Some of the most important Supreme Court decisions fly under the radar when first argued. Cedar Point Nursery v. Hassid, argued in front of the Supreme Court this week, is one of those cases.
In case you haven’t heard about Cedar Point (and I wouldn’t blame you, it wasn’t on my radar until last week) it is very interesting. The central question is under what circumstances can the government grant access to union organizers on a company’s private property? Cedar Point Nursery is a farm in California. Agricultural businesses like Cedar Point are excluded from coverage under the National Labor Relations Act (NLRA), so they are covered instead by California’s State Labor Code.
The California Code requires agricultural companies to give union organizers access to their property to help them organize agricultural workers. Organizers can be on the property up to 3 hours per day for 120 days per year. The original rule was adopted in 1975 at the urging of the United Farmworkers under the leadership of Cesar Chavez.
The employers in this case argued that the California regulation was an unconstitutional “taking” under the 5th amendment. As such, the State of California should have to pay just compensation to the company. But this case really isn’t about the lack of compensation – it’s really about whether the government should be allowed to compel access to private property in the first place.
The implications of this decision are far-reaching. That’s because the centerpiece of the Biden Administration’s labor policy, the PRO Act, relies on a number of similar provisions that both grant access to union organizers (“equal time” for example) and restrict employer access to their own workers (banning “captive audience” meetings). Additionally, the PRO Act includes numerous other provisions that might be considered takings (for example, requiring companies to accept labor contracts determined by outside arbitrators). The Cedar Point decision will clearly indicate how the current Court will balance property rights with government attempts to advantage union organizing.
It’s hard to predict how the Court will rule based on oral arguments. Often the questions asked don’t necessarily reflect how a Justice plans to vote on a particular case, but instead anticipate or attempt to refute arguments that another Justice might be considering. That said, the oral argument in Cedar Point does suggest a possible outcome.
This isn’t the first time the Court has had to deal with an issue like this. In the 1956 NLRB v. Babcock and Wilcox case, the Court faced a similar circumstance. Union organizers sought access to employees who worked in a remote location controlled by the employer. The NLRB found that refusing access for distributing literature on the employer’s property effectively prevented the union from reaching workers and found the employer’s no distribution rule unlawful.
The Court in Babcock and Wilcox disagreed. There the Court found that the union’s right to organize employees must be balanced against the employer’s property rights. They established the rule that where a union has other reasonable ways to access employees (like at their homes or in the community) then the employer was not required to give the union access to its property. The Court stated:
“…an employer may validly post his property against nonemployee distribution of union literature if reasonable efforts by the union through other available channels of communication will enable it to reach the employees with its message and if the employer’s notice or order does not discriminate against the union by allowing other distribution.”
The Babcock & Wilcox decision did not consider the 5th Amendment argument presented in Cedar Point. During the oral argument the Justices seemed concerned about ruling that the California regulation amounted to a government taking. Instead, Justice Kavanaugh suggested the Babcock & Wilcox balancing framework might be a better approach to resolving this dispute.
Most Justices seemed skeptical of using the takings clause in this way. They named numerous other situations where the government is granted access to a private employer’s property, especially safety and compliance investigations. Justice Breyer seemed especially concerned about the “dozens and dozens and dozens” of other laws that allowed inspections that might be impacted by this decision. He even expressed concern about restricting inspections of our private spaceships and electric cars. No kidding. Check out pages 12-13 for the head-scratching exchange that ends with Breyer reminding everyone that, “They had no spaceships at common law.”
Counsel for the Employer did make some strong arguments for why this case should be distinguished from other government inspections. The access provided here is not for an inspection. The property right is granted to non-government third parties. And this access is much more burdensome than other routine inspections. That said, it does look like the 5th Amendment argument faces some headwind with a majority of the Justices.
Even if the Court decides that the statute isn’t a per se taking under the 5th Amendment, the opinion in Cedar Point will be a very important prism for thinking about challenges to the PRO Act. That bill (which I anticipate will soon be considered by the Senate) is without doubt a much bigger infringement on employer property interests than the California regulation. Hopefully the Court anticipates these further encroachments as it decides what to do in Cedar Point. Unfortunately, they may get to consider it either way.