For most of the last century, a labor dispute in Sacramento or Syracuse ran under the same federal rules. States are now passing laws on organizing outside the jurisdiction of the National Labor Relations Board (NLRB) and sectoral bargaining. Subjects that courts have long treated as off-limits, and an approach that unions are embracing. We’ve touched on sectoral bargaining, federal preemption, and other similar trends before, but it’s worth paying attention to this discussion.
Alex MacDonald, co-chair of Littler Mendelson’s Workplace Policy Institute (WPI), joins Phil Wilson, CEO and General Counsel of LRI Consulting Services (LRI), on The Left of Boom Show podcast to explain why that assumption no longer holds, and why the shift from Washington to the states is accelerating faster than most employers realize.
Three overlapping doctrines (Garmon, Machinists, and Section 301 of the Labor Management Relations Act made labor relations a federal subject under the National Labor Relations Act (NLRA). MacDonald says many labor lawyers, himself included, dismissed the first state efforts as legally unserious. He no longer does.
Governments can require these on their own construction projects as market participants. States have stretched that exception to cannabis licensing, where more than a dozen states encourage or require them.
A federal court in New Jersey found that the state’s requirement preempted, and an Oregon court reached the same result. Both rulings are on appeal. California went the other way on an unrelated “unclean hands” theory that the state has since dropped. MacDonald represents New Jersey cannabis businesses in these cases.
Massachusetts and California laws now let one union negotiate with every rideshare company, and a state agency adopts the terms as regulation. The statutes avoid the word “bargaining” to sidestep preemption. In Massachusetts, a union can be certified without an election once 25 percent of “active” drivers sign on. Active means above the median ride count, so that is roughly 12.5 percent of all drivers, and the union then represents every driver. It’s a very subjective number
Model legislation from the Harvard Center for Labor and a Just Economy would extend this to any industry.
MacDonald also flagged Section 14(c)(2) of the NLRA as a route into NLRA-covered industries if a future National Labor Relations Board declines jurisdiction where a state has a comprehensive sectoral law.
What to Watch
Employers in licensed industries should follow the pending LPA appeals. Gig and app-based employers should expect the rideshare model to spread. Everyone should read state bills for low signature thresholds, union access to employee contact information, and regulator-set terms.
Listen to the full episode. Alex also shared a deeper-dive article on sectoral bargaining here.
