On May 16, 2018, we blogged about California’s compulsory arbitration requirements for unionized agricultural workers, the California Supreme Court’s rejection of constitutional challenges to that statute, and the petition for certiorari filed by the employer, Gerawan Farms. A majority of Gerawan’s employees signed a petition seeking an election on whether to decertify the union.  The California Agricultural Labor Relations Board (ALRB ) allowed the election but it refused to count the ballots.  The ALRB found that Gerawan had committed unfair labor practices that tainted the reliability of the petition.  The remedy the ALRB imposed was to ignore the results of the election.

On May 30, 2018, the California Court of Appeal, Fifth Appellate District, vacated the ALRB’s order and remanded for further proceedings consistent with its opinion. The appellate court first held that it had jurisdiction to hear the appeal.  Most ALRB orders dealing with elections are not immediately reviewable because they are not final.  Rather, the employer must refuse to bargain with the union and then appeal from the ALRB order finding that the refusal was an unfair labor practice.

For three reasons, the court held that this “technical refusal to bargain” process did not apply to Gerawan’s petition for review. First, the ALRB’s refusal to count the ballots meant that the technical refusal to bargain process was an inadequate remedy.  If Gerawan refused to bargain, but the union won the election, Gerawan would be guilty of an unfair labor practice.  Second, the court did have jurisdiction to review the unfair labor practice findings and the election remedy was an integral part of those findings.  Third, the rationale for the technical refusal to bargain process is to avoid disrupting the status quo by lengthy, possibly frivolous, litigation.  Here, the status quo remains in effect unless and until the union is decertified.

On the merits, the court sustained some of the ALRB’s factual findings and overturned others. The findings the court sustained were technical and relatively trivial.  For example, Gerawan allowed two workers to devote parts of the regular work day to campaign for signatures on the petition.  On one day, in the face of numerous absences by employees objecting to the union, Gerawan raised the unit price for a packed box of grapes by 25 cents; the court held that this finding was “marginally sustainable.”

The principal legal issue in the opinion is the standard of proof required to set aside an election. The NLRB inquires whether unfair labor practices have violated the “laboratory conditions necessary for a fair election” – a quite lenient standard.  The California court adopted a much more demanding “outcome-determinative” standard – i.e., the employer’s misconduct was sufficiently severe that it “affected the outcome of the election.”

The Court reasoned that, under federal law, a rerun election is usually possible within a relatively short period of time and by essentially the same employees. By contrast, in California, the statute requires at least 50% of peak employment at the time a petition is filed.  Given the seasonal nature of agricultural employment, a year might elapse before a rerun election could legally be held; given the high rate of turnover in agricultural employment, the electorate might be very different.  The court was concerned that this lengthy delay would intrude on employees’ rights not to join a union if they do not want one.

The court also held that, in assessing the impact of employer misconduct, the ALRB must consider the margin of the election. If the vote is close, a lesser level of misconduct might require a rerun; if the vote is 90-10 in favor of decertification, it would require much more egregious misconduct.  On remand, therefore, the ALRB was required to count the ballots.  Given the intensity with which the employees oppose the union, it seems likely that the vote will not be close.

In its initial ruling, the ALRB did not apply the outcome-determinative standard. It held that that standard applied to elections.  Here, though, the ALRB found that Gerawan’s unfair labor practices had “tainted” the petition and, since the petition was therefore invalid, so was the election.  The court thought that the taint standard all but ignored employees’ interest in filing a petition seeking decertification.

Following a dissent in an earlier ALRB case, the court held that the petition was not a jurisdictional requirement for a decertification election, but merely an administrative tool to assist the ALRB in determining whether there was sufficient support for decertification to warrant an election. Moreover, the taint standard assumed widespread dissemination of improper efforts to coerce employees, without either direct or circumstantial evidence to support it.  Finally, the taint standard focuses on the petition rather than the election, but California law strongly favors elections.  So the proper legal standard is whether Gerawan’s alleged misconduct had an outcome-determinative effect on the election.

The court remanded the case to the ALRB for reconsideration based on the unfair labor practices actually supported by the evidence; the proper standard of review; and the vote tally. But it is hard to believe that the ALRB on remand can do anything other than uphold the election.  The court held that the relatively minor unfair labor practices Gerawan actually committed “plainly did not rise to the level or character of employer interference in the decertification process to permit the Board to pronounce the entire worker petition void.”

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On June 22, 2017, we blogged about the challenge to North Carolina’s “ag-gag” law. The statute provides for actual and punitive damages against a person or entity who engages in an undercover investigation into charges of animal cruelty.  People for the Ethical Treatment of Animals (PETA) and the Animal Legal Defense Fund (ALDF) challenged the statute on First Amendment grounds.  The District Court dismissed the lawsuit on the basis that plaintiffs lacked standing – i.e., they had not alleged any immediate concrete injury.

