MEMORANDUM DECISION AND ORDER - 1
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
IDAHO BUILDING AND
CONSTRUCTION TRADES COUNCIL,
AFL-CIO, and SOUTHWEST IDAHO
BUILDING AND CONSTRUCTION
TRADES COUNCIL, AFL-CIO
Plaintiffs,
v.
LAWRENCE G. WASDEN, in his
official capacity as ATTORNEY
GENERAL FOR THE STATE OF
IDAHO,
Defendant.
Case No. 1:11-CV-253-BLW
MEMORANDUM DECISION AND
ORDER
INTRODUCTION
The Court has before it a motion for preliminary injunction filed by Plaintiffs
Idaho Building and Construction Trades Council, AFL-CIO and Southwest Idaho
Building and Construction Trades Council, AFL-CIO (Dkt. 2).
Plaintiffs move the Court for a restraining order and injunction barring Attorney
General Lawrence Wasden from implementing and enforcing Idaho Senate Bill 1007,
enacted as Idaho Code § 44-2012 and known as the “Fairness in Contracting Act.” On
July 1, 2011, the statute will become effective. The Fairness in Contracting Act is
codified as a portion of the “Right to Work Act,” which Congress has expressly
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MEMORANDUM DECISION AND ORDER - 2
exempted from the preemptive effect of federal labor law. But, Plaintiffs argue, the
Fairness in Contracting Act has nothing to do with the right to work statute, and instead
purports to regulate a form of collective action known as market recovery plans.
Plaintiffs contend that the National Labor Relations Act preempts the Fairness in
Contracting Act and that its implementation and enforcement will cause irreparable harm
to Plaintiffs and the local building trade unions they represent. Defendant Attorney
General Lawrence G. Wasden opposes the motion. In addition, the Inland Pacific
Chapter of Associated Builders and Contractors, Inc., with leave of Court, filed an
amicus curiae brief opposing Plaintiffs’ motion for a preliminary injunction.
The Court heard oral argument on June 21, 2011, and took the matter under
advisement. For the reasons set forth below, the Court will grant Plaintiffs’ motion for a
preliminary injunction.
BACKGROUND
Plaintiffs are two building and construction trade councils affiliated with the
Building and Construction Trades Department, AFL-CIO. Both trade councils are
unincorporated associations comprised of local unions that represent building trade
workers throughout southern Idaho. Clay Decl. ¶ 2, Dkt. 2-2; Moore Decl. ¶ 2, Dkt. 2-3.
The trade councils exist for the purpose of advancing the interests of building trade
unions and their members, advancing generally the union sector of the construction
market, and improving working conditions for workers in the building trades. Clay Decl.
¶ 3, Dkt. 2-2; Moore Decl. ¶ 3, Dkt. 2-3.
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Construction industry workers face unique problems in comparison to most private
sector workers represented by unions. Most laborers, both skilled and unskilled, are
employed by a single employer for a substantial period of time. For this reason, the law
does not permit most unions to negotiate a collective bargaining agreement with an
employer until the union has demonstrated that it represents a majority of the company’s
current employees. 29 U.S.C. §159. In contrast, skilled workers in the construction
industry may only be hired for a single construction project. Clay Decl. ¶ 6, Dkt. 2-2.
To account for this difference, building and construction industry workers are permitted
to negotiate “pre-hire” agreements, which apply to all work performed by that employer
within the union’s geographic jurisdiction. 29 U.S.C. § 158(f). The agreements do not
guarantee employment for any particular members but instead provide that if a contractor
has work that requires the skilled trade a particular local represents, the contractor will
hire the workers through a hiring hall operated by the local. Clay Decl. ¶ 6, Dkt. 2-2.
Because workers represented by building trade unions only secure employment
when employers that have signed pre-hire agreement are awarded contracts and
subcontracts on a project, building trade unions and their members have a vested interest
in encouraging signatory employers to aggressively pursue as many public and private
construction contracts and subcontracts as possible. Most large-scale construction
contracts are awarded through some form of competitive bidding process. Clay Decl. ¶ 8,
Dkt. 2-2. Prospective bidders evaluate the project specifications and estimate their costs
to perform the contract. These estimates include an assessment of the cost of skilled and
unskilled labor needed to complete the project. Moore Decl. ¶ 5, Dkt. 2-3. To aid
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signatory employees in this competitive bidding process, building trade unions and their
members, including many in Idaho have created “market recovery programs.”
