JUSTICES HEAR KEY LABOR CASE
ON NEUTRALITY WITH STATE FUNDS

In a case that could have nationwide impact, the U.S. Supreme Court on March 19 tackled whether a state can use its economic power to guarantee company neutrality in union organizing campaigns.

At issue was a California law, enacted in 2000 but never enforced, that says that any firm or organization that receives state funds cannot use those funds for or against organizing drives. It can use its own funds, but must strictly split them from the state’s.

But what’s even more important, said attorney Michael Gottesman, representing California, is the principle of “employee free choice,” a principle he said was undermined by companies using state-supplied grant and contract money--along with their own--to run anti-union campaigns.

The California Labor Federation and the national AFL-CIO submitted briefs on California’s side, while several trade associations and the Radical Right National Right to Work Committee, along with the anti-worker GOP Bush regime, sided with the Chamber of Commerce.

The case is important not just because of the California law but also because 15 other states have similar legislation pending, and are waiting for the justices’ decision. And Gottesman pointed out that three federal programs--including Medicare--ban receivers of their funds from using any federal money for anti-union campaigning.

The Democratic-run legislature approved the law, which Mike Garcia of Jobs with Justice helped draft. Then-Gov. Gray Davis (D) signed it. The Chamber of Commerce promptly challenged it in court, saying it violated employers’ free speech rights and that it intruded in a field, labor law, governed by the National Labor Relations Act.

Court rulings, two for the Chamber and the last one for the state, have delayed the law since. That last ruling, for the law, pushed the business lobby to go to the Supreme Court, which also asked for Bush’s views.

Chamber of Commerce attorney Willis J. Goldsmith had barely gotten into his argument when he claimed “the National Labor Relations Act promotes employer free speech” in union organizing drives--and Associate Justice Antonin Scalia differed.

“It (NLRA) clearly permits it. Is that the same as promoting it?” Scalia asked. Goldsmith argued that it is, and thus that the NLRA trumps the California law. He claimed the California law restricts employer free speech.

That prompted Associate Justice Ruth Bader Ginsburg to cite the exceptions, in Medicare and several other statutes. “Those three statutes” where federal funds were banned from being used for or against organizing “in no way reflect the overall intent of Congress” to let employers campaign against unions, Goldsmith replied.

“The lower courts decided this was a matter of law and pre-emption” of the state’s law by the NLRA, Goldsmith argued. “The state was very open about what it was doing: ‘We believe employer speech interferes with employee free choice,’ the preamble says,” he added.

Deputy Solicitor General Thomas Hungar, speaking for the Bush government, claimed “the NLRA manifests its intent to encourage free debate,” which he defined as letting employers and unions have their say before workers vote on union recognition.

That prompted Chief Justice John Roberts to ask about California’s use of its spending power to mandate employer neutrality, since the law says firms can’t use state-provided money either for or against unions. “How do we tell they’re using the spending power to regulate as opposed to just attacking?” he asked.

Hungar admitted in reply that “there is a legitimate policy interest the government is entitled to advance” by setting laws for organizing through the NLRA. “But the problem here is what the state said is directly contrary to the federal policy of encouraging employee free choice.” He later said, to Associate Justice Stephen Breyer that if another state--Breyer picked Utah--passed a law directly opposite that of California, the NLRA would pre-empt that law, too.

Gottesman, arguing for California, concentrated on the state’s power to say how its taxpayers’ dollars should be spent. “All California is saying is that ‘We’re not going to pay for this activity,’” he said, referring to private firms’ campaigning for or against union organizing.

“Until this statute (the California law), the state was funding one side in this dispute--and the union was not getting any money to respond. For the state to do that would be remarkable,” he added.

“The state maintains a legitimate interest in how its program funds are used” by companies or non-profits “until the contract is completed,” Gottesman added. “The court of appeals,” which ruled for workers and the California law, “said the only argument here is about subsidizing speech. This statute says we don’t want to subsidize one side or the other,” he told Roberts. “We’re not regulating whether an employer opposes unions, but only what you can do with the state’s money.”

A ruling is expected by the end of June.