good morning your honor man pleased to court my name is michael starr here representing the american hotel a lodging association and the asian american hotel owners association i would like to lease or five minutes for rebuttal and had hoped for something better yet we are here today because the city of los angeles has passed an ordinance that substantially distorts the economic balance of power between labor and management and interferes with labor management relations in a significant way that's established in the record below it is not disputed that is the fact record upon which this court must makes its determination but don't all minimum wage requirements imposed by states can sometimes show by localities interfering in the process to some extent hasn't the supreme court recognized that the answer to your quote question first question owners no not all minimum wage laws do that and the supreme court has not recognize that well just being court has approved the notion that minimum wage laws do not file a d n r i correct the i think that you're on its way further into the case of metropolitan life and for halifax and i think it would be helpful if we focus on what the issue was in that well i guess what i'm asking a different question ok so you're whining it is your argument if accepted invalidate all minimum wage substantially distorts the economic power between labor and management and significantly interferes with labor management relations that's a staff least by the testimony of our expert professor who said in his opinion that it has these effects and it wouldn't be obvious interacted the next ruling of the district court was that because it's a minimum wage law on minimum labor standards it's preempted only if it not merely tilts the playing field but also forces the hand of the employer when i was answering the question i'm trying to ask all minimum wage laws tilt the playing field then i know they do not well as i don't understand understand that if if when we start bargaining i know that the state would require me to pay my employee some amount per hour no matter what the review then it seems to me my employees start out with a trip they start out knowing that when they bargain there are the floor is the said to him let us come in and organize your employees and we'll have to pay more but you won't have to pay as much as you have to pay under the city law that is clearly the use of this statute to affect union organizing that what's bad about that because the human are saying sign a card check work ignition agreement give up your right to demand the union organizing election give up your right to exclude people from the workplace the influence of the employee vote give up the right of your employees to have an election to determine the outcome of the it is not doesn't matter what the union was saying that's self evident the statute says you have to pay a certain amount per hour but you don't have to have a collectively bargained agreement that provides for last so no matter what seems to me what the union rep was saying was was just reiterating what the statute said which is that if you if you organize if you let us come in and organize we may be able to collectively bargain in agreement below the minimum wage level and why is that different than any other minimum wage i think it's because that the question in each case is whether it frustrates the effective implementation of the at the union as the record is that because of this law of the union got extra leverage to ask the employer to consent to a card check recognition agreement that's what the employer could say no but then it would be subject to the minimum wage law that's right  argument for a carjack better than it would have been otherwise i think your honor the way you articulated it isolate the one legal issue we have you know no one put a gun to the head but they tilt the playing field in a signal so now let's get back to the question if you're going to run i asked at the beginning because i'm still not sure i understand why is that different than any case in which there's a minimum wage and the union comes to the employer and says if you will facilitate our we're going to organize in your workforce we might be able to bargain for a wage below the minimum wage i think you're on assessing the question why in the abstract is it any different from anything else in the abstract everything is like everything else it's different because of the facts on the ground it's different because of the way this industry is or the judge would last you for the facts on the ground and what you said was the union went to the employer and said hey you want to escape the minimum wage here's a legal way to do so puts nonunion hotels at a severe competitive disadvantage to other hotels that are either unionized and therefore get the exemption in the waiver or are not unionized and are cuts competitive the fact on the maids make i can tell you that the room attendant we don't call the maids anymore the room attendant and some of the larger hotels i get sixteen thirty get over sixteen dollars an hour to stablish in the affidavits in many of the declarations fifty seven cents the problem is not the fifteen dollars and thirty seven cents you're on of the problem is the fifteen dollars and thirty seven cents plus the provision that you can't keep a portion of the service charge plus the provision that the entirety of the service charge can't be counted against that satisfying the fifteen dollars and thirty seven cents plus the fact that if you and we haven't gotten to the way of a clause in the implementation problem but the fact of the matter is that these three provisions taken together the minimum wage level the fact that you can't credit the service charge to satisfy him that the fact that you can't keep a portion of the service charge for the house these provisions create a problem for nonunion hotels that they are competitively disadvantage severely competitively that not slightly not potentially but in actuality competitively disadvantage so the issue before this court i submit is the fact establishes that this statute makes nonunion hotels competitor only disadvantage legal in your view yes creates the preemption is that it creates a burden on hotels that can be a state if you unionize so if if all your clients were required to pay fifteen preempted by machinists just trying to understand your present shock him and if the only thing that raise the minimum wage and that all these other things which i didn't say about all the other things i'd say saying it raised the minimum wage those other things are all just guaranteed to make sure that the employee is paid the minimum wage that you don't credit towards the employees i compensate should money that the hotel keeps so my question is if that's all there were and there were no exemptions for organized organized labor likely then there wouldn't be a good morning paul more with david's