In a defeat for the union movement, the Supreme Court on Thursday struck down a first-in-the-nation law adopted in California that would have barred companies from speaking out against unions if they received state funds.

The justices in a 7-2 decision said the state measure conflicts with the free-speech zone created by federal labor law.

The ruling is likely to benefit especially companies in the healthcare industries, such as nursing homes, that receive some state funds and have low-level employees who are not unionized. It is a sharp setback for unions seeking to organize janitors, nurses, clerical workers and other employees in those areas.

Labor organizers may encourage workers to join unions, the high court said, but the employers also are free to try to persuade them against unionizing. Employers do not lose this right simply because they take the government’s money, the justices said.


The California law was triggered by a campaign to organize janitors in the Los Angeles area. Mike Garcia, a union leader, complained to lawmakers that some companies were using state money “to pay for aggressive anti-union tactics.”

State lawmakers, led by Sen. Gil Cedillo (D-Los Angeles), won approval of a bill to stop this practice. The measure, known as AB 1889, said state contractors and other private employers may not use state money “to assist, promote or deter union organizing.”

The sponsors described this as the “nation’s first state neutrality law” on labor organizing.

The state law “simply prevents the misuse of state funds,” Art Pulaski, secretary-treasurer of the California Labor Federation, said. “Our unions don’t use state funds to help workers gain a voice at work, so employers shouldn’t use them to prevent workers from organizing for improved wages, benefits and working conditions.”


Since California adopted its law in 2000, at least 10 other states, including New York and Florida, have passed similar measures.

But the U.S. Chamber of Commerce sued to stop enforcement of the measure, and a federal judge in Los Angeles agreed it wrongly “regulated employer speech about union organizing.”

The U.S. 9th Circuit Court of Appeals disagreed and said the state could put restrictions on the use of its own funds. But the law remained on hold while the Chamber of Commerce challenged the measure in the Supreme Court.

Thursday’s ruling voids the state law.


This “shuts the door on attempts by other states to use their spending powers to get around federal labor laws,” said Robin Conrad, vice president of the National Chamber Litigation Center. “The impact of the court’s decision will be sweeping.”

The ruling was at least the third major decision this year to read federal law broadly to “preempt” or trump state laws.

In February, the justices struck down a Maine law that sought to limit shipments of cigarettes to homes. The court said it conflicted with a federal law that deregulated the trucking industry. At the same time, the justices also ruled that a federal law regulating medical devices preempts lawsuits by injured patients. The decision threw out a suit brought under New York’s general consumer-protection law.

In the union case, Justice John Paul Stevens said labor law since 1935 has tried to maintain a level playing field for unions and management. The court has said the laws favored “uninhibited, robust and wide-open debate” between unions and employers and “create a zone free from all regulations” by the government. Stevens said the state may not limit one side from making its case to workers.


Justices Stephen G. Breyer and Ruth Bader Ginsburg dissented. They said the state law does not restrict what employers can say, and therefore does not violate the free-speech rule set by federal labor law.

Normally, legislatures have “broad authority to decide how to spend the People’s money,” Breyer said. If Californians do not want their tax money used against union organizers, he said, “why should they be conscripted into paying?”

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david.savage@latimes.com