801 F.3d 950
9th Cir.2015Background
- Idaho enacted the "Fairness in Contracting Act" banning unions or contractors from using funds "the source of which is wages, dues or assessments collected by or on behalf of any labor organization" to subsidize contractor bids, with misdemeanor criminal fines and a private civil right of action.
- Purpose of challenged Idaho statute: prohibit "job targeting"/"market recovery" programs where unions collect contributions from members and subsidize union contractors so they can bid lower and secure work for union members.
- Two Idaho trades councils sued to enjoin enforcement, arguing the statute is preempted by the National Labor Relations Act (NLRA); district court granted preliminary injunction and summary judgment for the unions.
- The NLRB has repeatedly held job-targeting programs generally constitute protected concerted activity under Section 7 of the NLRA; those precedents are central to the preemption analysis.
- Idaho contended some applications of the statute could validly be enforced where job-targeting funds derive from wages earned on Davis-Bacon federal projects; the State would be effectively enforcing federal Davis-Bacon wage rules with criminal penalties.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Idaho's ban on job-targeting programs is preempted by NLRA (Garmon preemption) | Trades Councils: statute regulates activity §7 protects; thus preempted | AG: statute has some legitimate non-preempted applications (e.g., when funds derive from Davis-Bacon wages) so facial challenge fails | Court: statute is facially preempted under Garmon; most prohibited conduct is protected or arguably protected by §7 |
| Whether §14(b) (right-to-work) saves the Act from NLRA preemption | ABC/State: §14(b) allows state restrictions on union-related agreements, so Act valid | Trades Councils: §14(b) applies only to agreements requiring union membership, not broad bans on union conduct | Court: §14(b) does not save the Act; it cannot be read to grant general power to supplant federal labor law |
| Whether Davis-Bacon law makes job-targeting funded by Davis-Bacon wages unprotected under NLRA | AG: collecting/using Davis-Bacon wages for targeting violates Davis-Bacon; therefore some uses are not arguably protected and statute has valid applications | Trades Councils: even if some collection might violate Davis-Bacon, state enforcement would intrude on federal enforcement; NLRB decisions leave distribution issue open and arguably protect distribution | Court: State enforcement of Davis-Bacon (with criminal penalties) would likely be preempted by federal law; NLRB precedent makes distribution at least arguably protected, so Garmon preemption applies |
| Whether the Sears local-interest exception avoids preemption | AG/ABC: Idaho has deep local interest in regulating competition/labor (right-to-work) so Garmon should not apply | Trades Councils: local interest cannot overcome NLRA's national labor policy; where conduct touches §7 the NLRB's primary jurisdiction controls | Court: Sears exception inapplicable; state interest is not sufficiently distinct or deeply rooted to avoid preemption |
Key Cases Cited
- San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236 (1959) (establishes Garmon preemption; NLRB primary jurisdiction over activities arguably protected or prohibited by NLRA)
- Chamber of Commerce v. Brown, 554 U.S. 60 (2008) (discusses two strands of NLRA preemption and Garmon scope)
- Int’l Bhd. of Elec. Workers, Local 357 v. Brock, 68 F.3d 1194 (9th Cir. 1995) (held collection of job-targeting funds from Davis-Bacon wages violates Davis-Bacon)
- Building & Const. Trades Dep’t v. Reich, 40 F.3d 1275 (D.C. Cir. 1994) (D.C. Circuit decision relied on re: Davis-Bacon/regulatory deference)
- Can-Am Plumbing, Inc. v. NLRB, 321 F.3d 145 (D.C. Cir. 2003) (remanded NLRB's finding on whether small amounts of Davis-Bacon-derived funds taint a job-targeting program; left open the definitional question)
- Sears, Roebuck & Co. v. San Diego Cnty. Dist. Council of Carpenters, 436 U.S. 180 (1978) (explains narrow exception to Garmon preemption where local interests are deeply rooted)
- Arizona v. United States, 567 U.S. 387 (2012) (federal scheme preempts state enforcement that interferes with exclusive federal enforcement powers)
- United States v. Salerno, 481 U.S. 739 (1987) (facial-challenge standard: plaintiff must show no circumstances exist under which statute would be valid)