In a significant development, New York enacted S.8034A, a law that would transform its Public Employment Relations Board (PERB) into a mini-National Labor Relations Board (NLRB). Under the new law, PERB would have new authority to resolve unfair labor practices (ULPs), enforce collective bargaining agreements, and certify unions operating in the private sector.
The five-member NLRB has lacked a quorum since January 2025, leaving it unable to, among other things, decide appeals of administrative law judges' decisions in unfair labor practice cases, resolve disputed issues in representation case proceedings, and finalize proposed regulations. To make matters worse, the NLRB as an agency has long been considered underfunded, and its regional offices are understaffed. By enacting S.8034A, New York signals the state's intent to increase protections for workers while the NLRB continues to operate without a quorum. What's more, New York is not the only state to consider taking such action. California and Massachusetts are also considering legislation that would expand the jurisdiction of those states' public employment relations boards over private-sector employers ordinarily subject to the exclusive jurisdiction of the NLRB.
Pitfalls for Employers
Under the National Labor Relations Act ("NLRA") the NLRB has exclusive jurisdiction over virtually all private labor relations matters, which is necessary to ensure there is a single set of national standards governing labor relations for all 50 states. New York's intrusion into federal labor policy risks undermining these uniform federal standards, creating considerable compliance challenges in the process:
- Dual Jurisdiction: With PERB and NLRB potentially asserting simultaneous jurisdiction over labor disputes, impediments to effective collective bargaining, and representation proceedings, businesses may be subject to duplicative proceedings and even conflicting outcomes. That problem would be compounded for employers with multi-state operations.
- Inconsistent Standards: Because no one can guarantee that PERB and NLRB decisions, as well as their respective processes, procedures, and jurisdictional standards will always align, S.8034A could introduce increasing complexity and compliance burdens for businesses, stifling those employers' ability to grow and effectively manage their operations.
- Multiple Mini-NLRBs: If New York can expand PERB's authority to private-sector labor matters, then other states would likely follow suit. Such a proliferation would almost certainly lead to a patchwork approach to labor law, which would significantly impact businesses engaged in interstate commerce, an unacceptable result the NLRA was enacted to prevent.
The NLRB Challenge: A Doctrinal Flashpoint
The Acting General Counsel for the NLRB, William Cowen, has taken notice, signaling strong opposition to states' efforts to inject themselves into matters affecting national labor policy. On August 15, 2025, Mr. Cowen issued a statement warning that any state's attempt to regulate private-sector workers would likely be preempted by the NLRA. He also noted that the NLRB's work continues largely unimpeded by the Board's lack of a quorum and other challenges. Regional Offices continue to process ULPs, hold elections, and resolve representation cases. Indeed, in a typical year, approximately 95% of cases are processed by the various regional offices without any Board involvement.
After New York passed S.8034A, Mr. Cowen, acting on behalf of the NLRB, promptly filed suit in the U.S. District Court for the Northern District of New York, seeking declaratory and injunctive relief against enforcement of the state law "as it creates a parallel regulatory system that undermines the federal labor policy Congress designed to be national in scope." The lawsuit rests largely on the Supremacy Clause of the U.S. Constitution and U.S. Supreme Court precedent set out in San Diego Building Trades Council v. Garmon, 359 U.S. 236, 244–46 (1959).
The thrust of the NLRB's argument is that Congress enacted the NLRA to establish a uniform national policy for governing labor-management relations. In Garmon (and in related cases), the U.S. Supreme Court emphasized the primacy of federal authority in this domain, leaving limited room for state intervention. States are thus prohibited from regulating activity that the NLRA protects or prohibits—or even arguably protects or prohibits—to ensure a uniform national labor policy that preempts conflicting state regulation.
It should also be noted that preemption under International Ass'n of Machinists & Aerospace Workers v. Wisconsin Employment Relations Comm'n, 427 U.S. 132 (1976), which is close cousin to Garmon preemption, could also be implicated by the NLRB's lawsuit. Under Machinists, states are prohibited from regulating areas where Congress intended neither state nor federal intervention, such as state laws purporting to require employer neutrality during an organizing campaign, or state laws purporting to regulate the right to strike or engage in other economic weapons during collective bargaining.
In both instances, Mr. Cowen argues the state law encroaches on the NLRB's exclusive prerogatives to set federal labor policy and seeks to strike down the state law as unconstitutional interference with the federal labor law framework.
Implications and Recommendations for Employers
New York's expansion of state labor authority introduces uncharted complexities for employers, potentially altering the playing field for labor relations in New York and, if other states take similar measures, across the country. At the same time, the NLRB's legal challenge brings federal preemption to the forefront, mounting a strong legal challenge to state-level regulation.
DWT's labor lawyers will continue to monitor this litigation and other states' efforts to create their own mini-NLRB and share information as the NLRB's case against New York moves forward.
