I.       Introduction. 

Unlike federal labor law, the California Agricultural Labor Relations Act (ALRA or Act) authorizes agricultural workers to form unions and engage in collective bargaining.  If the parties cannot reach agreement on the terms of the contract, the Act requires mediation.  If mediation is unsuccessful, the ALRA requires the mediator to dictate the terms of the contract and impose them on the parties without either’s consent.  The California Supreme Court upheld the Act in the face of numerous constitutional challenges.  The employer has now filed a petition for certiorari.

II.       Factual Background.

The employer, Gerawan Farming, Inc., is the largest grower of peaches, plums and nectarines in the United States. It employs approximately 5,000 workers.  In 1990, the United Farmworkers of America (UFW) was certified as the bargaining representative for Gerawan workers.  The parties did some bargaining through 1995 without reaching agreement.  The UFW then vanished for the next 17 years before resurfacing in 2012 and requesting further bargaining sessions.

The parties engaged in several negotiating sessions, although the UFW never put an economic proposal on the table.  In March 2013, the UFW invoked mandatory mediation.  The ALRA has three prerequisites to such mediation:  (1) the parties have not reached agreement for at least a year after the union requested to bargain; (2) the parties have not previously had a binding contract; and (3) the employer has been found to have committed an unfair labor practice.  Here, the unfair labor practice was committed before the union won certification in 1990, 22 years before it sought mediation.

In the meantime, a majority of Gerawan employees twice petitioned the agency that administers the ALRA to decertify the UFW.  The agency ordered a secret vote after the second petition, but refused to count the ballots on account of an alleged unfair labor practice by Gerawan months before the election.

The mediation being unsuccessful, the mediator proceeded to impose terms and conditions on the parties.  Neither Gerawan nor its employees were happy with the contract.  Most workers experienced a reduction in take home pay, because the raises they received were less than the union dues imposed by the mediator.  The contract also disrupted Gerawan’s quality control program and a seniority system that had worked well for both Gerawan and its employees.

Gerawan sought judicial review of the mediator’s ruling in the California Court of Appeals.  That Court found that the ALRA violated the California Constitution by unlawfully delegating legislative power to an administrative agency.  It also held that the Act violated equal protection, by giving the mediator essentially unrestricted power to impose different contract terms on similarly situated employers.  The Court of Appeals did not reach Gerawan’s argument that the ALRA also violated substantive due process.

The California Supreme Court reversed.  It acknowledged that the Supreme Court of the United States had held compulsory arbitration for private employers violated due process. But it also held that these Lochner-era decisions had been completely repudiated by the Court’s New Deal decisions.  It rejected the equal protection argument on the theory that the Act contained sufficient criteria to limit the discretion of the mediator, including such things as the employer’s financial condition; wages, benefits and terms and conditions of similar operations; and the cost of living in the area.

III.      The Certiorari Petition.

The petition presents three arguments as to why the Act violates the Fourteenth Amendment.  First, Gerawan asserts that compulsory arbitration arbitrarily deprives both it and its employees of liberty and property interests.  Imposing contract terms that neither party wants clearly deprives each of them of an economic interest.  But it also deprives the employees of their rights of free association by denying them the opportunity to decertify the union.  California treats a compelled contract as the same as a collectively bargained one.  Under California law, employees cannot seek decertification until the final year of the contract.

Second, Gerawan argues that the ALRA violates substantive due process, because the three Lochner-era cases (the Wolff trilogy) expressly held that states could not require compulsory arbitration for private companies. Chas. Wolff Packing Co. v. Court of Industrial Relations, 262 U.S. 522 (1923), held that the State of Kansas could not impose a wage schedule on an employer and its union. Dorchy v. State of Kansas, 264 U.S. 286 (1924), held that Kansas could not punish a union official for calling a strike in an effort to secure better terms for union members. Chas. Wolff Packing Co. v. Court of Industrial Relations, 267 U.S. 552 (1925), held that Kansas could not impose maximum hours on the parties.

The petition alleges that the Wolff trilogy remains good law, never having been expressly repudiated by the Supreme Court.  It is true that the initial Wolff opinion relied in part on Adkins v. Children’s Hospital, 261 U.S. 525 (1943), and West Coast Hotel Corp. v. Parrish, 300 U.S. 379 (1937), expressly overruled Adkins.  But Adkins was not the only basis for the Wolff trilogy, and the Supreme Court reserves for itself the right to overrule its own precedents, no matter how “moth eaten” they may be. State Oil Co. v. Khan, 522 U.S. 3, 20 (1997).

