/>iAs discussed in our recent article, the introduction of SB 399 in California (approved and added as California Labor Code section 1137) sparked significant discussion and concern among California employers with union employees. The legislation, which became effective January 1, 2025, restricts so-called “captive audience meetings” by prohibiting employers from discharging or disciplining employees for refusing to attend mandatory employer-sponsored meetings. Many employers believe the law unnecessarily restrains their ability to communicate effectively and transparently with employees about important issues.
In response to SB 399, the California Chamber of Commerce and the California Restaurant Association filed a federal lawsuit in the United States District Court for the Eastern District of California on December 31, 2024 (the “Lawsuit”). The Lawsuit challenges the constitutionality of SB 399, arguing it infringes on employers’ free speech rights and is otherwise preempted by the National Labor Relations Act (“NLRA”).
The California Worker Freedom from Employer Intimidation Act
SB 399, or the California Worker Freedom from Employer Intimidation Act (the “Act”), prohibits employers from taking adverse actions against employees who choose not to attend meetings where opinions on religious or political matters, including unionization, are expressed. Previously, employers were permitted to require employee attendance at such meetings. The Act is currently enforced by the Division of Labor Standards Enforcement and is ostensibly designed to protect employees from presumably coercive tactics that could influence their decisions regarding union policies.
The Act follows a larger trend among several states that have enacted similar captive audience bans.
The Constitutional Challenge
The Lawsuit in the Eastern District of California challenges the Act on essentially two grounds. First, the Lawsuit argues the Act violates the First and Fourteenth Amendments of the United States Constitution. Second the Lawsuit argues the Act is preempted by the NLRA.
The Lawsuit’s constitutional challenge contends the Act unfairly targets employers’ viewpoints on political matters by regulating the content of their communications and suppressing their ability to speak freely; thereby violating the First and Fourteenth Amendments. Specifically, by restricting speech on “matters relating to elections for political office, political parties, legislation, regulation, and the decision to join or support any political party or political or labor organization,” the Act is overbroad and unconstitutional content-based discrimination aimed at chilling employers’ speech. The Lawsuit also claims the Act will potentially leave workers without a full understanding of the implications of unionization.
Additionally, the Lawsuit argues the Act is preempted by the NLRA. More particularly, the Lawsuit claims the NLRA already provides a comprehensive framework for labor relations. The NLRA’s Section 8(c) protects employers’ rights to express views on unionization, provided there are no threats or promises of benefits. The Lawsuit argues the Act conflicts with these protections and intrudes into areas that are already federally regulated.
The Lawsuit asks the Federal Court of the Eastern District of California for a temporary and permanent injunction blocking enforcement of the Act.
Key Takeaways for California Employers
The outcome of the Lawsuit is uncertain. So for now, California employers should reassess meeting policies and practices. Specifically, employers should make meetings on religious, unionization, or political matters voluntary. Businesses should also ensure front-line supervisors and managers are trained to properly conduct meetings concerning unionization and other political topics. Employers should consider—preferably in writing—informing employees about the purpose of any meetings related to unionization and clearly emphasize that attendance is voluntary. Finally, employers should find ways for employees to acknowledge the voluntary nature of these meetings without violating NLRA provisions; taking care to avoid actions that might be perceived as surveillance or coercion.