Unions began adopting market recovery programs, also known as “job targeting
programs,” in the early 1980’s to enable signatory employers to compete for “targeted”
jobs. Typically, unions carry out their market recovery programs by selecting projects to
target and guaranteeing subsidies to union contractors who submit successful bids. The
purpose of the subsidies is to reduce the unionized contractor’s labor costs while allowing
the union to maintain its collectively-bargained wage scale on the job and secure
additional employment opportunities for its members. Clay Decl. ¶ 3, Dkt. 2-2; Moore
Decl. ¶ 3, Dkt. 2-3.
All market recovery programs in Idaho are maintained through voluntary
contributions, which are deducted from the gross earnings of workers represented by the
unions that operate the programs. Clay Decl. ¶ 11, Dkt. 2-2; Moore Decl. ¶ 5, Dkt. 2-3;
Oveson Decl. ¶ 3; White Decl. ¶ 3. In some instances, such contributions are paid
directly by union members to the union. Moore Decl. ¶¶ 5, 6. By allocating the
contributions among all members, local building trade unions seek to spread the
economic concessions over the entire union membership in an equitable fashion. Id.
The Fairness in Contracting Act aims to prohibit three types of conduct by labor
organizations and contractors in the competitive bidding process:
“No contractor or subcontractor may directly or indirectly receive a wage subsidy,
bid supplement or rebate on behalf of its employees, or provide the same to its
employees, the source of which is wages, dues or assessments collected by or on
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behalf of any labor organization(s), whether or not labeled as dues or
assessments.”
“No labor organization may directly or indirectly pay a wage subsidy or wage
rebate to its members in order to directly or indirectly subsidize a contractor or
subcontractor, the source of which is wages, dues or assessments collected by or
on behalf of its members, whether or not labeled as dues or assessments.”
“It is illegal to use any fund financed by wages collected by or on behalf of any
labor organization(s), whether or not labeled as dues or assessments, to subsidize
a contractor or subcontractor doing business in the state of Idaho.”
The Act creates two enforcement routes: Misdemeanor liability consisting of fines up to
$100,000 depending upon the number of offenses; and a private right of action for any
“bidder, offeror, contractor, subcontractor or taxpayer . . . to challenge any bid award,
specification, project agreement, controlling document, grant or cooperative agreement”
that violates the statute.
Plaintiffs challenge the Act, arguing that it is preempted by the NLRA, and its
enforcement will cause irreparable harm to Plaintiffs and the local building trade unions
they represent.
ANALYSIS
The United States Supreme Court, in Winter v. Natural Resources Defense
Council, Inc., 129 S.Ct. 365, 374 (2008) , clarified the applicable standard for the
issuance of a preliminary injunction. A plaintiff seeking a preliminary injunction must
establish: (1) that it is likely to succeed on the merits; (2) that it is likely to suffer
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irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips
in its favor; and (4) that an injunction is in the public interest. All four elements must be
shown, but a stronger showing of one element may offset a weaker showing of another.
See, e.g., Alliance for the Wild Rockies v. Cottrell, 622 F.3d 1045, 1052-53 (9th Cir.
2010)
A preliminary injunction is “an extraordinary remedy never awarded as of right.”
Id. at 376. The standard for issuing a preliminary injunction is identical to that for
issuing a temporary restraining order. Lockheed Missile & Space Co., Inc. v. Hughes
Aircraft Co., 887 F.Supp. 1320, 1323 (N.D. Cal. 1995).
Here, Plaintiffs have satisfied all four elements necessary for issuance of a
preliminary injunction.
