Opinion ID: 779933
Heading Depth: 2
Heading Rank: 2

Heading: Parties' Preemption Arguments

Text: 27 1. Plaintiffs' Argument. Plaintiffs do not dispute that Congress planned for program registration to be subject to regulation. Instead, they urge that the activity at issue is not training program registration, but rather ongoing collective bargaining negotiations. Plaintiffs point out that it was Congress' aim that collective bargaining take place in an environment free from state interference. See NLRB v. Ins. Agents' Int'l Union, 361 U.S. 477, 488, 80 S.Ct. 419, 4 L.Ed.2d 454 (1960). They contend that defendant's policy of abeyance interferes with ongoing collective bargaining negotiations to their disadvantage. Specifically, they complain that defendant has interfered with such negotiations by refusing to process plaintiffs' program registration application until at least one of three conditions is satisfied, i.e., plaintiffs and Local 3 reach a settlement, or plaintiffs and Local 3 reach an impasse in negotiations, or the Board determines whether an employers' unilateral application for registration of a program, in the circumstances of the present case, is an unfair labor practice. 28 Because plaintiffs have a financial incentive in having their training program registered, they maintain that defendant's policy of abeyance pressures them to wrap up negotiations or bargain to the point of impasse. Although defendant asserts that it will process plaintiffs' application if the Board makes a dispositive ruling, a Board ruling is dependent, in the first instance, on the union's filing an unfair labor practice charge. Such a filing is most unlikely to occur given that defendant's moratorium policy gives the union advantageous leverage in its negotiations with plaintiffs. 29 2. Background for Defendant's Argument. A state may not, of course, regulate conduct that is covered by — or even arguably covered by — § 7 or § 8 of the NLRA. According to § 8(a)(5), it is an unfair labor practice for an employer to refuse to engage in collective bargaining with its employees' certified union. 29 U.S.C. § 158(a)(5) (codifying § 8(a)(5) of the Act). An employer commits this unfair labor practice by refusing to negotiate with its employees' certified union over mandatory subjects of collective bargaining. These mandatory subjects, listed in § 9(a) of the NLRA, are limited to rates of pay, wages, hours of employment, or other conditions of employment. Id. § 159(a) (codifying § 9(a) of the Act). Any other subjects are permissive, that is, the parties may, but are not obliged to consider them during collective bargaining. See Silverman v. Major League Baseball Player Relations Comm., Inc., 67 F.3d 1054, 1059 (2d Cir.1995). 30 In addition to a literal refusal to sit down at the bargaining table, an employer also violates § 8(a)(5) by unilaterally implementing a change in the workplace that implicates a mandatory subject of bargaining. See NLRB v. Katz, 369 U.S. 736, 743, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962). In other words, [w]hen a collective agreement expires, an employer may not alter terms and conditions of employment involving mandatory subjects until it has bargained to an impasse over new terms. Silverman, 67 F.3d at 1059. 31 3. Defendant's Argument. We now turn to defendant's Garmon preemption defense. That defense unfolds as follows: As part of the training program registration process, the State Labor Department must notify the union of any employer-sponsored program registration applications. The union must approve such applications only if there exists an instrument that provides for union participation in apprenticeship programs. Here, there is no current labor agreement in effect between plaintiffs and Local 3, but the last expired agreement between plaintiffs and Local 3's predecessor union contained a clause providing for union participation in those programs. 32 The Board, which has primary jurisdiction over the issue, has never determined whether program sponsorship is a mandatory subject of bargaining. If program sponsorship is a mandatory subject of bargaining, then the training program provision from the expired labor agreement remains in effect (for the purposes of the NLRA) since collective bargaining negotiations have not reached an impasse. Consequently, the employer's unilateral attempt to register an employer-sponsored training program would be a refusal to bargain, which is an unfair labor practice. On the other hand, if program sponsorship is not a mandatory subject of bargaining then the employer's attempt to register its program clearly is not an unfair labor practice. 