U.S. Supreme Court Strikes Down California Law Banning Use of State Funds to Fight Unions

January 13, 2009 by Beeson Tayer & Bodine

The U.S. Supreme Court voted 7-2 to strike down a California law that prohibited employers that receive state funds from using the money “to assist, promote or deter union organizing.” Chamber of Commerce v. Brown, 128 S.Ct. 2408 (2008). The law required employers who receive more than $10,000 annually from state coffers to keep records to show that the money was not being spent to discourage or encourage union organizing. The law, which was passed in 2000, also allowed the Attorney General and private citizens to sue suspected violators for injunctive relief and civil penalties. In its June decision, the Supreme Court sided with the U.S. Chamber of Commerce, which called the law an attempt “to place the state’s thumb on the scale in unionization debate,” The Chamber claimed that the law’s “burdensome” and “onerous” recordkeeping requirements and potentially steep penalties would prevent employers from speaking freely on union matters. Although the Ninth Circuit Court of Appeals had upheld the law, the Supreme Court sided with the employers, ruling the law preempted by the National Labor Relations Act. The California law, the Court held, was intended to regulate employer speech about union organizing under circumstances where the NLRA left such speech free from government regulation.

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