1. Success on the merits
The issue of Plaintiffs’ likelihood of succeeding on the merits turns on whether the
NLRA categorically preempts the Fairness in Contracting Act. Congress’ power to
preempt state law is derived from the Supremacy Clause of the United States
Constitution, U.S. Const., Art. VI. Gibbons v. Ogden, 9 Wheat. 1 (1824). Under the
Supremacy Clause, state law may be preempted by federal legislation either by “express
provision, by implication, or by a conflict between federal and state law.” New York
State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645,
654 (1995). In determining whether federal law preempts state legislation, congressional
purpose must be the ultimate focus. Malone v. White Motor Corp., 435 U.S. 497, 504
(1978). Because Plaintiffs make a facial challenge to the Fairness in Contracting Act,
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Plaintiffs must show that no set of circumstances exist under which the Act would be
valid. U.S. v. Salerno, 481 U.S. 739, 745 (1987).
It is well-established that state regulation is presumptively preempted by the
NLRA when it concerns conduct that is actually or arguably either protected or
prohibited by the NLRA. Belknap, Inc. v. Hale, 463 U.S. 491, 498, 103 S.Ct. 3172, 3177,
77 L.Ed.2d 798 (1983).1 The general framework for determining whether particular
state-law claims are preempted by the NLRA remains that initially established by the
Supreme Court in San Diego Building Trades Council v. Garmon, 359 U.S. 236, 243-45
(1959).
First, states must yield to the National Labor Relations Board’s exclusive
jurisdiction over conduct “actually” protected or prohibited under Sections 7 or 8 of the
NLRA. Garmon, 359 U.S. 243. If the state law regulates conduct actually protected by
federal law, preemption follows as a matter of substantive right. Brown v. Hotel &
Restaurant Employees & Bartenders Int’l. Union Local 54, 468 U.S. 491, 501-503
(1984). Second, “[w]hen an activity is arguably subject to § 7 or § 8 of the [NLRA], the
States as well as the federal courts must defer to the exclusive competence of the
National Labor Relations Board if the danger of state interference with national policy is
1 The Supreme Court has recognized a second pre-emption principle, which
prohibits state and municipal regulation of areas that have been left “to be controlled by
the free play of economic forces.” see Machinists v. Wisconsin Employment Relations
Comm’n, 427 U.S. 132, 147 (1976). However, Plaintiffs do not argue that it should apply
here.
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to be averted.” Garmon, 359 U.S. at 245. The goal of Garmon preemption is to preserve
the primary jurisdiction of the NLRB to interpret and enforce the NLRA.
Unlike the “actually protected” preemption rule, which is categorical, the
“arguably” protected rule is subject to exception in limited circumstances: (1) the NLRA
does not preempt state action that regulates activity of “a merely peripheral concern” to
the Act; and (2) the NLRA does not preempt state action “where the regulated conduct
touch[s] interests so deeply rooted in local feeling and responsibility,” it cannot be merely
inferred that Congress intended to deprive states of the power to act. Id. at 243-44.
In this case, Plaintiffs argue that the state’s attempt to prohibit market recovery
programs through enactment of the Fairness in Contracting Act is preempted because
such programs are protected by Section 7 of the NLRA. Section 7 protects employees’
rights “to engage in other concerted activities for the purpose of other mutual aid or
protection.” With respect to market recovery programs, the NLRB has found that they
constitute concerted protected activity under Section 7: “[t]he objectives of the “job
targeting program” are to protect employees' jobs and wage scales. These objectives are
protected by Section 7.” In re Manno Elec., Inc. 321 NLRB 278, 298 (1996). See also
In Associated Builders and Contractors, Inc., Golden Gate Chapter, 331 NLRB 132, 166
L.R.R.M. (BNA) 1086 (2000), modified by, 333 N.L.R.B. 955, 171 L.R.R.M. (BNA)
1508 (2001). Based on this ruling by the Board, the Fairness in Contract Act would be
preempted. Id.
But the inquiry does not end there. Attorney General Wasden acknowledges that
the Board has found that the market recovery programs the Idaho legislature seeks to
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prohibit are actually protected under the NLRA. He argues, however, that a certain class
of market recovery programs – those that are partially funded by dues exacted from
employees working on projects subject to the Davis-Bacon Act, or, federal prevailing
wage projects – is only “arguably” protected. Wasden points to a series of administrative
and federal court decisions holding that the Davis-Bacon Act bars wage deductions
pursuant to a job targeting programs on public work projects. See NLRB v. IBEW Local
48, 345 F.3d 1049 (9th Cir. 2003) IBEW Local 48 (Kingston Constructors, Inc.), 332
N.L.R.B. 1492, 1502 (2000).
