BROWN, DIRECTOR, DEPARTMENT OF LAW AND PUBLIC SAFETY, DIVISION OF GAMING ENFORCEMENT, STATE OF NEW JERSEY, ET AL. v. HOTEL & RESTAURANT EMPLOYEES & BARTENDERS INTERNATIONAL UNION LOCAL 54 ET AL.
No. 83-498
Supreme Court of the United States
Argued March 26, 1984—Decided July 2, 1984
468 U.S. 491
*Together with No. 83-573, Danziger, Acting Chairman, Casino Control Commission of New Jersey, et al. v. Hotel & Restaurant Employees & Bartenders International Union Local 54 et al., also on appeal from the same court.
Anthony J. Parrillo, Assistant Attorney General of New Jersey, argued the cause for appellants. With him on the briefs for appellants in No. 83-498 were Irwin I. Kimmelman, Attorney General, and Gary A. Ehrlich and Eugene M. Schwartz, Deputy Attorneys General. Robert J. Genatt and John R. Zimmerman filed briefs for appellants in No. 83-573.
Laurence Gold argued the cause for appellees. With him on the brief were Bernard N. Katz, Michael N. Katz, and George Kaufmann.†
JUSTICE O‘CONNOR delivered the opinion of the Court.
In 1976, the citizens of New Jersey amended their State Constitution to permit the legislative authorization of casino
I
A
The advent of casino gambling in New Jersey was heralded with great expectations for the economic revitalization of the
In order to promote “public confidence and trust in the credibility and integrity of the regulatory process and of
The Act imposes strict licensing requirements on any business seeking to own and operate a casino hotel,
All those entities and persons required to be licensed or registered are subject to the disqualification criteria set forth in
Section 93(b) directly subjects registered labor organizations to the § 86 disqualification criteria and imposes two express penalties for noncompliance:
“No labor organization, union or affiliate registered or required to be registered pursuant to this section and representing or seeking to represent employees licensed or registered under this act may receive any dues from any employee licensed or registered under this act and employed by a casino licensee or its agent, or administer any pension or welfare funds, if any officer, agent, or principal employee of the labor organization, union or affiliate is disqualified in accordance with the criteria contained in section 86 of this act. The commission may for the purposes of this subsection waive any disqualification criterion consistent with the public policy of this act and upon a finding that the interests of justice so require.”
The disqualification criteria referred to in § 86 include convictions for a list of enumerated offenses or “any other offense which indicates that licensure of the applicant would be inimical to the policy of this act and to casino operations.”
Appellee Hotel and Restaurant Employees and Bartenders International Union Local 54 (Local 54) is an unincorporated labor organization within the meaning of § 2(5) of the NLRA,
In 1978, Local 54 began filing with the Commission the annual registration statement required by
After a hearing, the District Court denied the motion for a preliminary injunction, concluding that appellees were unlikely to succeed on the merits of their claims. 536 F. Supp. 317 (NJ 1982). Since no preliminary injunction was entered, the Commission went forward with its disqualification hearing. The Commission concluded that Gerace and Materio were disqualified under § 86(f) because they were associated with members of organized crime in a manner inimical to the policy of the Act and to gaming operations. Local 54‘s Business Agent, Karlos LaSane, was also held disqualified under § 86(c) because he had been convicted in 1973 of extortion from persons doing business with Atlantic City while he was a City Commissioner.7 On the basis of its findings, the Commission ordered that these individuals be removed as officers, agents, or principal employees of Local 54, failing which Local 54 would be barred from collecting dues from any of its members who were licensed or registered employees under the Act. See App. to Juris. Statements 206a-207a. The Commission later issued a supplemental decision, determining that the prohibition against dues collection would suffice to effectuate the removal of the three union officials and that it was therefore unnecessary to invoke the additional sanction of prohibiting the disqualified officials from administering pension and welfare funds. Id., at 208a-215a.
We noted probable jurisdiction, and consolidated the separate appeals of the Commission and the Division to consider the pre-emption issue, 464 U. S. 990 (1983).9
II
When federal pre-emption is invoked under the directive of the Supremacy Clause, it falls to this Court to examine the presumed intent of Congress. See Fidelity Federal Savings & Loan Assn. v. De la Cuesta, 458 U. S. 141, 152-153 (1982).