column both on behalf of intervener appellee unite here local eleven i'll be using ten minutes of our fifteen minutes time and i'd like to reserve two minutes of that using ten minutes in cities time our collective presentation they have made this case about our client and about what our client has done and hasn't done that's the reason we intervened in the case and that's the reason why i'm here to defend let me ask you something about your client is  requirements i'm sent you to negotiation with the hotel it's absolutely it is subject to negotiation and let me start with those neutrality agreements because this is absolutely a sideshow to what is a completely typical ordinance this is a typical minimum wage ordinance that contains an opt out of the sort that has been upheld by this court repeatedly most recently in the callup business systems versus city of los angeles case which involved the living wage ordinance contained in identical opt out for all intents and purposes this court upheld that last may this is a typical ordinance and what opponents are seeking to do here is to turn this into a factual case about what a union might or might not do with that typical ordinance there is nothing preempted about the ordinance now neutrality agreements this is the argument that is being made is no different from the argument that was made in the vice cold case which we've cited which is that the combination of what we consider as employers to be onerous minimum labor standards with an opt out creates an incentive to unionize and that's unfair this court looked at that and said no that's not the test for preemption as judge her with said all minimum wage laws affect the incentives to unionize by changing the relative price of labor so if that were the test there would be no metropolitan life there would need you know for it halifax these cases say in fact that minimum labor standards differ fundamentally not just in how far they go but what day they're in existence practically in every state in the union that they are and in california nearly i think something like two dozen cities have adopted living wage ordinances with opt out provisions exactly like the one that's at issue here pasadena code of ordinance four point one one point one one of the provisions of this chapter of this living wage ordinance or any part thereof may be waived in a bona fide collective bargaining agreement but only if the waiver  explicitly set forth in clear and unambiguous terms these are absolutely typical types of loss now on the new trial when the exception i mean this is a strange thing about this case if you're trying to protect workers and make sure they get at least a minimum wage what would you like to be paid less than a minimum wage if they were represented by union for the same reason your honor as opt outs had been in existence since that leaf lease the i know they've been in existence i'm just trying to figure out what's the what's the rationale for the opt out other then other than favoring union organization has legislatures have reasonably concluded that in unionized settings workers are able through their collective bargaining representative to negotiate packages of wages benefits just cause protection seniority rights guaranteed work weeks retirement retirement pensions all of which add up to something more than what the legislation provides and because legislatures have decided your honor that they're not able to legislate in each one of those areas and they're going to respect a collective bargaining process which will lead to a result that will be better for workers and looking workers don't like the collective bargaining agreement they won't ratify it if they want to keep their fifteen thirty seven an hour and don't want their union to negotiate something that's less than that they won't ratify the agreement now on neutrality agreements the council has seriously overstated what's in the record here we have one meeting involving a holiday inn in torrance at which the union said we want you to unionize do you know about this law that's coming into effect if you don't have a collective bargaining agreement you won't be able to negotiate an opt out we're looking at we'll consider it as your honor said they simply stated what's in the law well the owner of that property said no we don't want that we don't want to neutrality agreement end of story that's not a basis for holding this law to be facial concluded rightly that there was no likelihood of success in this case but as a matter of law well it's a combined matter of fact and law so what so what's our standard of review the standard of review on the on whether the judge applied the correct legal standard but the judge also made factual findings most relevant to the argument that counsel has put front and center here was that there was no evidence in all of the declarations that had been presented that any employer was going to be required to enter into a neutrality they haven't proved that factually and what we have is we're not use that one for discretion brecht and what we have here is a collection of declarations from hotel employers some of which have been subject to a and identical for all intents and purposes ordinance that applied in the l a x corridor which was the predecessor to the city one version of this and was an experiment to see well how will this work well it worked well workers got higher wages there was no detriment to the hotels there so it was extended citywide so we have here really an attempt to distract the court from a legal issue that is absolutely clear minimum labor standards and this is supreme court a trilogy of supreme court cases makes this absolutely clear the metropolitan life case the fourth halifax case and the levada us case that minimum labor standards are not preempted under machinist's they're preempted because the national labor relations act is a regulation that goes to the collective bargaining process it does not set out subset in terms of the ultimate contract that is why minimum wage laws living wage laws have survived machinist preemption challenges repeatedly in this circuit and repeatedly in the face of our arguments that are identical to the ones that counsel is making  will touch briefly on one of the arguments that consing makes which is that there is going to be some interference with the bargaining process if as a speculative matter after the expiration of a collective bargaining agreement  workers enforce their state right to the higher minimum wage that's another argument that council has made they've said well that has to interfere with the collective bargaining process because the e c b a the collective bargaining agreement will expire they'll no longer be a waiver and the minimum wage will be an effect but that is absolutely a result of how an opt out works is exact same issue in the n b c vs bradshaw case which we cite where a state overtime provision for the entertainment