In IBEW Local 48, for example, the Ninth Circuit enforced an NLRB order finding
a labor organization violated Section 8 of the NLRA by requiring, on threat of
employment termination, a member to contribute to a market recovery program when he
worked on Davis-Bacon projects. In the underlying decision, the Board concluded that
“payments to support job targeting programs are not ‘periodic dues’ for purposes of
section 8(a)(3) and 8(b)(2) if those payments are based on employment on Davis-Bacon
projects, because their forced exaction is ‘inimical to public policy.’” IBEW Local 48
(Kingston Constructors, Inc.), 332 N.L.R.B. 1492, 1502 (2000). After analyzing two
other cases, Building and Trades Department v. Reich, 40 F.3d 1275 (D.C. Cir. 1994),
and IBEW Local 357 v. Brock, 68 F.3d 1194 (9th Cir. 1995), which invalidated
assessments to job targeting programs under the Davis-Bacon anti-kickback provision,
the Ninth Circuit rejected the labor organization’s contention that the NLRB, inter alia,
“unreasonably applied the law.” 345 F.3d at 1055-56.
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The Court agrees that these cases raise questions of whether all market recovery
programs are actually protected under the NLRA. See, e.g., IBEW Local 48 in Can-Am
Plumbing, Inc. v. NLRB, 321 F.3d 145 (D.C. Cir. 2003) (finding determination by NLRB
that dues unlawfully withheld on Davis-Bacon projects did not taint union's job targeting
program was inadequate to support determination that operation of program was
protected conduct, and remanding to NLRB to consider further evidence). Notably,
however, for preemption purposes a court need not decide whether the state regulation
would be deemed to be prohibited by the NLRA, since it is enough that the state
regulation is based is “arguably” prohibited. As the Court explained Garmon, it is for the
NLRB, not the courts, to decide whether the particular state regulation falls within the
scope of section 7 or 8 of the NLRA:
At times it has not been clear whether the particular activity regulated by
the States was governed by § 7 or § 8 or was, perhaps, outside both these
sections. But courts are not primary tribunals to adjudicate such issues. It
is essential to the administration of the Act that these determinations be
left in the first instance to the National Labor Relations Board....
******
In the absence of the Board's clear determination that an activity is
neither protected nor prohibited or of compelling precedent applied to
essentially undisputed facts, it is not for this Court to decide whether such
activities are subject to state jurisdiction.
Garmon, 359 U.S. at 244-46 (emphasis added). See also Bud Antle, Inc. v. Barbosa, 45
F.3d 1261, 1271 (9th Cir. 1994) (holding that a private party may bring an action in a
federal district court seeking injunctive relief on the basis of Garmon preemption for only
“arguably” protected or prohibited activity).
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Both Wasden and amicus suggest that even if the conduct alleged is arguably
protected by the NLRA, this is not a case in which preemption should be applied. As
noted above, the Supreme Court's cases have referred to two circumstances in which state
law is not preempted, even if the conduct at issue is arguably protected or prohibited by
the NLRA. Those exceptions apply if the alleged conduct is of only “peripheral concern”
to the NLRA, or “touches on interests ... deeply rooted in local feeling and
responsibility.” Jones, 460 U.S. at 676 (citing Garmon, 359 U.S. at 243-44).
In this case, it is evident that the Court could not characterize the conduct the
legislature seeks to regulate with the Fairness in Contract Act as a mere “peripheral
concern” to the NLRA because it involves activities that lie at the core of NLRA
concerns: union activities seeking to protect employees’ jobs and wages. However, the
Court must also consider the contention urged by the amicus that this case falls within the
local interest exception.