33 On account of the Garmon preemption doctrine, defendant insists, it is for the Board to determine whether such sponsorship is a mandatory subject of bargaining or, more specifically, whether plaintiffs' attempt to register their program in this case is an unfair labor practice. Without such a ruling, defendant says it is unable to interpret § 601.4(g). Were defendant to send the application to the union for approval, that would amount to an impermissible state determination that program sponsorship is a mandatory subject of bargaining because that is the only reason why the expired contract's program provision would remain in effect. If the state agency instead only gives the union an opportunity to comment on the application, that would amount to an impermissible state determination that program sponsorship is not a mandatory subject of bargaining. Either way — defendant's argument concludes — the State Labor Department fears it would be deciding an issue reserved for the Board, and Garmon preemption forbids it from making such a decision. III Analysis A. Golden State Guide 34 At the outset we observe it was not part of Congress' plan for apprenticeship training program registration to go unregulated. After all, the National Apprenticeship Act conferred on the federal Department of Labor authority to promulgate regulations regarding apprenticeship training. The federal agency established a registration program for training programs to satisfy, in part, this congressional directive. As stated earlier, the U.S. Department of Labor delegated this authority in New York to the State Labor Department. Yet, we do not agree with defendant's assertion that Machinists preemption does not apply simply because training program registration is a regulated activity. 35 With respect to the merits, we think this case governed by the Supreme Court's opinion in Golden State Transit Corp. v. City of Los Angeles, 475 U.S. 608, 106 S.Ct. 1395, 89 L.Ed.2d 616 (1986), which it closely tracks. There the Court concluded that government inaction that interfered with ongoing collective bargaining was prohibited by Machinists preemption. Id. at 619, 106 S.Ct. 1395. In Golden State, the plaintiff was a taxicab company engaged in collective bargaining negotiations with the union representing its drivers. See id. at 609-11, 106 S.Ct. 1395. The plaintiff's franchise had expired, and the Los Angeles city council conditioned the renewal of the plaintiff's franchise on the settlement of the collective bargaining negotiations. Id. at 611, 106 S.Ct. 1395. 36 The plaintiff in Golden State did not assert the city was preempted from regulating the taxicab industry, but rather contended the city could not use its power over the franchise to force an end to collective bargaining negotiations. See id. at 611-12, 106 S.Ct. 1395. In the same fashion, the present plaintiffs do not challenge defendant's union notification regulation, but insist instead that defendant is preempted from using its power over training program registration to bring about a premature end to ongoing collective bargaining negotiations. 37 We further think the State Labor Department's defense sounds similar to that raised by the City of Los Angeles in Golden State that it was in a no-win situation: having not renewed the franchise and thus permitting it to lapse, it stands accused of favoring the union; had it granted the renewal, it would have been accused of favoring the employer. Id. at 619, 106 S.Ct. 1395. Unfortunately for defendant the Supreme Court rejected this precise argument explaining that 38 the question is not whether the city's action favors one side or the other. Our holding does not require a city to renew or to refuse to renew any particular franchise. We hold only that a city cannot condition a franchise renewal in a way that intrudes into the collective-bargaining process. 39 Id. 40 To distinguish Golden State, defendant points out that the bargaining negotiations in the present case have stalled. The agency therefore maintains that its inaction, unlike the city's inaction in Golden State, cannot possibly intrude on the collective bargaining process. The district court found this argument persuasive. We do not. 41 Although it is true that negotiations have not occurred for several years, the process has not reached impasse. Thus, plaintiffs and Local 3 could resume actual negotiations at any time, at which point defendant's inaction will be as intrusive on the negotiations as the city's inaction was in Golden State. Hence, with due respect to the district court, we do not think the length of time elapsed since the last negotiations occurred is relevant for purposes of Machinists preemption. 