Opinion by Judge Pregerson, Senior Circuit Judge:
The American Hotel & Lodging Association and Asian American Hotel Owners Association ("the Hotels") appeal the denial of their motion to preliminarily enjoin the City of Los Angeles ("the City") from enforcing the Citywide Hotel Worker Minimum Wage Ordinance ("the Wage Ordinance"). The Hotels argue that the entire Wage Ordinance is preempted by federal labor law, referred to as Machinists preemption, because the Ordinance interferes with labor-management relations. The Hotels also argue that the opt-out provision for collective bargaining agreements is independently preempted.
The district court concluded that preemption was inapplicable and denied the Hotels' motion for preliminary injunctive relief. We have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm.
At issue in this case is the Citywide Hotel Worker Minimum Wage Ordinance ("the Wage Ordinance"), adopted by the Los Angeles City Council on October 1, 2014. The Wage Ordinance provides, among other provisions, an increased minimum wage for workers at select hotels — large hotels citywide with more than 150 rooms and some smaller hotels near the Los Angeles International airport ("LAX") that are already covered by another wage ordinance. An opt-out provision allows hotels covered by a collective bargaining agreement to waive the requirements of the Ordinance, and a hardship waiver allows those hotels whose viability might be threatened by the Ordinance to postpone implementation for one year.
The Wage Ordinance and its specific provisions follow a long history of minimum-wage ordinances that have been adopted by the City of Los Angeles ("the City") and subsequently contested by employers.
In 1997, the City adopted one of the country's first "living wage" ordinances ("Airport LWO"), mandating increased minimum wages and compensated time off for airport workers and certain contract employees working near LAX. See L.A. Admin. Code §§ 10.37 et seq. The Airport
In 2006 and 2007, the City adopted two ordinances to regulate wages at hotels near LAX. The City had determined that hotel customers — believing that workers already received a portion of the "service charges" added to their bills — reduced or eliminated tips to hotel workers. In 2006, the City adopted the Hotel Service Charge Reform Ordinance ("Service Charge Ordinance"), Ordinance No. 178084, which required hotels to pass along service charges to the employees who rendered the actual services.
In 2007, the City passed the Airport Hospitality Enhancement Zone Ordinance ("AHEZ Ordinance"), Ordinance No. 178432, to provide a living wage for employees of hotels with 50 or more rooms in the LAX area. The AHEZ Ordinance contains a heightened minimum wage (a total cash minimum wage of $12.28 per hour as of 2014), provides an opt-out for hotels covered by a collective bargaining agreement, and contains a hardship waiver for hotel employers. In 2008, the AHEZ Ordinance was challenged by an airport hotel, which argued that the ordinance was preempted by the National Labor Relations Act ("NLRA"). The district court disagreed, noting that "the employer will have the opportunity to negotiate a collective bargaining agreement whose rates could be higher or lower than the living wage." Fortuna Enters., L.P. v. City of Los Angeles, 673 F.Supp.2d 1000, 1010 (C.D. Cal. 2008). The subsequent appeal was voluntarily dismissed.
Finding that the AHEZ Ordinance "has resulted in higher pay and real benefits for low-income families, and the hotels around LAX have thrived," the City sought to extend the benefits of increased minimum wages to large hotels citywide. Before reaching a decision, the City received input from economists and consultants; the public; advocacy organizations such as the Los Angeles Alliance for a New Economy ("LAANE"); and Appellee-in-Intervention, UNITE HERE Local 11 ("Local 11").
The official purpose of the Wage Ordinance is to promote "an employment environment that protects government resources," and "the health, safety and welfare of thousands of hotel workers by ensuring they receive decent compensation
Many of these provisions are identical to those in previous City ordinances that have been upheld by the courts.
On December 16, 2014, a few months after the Wage Ordinance was adopted, American Hotel & Lodging Association and Asian American Hotel Owners Association ("the Hotels") sued the City,
Denial of a preliminary injunction is reviewed for abuse of discretion. Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011). A district court abuses its discretion if its analysis is premised on an inaccurate view of the law. Pom Wonderful LLC v. Hubbard, 775 F.3d 1118, 1123 (9th Cir. 2014). In such instances, the court reviews de novo the legal premises underlying the preliminary injunction. Id.
The NLRA — the federal architecture that governs relations between labor and management, for example, union organizing, collective bargaining, and conduct of labor disputes — has no express preemption provision. See 29 U.S.C. §§ 151-169; Chamber of Commerce v. Brown, 554 U.S. 60, 65, 128 S.Ct. 2408, 171 L.Ed.2d 264 (2008). Nonetheless, the Supreme Court has recognized two implicit preemption mandates: Garmon preemption and Machinists preemption. Brown, 554 U.S. at 65, 128 S.Ct. 2408. Garmon preemption, not at issue in this case, forbids states from regulating activity that Congress (arguably) expected the NLRA to protect or prohibit. San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 245, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959).
Under Machinists preemption, at issue here, the NLRA prohibits states from restricting a "weapon of self-help," such as a strike or lock-out. Int'l Ass'n of Machinists v. Wis. Emp't Relations Comm'n ("Machinists"), 427 U.S. 132, 146, 96 S.Ct. 2548, 49 L.Ed.2d 396 (1976) (internal quotations omitted). Congress left these self-help tools unregulated to allow tactical bargaining decisions "to be controlled by the free play of economic forces." Id. at 140, 96 S.Ct. 2548 (internal quotations omitted). In Machinists, a union refused to work overtime. When Wisconsin attempted to enforce a cease and desist order, the Supreme Court held the order preempted. Id. at 155, 96 S.Ct. 2548. By interfering with the union's bargaining tactic, Wisconsin interfered with "activity which must be free of regulation by the States if the congressional intent in enacting the comprehensive federal law of labor relations is not to be frustrated." Id.
