# Golden State Transit Corp. v. City of Los Angeles

Golden State Transit Corp v City of Los Angeles, 475 U.S. 608 (1986), is a US labor law case, concerning the scope of federal preemption against state law for labor rights.

## Facts

Golden State Transit Corp claimed that the City of Los Angeles was preempted by the National Labor Relations Act of 1935 from refusing to renew its franchise license to operate taxicabs in the city. During its application, its cab drivers went on strike for higher wages and better working conditions. The Teamsters Union put pressure on the city to not renew the license. Because the dispute was not settled, the franchise expired. The Federal District Court held that the city was entitled to not renew the license. The Court of Appeals affirmed this judgment. Golden State Transit Corp appealed.

## Judgment

A majority of the Supreme Court held that Los Angeles was not entitled to refuse to renew a taxi company's franchise license because the Teamsters Union had pressured it not to until a dispute was resolved. Blackmun J gave the judgment.
   This case, however, concerns the second pre-emption principle, the so-called Machinists pre-emption. See Machinists v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 96 S.Ct. 2548, 49 L.Ed.2d 396 (1976). This precludes state and municipal regulation "concerning conduct that Congress intended to be unregulated." Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S., at 749, 105 S.Ct., at 2394. Although the labor-management relationship is structured by the NLRA, certain areas intentionally have been left "'to be controlled by the free play of economic forces.'" Machinists, 427 U.S., at 140, 96 S.Ct., at 2553, quoting NLRB v. Nash-Finch Co., 404 U.S. 138, 144, 92 S.Ct. 373, 377[1971] USSC 183; 30 L.Ed.2d 328 (1971). The Court recognized in Machinists that " 'Congress has been rather specific when it has come to outlaw particular economic weapons,' "... and that Congress' decision to prohibit certain forms of economic pressure while leaving others unregulated represents an intentional balance " 'between the uncontrolled power of management and labor to further their respective interests.'... States are therefore prohibited from imposing additional restrictions on economic weapons of self-help, such as strikes or lockouts, see 427 U.S., at 147, 96 S.Ct., at 2556, unless such restrictions presumably were contemplated by Congress. "Whether self-help economic activities are employed by employer or union, the crucial inquiry regarding pre-emption is the same: whether 'the exercise of plenary state authority to curtail or entirely prohibit self-help would frustrate effective implementation of the Act's processes.' " Id., at 147-148, 96 S.Ct., at 2557, quoting Railroad Trainmen v. Jacksonville Terminal Co., 394 U.S. 369, 380, 89 S.Ct. 1109, 1116, 22 L.Ed.2d 344 (1969).
   B
   There is no question that the Teamsters and Golden State employed permissible economic tactics. The drivers were entitled to strike—and to time the strike to coincide with the Council's decision—in an attempt to apply pressure on Golden State. See NLRB v. Insurance Agents, 361 U.S., at 491, 496, 80 S.Ct., at 428, 430. And Golden State was entirely justified in using its economic power to withstand the strike in an attempt to obtain bargaining concessions from the union. See Belknap, Inc. v. Hale, 463 U.S., at 493, 500, 103 S.Ct., at 3174, 3177 (employer has power to hire replacements during an economic strike); American Ship Building Co. v. NLRB, 380 U.S. 300, 318, 85 S.Ct. 955, 967, 13 L.Ed.2d 855 (1965) (at bargaining impasse employer may use lockout solely to bring economic pressure on union).
   The parties' resort to economic pressure was a legitimate part of their collective-bargaining process. Machinists, 427 U.S., at 144, 96 S.Ct., at 2555. But the bargaining process was thwarted when the city in effect imposed a positive durational limit on the exercise of economic self-help. The District Court found that the Council had conditioned the franchise on a settlement of the labor dispute by March 31. We agree with the Court of Appeals that this finding is amply supported by the record.6 The city's insistence on a settlement is pre-empted if the city " '[entered] into the substantive aspects of the bargaining process to an extent Congress has not countenanced.' " Machinists, 427 U.S., at 149, 96 S.Ct., at 2557, quoting NLRB v. Insurance Agents, 361 U.S., at 498, 80 S.Ct., at 432.
