Gov. Newsom has signed SB 399 into law, which restricts the ability of employers to hold mandatory “captive audience meetings” with their employees. The new legislation, also known as “California Worker Freedom from Employer Intimidation Act,” takes effect Jan. 1, 2025.

New Restrictions Under SB 399

The new restrictions, which will be codified in Cal. Labor Code section 1137, prohibit employers from subjecting, or threatening to subject, employees to “discharge, discrimination, retaliation, or any other adverse action because the employee declines to attend an employer-sponsored meeting or affirmatively declines to participate in, receive, or listen to any communications with the employer or its agents or representatives” about “the employer’s opinion about religious or political matters.” “Political matters” include meetings focusing on whether to join a union, as well as meetings geared toward influencing employees to join or support a political party. “Religious matters” include trying to influence one’s “religious affiliation and practice and the decision to join or support any religious organization or association.”

The new statute targets “captive audience meetings.” Employers facing a union organizing drive often hold such meetings to express their views against unionization. SB 399 does not prevent employers from holding captive audience meetings, but it does prohibit employers from requiring attendance and punishing employees who do not attend. An employer must also pay employees who choose not to attend these meetings if they work while the meeting is held.

SB 399 does not cover all employers. The new statute exempts (1) religious organizations exempt from Title VII or state law protections against employment discrimination; (2) political organizations issuing communications about their “political tenets or purposes”; (3) educational institutions requiring attendance of lectures as part of “regular coursework”; (4) nonprofits mandating activities related to “the mission of the training program or sponsor”; (5) employers requiring training “to comply with the employer’s legal obligations,” including “civil rights laws and occupational safety and health laws”; and (6) public employers holding a new employee orientation under Gov. Code § 3555.5 or providers holding an orientation under Welf. & Inst. Code § 12301.24.

SB 399 empowers the Labor Commissioner to enforce its provisions. In addition to being able to obtain injunctive relief, the Labor Commissioner can recover a civil penalty of $500 per employee for each violation, in addition to “any other remedy.” The statute explicitly allows any employee who suffers a violation to bring an action for damages, including punitive damages.

In passing SB 399, California joins a number of other states that are attempting to restrict captive audience meetings, including Oregon, Washington, Minnesota, Illinois, New York, Vermont, and Maine. Indeed, SB 399 was modeled on Connecticut’s 2022 Act “Protecting Employee Freedom of Speech and Conscience.”

Question of Preemption

This area is historically preempted by federal law and regulated by the National Labor Relations Board (NLRB). For over 75 years, the NLRB has interpreted section 8(c) of the National Labor Relations Act to allow captive audience meetings. See Babcock & Wilcox Co., 77 N.L.R.B. 577, 578 (1948) (the compulsory audience meetings in question were lawful because they did not involve “any threat of reprisal or force or promise of benefit and [were] therefore protected by the guaranty of the free speech amendment.”).

In 2022, however, the NLRB’s general counsel issued a memo urging the NLRB to overturn Babcock & Wilcox because, according to the general counsel, it “is at odds with fundamental labor-law principles” and the NLRB’s statutory language and congressional mandate.

To date, neither the NLRB nor the courts have followed the memo, but it may have inspired the California legislature, which cited to the memo in its SB 399 analysis.

Takeaway

SB 399 may be challenged in the courts, and ultimately a court may find that federal law preempts SB 399. In the meantime, California employers should be mindful when holding captive audience meetings.