Against Labor Law Preemption

David Bander, NLC New Jersey

Supreme Court Justice Louis Brandeis famously described the 50 states as “laboratories of democracy,” where states may “try novel social and economic experiments without risk to the rest of the country.” So long as there is no conflict with the baseline guarantees of federal law, states have the authority to set higher minimum wage rates; to prohibit discrimination against a wider array of citizens; to more closely regulate health insurers; to permit the legal consumption of marijuana; and so forth. There are probably thousands of ways in which laws differ from state to state. Such differences are at the core of federalism. Indeed, in the Trump Era progressive organizations have looked to “progressive federalism” as a way to fight against a federal government whose concerns are antithetical to ours.

Despite the widespread acceptance of the principle of federalism, though, there is one important area in which the federal courts have refused to allow this principle to take hold: labor law. For decades — and with no explicit, statutory basis — federal courts have refused to permit any kind of variation or experimentation in labor law to occur at the state or local level. They have consistently held that nearly any labor law protections beyond the baseline guarantees provided in the National Labor Relations Act (“NLRA” or “the Act”) are “preempted.” That is to say, courts will find that these variations are in conflict with federal law and will strike them down on that basis. Indeed, as one scholar has noted, “it would be difficult to find a regime of federal preemption broader than the one grounded in the NLRA.” Benjamin Sachs, Despite Preemption: Making Labor Law in Cities and States, 124 Harvard L. Rev. 1153, 1154 (2011). This broad preemption has essentially “eliminated traditional forms of labor law in cities and states.” Id. at 1155. Such limitation has proven to be a tremendous deterrent to many states and localities that would like to provide greater labor protections to their residents.

Unlike essentially every other aspect of our modern economy and society, labor rights are set entirely by the federal government and the federal courts. This regime is not required by statute. The Supreme Court has itself acknowledged that the NLRA “contains no express pre-emption provision.” Chamber of Commerce v. Brown, 554 U.S. 60, 65 (2008). Despite this, federal courts have held that Congress “implicitly mandated two types of pre-emption as necessary to implement federal labor policy.” Ibid.

The first type of preemption, known as Garmon preemption after San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959), “is intended to preclude state interference with the National Labor Relations Board’s interpretation and active enforcement of the ‘integrated scheme of regulation’ established by the NLRA.” Brown, 554 U.S. at 65, citing Golden State Transit Corp. v. Los Angeles, 475 U.S. 608, 613 (1986). To this end, Garmon preemption forbids states from “regulating activity that the NLRA protects, prohibits, or arguably protects or prohibits.” Id., citing Wisconsin Dept. of Indus., Labor & Human Rels. v. Gould, Inc., 475 U.S. 282, 286 (1986).

The second type of preemption, known as Machinists preemption after Machinists v. Wisconsin Employment Relations Comm’n, 427 U.S. 132, 140 (1976), forbids both the National Labor Relations Board and states from regulating conduct that Congress intended to be unregulated and “controlled by the free play of economic forces.” Machinists preemption is based on the premise that “Congress struck a balance of protection, prohibition, and laissez-faire in respect to union organization, collective bargaining, and labor disputes.” Id. at 140 n. 4. Under Machinists, a law or regulation will be struck down if it regulates within “a zone protected and reserved for market freedom.” Building & Constr. Trades Council v. Associated Builders & Contractors of Mass./R.I., Inc., 507 U.S. 218, 227 (1993).

The command of federal courts is clear: state laws that act “as a supplemental sanction for violations of the NLRA” will be struck down as preempted, because they detract from the “integrated scheme of regulation” created by Congress, or because they regulate in an area “protected and reserved for market freedom.” Gould, 475 U.S. at 288. Over the years, a remarkable number of innovative pro-union statutes and regulations have fallen victim to preemption, including requirements that firms having public contracts sign “labor peace agreements” with any union seeking to organize its employees, Metro. Milwaukee Ass’n of Commerce v. Milwaukee County, 431 F.3d 277 (7th Cir. 2005); a state law forbidding the hiring of any contractor that had three or more violations of federal labor law in the previous five years, Wisconsin Dept. of Industry, Labor & Human Rels. v. Gould, Inc., 475 U.S. 282 (1986); and a state law forbidding employers that receive state funds from using the funds to deter union organizing, Chamber of Commerce of the United States v. Brown, 554 U.S. 60 (2008).

