a successor within the meaning of the successorship doctrine, but the City asserted the express 90-day limitation avoids preemption. If the ordinance were unlimited in duration, I think there would be little doubt, under the terms of the ordinance itself, that it would dictate the successorship outcome. The new employer— defined in the ordinance as the person "that owns, controls, and/or operates the Grocery Establishment" (L.A. Mun. Code, § 181.01, subd. I) after the transfer of "all or substantially all of the assets or a controlling interest" (id., § 181.01, subd. B) of the old employer—would necessarily be a successor, and would necessarily be bound to bargain with the union representing the workers that the new employer has been required (indefinitely under this scenario) to retain. This scenario would present an obvious intrusion into the collective bargaining process, requiring the employer to bargain with a workforce it did not choose.
In my view, the ordinance seeks to do indirectly that which the City acknowledges it cannot do directly, because the practical effect of the ordinance is to visit upon the new owner all the obligations of a successor under the successorship doctrine. The majority, however, concludes, based on existing NLRB decisions by the agency's administrative law judges (ALJ's) and a federal district court decision, that the new employer will be obligated
I cannot agree with this analysis.
First, it is entirely uncertain that the obligation to bargain will not arise unless the new employer voluntarily retains the workforce after the 90 days. As the Rhode Island Hospitality court acknowledged, the two NLRB decisions on the issue are not of a single mind (though both concluded the new employer under a mandatory retention ordinance was a successor with an obligation to bargain). One of them rejected the new employer's contention that it was forced to hire its predecessor's employees (and therefore did not "consciously decide[ ] to take advantage of its predecessor's trained workforce"); the ALJ observed that the NLRB had "never formally adopted a requirement that a successor employer must consciously decide to avail itself of its predecessor's trained workforce in order to be considered a Burns' successor employer ...." (U.S. Service Industries, Inc. (NLRB, Dec. 13, 1995, No. 5-CA-24575) 1995 N.L.R.B. Lexis 1151, pp. *11-*12 (Service Industries).)
This uncertainty as to when the obligation to bargain attaches, it seems to me, itself demonstrates that the ordinance impermissibly intrudes on the processes of self-organization and collective bargaining that are the exclusive province of the NLRA. The fact is that under the current state of the law, a "[s]uccessor [g]rocery [e]mployer" (defined in the ordinance) (L.A. Mun. Code, § 181.01, subd. I, boldface omitted) in a unionized workplace would not know whether it is obliged to bargain, at the request of the union representing the employees it was forced to hire, during that 90-day retention period. The new employer is, at a minimum, exposed to charges of an unfair labor practice if it refuses to bargain.
An obvious illustration of this point would be the case of an employee who files a grievance with the union because he was fired within the first 90 days. The right to continue employment unless there is good cause for termination is a significant benefit ordinarily conferred, if at all, only after the employer and union have negotiated all other terms of employment, and the union has made concessions to offset the employer's "termination for cause only" agreement. The ordinance bestows this benefit upon a unit of employees whom the successor has not chosen to hire. The successor did not obtain
Of course no one can foresee what will occur in any particular case. But the exposure to unfair labor practice charges caused by the ordinance illustrates its intrusion into an area reserved for market freedom. Machinists tells us that, just as the state may not prohibit the use of economic weapons such as strikes, lockouts and other "self-help economic activities," the state "may not ... `add to an employer's federal legal obligations in collective bargaining' ...." (Machinists, supra, 427 U.S. at p. 147.) It seems to me that the City's ordinance does just that, effectively "`upset[ting] the balance that Congress has struck between labor and management in the collective-bargaining relationship.'" (Metropolitan Life, supra, 471 U.S. at p. 751.)
The ordinance does not on its face prevent the new employer, after 90 days, from terminating the workers it was forced to employ and hiring its own independent workforce. But, once an employment relationship is established, it is not easy to terminate, certainly not without substantial risk. For one thing, it is highly impractical to terminate an entire workforce at once, and virtually impossible to do so without business disruption and damage to the new employer's reputation in the community. For another, it is easy to imagine the litigation consequences that would ensue if the employees in a previously unionized workplace are terminated en masse after working for the new employer for 90 days. The likelihood of unfair labor practice charges alleging union animus would be high, as would the likelihood of wrongful termination claims. The majority finds that similar consequences, at least in terms of unfair labor practice charges, would ensue if there were no ordinance and the new employer were free to hire an entirely new workforce at the time of acquisition. I disagree. We need not blind ourselves to probable consequences that ordinary experience suggests will occur.
Moreover, it seems obvious that a new employer free to hire as it chooses before going into business does not have to discharge anyone, much less terminate en masse, in order to employ the people it wants to conduct its business, so its exposure to claims necessarily will be significantly different.
In short, the facially temporary nature of the ordinance's interference with an employer's right to select its workforce does nothing, in my view, to change the core facts. It is simply unrealistic to believe the temporary nature of the ordinance will not materially affect the successorship inquiry. In reality, whether the obligation to recognize the union ripens on day one, or on day 91, or on some later date, may depend on the various circumstances of each successor grocer's workplace. But there is little room for doubt that, under the law as applied by the NLRB in the decades since John Wiley and Burns, many successor grocers will be deemed obligated to recognize and bargain with the union at some point, as a direct consequence of complying with the ordinance.
Thus, under any of the scenarios that may occur under the ordinance, there is an impact, to a greater or lesser degree, on collective bargaining: either the new employer is a successor who must bargain with the union during the 90-day period and/or shortly thereafter, or the employer must terminate employees en masse after the 90-day period, exposing it to business consequences and legal claims that would otherwise not exist, if it wishes to choose its own workforce. The ordinance legislates in an area that federal labor law, clearly articulated by the high court, left unregulated: "the normal exercise of the right of the employer to select its employees" (Jones & Laughlin, supra, 301 U.S. at p. 45), "`the rightful prerogative of owners independently to rearrange their businesses'" (Burns, supra, 406 U.S. at p. 301, quoting John Wiley, supra, 376 U.S. at p. 549), and a new employer's "right not to hire any of the former [employer's] employees, if it so desire[s]" (Howard Johnson, supra, 417 U.S. at p. 262). To me, the ineluctable conclusion is that the ordinance is preempted under Machinists because it regulates "within `a zone protected and reserved for market freedom.'" (Brown, supra, 554 U.S. at p. 66.)
The high court in Burns identified the freedom of contract as a fundamental premise on which the NLRA is based—"`private bargaining under
The very different question presented here is whether the NLRA evinces an intent to prohibit regulations that interfere with an employer's freedom to choose whether to enter into any employment relationship at all with a particular employee or bloc of employees. In my view, the absence of high court precedent saying in so many words that the intent of the NLRA is to preserve the freedom of choice for employees and employers alike to decide whether to form an employment relationship does not mean states and municipalities are free to enact so-called worker "retention" ordinances. Rather, the high court has not yet had occasion to address this truly extraordinary intrusion upon the freedom of contract, one that threatens to upend the very foundation of our national labor laws and policies. Perhaps this case will offer the high court the occasion to address the question now.
