Hank Leland Service Employees International Union
Daily Labor Report No. 135
Monday, July 16, 2001
Federal Judge Grants Preliminary Injunction
Against Card Check Rule at California Airport
Granting a motion for a preliminary injunction sought by Aeroground Inc., a federal district judge July 9 enjoined the City and County of San Francisco from enforcing a card-check union-representation rule against the company at San Francisco International Airport (Aeroground Inc. v. City and County of San Francisco, N.D. Cal., No. C-01-1628VRW, injunction granted 7/9/01).
In granting the injunction, Judge Vaugh R. Walker of the U.S. District Court for the Northern District of California found Aeroground is likely to prevail in its attempt to invalidate the card check rule as being preempted by federal labor law. He also found that Aeroground could suffer irreparable injury if the injunction were not granted.
In February 2000, the city-owned San Francisco Airport Commission, at the urging of a union coalition, adopted a labor peace/card check rule that requires any employer that has a lease, sublease, contract, or subcontract with the airport, known locally as SFO, to enter into an agreement for a card-check authorization procedure with any union that has registered with the airport director and initiates a representation request.
In an effort to minimize the threat of labor unrest arising from union organizing drives at the airport, the rule also prohibits unions from engaging in any economic action, such as strike, picketing, or boycotts, during an organizing drive.
The process calls for the card check to be conducted by a neutral third party. The airport commission may terminate the employer's contract if it fails to enter into the labor peace/card check agreement within 30 days of the union's request.
In addition to mandating the card check procedure, the rule requires the parties to submit to binding arbitration any issues arising out of the procedure.
2,000 Workers Organized Under Rule
Under the rule, the SFO Organizing Project, a coalition of unions representing airport workers, so far has organized nearly 2,000 workers at SFO without going through a National Labor Relations Board election (236 DLR A-6, 12/7/00).
On Feb. 2, 2001, International Brotherhood of Teamsters Local 85 requested Aeroground, which employs some 450 workers who provide cargo handling operations to 10 different airlines at the airport, to enter into a labor peace/card check agreement. Aeroground petitioned the airport director for an exemption, contending it was covered under the Railway Labor Act and the card check rule explicitly exempts any employer regulated by the RLA. The director denied the request and told Aeroground that a refusal to enter into the agreement would trigger the airport director's authority to terminate the company's aviation support services permit, which would prevent the company from doing any business at the airport.
Aeroground filed its petition with the court in late April, seeking declaratory and injunctive relief from the rule (89 DLR A-2, 5/8/01). It contended that the card check rule is preempted by the National Labor Relations Act, the Railway Labor Act, and the Airline Deregulation Act. In his opinion, Judge Walker said Aeroground's strongest preemption argument is based on the NLRA, even though that statute does not contain an express preemption provision.
The U.S. Supreme Court has articulated two distinct NLRA preemption principles, Walker said. One, known as the "Garmon preemption," established in San Diego Building Trades Council v. Garmon, 359 U.S. 236, 43 LRRM 2838 (1959), prohibits state and local regulation of activities that the NLRA "protects, prohibits, or arguably protects or prohibits." The other, known as the "Machinistspreemption," set forth in Machinists v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 140, 92 LRRM 2881 (1976), prohibits state and municipal regulation of areas that have been left "to be controlled by the free play of economic forces."
According to Walker, Aeroground argued that the card check rule is preempted under the Garmon doctrine because it interferes with "substantive rights and requirements established by the NLRA." Specifically, Aeroground said Section 9 provides a formal mode for employees to vote on a bargaining representative through secret ballot elections and employers have the right to insist on such an election. "The card check rule requires non-exempt employers operating at the airport to forego this right by agreement as a condition of its permit that union representation be determined by a card check procedure," Walker wrote.
Aeroground also argued that the NLRA provides the board with the authority to address unfair labor practices. "The card check rule, however, requires that non-exempt employers at the airport agree to submit to binding arbitration for disputes that arise over the determination of union representation through the card check process," Walker wrote.