Minimum labor standards, such as minimum wages, are not subject to Machinists preemption. Metro. Life Ins. Co. v. Massachusetts ("Metropolitan Life"), 471 U.S. 724, 755, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985). Such minimum labor standards affect union and nonunion employees equally, neither encouraging nor discouraging the collective bargaining processes covered by the NLRA. Id. Minimum labor standards do technically interfere with labor-management relations and may impact labor or management unequally, much in the same way that California's at-will employment may favor employers over employees. Nevertheless, these standards are not preempted, because they do not "regulate the mechanics of labor dispute resolution." Concerned Home Care Providers, Inc. v. Cuomo, 783 F.3d 77, 86 (2d Cir. 2015). Rather, these standards merely provide the "backdrop" for negotiations. Metropolitan Life, 471 U.S. at 757, 105 S.Ct. 2380 (internal quotations omitted). Such standards are a valid exercise of states' police power to protect workers. Fort Halifax Packing Co. v. Coyne ("Fort Halifax"), 482 U.S. 1, 21-22, 107 S.Ct. 2211, 96 L.Ed.2d 1 (1987).
The Supreme Court clarified the distinction between nonpreempted employment standards and preempted regulation of the collective bargaining process in Metropolitan Life and Fort Halifax. In Metropolitan Life, the Court was faced with a Massachusetts law requiring general insurance policies and health care plans to provide specific mental-health care benefits. 471 U.S. at 727, 105 S.Ct. 2380. The employer argued that the requirement was preempted because it imposed a contract term that otherwise would be the subject of collective bargaining. Id. at 733, 105 S.Ct. 2380.
In Fort Halifax, the Court reiterated the distinction between minimum labor standards and laws that intrude into the process of collective bargaining. 482 U.S. at 19-22, 107 S.Ct. 2211. The Court was faced with a Maine law that required employers to provide a one-time severance payment to employees affected by plant closures, unless the employment contract dealt with severance pay. Id. at 1, 107 S.Ct. 2211. When the employer argued that the law was preempted because it intruded into the collective bargaining process, the Court underscored the critical role of the state in regulating employment conditions:
Id. at 21, 107 S.Ct. 2211 (internal citation omitted). In other words, minimum labor standards set the stage for labor-management engagement. See also Livadas v. Bradshaw, 512 U.S. 107, 132 & n.26, 114 S.Ct. 2068, 129 L.Ed.2d 93 (1994) (noting that "familiar and narrowly drawn opt-out provisions" for collective bargaining agreements are valid because they do not impact rights to collective bargaining).
As Metropolitan Life and Fort Halifax clarify, state action that intrudes on the mechanics of collective bargaining is preempted, but state action that sets the stage for such bargaining is not. Compare Metropolitan Life and Fort Halifax with, for example, Golden State Transit Corp. v. City of Los Angeles, 475 U.S. 608, 618, 106 S.Ct. 1395, 89 L.Ed.2d 616 (1986) (preempting renewal of a taxicab franchise because it was conditioned on the settlement of a strike), Brown, 554 U.S. at 68, 128 S.Ct. 2408 (preempting state provisions prohibiting employers from using funds "to assist, promote or deter union organizing" because of the "explicit direction from Congress to leave [such] non-coercive speech unregulated"), and even Machinists itself, 427 U.S. at 155, 96 S.Ct. 2548 (preempting an order requiring union workers to work overtime). It is no surprise, then, that "state minimum benefit protections have repeatedly survived Machinists preemption challenges," because they do not alter the process of collective bargaining. Assoc'd Builders & Contractors of S. Cal., Inc. v. Nunn, 356 F.3d 979, 989 (9th Cir. 2004), as amended, No. 02-56735, 2004 WL 292128 (9th Cir. Feb. 17, 2004) (internal quotations omitted).
The district court did not err in finding the Wage Ordinance to be the kind
The Hotels also argue that the Wage Ordinance's opt-out provision for collective bargaining independently warrants preemption. The Supreme Court has made clear, however, that the NLRA "cast[s] no shadow on the validity of these familiar and narrowly drawn opt-out provisions." Livadas, 512 U.S. at 132, 114 S.Ct. 2068; see also id. at 132 n.26, 114 S.Ct. 2068 ("Nor does it seem plausible to suggest that Congress meant to preempt such opt-out laws as `burdening' the statutory right of employees not to join unions by denying nonrepresented employees the `benefit' of being able to `contract out' of such standards.").
The district court did not abuse its discretion by denying the Hotels' motion for a preliminary injunction to stop enforcement of the City's Wage Ordinance, because the Hotels failed to show a likelihood of success on the merits. We have consistently
We have previously rejected this argument. See Nat'l Broad. Co. v. Bradshaw, 70 F.3d 69, 72 (9th Cir. 1995) as amended on denial of reh'g, No. 92-56178, 1995 WL 708163 (9th Cir. Dec. 4, 1995). In National Broadcasting, an employer brought a Machinists challenge to a state overtime law that exempted employers covered by collective bargaining agreements. 70 F.3d at 69-70. The employer argued that its ability to bargain was limited after an agreement expired because it was forced to pay state minimum wages or negotiate a retroactive overtime provision. Id. at 72. This court held that these effects were "without consequence in federal labor law." Id. Relying on Fort Halifax, the court noted that minimum labor standards always form the "backdrop" of negotiations and so default to this backdrop was not grounds for preemption. Id.