These pre-emption principles are no less applicable in the field of labor law. Section 7 of the NLRA, 49 Stat. 452, as amended,
Appellants argue that the appropriate framework for pre-emption analysis in these cases is the balancing test applied to those state laws which fall within the so-called “local interests” exception to the pre-emption doctrine first set forth in San Diego Building Trades Council v. Garmon, 359 U. S. 236, 243-244 (1959). They contend that because New Jersey‘s interest in crime control is “so deeply rooted in local feeling and responsibility,” ibid., the Act may yet be sustained as long as the magnitude of the State‘s interest in the enactment outweighs the resulting substantive interference with federally protected rights. See Operating Engineers v. Jones, 460 U. S. 669, 683 (1983). This argument, however, confuses pre-emption which is based on actual federal protection of the conduct at issue from that which is based on the primary jurisdiction of the National Labor Relations Board (NLRB). See, e. g., Railroad Trainmen v. Terminal Co., 394 U. S. 369, 383, n. 19 (1969). In the latter situation, a presumption of federal pre-emption applies even when the state law regulates conduct only arguably protected by federal law. Such a pre-emption rule avoids the potential for jurisdictional conflict between state courts or agencies and the NLRB by ensuring that primary responsibility for interpreting and applying this body of labor law remains with the NLRB. See Motor Coach Employees v. Lockridge, 403 U. S. 274, 286-289 (1971); San Diego Building Trades Council v. Garmon, supra, at 244-245. This presumption of federal pre-emption, based on the primary jurisdiction rationale, properly admits to exception when unusually “deeply rooted”
If the state law regulates conduct that is actually protected by federal law, however, pre-emption follows not as a matter of protecting primary jurisdiction, but as a matter of substantive right. Where, as here, the issue is one of an asserted substantive conflict with a federal enactment, then “[t]he relative importance to the State of its own law is not material . . . for the Framers of our Constitution provided that the federal law must prevail.” Free v. Bland, 369 U. S. 663, 666 (1962). We turn, therefore, to consider whether New Jersey‘s Act actually conflicts with the casino industry employees’ § 7 rights.
III
Section 7 guarantees to employees various rights, among them the right “to bargain collectively through representatives of their own choosing.”
The Court of Appeals relied heavily on this Court‘s decision in Hill v. Florida ex rel. Watson, 325 U. S. 538 (1945), as support for the threshold proposition that § 7 confers an unfettered right on employees to choose the officials of their own bargaining representatives. Hill involved a Florida statute that provided for state licensing of union business agents and prohibited the licensing of individuals who had not been citizens for more than 10 years, who had been convicted of a felony, or who were not of “good moral character.” The statute also required the unions to file annual reports. Pursuant to this law, the Florida Attorney General obtained injunctions against a union and its business agent, restraining them from functioning until they had complied with the statute.
On review, the Court found that Florida‘s statute as applied conflicted with § 7, explaining:
“The declared purpose of the Wagner Act, as shown in its first section, is to encourage collective bargaining, and to protect the ‘full freedom’ of workers in the selection of bargaining representatives of their own choice. To this end Congress made it illegal for an employer to interfere with, restrain or coerce employees in selecting their representatives. Congress attached no conditions whatsoever to their freedom of choice in this respect. Their own best judgment, not that of someone else, was to be their guide. ‘Full freedom’ to choose an agent means freedom to pass upon that agent‘s qualifications.” 325 U. S., at 541.
The decision in Hill does not control the present cases, however, because Congress has, in our view, subsequently disclaimed any intent to pre-empt all state regulation which touches upon the specific right of employees to decide which individuals will serve as officials of their bargaining representatives. As originally enacted, and as interpreted by the
“No person . . . who has been convicted of, or served any part of a prison term resulting from his conviction of [a series of enumerated crimes] shall serve . . . as an officer, director, trustee, member of any executive board or similar governing body, business agent, manager, organizer . . . of any labor organization . . . for five years after such conviction or after the end of such imprisonment . . . .”
By enacting
As the Court has already recognized, another provision of LMRDA,
In De Veau v. Braisted, supra, this Court first squarely confronted the issue of post-Hill congressional intent in the context of a challenge to § 8 of the New York Waterfront Commission Act. The New York statute prohibited any labor organization representing waterfront employees from collecting dues if any of its officers or agents had been convicted of a felony and had not subsequently been pardoned or cleared by the parole board. The statute had been enacted in furtherance of an interstate compact between New York and New Jersey, establishing a bistate commission intended to combat crime and corruption on the States’ mutual waterfront. The compact had been expressly approved by Congress pursuant to Art. I, § 10, of the Federal Constitution. The argument urged upon the Court was that the New York statute was pre-empted by § 7 of the NLRA as conflicting with Hill‘s guarantee of “complete freedom of choice in the selection of [waterfront employees‘] representatives.” 363 U. S., at 152. In an opinion for a four-Justice plurality, Justice Frankfurter rejected this pre-emption argument and upheld the challenged statute.