Rule Found Inconsistent With NLRA Requirements
"These examples demonstrate that the card check rule appears to 'set [] forth standards inconsistent with the substantive requirements of the NLRA' by requiring conduct that conflicts with certain options for employers that are protected by the NLRA," Walker wrote. "By pointing out these conflicts, the court concludes that Aeroground has demonstrated that a significant probability exists that the rule is preempted under the Garmondoctrine."
The City and County of San Francisco argued that Aeroground would not succeed on the merits of its claims based on the "market participant" doctrine established by the Supreme Court in Building and Constr Trades Council v. Associated Builders & Contractors of Mass/RI (Boston Harbor), 507 U.S. 218, 142 LRRM 2649 (1993). In that case, the court held that "states and municipalities do not regulate simply by acting within one of the areas protected by Garmon and Machinists," Walker said. The court concluded that the "NLRA preempts the two categories of state and local regulation discussed above, but does not preempt actions taken by a government entity when it acts as a mere proprietor or market participant."
According to Walker, the defendants argued that the rule is not preempted because it operates solely to protect the city's proprietary interests.
"Indeed, defendants spill much ink emphasizing the 'capitalist' nature of the airport and how it allegedly operates as a 'discrete business enterprise, fiscally and operationally separate from other City departments and operations, with its own unique revenue and capital needs.' All of this is an attempt to demonstrate that the airport is the equivalent of a private business enterprise protecting its propriety interests by minimizing labor unrest through the adoption of the card check rule. But defendants' assertion that the airport operates as a private business enterprise solely begs the question: is the card check rule a proprietary action immune from preemption or a regulatory action preempted by the NLRA?"
Noting that the U.S. Court of Appeals for the Fifth Circuit recently articulated a test for distinguishing between propriety and regulatory actions by a government entity in Cardinal Towing and Auto Repair v. City of Bedford, 180 F.3d 693, Walker found that the card check rule is a regulatory action. The card check rule requires employers at the airport to enter into a labor agreement with a union under the threat of not being able to do business if it refuses. "In contrast to many of the cases cited by defendants in which the market participation doctrine was employed to shield governmental action from NLRA preemption, the card check rule is not an effort by the airport to contract directly with Aeroground, or other employers, for goods or services," the court found.
Walker said a different situation would exist if the city and county purchased cargo handling services from Aeroground. "But defendants do not assert that they contracted directly with Aeroground in this regard; rather, defendants have attempted to influence the behavior of certain employers at the airport ostensibly to minimize labor unrest. Accordingly, the card check rule cannot be characterized as an effort by the airport to procure goods and services for some discrete city project."
Walker also found that since the card check rule controls the conduct of the employers at the airport in their dealings with third parties, this is a "classic example of regulation, suggesting that defendants intended the rule to encourage a general policy regarding employer-employee labor relations at the airport."
Saying he is not persuaded that the market participation doctrine applies in this case, Walker concluded that a "probability of success exists that the card check rule will be found to be preempted by the NLRA." Because of this finding, Walker did not address the merits of Aeroground's arguments that the rule is preempted by the RLA and the ADA.
In finding that the possibility exists of irreparable injury to Aeroground, Walker agreed with the company that the "mere threat by the airport director to terminate the permit has eroded the goodwill that Aeroground has established with its customers." Noting that Aeroground has pointed out that several customers have expressed concern about the company because of flyers allegedly distributed by unions that state the company is failing to follow the card check rule, Walker said "an intangible injury to a company's goodwill qualifies as irreparable harm."
William Gaus of Pillsbury Winthorp in San Francisco represented Aeroground. Mara Rosales, San Francisco Airport general counsel, City Attorney's Office, and Matthew Ross of Leonard, Nathan, and Zuckerman in San Francisco represented the City and County of San Francisco.
By Michelle Amber
Copyright © 2001 by The Bureau of National Affairs, Inc., Washington D.C.
Nathan Newman wrote:
> Dennis,
>
> Your comments show how really uninformed you are about organizing.
> Neutrality agreements are THE WAY unions have been bypassing the NLRB;
> however, employers are mounting a legal attack to force unions to use NLRB
> procedures and invalidate any recognition based on alternative methods of
> recognizing unions such as card check agreements.
>
> Nathan Newman
> nathan at newman.org
> http://www.nathannewman.org
>
>