On June 5, 2018, the Fourth Circuit reversed.  The appellate court held that the complaint did adequately allege that the existence of the statute had deterred PETA and ALDF from pursuing undercover investigations at the University of North Carolina at Chapel Hill.  In First Amendment cases, courts have relaxed standing requirements and the chilling effect on speech is sufficient injury to allow the lawsuit to proceed.

The Fourth Circuit declined to consider the State’s alternative argument that the chilling effect was not fairly traceable to the only two defendants in the lawsuit – the chancellor of the University and the Attorney General.  The District Court can visit that issue on remand and the plaintiffs may wish to add additional defendants.

 

Foie gras is based on the livers of geese and ducks. The traditional method of obtaining it is gavage, force-feeding poultry through a tube in their esophagi to enlarge the liver.  In 2004, California passed legislation effective in 2012 to ban the use of force-feeding in California and the sale in California of foie gras produced by such force-feeding any place else.  The rationale for the statute was that force-feeding is cruelty to animals.

Producers and consumers of foie gras sought to enjoin the ban on sales in California on the ground that the federal Poultry Products Inspection Act (PPIA) preempted the California statute.  Plaintiffs prevailed in the District Court, but the Ninth Circuit reversed in an opinion released on September 15, 2017. Association des Eleveurs De Canards et d’oies du Quebec, 870 F.3d 1140 (9th Cir. 2017).

The PPIA preempts state laws that impose marking, labeling, packaging or ingredient requirements in addition to or different from those prescribed by the PPIA.  The key issue in the case was whether California’s ban on the sale of foie gras banned an ingredient.  The District Court held that it did:  plaintiffs’ foie gras could comply with every federal requirement but still violate the California statute because “their products contain a particular constituent – force-fed bird’s liver.”  Thus, the statute “imposes an ingredient requirement.”

The Ninth Circuit thought otherwise.  It held that ingredients pertain to the “physical components that comprise a poultry product,” not the process by which those ingredients are produced.  Even if the result of the California statute is to prohibit foie gras altogether, PPIA preemption would not apply – nothing in the PPIA “limits a state’s ability to regulate the types of poultry that may be sold.”  The Ninth Circuit relied on Fifth and Seventh Circuit opinions holding that federal law did not preempt bans on the sale of horse meat.

The source of this disagreement is the Supreme Court’s ambiguous opinion in Nat’l Meat Association v. Harris. Harris interpreted the preemption provision of the Federal Meat Inspection Act (FMIA), which is essentially identical to the PPIA.  The California statute there at issue prohibited the purchase or sale of nonambulatory animals.

In holding that the FMIA preempted the statute, the Court observed:

  • [I]f the sales ban were to avoid the FMIA’s preemption clause, then any State could impose any regulation on slaughterhouses just by framing it as a ban on the sale of meat produced in whatever way the State disapproved.  That would make a mockery of the FMIA’s preemption provision.

The District Court thought that language mandated preemption in the foie gras case. The Ninth Circuit held that Harris involved completely different parts of the two preemption statutes.

Plaintiffs have now filed a petition for certiorari in the Supreme Court.  The petition presents two questions:  whether the PPIA preempts California’s ban on foie gras; and whether Congress has occupied the field of poultry product ingredients.

The petition asserts three grounds for granting the writ.  First, plaintiffs argue that the Ninth Circuit’s holding is contrary to Harris.  The Ninth Circuit held that nothing in the PPIA “limits a state’s ability to regulate the types of poultry that may be sold.”  The petition argues that Harris held that the states are not “free to decide which animals may be turned into meat.”  It also argues that the Ninth Circuit improperly invoked a presumption against preemption that the Supreme Court has explicitly rejected.

Second, the petition argues that the Ninth Circuit has created a clear circuit conflict on whether the PPIA reflects a congressional intent to occupy the field of ingredients in food.  It cites cases from the Fifth and Sixth Circuits so holding.  The conflict is not, however, as great as the petition makes out.  The Ninth Circuit’s authority clearly does hold that states can ban the sale of particular animals for human consumption, although both of those cases pre-dated Harris.

Third, the petition argues that the national interest in uniform application of the PPIA warrants a grant.  If the Ninth Circuit got it right, the City of San Francisco could ban the sale or consumption of all meat products, leading to a potentially Balkanized system of regulation.

Five amici have filed briefs in support of the petition.  California filed its response on May 14, 2018.  We would not be surprised if the Court asked the solicitor general to weigh in, in which case the petition will not be decided until next fall at the earliest.

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 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.

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