California's Union Neutrality Law

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Oct 9

California's Union Neutrality Law

Linda Chan

October 9, 2006

Know More: Employment law 2.0, Employment law

In September 2000, Assembly Bill No. 1889 (AB 1889), Cal. Gov’t Code §§ 16645-16649, forbid employers who receive state funds in excess of $10,000 from using such funding to “assist, promote, or deter union organizing.” Employers who violate this statute are subject to fines and penalties, including disgorgement of the state funds and a penalty equal to twice the amount of the funds.

The statute is not preempted by federal labor law. According to Chamber of Commerce v. Lockyer, 2006 U.S. App. LEXIS 24025 (9th Cir. Sept. 21, 2006), the court determined that California acted as a regulator, not a proprietor or market participant in enacting the statute. California did not condition the receipt of state funds on employer neutrality. The statute merely forbids the employer from spending state funds on its union related advocacy. If the California statute had required neutrality as a condition of receiving state funds, the employer’s use of its own funds would have been curtailed.
The Ninth Circuit’s refusal to recognize NLRA preemption permits California to enforce a law that favors organized labor’s ability to unionize employers receiving state funds. AB 1889 impacts the organizing process and collective bargaining because an employer receiving state funds who decides against “neutrality” when faced with a union organizing drive will incur compliance costs and litigation risks.

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