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Court Rejects Employer Objections to LAX “Labor Peace Agreements”

September 20, 2017 by

The Ninth Circuit Court of Appeals recently upheld the City of Los Angeles’s policy requiring employers doing business at LAX to enter into “Labor Peace Agreements” as a condition of doing business at the airport. The Court ruled that the City, which operates LAX International Airport, is a market participant in the transportation industry and has a proprietary interest in the operation of the airport. As a result, the City’s regulation that requires businesses at the airport to enter into “labor peace agreements” with any employee organization that requests one is not barred by federal labor laws. (See Airline Service Providers Association v. Los Angeles Word Airports, 17 C.D.O.S. 8325 (9th Cir, August 28, 2017).)

The Court rejected employer arguments that the City’s policy constituted a labor regulation of employers doing business at LAX, a regulation that conflicts with the NLRB’s exclusive jurisdiction in the area. The employers pointed to a previous case involving a Los Angeles rule on how taxicabs operated in the City, a case where the Court had concluded the City unlawfully adopted the rule as a regulator, and not as a proprietor. But, the Court here concluded that the City, as the owner and operator of LAX, had a legitimate proprietary interest in minimizing labor conflict at the airport.

The requisite “Labor Peace Agreement” includes provisions that prohibit picketing, boycotting, stopping work, or “any other economic interference.” The Court found that the City operates the airport as a private business and that the Labor Peace Agreement policy was intended to avoid disruption of its business. As the preemption provisions of the National Labor Relations Act and other federal labor laws do not apply to the City’s actions taken as a market participant, the “Labor Peace Agreement” requirement was determined lawful.


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