Third, Gerawan argues that the compulsory arbitration process violates equal protection, because it allows the mediator to impose on employers and employees whatever terms and conditions he or she pleases.  The criteria that the ALRA sets forth are not binding.  The mediator may give those criteria whatever weight he or she chooses to do so.  The mediator may ignore them entirely.  The result is a standard-free imposition of any terms and conditions the mediator wants.

The State and the UFW initially waived their right to file responsive briefs.  The Court, however, ordered them to respond, which suggests the Justices are taking the petition seriously.

On December 19, 2017, we blogged about the efforts of several states, including Missouri, to overturn California’s egg regulations by suing California directly in the Supreme Court. A California referendum requires all egg-laying hens in California to have substantially more cage space than is the industry norm.  California egg farmers were understandably concerned about being placed at an economic disadvantage vis-à-vis their out-state competitors, so they lobbied the legislature to require that all eggs sold in California be laid by hens in cages that comply with the space requirement.  As a practical matter, there is no way to comply with that requirement without providing minimum cage space to all hens.

The State of Missouri sued California for declaratory and injunctive relief, alleging that its attempt to control the actions of out-of-state producers violated the Commerce Clause. Both the District Court and the Ninth Circuit rejected those claims, not on the merits, but because Missouri had not alleged that the regulations caused it any damage.

Last December, 12 states joined with Missouri in a motion for leave to sue California in the Supreme Court under the Court’s original jurisdiction.  They supported the motion with an expert report asserting that the California measure has raised the price of eggs across the board.  The motion has been fully briefed by the parties and the Court has asked the Solicitor General for his views on the matter.  The Court will likely decide before the end of June whether to hear the case.

The Washington Post reported on a proposed EPA rule limiting the science that can be used in EPA regulations.

Food Safety News discussed a USDA report on food recalls.

Food Dive reported on how digital technology is changing the food industry.

Business Standard discussed 3D food printing.

Food Dive discussed a Tyson and Flashfood partnership to cut food waste.

 

USAgNet discussed industry groups request for new beef labeling requirements.

The Houston Chronicle reported on a provision in the 2018 Farm Bill that would remove certain rules on EPA pesticide review.

The Western Producer discussed farmer reaction to potential trade war with China and proposed subsidies.

The Press-Enterprise reported on six California bills aimed at reducing plastic waste.

Bloomberg discussed the impact of Chinese sorghum tariff on Kansas agriculture.

 

Agriculture.com discussed ag group efforts ahead of White House meetings on biofuels.

The Kansas City Star reported on potential meetings between ag state representatives and the White House on Chinese tariffs.

Farms.com discussed the impact of the loss of foreign born agriculture workers.

Bloomberg reported on the use of blockchain technology to trace food.

GeekWire discussed Walmart’s delivery partnership with Postmates.

 

Coffee sellers in the State of California will now be required to provide cancer warnings on their coffee products. On March 28, 2018, a California State Court issued a Statement of Decision in a Proposition 65 (Prop 65) case that found that Starbucks and other retailers failed to prove that a chemical found in coffee poses no significant harm. Council for Education and Research on Toxics v. Starbucks Corporation, No. BC435759 (L.A. Super. Ct. Mar. 28, 2018).

Under California’s Prop 65, cancer warnings are required to appear on a wide range of products. In 2010, a nonprofit sued over 90 coffee sellers alleging that the companies failed to warn consumers regarding the presence of acrylamide in their coffee in violation of Prop 65. Acrylamide is listed as a chemical known to the State of California to cause cancer and reproductive toxicity and, consequently, products containing it are required to carry a warning. The chemical is created in certain plant-based foods during cooking, baking, frying, or roasting at high temperatures. Because acrylamide is also created during the cooking process for other foods, including potato chips, bread, french fries and roasted nuts, many of these products are arguably required to carry cancer warnings in California.

The court in the Starbucks case still has to rule on penalties the coffee sellers could face, but the decision exposes the defendants to significant fines: civil penalties of up to $2,500 per person exposed each day over eight years.

Contact us if you need help determining whether your products – coffee or otherwise – are covered by Prop 65, if you want assistance designing a Prop 65-compliant warning label for your products, or if you need legal counsel to address a Prop 65 60-day notice you’ve received.