Terms of Ensnarement

June 25, 2020 − by CIR2 − in Case Updates − Comments Off on Terms of Ensnarement

In Barke v. Banks, CIR is challenging California law Section 3550, which directly prohibits public employers from criticizing government unions.  But legislatures around the country are silencing union criticism in other ways—namely by mandating labor peace agreements.  An LPA is a contract that an employer signs with a union before the union begins to organize.  The union agrees not to disrupt business—through strikes, picketing, boycotts, etc.—and the employer helps facilitate union organization.

One of the most commonly included features of an LPA is a provision requiring employers to remain “neutral.” These neutrality provisions are far from benign; rather, they are highly sought after tools for unionization.  In the most comprehensive study to date, 93% of LPAs included a neutrality provision.  Many used highly restrictive language that “made clear that the employer would not communicate opposition” to unionization.

When the government mandates LPAs by law, unions have even greater leverage to demand one-sided contracts.  Under the National Labor Relations Act, legislatures do not have free rein to mandate LPAs.  But state and local governments can require LPAs when they act as market participants and not merely as regulators.  For example, a local government that leases property to a development is considered a participant in the development, and as such, it can stipulate that the developer enter into an LPA.

In one case, the District of Columbia leased land to DC Stadium, and DC law conditioned the lease on the stadium entering an LPA.  The stadium signed an LPA with UNITE HERE Local 25—a major union representing several industries—which included a severely restrictive neutrality provision.  Stadium supervisors, agents, and representatives could “not act or make any statement that will directly or indirectly imply the Employer’s opinion as to whether or not the employees should unionize.”

But state and city governments do not limit LPA requirements to stadium sized projects.  Frequently, hotels are required to enter into LPAs when they lease land or receive some kind of financial assistance, broadly defined, from the government.  In the same way, real-estate developers, restaurant owners, and gaming companies are often compelled to sign LPAs.

As long as a project involves some kind of a government investment, the government can require an LPA by law.  Often these laws are passed without any particular project in view.  Instead, the law declares in advance that whenever the government has a proprietary interest in a project, companies involved in the project must sign an LPA.

Recently, unions have even begun pushing for LPA legislation in the marijuana industry.  Four states—New York, New Jersey, California, and Illinois—have included LPA provisions in their marijuana statutes, and several others are considering similar laws.  These laws are particularly egregious because the states cannot show that they are acting as market participants at all.

LPA requirements raise serious free speech issues.  The Supreme Court has long held that the First Amendment protects the right of employers “to persuade” their employees with “respect to joining or not joining unions.”  But LPA laws virtually guarantee that employers will lose their right to speak openly with employees.  So, these laws delegate to unions the power to restrict what employers can tell their employees, in violation of their First Amendment rights.

CIR’s fight in Barke v. Banks concerns the constitutionality of laws that silence elected officials from criticizing union policy.  Increasingly, the use of LPAs to silence employer criticism raise similar First Amendment problems.

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