The Supreme Court has ordinarily applied this exception in cases where the
conduct alleged concerned activity traditionally recognized to be the subject of local
regulation, most often involving threats to public order such as violence, threats of
violence, intimidation and destruction of property. See Lodge 76, Int'l Ass'n of Machinists
v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 136 (1976); Garmon, 359
U.S. at 247-48; see, e.g., International Union, United Auto., Aircraft and Agr. Implement
Workers of America (UAW-CIO) v. Russell, 356 U.S. 634 (1958) (upholding state court
jurisdiction to entertain action by employee for harm resulting from strikers' threats of
violence and exclusion by force). The Supreme Court has extended this exception to
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cover acts of trespass, see Sears, Roebuck & Co. v. San Diego County Dist. Council of
Carpenters, 436 U.S. 180, 190-98 (1978), and certain personal torts, such as intentional
infliction of emotional distress, see Farmer v. United Bhd. of Carpenters, Local 25, 430
U.S. 290, 304-05 (1977), and malicious libel, see Linn v. United Plant Guard Workers of
America, Local 114, 383 U.S. 53, 57-63 (1966).
Amicus has not demonstrated that undermining union-sponsored market recovery
programs falls within the category of claims which the Court has determined “touch[s]
interests deeply rooted in local feeling and responsibility.” Belknap, 463 U.S. at 498, 103
S.Ct. at 3177. Although Amicus claims that “the right-to-work statutes in the Idaho Code
provide the requisite ‘state interest’ to withstand federal preemption,” Amicus Br. at 40,
Amicus has cited no authority supporting its argument that prohibition of market
recovery programs is an area “traditionally subject to state regulation,” Sears, 436 U.S.at
188. To the contrary, regulation of union-sponsored market recovery programs is an area
of particular concern to the NLRA.
Nor does the Court believe that Congress intended the limited exception to federal
preemption carved out in Section 14(b) of the NLRA – which permits states to proscribe
agreements that require employees to pay dues or fees to a union as a condition of
employment – to allow states to prohibit activity clearly covered by the NLRA because a
particular state deems the activity a “local interest.” This argument, taken to its logical
end, would allow states to proscribe any conduct expressly protected by the NLRA if the
state deemed it a matter of local concern. The exception would swallow the rule.
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Even were the Court to conclude that the issue presented is one of particular state
concern, the Supreme Court has cautioned that in such circumstances, any state concern
must be balanced against the risk that the exercise of state jurisdiction over the tort claim
would interfere with the regulatory jurisdiction of the NLRB. Jones, 460 U.S. at 676
(whether targeted conduct implicates local interests “involves a sensitive balancing of
any harm to the regulatory scheme established by Congress”); Sears, 436 U.S. at 188-89,
98 S.Ct. at 1752-53. As the Court explained in Sears:
The critical inquiry ... is not whether the State is enforcing a law relating
specifically to labor relations or one of general application but whether the
controversy presented to the state court is identical to (as in Garner) or
different from (as in Farmer) that which could have been, but was not,
presented to the Labor Board. For it is only in the former situation that a
state court's exercise of jurisdiction necessarily involves a risk of
interference with the unfair labor practice jurisdiction of the Board which
the arguably prohibited branch of the Garmon doctrine was designed to
avoid.
436 U.S. at 197.
Here, a state court presented with a claim under the Fairness in Contract Act
would first have to decide (1) whether the challenged market recovery program derived
funds from Davis-Bacon projects and (2) whether the program in question was
nonetheless protected under the NLRA before it could reach the issue of whether the
defendant contractor or union had violated the Act. This creates a risk of conflicting
rulings from the state court and the Board, and threatens state interference with the
NLRB's enforcement of national labor relations policy. See Jones, 460 U.S. at 682 (state
claim preempted where fundamental element of claim also had to be proved to make out
a case under § 8(b) (1) (B) of the NLRA).
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Because the conduct the Fairness in Contracting Act seeks to regulate would
overlap with NLRB issues, this case is distinguishable from Sears. In Sears, the
employer filed a trespass action in state court in an effort to end the union's picketing on
its property. The Supreme Court rejected the union's claim that the action was preempted,
noting that the controversy regarding the location of the picketing was unrelated to the
issue Sears might have presented to the Board. To make out a state-law claim of trespass,
Sears needed only to prove the location of the Union's picketing. An unfair labor practice
charge, on the other hand, would have focused on the objectives of the picketing, an issue
“completely unrelated to the simple question whether a trespass had occurred.” 436 U.S.
at 198. Thus “permitting the state court to adjudicate Sears' trespass claim would create
no realistic risk of interference with the Labor Board's primary jurisdiction to enforce the
statutory prohibition against unfair labor practices.” Id.
