On Sept. 15, the National Labor Relations Board (NLRB) filed a lawsuit against the State of New York and its Public Employment Review Board (NYPERB) in a New York federal court seeking to overturn the state’s recently-passed law authorizing NYPERB to regulate private sector labor relations when the NLRB lacks a quorum.
On Sept. 30, California Gov. Gavin Newsom also signed similar legislation passed by the state legislature, permitting a worker to petition that state’s Public Employment Relations Board to protect and enforce rights prescribed by law under specified circumstances, including when the NLRB has expressly or implicitly ceded jurisdiction, in the state legislators’ view.
Joining these two are other states who also are looking at other ways to step in and by adding laws and initiating state labor regulatory enforcement where they see Trump officials reversing and ending policies that were adopted during the Biden Administration.
In this case, these states claim they are simply stepping in because, as it is currently constituted, the NLRB, which is supposed to have a total of five members, only has two. This means it lacks the necessary quorum of three sitting board members needed to take action on deciding labor disputes brought before it.
President Trump already has nominated Scott Mayer, labor counsel for Boeing, and James Murphy, a former NLRB staff attorney, to the seats currently open but they have yet to be confirmed by the Senate, which is required by law.
Although the New York law authorizes NYPERB to handle labor disputes between private employers and employees while the NLRB operates without a quorum, this issue is not believed to be the whole story behind the state actions.
“These state actions are not only in response to the NLRB’s loss of a quorum, but also appear to be the result of intense lobbying efforts by labor unions which have raised concerns that, without state action, employees could face challenges in having their federal labor rights enforced, including their ability to organize and join labor unions,” said Lauren Herz, an attorney with the law firm of Squire Patton Boggs.
But there is a danger that these states will find that they have overreached should these new laws face challenges in court. “With these measures, state legislatures are testing the boundaries of the legal doctrine of preemption,” she added. “This issue could soon become a multistate battle over the limits of federal preemption in labor law.”
States Rights Redux?
The preemption doctrine holds that state governments cannot decide to take action regulating conduct that is already covered by federal law. In the context of labor law, this means that states cannot have laws to regulate conduct that the National Labor Relations Act (NLRA) protects or prohibits, Herz observed.
In August, the NLRB Acting General Counsel William Cowen warned that such state laws would almost certainly be preempted by the NLRA, citing long-established U.S. Supreme Court precedent. He also warned that he considered enactment of the New York law as a direct attack on the board’s “core jurisdiction.”
The New York law “rocks the foundation of government oversight of labor relations,” in the view of attorneys with the law firm of Sheppard Mullin Richter & Hampton. “Unless and until a federal court enjoins the law, however, or the Senate confirms the President’s nominees to the NLRB, PERB will likely exercise its authority under the law to adjudicate unfair labor practice charges and conduct union elections in the private sector.”
As for California law, attorneys Joy Rosenquist and Alexander MacDonald of the Littler Mendelson law firm believe it creates an alternative, parallel process for overseeing labor relations, and as a result ultimately it is not expected to survive further court review.
“It would allow disputes otherwise covered by the NLRA to run through a separate process overseen by the PERB,” they point out. “By longstanding tradition, understanding and legal precedent, California lacks the authority to bypass the established federal framework in this way.”
Rosenquist and MacDonald also believe that states have grown more aggressive in the labor-relations space in recent years. Several have banned “captive audience” meetings, extended unemployment benefits to strikers, and required “labor peace” agreements for some employers. “This California bill is the latest—and most expansive—example of that trend. This trend is likely to continue until there is definitive guidance from the courts.”
In fact, California and New York already have joined 12 other states in banning or severely restricting employer mandatory meetings seeking to counter union-organizing efforts by enacting state laws to that effect. However, the California law has been stayed while legal challenges are being heard, while a similar Minnesota law has been upheld in court.
Under President Biden, the NLRB established a similar ban on mandatory meetings that is not expected to survive further rulings by the new board created by President Trump. Of course, the board also is facing a court challenge that claims its very existence should be considered unconstitutional.