The plurality opinion began by noting that the NLRA “does not exclude every state policy that may in fact restrict the complete freedom of a group of employees to designate ‘representatives of their own choosing.‘” Ibid. The plurality reasoned:
“It would misconceive the constitutional doctrine of pre-emption—of the exclusion because of federal regulation of what otherwise is conceded state power—to decide this case mechanically on an absolute concept of free choice of representatives on the part of employees, heed-
less of the light that Congress has shed for our guidance. The relevant question is whether we may fairly infer a congressional purpose incompatible with the very narrow and historically explained restrictions upon the choice of a bargaining representative embodied in § 8 of the New York Waterfront Commission Act. Would Congress, with a lively regard for its own federal labor policy, find in this state enactment a true, real frustration, however dialectically plausible, of that policy?” Id., at 153 (emphasis added).
After thus framing the inquiry, the plurality concluded that the Court need not in fact “imaginatively summon” a hypothetical congressional response since, in light of Congress’ express approval of the compact, federal pre-emption could not be found. Ibid.
De Veau‘s direct relevance for these cases lies less in its approach to determining § 7‘s pre-emptive scope than in its focus on the indicia of congressional intent that can be garnered from Congress’ approval of the compact. At congressional hearings, labor union officials testified against the compact‘s ratification on the specific ground that the New York statute conflicted with federal labor policy and that approval of the compact would therefore appear to sanction all such state restrictions. See 363 U. S., at 151 (citing to testimony of International Longshoremen‘s Association). In approving the compact over such objections, Congress apparently concluded that, at least where the States were confronted with the “public evils”12 of “crime, corruption, and racketeering,”13 more stringent state regulation of the qualifications of union officials was not incompatible with the national labor policy as embodied in § 7.14
We emphasize that this conclusion does not implicate the employees’ express § 7 right to select a particular labor union as their collective-bargaining representative, but only their subsidiary right to select the officials of that union organization. While the Court in Hill v. Florida ex rel. Watson,
IV
Although the NLRA does not preclude
Unfortunately, because of the procedural posture of this litigation, we cannot decide this issue. Appellees’ factual allegations were never addressed by the District Court and the Court of Appeals. We are thus confronted with a situation comparable to that presented in Alabama State Federation of Labor v. McAdory, 325 U. S. 450 (1945), in which the Court declined to decide whether the NLRA pre-empted a state filing requirement for unions because the statute had not been “construed to operate . . . by its penal sanctions . . . to prevent [the unions] . . . from functioning within the state for non-compliance . . . .” Id., at 466. We follow the same course here, and remand so that the District Court can make the requisite findings of fact to determine whether imposition of the dues collection ban will so incapacitate Local 54 as to prevent it from performing its functions as the employees’ chosen collective-bargaining agent.
We observe that even a finding that § 7 prohibits imposition of the dues collection sanction need not imply that New Jersey‘s disqualification standards are not otherwise enforceable by the Commission. The Act, for example, apparently grants broad powers to the Commission to impose sanctions directly on disqualified persons and to limit or restrict a labor organization‘s registration. See
Finally, we also decline to reach the validity of
V
We find that § 93 of New Jersey‘s Act is not pre-empted by § 7 of the NLRA to the extent that it imposes certain limi-
It is so ordered.
JUSTICE BRENNAN and JUSTICE MARSHALL took no part in the decision of these cases.
JUSTICE WHITE, with whom JUSTICE POWELL and JUSTICE STEVENS join, dissenting.
Section 93(b) of the New Jersey Casino Control Act restricts the activities of unions representing workers employed in the casino industry. In particular, it provides that a union may not collect dues from casino workers or administer pension or welfare funds if any of its officials is disqualified under the criteria set forth in § 86. The Court purports to save some portion of this statute1 by holding that a state law restricting the class of individuals who can serve as officers in a union is not pre-empted by federal labor law. If § 93(b) did no more than that, I would agree with the Court‘s
Section 7 of the NLRA grants covered employees the right “to bargain collectively through representatives of their own choosing.”
In Hill v. Florida ex rel. Watson, the Court held that federal labor policy prohibits a State from enforcing permissible regulations by the use of sanctions that prevent the union “from functioning as a labor union.” Id., at 543. Allowing the State to so restrict the union‘s conduct infringes on the employees’ right to bargain collectively through the representative of their own choosing because it prevents that representative from functioning as a collective-bargaining agent. The same effect would occur if New Jersey were to enjoin Local 54 from collecting dues from employees in the casino industry. A union which cannot sustain itself financially obviously cannot effectively engage in collective-bargaining activities on behalf of its members. Unlike the Court, I see no need to remand these cases in order to determine whether, as a factual matter, Local 54 is so dependent on dues that it will be prevented from effectively functioning as a bargaining representative if that source of revenue is cut off. I am willing to hold that, as a matter of law, a statute