In any case brought under the Fairness in Contracting Act, by contrast, the
allegation that a contractor received or a union paid wage subsidies derived from Davis-
Bacon projects would be the focus of both an unfair labor practice charge and any state
Fairness in Contracting Act claims. The risk of conflicting rulings and interference with
Board enforcement of national labor policy is evident.
Having determined that the claim at issue here (1) involves activity that is actually
or arguably prohibited by the NLRA; (2) does not involve an issue deeply rooted in local
feeling and responsibility; and (3) would risk substantial interference with the jurisdiction
of the NLRA were it litigated in the state courts, the Court concludes that Plaintiffs are
likely to succeed on their claim that the proposed state law prohibiting market recovery
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programs is preempted. In reaching this conclusion, the Court rejects Wasden’s
argument that NLRA primary jurisdiction never preempts state regulation until and
unless the NLRB General Counsel files a complaint– a conclusion Wasden urges based
on statements in Sears and the NLRB case, Loehmann's Plaza, 305 NLRB 663, 670
(1991). According to Wasden, because there may be an instance when the NLRB does
not file a complaint relating to a market recovery program challenged under the Fairness
in Contracting Act, circumstances may exist when the Fairness in Contracting Act is not
preempted, and therefore Plaintiffs’ facial challenge to the Act must fail.
In Loehmann’s Plaza, the Board’s General Counsel alleged that the respondent
used the filing of a state trespass action attacking peaceful union picketing as an
instrument of retaliation and coercion against the union. The Board’s General Counsel
sought to enjoin the lawsuit on the grounds that the lawsuit was preempted by the NLRA.
At issue was “whether, and also when, state court lawsuits seeking to enjoin peaceful
union picketing or leafleting are preempted by Federal law.” Id. In deciding this issue,
the Board in Loehmann’s Plaza looked to the Supreme Court decision in Sears, 436 U.S.
at 199-207.
The Supreme Court in Sears “start[ed] from the premise that the Union’s picketing
on Sears’ property after the request to leave was a continuing trespass in violation of state
law.” 436 U.S. at 185. The Court’s second premise was that the picketing was both
arguably prohibited and arguably protected by federal law. Id. at 187. While
acknowledging that courts must generally defer to the exclusive jurisdiction of the NLRB
when activity is “arguably” protected or prohibited, the Court found that the state trespass
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action was not preempted because the trespass action touched on deeply rooted local
interests. In addition, the Sears Court noted that no risk of overlapping jurisdiction
between the NLRB and the state court existed because the union never filed an unfair
labor practice charge, and therefore the employer could not directly obtain a Board ruling
on whether the trespass was a protected activity. Applying Sears, the Board in
Loehmann’s Plaza found that a state court trespass action is not preempted until the
General Counsel issues a complaint.
A close review of Sears, on which the Board in Loehmann’s Plaza relied,
convinces the Court that the so-called modification to the Garmon analysis – permitting
state jurisdiction over union conduct that is only arguably protected unless the Board
becomes involved in the matter – does not apply absent an initial determination that: (1)
the state action touches matters of peripheral concern to the NLRA, or interests that are
deeply rooted in local feeling and responsibility; and (2) at least one party is unable to
avail itself of the NLRB’s processes. It makes sense that the Board applied the exception
in Loehmann’s Plaza because both Sears and Loehmann’s Plaza involved trespass on
private property, and in both cases, it was found that the state trespass action touched on
matters deeply rooted in local feeling and responsibility.
In this case, by contrast, this Court had found that the activity the state seeks to
prohibit is not rooted in local feeling and responsibility. Moreover, this Court has found
that there exists a significant risk of overlapping jurisdiction between Idaho state courts
and the NLRB if the Fairness in Contracting Act becomes effective. For these reasons,
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the modification to Garmon preemption espoused in Loehmann’s Plaza and Sears does
not apply here.
This conclusion is supported by the Ninth Circuit’s decision in Bud Antle, Inc. v.