   That such a condition—by a city or the National Labor Relations Board—contravenes congressional intent is demonstrated by the language of the NLRA and its legislative history. The NLRA requires an employer and a union to bargain in good faith, but it does not require them to reach agreement. § 8(d), as amended, 29 U.S.C. § 158(d) (duty to bargain in good faith "does not compel either party to agree to a proposal or require the making of a concession"); NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 45, 57 S.Ct. 615, 628, 81 L.Ed. 893 (1937) ("The theory of the Act is that free opportunity for negotiation . . . may bring about the adjustments and agreements which the Act in itself does not attempt to compel").
   The legislative history, too, makes clear that the Act and the National Labor Relations Board were intended to facilitate bargaining between the parties. The Senate Report states: "Disputes about wages, hours of work, and other working conditions should continue to be resolved by the play of competitive forces. . . . This bill in no respect regulates or even provides for supervision of wages or hours, nor does it establish any form of compulsory arbitration." S.Rep. No. 573, 74th Cong., 1st Sess., 2 (1935). Senator Wagner, sponsor of the NLRA, said that the Board would not usurp the role of free collective action. See 79 Cong.Rec. 6184 (1935). See also id., at 7574 (Sen. Wagner affirming that the Act encourages "voluntary settlement of industrial disputes").
   Protecting the free use of economic weapons during the course of negotiations was the rationale for this Court's findings of pre-emption in Machinists and in its predecessor, Teamsters v. Morton, 377 U.S. 252, 84 S.Ct. 1253, 12 L.Ed.2d 280 (1964). In some areas of labor relations that the NLRA left unregulated, we have concluded that Congress contemplated state regulation. See Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S., at 754-758, 105 S.Ct., at 2396-2399; New York Tel. Co. v. New York Labor Dept., 440 U.S. 519, 540-544[1979] USSC 46; 99 S.Ct. 1328, 1341-1343, 59 L.Ed.2d 553 (1979) (plurality opinion); id., at 547 and 549, 99 S.Ct., at 1344 and 1345 (opinions concurring in result and concurring in judgment). Los Angeles, however, has pointed to no evidence of such congressional intent with respect to the conduct at issue in this case.
   Instead, the city argues that it is somehow immune from labor pre-emption solely because of the nature of its conduct.S8 The city contends it was not regulating labor, but simply exercising a traditional municipal function in issuing taxicab franchises. We recently rejected a similar argument to the effect that a State's spending decisions are not subject to pre-emption. See Wisconsin Dept. of Industry v. Gould Inc., 475 U.S., at 287-288, 106 S.Ct., at 1061. Cf. Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S., at 754-758, 105 S.Ct., at 2396-2399. Similarly, in the transportation area, a State may not ensure uninterrupted service to the public by prohibiting a strike by the unionized employees of a privately owned local transit company. See Bus Employees v. Missouri, 374 U.S. 74, 83 S.Ct. 1657, 10 L.Ed.2d 763 (1963); cf. Bus Employees v. Wisconsin Employment Relations Board, 340 U.S. 383, 391-392, 71 S.Ct. 359, 363-364, 95 L.Ed. 364 (1951). Nor in this case may a city restrict a transportation employer's ability to resist a strike.
   "Free collective bargaining is the cornerstone of the structure of labor-management relations carefully designed by Congress when it enacted the NLRA." New York Tel. Co. v. New York Labor Dept., 440 U.S., at 551, 99 S.Ct., at 1347 (POWELL, J., dissenting). Even though agreement is sometimes impossible, government may not step in and become a party to the negotiations. See H.K. Porter Co. v. NLRB, 397 U.S., at 103-104, 90 S.Ct., at 823-824. A local government, as well as the National Labor Relations Board, lacks the authority to " 'introduce some standard of properly "balanced" bargaining power' . . . or to define 'what economic sanctions might be permitted negotiating parties in an "ideal" or "balanced" state of collective bargaining.' " Machinists v. Wisconsin Employment Relations Comm'n, 427 U.S., at 149-150, 96 S.Ct., at 2557-2558, quoting NLRB v. Insurance Agents, [1960] USSC 23; 361 U.S. 477, 497-500[1960] USSC 23; 80 S.Ct. 419, 431-433, 4 L.Ed.2d 454 (1960). The settlement condition imposed by the Los Angeles City Council, as we read the summary-judgment record before us, destroyed the balance of power designed by Congress, and frustrated Congress' decision to leave open the use of economic weapons.
