American Hotel & Lodging Ass'n v. City of Los Angeles
834 F.3d 958
9th Cir.2016Background
- Los Angeles enacted the Citywide Hotel Worker Minimum Wage Ordinance (Wage Ordinance) in October 2014, raising minimum wages and providing paid time off, service-charge pass-through, enforcement remedies, a one-year hardship waiver, and an opt-out for workers covered by bona fide collective bargaining agreements.
- The Ordinance covers large hotels (≥150 rooms) citywide and replaces an earlier Airport Hospitality Enhancement Zone (AHEZ) ordinance for hotels near LAX; its wage rate ($15.37/hr) and many provisions mirror prior city ordinances.
- Plaintiffs American Hotel & Lodging Association and Asian American Hotel Owners Association sued the City, seeking a preliminary injunction arguing the Ordinance is preempted by federal labor law (Machinists preemption) and that the collective-bargaining opt-out itself is preempted.
- The district court denied the preliminary injunction for lack of likelihood of success on the merits; the Hotels appealed to the Ninth Circuit.
- The Ninth Circuit affirmed, holding the Wage Ordinance is a permissible minimum labor standard that sets the "backdrop" for bargaining and does not impermissibly regulate the mechanics of collective bargaining or self-help tools protected by federal law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Wage Ordinance is preempted under Machinists (NLRA) | Ordinance interferes with labor–management relations and restricts union organizing tactics; thus preempted | Ordinance is a minimum labor standard applying to all workers and does not regulate bargaining mechanics or self-help tactics | Not preempted; it is a valid minimum labor standard |
| Whether the opt-out for collective bargaining agreements is preempted | The opt-out framework and post-expiration application alter bargaining and improperly intrude on bargaining processes | Opt-out provisions are "familiar and narrowly drawn" and lawful; law simply sets a statutory backdrop for bargaining | Not preempted; opt-out is valid |
| Whether the Ordinance effectively imposes union-level wages (prevailing-wage argument) | Comparable to prevailing-wage schemes that force nonunion employers to pay union wages, thus interfering with bargaining | Ordinance is a uniform minimum standard, not a scheme tied to union agreements or prevailing collective-bargaining rates | Not analogous to struck-down prevailing-wage schemes; survives preemption challenge |
| Whether plaintiffs showed likelihood of success to justify preliminary injunction | Plaintiffs claim substantial legal likelihood on preemption grounds | City argues settled precedent allows state minimum labor standards; plaintiffs fail to show likely success | Preliminary injunction denial affirmed; plaintiffs failed to show likely success |
Key Cases Cited
- Int’l Ass’n of Machinists v. Wis. Emp’t Relations Comm’n, 427 U.S. 132 (1976) (state action that restricts economic self-help tactics may be preempted)
- Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724 (1985) (state minimum labor/benefit mandates are valid exercises of police power and typically not preempted)
- Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987) (state employment standards form the bargaining "backdrop" and do not necessarily intrude on collective bargaining)
- Livadas v. Bradshaw, 512 U.S. 107 (1994) (narrowly drawn opt-out provisions for collective bargaining agreements are valid)
- Chamber of Commerce v. Brown, 554 U.S. 60 (2008) (recognized limits on state regulation of activities Congress intended to leave unregulated under NLRA)
- Golden State Transit Corp. v. City of Los Angeles, 475 U.S. 608 (1986) (preemption where local action effectively conditioned regulatory relief on settlement of a labor dispute)
- Assoc’d Builders & Contractors of S. Cal., Inc. v. Nunn, 356 F.3d 979 (9th Cir. 2004) (state minimum-wage regulations survive Machinists preemption challenges)
- Chamber of Commerce v. Bragdon, 64 F.3d 497 (9th Cir. 1995) (invalidated prevailing-wage ordinance that effectively forced nonunion employers to pay union wages)
- Nat’l Broad. Co. v. Bradshaw, 70 F.3d 69 (9th Cir. 1995) (state minimum standards that resume effect after an expired CBA do not establish Machinists preemption)