Barbosa, 45 F.3d 1261, 1269 (9th Cir. 1994). While Bud Antle did not involve the exact
issues at play here, it remains instructive. In Bud Antle, the Ninth Circuit held that “a
private party may seek injunctive relief against the enforcement statute scheme on the
ground of federal preemption” even absent Board action and despite the fact the state
defendant was neither an employer nor employee able to initiate unfair labor practice
proceedings. This holding suggests that a federal court need not wait for Board action
before finding that regulation of an arguably protected or prohibited activity is
preempted.
Time and time again, the Supreme Court has reiterated that the NLRB should
serve as the principal arbiter of labor disputes. Thus the Court sees no justification for a
court to abandon consideration of the threshold question, which is whether the matter at
issue is peripheral to the concerns of the NLRA or a matter of particular local concern.
This would require the Court to discard more than half a century of federal policy that
places exclusive jurisdiction over issues of national labor relations in the hands of the
agency created by Congress to deal with them. Absent more explicit direction from
Congress or the Supreme Court, the Court sees no reason to do so.
2. Irreparable Harm
A “possibility” of irreparable harm is insufficient basis for a preliminary
injunction; irreparable injury must be “likely” in the absence of an injunction. Winter,
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129 S.Ct. at 374. Plaintiffs argue that they will suffer irreparable harm arising from the
state’s interference with the exercise of an important federal statutory right. See Arcamuzi
v. Continental Air Lines, Inc., 819 F.2d 935, 938-39 (9th Cir. 1987).
In Arcamuzi, the pilot’s union sought an injunction barring Continental Air Lines
from requiring pilots to complete polygraph tests as a condition of their continued
employment following a lengthy strike. Id. at 937. The union alleged that the polygraph
requirement was part of a scheme to interfere with the pilots’ right to engage in legitimate
union activity under the Railway Labor Act. Id. Reversing the district court, the Ninth
Circuit held that alleged interference with federally protected union activity constitutes
irreparable harm. Id. at 938.
Like the plaintiffs in Arcamuzi, Plaintiffs seek an injunction against Wasden to
protect their right to engage in job targeting. And, as described above, the NLRB has
found that market recovery programs employed by building trade unions to secure
expanded employment opportunities for their members is protected activity under Section
7 of the NLRA (assuming the programs do not rely on funds derived from Davis-Bacon
projects). Based on the conclusion that market recovery programs are protected under the
NLRA, enactment and enforcement of the Fairness in Contracting Act, which seeks to
prohibit such programs, would interfere with that federal protected right.
Wasden responds that (1) county prosecutors, not the Attorney General, initiates
criminal proceedings and (2) even if he were prosecuting the actions, his understanding
that some applications of the Fairness in Contracting Act would be preempted would
guide his enforcement efforts. Based on these two points, Wasden argues that Plaintiffs
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have failed to establish a controversy ripe for the Court’s adjudication. Instead, contends
Wasden, the appropriate route for Plaintiffs to contest the validity of the Fairness in
Contract Act “is to await its attempted enforcement by a county prosecutor under
subsection (5) of Idaho Code § 44-2012 or an aggrieved private party under subsection
(6).” Def.’s Br. at 18, Dkt. 10.
The Court disagrees. First, the Ninth Circuit has held that an injunction against
the Idaho Attorney General may redress a plaintiff’s alleged injuries with regard to
exposure to the risk of prosecution created by a criminal statute. Planned Parenthood of
Idaho, Inc. v. Wasden, 376 F.3d 908, 920 (9th Cir. 2004). As the Ninth Circuit
explained, “the attorney general may in effect deputize himself (or be deputized by the
governor) to stand in the role of a county prosecutor, and in that role exercise the same
power to enforce the statute the prosecutor would have.” Id. at 920. Thus, Wasden’s
suggestion that he is not the proper defendant is unavailing.
