The Supreme Court ruled 6/19/2008 that a California law that prohibits employers who receive more than $10,000 in state funds annually from using those funds to “assist, promote, or deter union organizing” is preempted by the National Labor Relations Act (NLRA). The NRLA provides that companies’ anti-labor speech cannot be considered evidence of an unfair labor practice so long as it does not threaten or coerce workers. The Chamber argued that California’s law violated the NLRA’s safe harbor for anti-union speech, and is therefore preempted. The Court agreed, finding that noncoercive speech is fully protected by the NLRA. Congress intended to leave unregulated uninhibited, robust and wide-open debate on labor disputes.
The impact of the Supreme Court’s decision in this case could be significant for state government contractors, as more than a dozen states were considering adopting laws similar to California’s.