SCOTUS to Consider Whether California Unconstitutionally “Takes” Private Property When It Compels Agricultural Employers to Grant Union Access to Private Property

Sheppard Mullin Richter & Hampton LLP
Contact

When it comes to whether unions have a right to enter an employer’s premises over the employer’s objections, California’s law is the polar opposite of the National Labor Relations Act (NLRA) and the law in most other states. In California, unions generally have special access rights that nonlabor parties do not have. Unions are given preferential treatment because of the state’s union-friendly public policies. For example, under Assembly Bill 1291 (AB 1291) (AB 1291) and California Business and Professions Code Section 26001(x), any company engaged in the cultivation, packaging, distribution or sale of cannabis products cannot be licensed unless it agrees to enter into a labor peace agreement (LPA) with a union. By statute, an LPA must, at minimum, (a) require the company not to “disrupt” the ability of unions to communicate with and to organize employees, and (b) grant workplace access to union organizers. Likewise, under the California Agricultural Labor Relations Board (ALRB)’s access regulations – which covers agricultural workers engaged in the cultivation of cannabis – agricultural employers are required to provide union organizers with access to their property to communicate with employees and engage in union organizing efforts for up to 120 days in a calendar year.[1]

However, this may soon change due to the Supreme Court’s recent order granting a hearing in Cedar Point Nursery et. al. v. Hassid where the issue presented is:

[W]hether the uncompensated appropriation of an easement that is limited in time [created by operation of the ALRB access regulation requiring that union organizers be granted access to employer property for organizational purposes] effects a per se physical taking [of private property] under the Fifth Amendment.

Cedar Point comes before the Court from a Ninth Circuit decision in which a majority of the court’s three-judge panel concluded that the ALRB’s access rule granting union organizers the right to come onto an employer’s property to communicate with workers were mere restrictions on the use of the employer’s land and did not rise to the level of an actionable “taking” within the meaning of the 5th Amendment. According to the majority, the access rule did not allow union organizers to enter the employer’s land “24 hours a day, 365 days a year” and, thus, did not cause the employer to suffer the permanent and continuous loss of their right to exclude the public from their property needed to establish a “taking.” However, on a subsequent denied petition for hearing en banc, a group of eight judges dissented from the majority’s opinion. In their view, the rule constituted a “taking” because it granted the union an affirmative easement to access and make use of the employer’s land in furtherance of a governmental use. Accordingly, the eight dissenters held that this state-recognized property right could not be taken or given away to a union by the state without just compensation. They, therefore, would have declared the ALRB’s access rule invalid as an unconstitutional taking of the employer’s property in violation of the 5th Amendment.

The reasoning of the Cedar Point dissenters comes into play every time a California state law operates to grant unions unauthorized access and use of an employer’s private property. Accordingly, depending on whether and how the Court answers the question presented, state and local laws granting unions access to cannabis employer’s private property may later be subject to challenge as unconstitutional “takings” and have to be rethought. See e.g., California Labor Code Section 1141, 1144; AB 1291; California Business and Professions Code Section 26001(x). Cannabis companies should carefully evaluate the pros and cons and legal risks associated with granting requests by unions to access their private property. Further, insofar as state and local laws and/or contracts make an employer’s entry into a LPA a condition of doing business, mandatory union access requirements may be unconstitutional, giving an otherwise successful licensee/bidder a legal basis for rejecting a state LPA requirement and the ability to refuse to honor their state license’s/contract’s LPA requirements.[2]

FOOTNOTES

[1] Some employees engaged in cannabis activities are nonagricultural employees, and therefore fall under the primary jurisdiction of the NLRA. Agricultural workers engaged in the cultivation of cannabis are exempt from the NLRA but covered by the California Agricultural Labor Relations Act (ALRA), which is administered and enforced by California’s Agricultural Labor Relations Board (ALRB). The ALRA is patterned after the NLRA and like the National Labor Relations Board (NLRB) vis-à-vis the NLRA, the ALRB has primary jurisdiction over the ALRA.

[2] In addition, state and local LPA requirements may also be preempted by federal labor law. See our prior blog post here.

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.

© Sheppard Mullin Richter & Hampton LLP | Attorney Advertising

Written by:

Sheppard Mullin Richter & Hampton LLP
Contact
more
less

Sheppard Mullin Richter & Hampton LLP on:

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:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.