industry and other targeted state law applied unless there was a collective bargaining provision that provided otherwise that agreement those agreements expired the union in the course of bargaining began filing overtime claims against their employer because the overtime provision kicked in because there was no collective bargaining agreement to exempt from it and the employer said n b c said well this is preempt we're trying to bargain and this court said no this is simply a result of any minimum wage law that's coupled with an opt out there is nothing unusual about this provision and the attempts to change this into a factual case about a handful of meetings between the union and a handful of hotels back in the fall of two thousand and fourteen is simply a distraction as to the unionized properties and i'll stop in a second as to those unionized properties the attempt has  been to create a different record from the one before the court below the claim was that the union was going to withhold negotiated opt outs in unionized settings until those unionized hotels he union organizers or or did something else for the union and we proved that to be false the union has has negotiated opt outs with the two unionized hotels that's better declarations that weren't conditioned on anything so the arguments that are being made here are a sideshow this is an absolutely typical unusual and non preempted law and i'll reserve whatever's left of my time thank you that just an unfair labor practices issue i think that focusing on on local leavens unionization campaign is is a is a red herring a bit because it is fifteen thirty seven an hour and i could see a lot of workers not wanting to waive that right in a collective bargaining process situation i guess i'm asking if the union misuses it in some way and i'm not suggesting they have is not really an unfair labor practices issue rather than a preemption issue i believe so your honor if they believe that the unions somehow is doing something inappropriate then focus on the unions actions rather than the city's ordinance as written because again there's there's nothing on on the ordinances face with and that's why i think you're you were present the city and we normally we don't say well the statute was constitutional when the when the governing body passed it but we found out later that people are doing bad things under the statute we normally stop them from doing bad things we don't throw out the st reform that the city enacted in the last twenty years and all of them have been faithfully challenge and upheld in fact in two thousand and eight the living wage ordinance that is nearly identical to the hotel worker living wage ordinance that paid below earning wages below the federal poverty line and we're here to focus on their plight not the plight of the hotel industry this ordinance applies to america lucrative chain hotels  focus on not the more highly paid workers in the hotel industry but those workers that form the backbone of the hotel industry the maids the bellhops the janitors the housekeepers those folks who are our economic studies have shown earned the bare minimum under under state law there they're really earning quite a low wage and we want to focus on their plight and that was the compelling fact well now the state minimum wage has been raised to ten dollars so yes the our our studies show that they were already in very low wages and that they were relying on government social support services and we have an interest smaller hotels that was the result of small hotels lobbying hard against this ordinance and asking that the room threshold be raised and this really has contemplated it was to apply to hotels with one hundred rooms or more but the small hotel lobby came out and that told city council that's a bad economic policy we agreed and we raised it to one fifty so we are not we are working that city councils direction not a thing union you're on has let me begin by saying this case is governed by the supreme court decision in new york telephone and that decision requires preemption because in that case the holding of the court that the critical inquiry is whether the exercise of state authority frustrates effective implementation of the x processes not whether the states purposes what it can for a benefit on a class of citizens judge gro of law that the pressure was not so much as to force the hand and because it didn't force the hand didn't create a situation of economic and feasibility therefore it wasn't preempted the court's decision below was on the degree of interference now that the solution i submit is inconsistent with this court's decision in bragdon and in that town because in both those cases all local minimum wage standards what preempted by machinist's and there was no showing of economic on feasibility or that it forced the hand of the employer or drew the employer into bankruptcy so the legal standard of this case i prevailing wage that is that is that mr rection by the union i must say in bragdon there was a state a county ordinance that told private sector employers th had to pay a minimum level of wages and benefits that's a minimum labor standard but it was a specific number wasn't it wasn't pacific or was it was determined by figuring out the prevailing went off and was targeted to a listing put out by the state for d it was a case in which the government regulated the workplace by telling private sector employers what they had to play employees judge what law you identify the difference in are you are you understand it and you stated for the court that there's a difference between the government acting as a market participant and a market regulator prevailing wages occur when the state acts as a market participant in this case  which is typical of most collective bargain agreement that's true but this but the ruling of this court in that case was not that it was the call the prevailing weight it was that big interfere with what the union and the employer could bargain among themselves the critical factor is that it was a minimum wage standard that's what the court called it that's what the county called it and it was preempted on the machinist which puts a lie to the union's argument that minimal age bandits are in a category all by themselves minimum wage standards are not preempted when they do not interfere when they do interfere they are preempted that is what new york tell substantiate you're going to make that argument on all minimum because it is a minimum labor standard that does not interfere with collective bargaining justice brennan would not have added that provision that does not interfere with collective bargaining if it wasn't relevant to what's holding it did not interfere with collective bargaining which is why it's not preempted to interpret met life and for halifax the way the union would have this court interpret is to write out of the law new york telephone and i submit you can't do that