Chamber Welcomes Ruling that Upholds Employer Rights

WASHINGTON, D.C. – The United States Chamber of Commerce recently won a major victory for employers' free speech rights, when the U.S. Court of Appeals for the Ninth Circuit upheld a district court ruling that said California could not prohibit recipients of state funds, such as state contractors, from using those funds to support or oppose union organizing drives.

"The free speech rights of businesses have been fortified by the Court of Appeals decision," said Robert J. Costagliola, labor and employment counsel for the Chamber's litigation center. "Laws like California's are being sponsored nationwide by the AFL-CIO to unfairly prevent employers from telling their side of the unionization story to their own employees."

In a suit initiated by the National Chamber Litigation Center (NCLC), the public policy law firm of the U.S. Chamber, and joined by a host of other businesses and organizations – the parties successfully defeated an appeal brought by the State of California and the AFL-CIO that sought to overturn a 2002 decision handed down by the United States District Court for the Central District of California.

In affirming the district court's decision, the Court of Appeals held that the statute contains broad and burdensome provisions that impermissibly interfere with employers' free speech rights under the federal National Labor Relations Act (NLRA) and with activity that Congress intended to be left to the free play of economic forces. As a result, the court concluded that federal law preemption invalidates those provisions.

NCLC also supported a successful challenge to a similar law in New York, Costagliola noted, Healthcare Association of New York State v. George Pataki, a case that is now on appeal in the Second Circuit. NCLC remains actively involved in that case.

NCLC is a membership organization that advocates fair treatment of business in the courts and before regulatory agencies. The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region.

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