California’s Compulsory Arbitration Law

by Husch Blackwell LLP
Contact

 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.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Husch Blackwell LLP | Attorney Advertising

Written by:

Husch Blackwell LLP
Contact
more
less

Husch Blackwell LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.