Wasden’s second argument – that Plaintiffs’ facial challenge is not ripe for
adjudication because Plaintiffs have failed to show that Wasden intends to pursue
enforcement actions against member labor organizations for Section 7-protected uses of
job targeting program funds – also fails. As explained above, this Court has found that it
is likely that Plaintiffs will prove that the statute is preempted whether it is aimed at
actually protected activity or arguably protected activity. Therefore, as Plaintiffs posit,
“the Attorney General’s ‘nuanced’ enforcement approach would do nothing to shield the
plaintiffs from [the Fairness in Contracting Act’s] unlawful effects.” Pls.’ Reply Br. at 4,
Dkt. 15. And as Plaintiffs also point out, even assuming the statute were not facially
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MEMORANDUM DECISION AND ORDER - 20
invalid and Wasden had a legitimate basis to draw the enforcement lines he articulates, he
has not committed himself to enforcing the statute in the manner he suggests. The fact is
that the statute prohibits all types of job targeting programs, whether they derive funds
from Davis-Bacon projects or not.
Finally, a party challenging a new law before it becomes effective cannot show a
“history of past prosecution or enforcement.” But a party is not required to first “expose
himself to liability before bringing suit to challenge the basis for the threat.” MedImmune
v. Genentech, Inc., 549 U.S. 118, 129 (2007). Rather, a case is ripe when “the very
existence of the new” law compels the affected parties to take specific actions and suffer
specific harms. Storman’s, 586 F.3d at 1123. Plaintiffs have submitted declarations from
representatives of two local unions who attest that they will not implement job targeting
programs that their members authorized because of the Fairness in Contracting Act.
Oveson Decl., ¶¶ 3, 5, Dkt. 2-4; White Decl., ¶ 5, Dkt. 2-5. They have therefore foregone
activity that is at least arguably protected by federal law. As described by the union
representatives, the effect of this forbearance is the loss of work and earning
opportunities for the workers represented by those unions. See, e.g., Clay Decl., ¶¶ 8, 10,
Dkt. 2-2; Moore Decl., ¶ 8, Dkt. 2-3. This harm the union representatives describe
satisfies the ripeness requirement. Therefore, given the facts and argument presented, the
Court finds that Plaintiffs have sufficiently demonstrated irreparable harm.
3. Balance of Equities and Public Interest
In considering whether a preliminary injunction or temporary restraining order
should issue, courts “must balance the competing claims of injury and must consider the
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effect on each party of the granting or withholding of the requested relief.” Winter, 129
S.Ct. at 376. Here, the injury to Plaintiffs outweighs any injury to Wasden because the
State and its officials do not have an interest in enforcing a state law that is likely
preempted by federal law. Conversely, Plaintiffs do have a valid interest in continuing
to engage in conduct actually, or at least, arguably protected by the NLRA. Wasden does
not specifically refute this contention other than to argue that the Fairness in Contract Act
is not preempted. However, because the Court had found that the Act will likely be
preempted, this argument no longer holds sway. Furthermore, preservation of the status
quo will not cause injury to Wasden. To the contrary, any delay will avoid the needless
expenditure of public funds on enforcement while this Court determines the law’s
validity.
Lastly, the Court finds that enjoining the enactment and enforcement of the
Fairness in Contracting Act will further the public interest because (1) the public interest
favors enjoining a state law that conflicts with a federal statutory scheme; (2) there is
some evidence that job targeting programs may have resulted in financial savings on state
and local public work projects; and (3) enjoining the state statute protects union
members’ right to engage in concerted activity for their mutual aid and protection. There
being no evidence that a delay in enacting the Act would unduly harm Wasden or the
public, the Court finds that the ‘balance of equities’ and ‘public interest’ elements for a
preliminary injunction are also met.
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ORDER
IT IS ORDERED that Plaintiffs’ motion for preliminary injunction (Dkt. 2) is
GRANTED, and Defendant Attorney General Wasden is hereby enjoined from enforcing
any of the provisions of Senate Bill 1007.
IT IS FURTHER ORDERED, that the preliminary injunction shall last until the
Court can resolve any motion for permanent injunction. Plaintiffs are directed to contact
the Court's Clerk, Sherri O’Larey (208) 334-1473 for the purpose of setting a Case
Management Conference, during which the further progress of this case can be discussed
and various dates and deadlines can be set.
DATED: July 1, 2011
_________________________
B. Lynn Winmill
Chief Judge
United States District Court
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