Rehnquist J dissented, saying the following.
   The city of Los Angeles refused to renew Golden State's taxicab franchise unless it settled a labor dispute with its drivers. The Court of Appeals for the Ninth Circuit stated that "[n]othing in the record indicates that the City's refusal to renew or extend Golden State's franchise until an agreement was reached and operations resumed was not concerned with transportation." 754 F.2d 830, 833 (1985). Nonetheless, the Court today holds that "a city cannot condition a franchise renewal in a way that intrudes into the collective-bargaining process." Ante, at 619. The extraordinary breadth of the Court's holding is best illustrated by comparing it to this Court's initial cases involving federal labor pre-emption.
   Today we are told that a city, not seeking to place its weight on one side or the other of the scales of economic warfare, may not condition the renewal of a taxicab franchise on the settlement of a labor dispute. The settlement of that dispute would have enabled the company to put its taxis back on the streets where the franchise presumably contemplated they would be. The Court says that since the Labor Board may not structure an ideal balance of collective-bargaining weapons, the city may not consider the existence of a labor dispute in deciding whether to renew a franchise. See ante, at 619-620. We are further told that because a State may not legislate to provide uninterrupted service to the public by prohibiting a strike of public utility employees, a city may not act upon its views of sound transportation policy to refuse to renew a taxi franchise unless the franchisee settles a labor dispute and returns its cabs to the purpose for which the franchise exists. See ante, at 617-618. Such sweeping generalizations commend themselves neither to common sense nor to whatever hypothetical "intent of Congress" as can be discerned in an area so remote from the core concerns of labor-management relations addressed by federal labor law.
   Federal pre-emption of state law is a matter of congressional intent, presumed or expressed. Because Congress cannot foresee the various ways in which state laws might rub up against the operation of federal statutes, the Court in a multitude of cases has held state regulation pre-empted even when Congress has not expressed any intent to pre-empt because of the danger that the existence of federal and state regulations side by side will interfere with the achievement of the objectives of the federal legislation. The entire body of this Court's labor law pre-emption doctrine has been built on a series of implications as to congressional intent in the face of congressional silence, so that we now have an elaborate pre-emption doctrine traceable not to any expression of Congress, but only to statements by this Court in its previous opinions of what Congress must have intended.
   The Court today doffs its hat to the legislative history of the Wagner Act and comes up with the following three items:
   "[1] The Senate Report states: 'Disputes about wages, hours of work, and other working conditions should continue to be resolved by the play of competitive forces. . . . This bill in no respect regulates or even provides for supervision of wages or hours, nor does it establish any form of compulsory arbitration.'
   "[2] Senator Wagner, sponsor of the NLRA, said that the Board would not usurp the role of free collective action.
   "[3] Senator Wagner affirm[ed] that the Act encourages 'voluntary settlement of industrial disputes.' " Ante, at 617 (citations omitted).
   These three bits of legislative history furnish absolutely no support for the result the Court reaches today. The observations that the Wagner Act leaves it to the parties to resolve their disputes by the play of competitive forces, that the Labor Board would not usurp the role of free collective action, and that the Act encourages voluntary settlement of industrial disputes, simply do not speak to the question whether a city may condition the renewal of a taxicab franchise on the settlement of a labor dispute. I do not believe that Congress intended the labor law net to be cast this far, and I therefore dissent.