42 In sum, we think defendant's refusal to act threatens to skew the collective bargaining process by placing economic pressure on plaintiffs. With the financial benefits of apprenticeship training program registration at stake, plaintiffs are being pressured to settle negotiations or to reach impasse. In effect, if plaintiffs want any action to be taken on their program registration application, they must put themselves in a position to be influenced by the State Labor Department's inaction. Further, we believe a dispositive Board ruling — the only other occurrence that will spur defendant to act — is highly improbable under the present circumstances because of the unlikelihood of the union filing an unfair labor charge. B. Defendant Entangling Itself in Federal Labor Policy 43 The Board has never determined whether the sponsorship of apprenticeship training programs is a mandatory or permissive subject of bargaining. But we cannot agree that this compels defendant to refuse to interpret its own regulation. Ironically, we believe defendant's inaction, rather than its action, is barred by Garmon preemption. That is to say, defendant's inaction is preempted by the very same doctrine that it uses to justify that inaction. 44 Although defendant correctly observes that the Board may deem program sponsorship to be a mandatory term of bargaining, that possibility does not mandate the State Labor Department's policy of abeyance, which itself interferes with labor-management relations. Even were program sponsorship to be a mandatory term of bargaining, it still does not fall within the State Labor Department's responsibility to see to it that no unfair labor practice is committed by a party's unilateral application for program registration. See Associated Builders, 166 F.3d at 1256; cf. Linn v. United Plant Guard Workers of Am., 383 U.S. 53, 66, 86 S.Ct. 657, 15 L.Ed.2d 582 (1966) (The Board would not be ignored since its sanctions alone can adjust the equilibrium disturbed by an unfair labor practice.). By refusing to apply § 601.4(g) out of concern that the Board may later rule that an expired bargaining agreement with a training program sponsorship provision is an existent labor agreement with a program sponsorship provision, defendant needlessly entangles itself in federal labor policy. It cannot, under Garmon preemption, entertain such an interpretation. 45 To see why we conclude Garmon preemption forbids defendant from interpreting § 601.4(g)'s reference to standards, collective bargaining agreement, or other instrument to include an expired agreement under the circumstances of this case, consider as an example a case like ours where the employer contends negotiations had reached an impasse, but the union disagrees. If defendant refuses to process the employer's unilateral application, that would be a determination that negotiations were not at an impasse; but if the state agency processes the application, that amounts to a determination that there was an impasse. Thus, were the employer and union to disagree whether an impasse has been reached, defendant would necessarily be interfering with labor-management relations regardless of whether it chose to act or not. Whatever the State Labor Department did, it would be deciding whether or not an impasse had been reached, which is an issue exclusively for the Board. Consequently, the Garmon doctrine preempts the Labor Department from interpreting § 601.4(g) to include an expired labor agreement as an existing instrument that provides for union participation in a training program. 46 Further, reading § 601.4(g) to include an expired agreement as an instrument that provides for union participation in programs would have a perverse effect on the likelihood that the Board would ever be asked to determine whether such sponsorship is a mandatory subject of bargaining. Although defendant contends that its inaction is required out of deference to the Board's primary jurisdiction, [t]he primary-jurisdiction rationale justifies preemption only in situations in which an aggrieved party has a reasonable opportunity either to invoke the Board's jurisdiction himself or else to induce his adversary to do so. Sears, Roebuck & Co., 436 U.S. at 201, 98 S.Ct. 1745. Here, the union would be the aggrieved party, but as we said earlier, the union has no incentive to pursue an unfair labor practice claim with the Board. In fact, the union actually has an incentive to refrain from filing a claim with the Board. The union would not want to risk a Board determination that program participation is only a permissive subject of bargaining because that would give the union less leverage in negotiations with an employer who wants to register a program. 47 Accordingly, we hold that defendant's inaction in the circumstances of this case is preempted, both by Machinists and Garmon preemption. However, because the registration process consists of more than this one regulation, we do not hold that the State Labor Department must register plaintiffs' training program. Moreover, our holding does not require defendant to adopt any particular interpretation of § 601.4(g), but rather it bars the state agency from adopting one particular interpretation. That is, as a matter of federal law, an expired agreement cannot be an instrument that provides for union participation in training programs. Because defendant advances no other reason for refusing to process plaintiffs' application, we hold that the defendant must process the application. Again, we express no opinion on what the outcome of that process should be.