Supreme Court Sides with Businesses Challenging California Labor Law

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On June 23rd, the Supreme Court sided with California agriculture businesses that objected to a state regulation that permitted unions’ access to farm property to organize workers.

With this decision, Cedar Point Nursery v. Hassid, the State of California will have to change or strike its 1975 regulation that was put in place in response to labor leader Cesar Chavez’s actions. The Supreme Court voted along ideological positions (6-3) in favor of the state’s agriculture businesses, creating another potential setback for unions.

“The access regulation amounts to simple appropriation of private property,” Chief Justice John Roberts wrote for the conservative majority. The Chief Justice wrote that the regulation “grants labor organizations a right to invade the growers’ property.”

The California Regulation Permitted Union Organizing

The California regulation, California Code Regs. tit. 8, § 20900(e)(1)(C) permitted unions to access to farms and other agriculture businesses to organize workers for up to three hours per day, 120 days per year. Businesses were to be notified before the union organizers arrived, and the organizers were to visit during non-work times such as lunch as well as before and after work.

Two agriculture businesses, Cedar Point Nursery and Fowler Packing Company, challenged the regulation, arguing that it had the effect of taking their property without compensation and in violation of the Constitution. The businesses also said the regulation was outdated and unnecessary given that unions can now reach workers with technology.

Background

Cedar Point Nursery is a strawberry grower in northern California that employs about 400 seasonal workers and nearly 100 full-time workers. None of these workers live on the property.

In October 2015, at five o’clock one morning, members of United Farm Workers came to Cedar Point’s property without the required notice. The organizers went to Cedar Point’s trim shed, where hundreds of workers were preparing strawberry plants. The union organizers used bullhorns, which disturbed operations. Some workers joined the organizers in a protest and others left the worksite altogether. Cedar Point filed a charge against the union for taking access without giving notice. The union responded with a charge of its own, claiming that Cedar Point had committed an unfair labor practice.

Fowler Packing Company is a Fresno-based grower and shipper of table grapes and citrus with 1,800 to 2,500 employees in its field operations, plus another 500 in its packing facility. Like Cedar Point, none of Fowler’s workers live on the premises. In July 2015, organizers from the United Farm Workers tried to take access to Fowler’s property. The company blocked them from entering. The UFW filed an unfair labor practice charge against Fowler, which it later withdrew.

Thinking that the UFW would likely try to enter their property again in the near future, the growers filed suit in Federal District Court against several California Agricultural Labor Relations Board members in their official capacity. The growers alleged that the access regulation affected an unconstitutional per se physical taking under the Fifth and Fourteenth Amendments by appropriating without compensation an easement for union organizers to enter their property. The agriculture companies requested declaratory and injunctive relief prohibiting the Board from enforcing the regulation against them.

The District Court denied the growers’ motion for a preliminary injunction and granted the Board’s motion to dismiss. A divided panel of the Court of Appeals for the Ninth Circuit affirmed that decision.

The Takings Clause of the Fifth Amendment, applicable to the States through the Fourteenth Amendment, provides: “[N]or shall private property be taken for public use, without just compensation.”

Roberts’ Opinion

Chief Justice Roberts rejected the notion that the ruling would “endanger a host of state and federal government activities involving entry onto private property.” He said that the Court’s holding “does nothing to efface the distinction between trespass and takings.” Second, many government-authorized physical invasions won’t amount to takings because they’re consistent with longstanding background restrictions on property rights, including traditional common law privileges to access private property.

Next, Roberts held that the government may require property owners to cede a right of access as a condition of receiving certain benefits, without causing a taking. As a result, “under this framework, government health and safety inspection regimes will generally not constitute takings,” he opined. However, here, none of those considerations undermine the Court’s determination that the access regulation gives rise to a per se physical taking.

In a statement, Joshua Thompson of the Pacific Legal Foundation, who argued the case for the businesses at the high court, called the ruling a “huge victory for property rights.”

“Today’s decision affirms that one of the most fundamental aspects of property is the right to decide who can and can’t access your property,” he said.

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Eanet, PC is a boutique law firm located in Los Angeles, California specializing in business litigation, real estate litigation, labor and employment litigation, and employment advice and counsel. We represent companies in California with issues of sexual harassment, wrongful termination, and retaliation discrimination under California and federal law.

Contact us to discuss your employment questions, including this new decision concerning the Supreme Court’s ruling on the California regulation that permitted unions access to farm property to organize workers.

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