And yet, in looking at the plain text of the NLRA, one is puzzled by the federal courts’ parsimonious view toward labor law. In its stirring declaration of policy, the Act declares:

It is hereby declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred 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 Act further inveighs against the “denial by some employers of the right of employees to organize and the refusal by some employers to accept the procedure of collective bargaining” and “the inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract” and their employers. Ibid. It approvingly finds that “protection by law of the right of employees to organize and bargain collectively safeguards commerce from injury” and “restor[es] equality of bargaining power between employers and employees.” Ibid. It is simply preposterous for federal courts to claim that the Act requires neutrality in labor relations, when by its plain language it boldly declares its advocacy on behalf of labor. A union organizer could hardly have been more eloquent in defense of labor rights than what the Congress wrote into law.

To be sure, the NLRA ties these labor rights to the preservation of interstate commerce. Ibid. But that is merely the grant of federal authority upon which the Act relies. In the Americans with Disabilities Act, 42 U.S.C. §12101 et seq., Congress similarly declared that discrimination against disabled citizens “costs the United States billions of dollars in unnecessary expenses resulting from dependency and nonproductivity” and therefore could be regulated under the Commerce Clause. 42 U.S.C. §12101(a)(8), (b)(4). The 1964 Civil Rights Act locates its authority in “establishments and operations affecting commerce.” 42 U.S.C. §2000(a). Yet no federal court would profess that these laws require “neutrality” in protecting civil rights, nor would prohibit states and cities from enhancing such rights.

The Court’s interest in “preserv[ing] national uniformity without opening the door to a 50-state patchwork of inconsistent labor policies” is misguided. Brown, 554 U.S. at 76. In thousands of other ways, from the most trivial to the most important, federal courts have permitted variation at the state and local level. Only in the area of labor law, however, are states and cities powerless to act. This one exception to state and local experimentation has, in the words of NYU Law Professor Cynthia Estlund, has “granted to employers a federal ‘right’ to use their economic power against unions.[1]Such a “right” is not located in the Constitution, nor in federal law. It appears to wholly created by the judiciary, and goes against the broad labor rights enshrined in the NLRA.

What if this preemption did not exist? The mind reels at the possibility of pro-union states and cities being able to enact truly supportive policies. Lewis & Clark Law Professor Henry Drummonds recently enumerated ten pro-union reforms that could be passed without NLRA preemption. These include allowing states to increase damages for violating workers’ labor rights; banning the permanent replacement of striking workers; banning employer lockouts; permitting “card check” union recognition; providing equal access to union organizers as well as employers during a union organizing campaign; and requiring arbitration if an impasse arises in the bargaining over a first contract.[2] Such changes would be a welcome shot in the arm to the labor movement and would hold out hope for a much broader resurgence of workers’ rights.

The time is ripe for a broad challenge to federal labor law preemption. The doctrine is not based in the Constitution or in federal statutes, is a wholesale creation of the federal judiciary, and has been discriminatorily applied so as to disadvantage labor unions and their members. By failing to recognize that the National Labor Relations Act “made an economic, social, constitutional, and human rights case for labor organization,” federal courts have systematically distorted its true purpose in enhancing labor rights. Dorothy Sue Cobble, The Intellectual Origins of an Institutional Revolution, 26 ABA Journal of Labor and Employment Law 201, 211 (2011). That original purpose must be rediscovered by the courts. A resurgent union movement awaits!

David Bander is a labor attorney at Mets, Schiro & McGovern, LLP, a councilman in Plainsboro Township, NJ, and a former union organizer. He is also a member of the New Leaders Council — New Jersey Advisory Board and a 2013 NLC-NJ fellow. He can be reached at dbander@msmlaborlaw.com.

[1] Moshe Z. Marvit, “The Way Forward for Labor is Through the States,” The American Prospect (September 1, 2017). Located at http://prospect.org/article/way-forward-labor-through-states

[2] Moshe Z. Marvit, “The Way Forward for Labor is Through the States,” The American Prospect (September 1, 2017). Located at http://prospect.org/article/way-forward-labor-through-states