Phil Wilson (00:02.368)
Alex McDonald, welcome to the Left of Boom Show. Great to see ya.

Alex McDonald (00:06.521)
Well, thanks for having me. This is great. I’m excited.

Phil Wilson (00:09.368)
Yeah, me too, me too. So why don’t we just start with maybe tell folks a little bit about yourself and how you got into this whole, you know, law thing that we do. And then I’d also like to hear a little bit about some of the projects you work on. So just start, like tell us how you got here.

Alex MacDonald (00:29.911)
Yeah, so it’s a big question, right? Give me your life in five seconds. No, I mean, so I’m part of what we call the Workplace Policy Institute. I’m a co-chair. It’s a group within the law firm Littler Mendelssohn, where the largest labor and

We at WPI specifically focus on what a old friend of mine, Michael Latito, used to call the intersection of law and policy and politics, which just really means a lot of the new novel public law stuff that happens in labor and employment law, you know, constitutional stuff, regulatory stuff, getting involved with the administrations, both at the federal and the state level, that’s kind of what WPI traditionally focuses on.

And it’s interesting, because the topic of this show is what we’re gonna get into in a little bit: it used to be that our focus was very Washington, DC-oriented. And frankly, for an old labor lawyer like myself, that’s sort of what I came up doing. My first job as a baby lawyer was in the United States Postal Service in their office of general counsel. At the time, the largest single unionized employer in the world.

Phil Wilson (01:34.68)
Yeah.

Alex MacDonald (01:42.512)
Subject to the NLRA. A lot of people don’t know that. So that’s sort of where I cut my teeth on labor law, starting in the least glamorous place you could start. So I mean, it used to be that we all thought about that as federal law, but increasingly labor law in general and WPI’s focus specifically has been on the states and on the cities. And I think that’s probably where we’re gonna get into today. That recently I at least in not

Like yesterday, didn’t happen yesterday, but it is a relatively recent shift that is seeming to accelerate.

Phil Wilson (02:15.544)
Mm-hmm.

Yeah, our topic is sort of who’s in charge of labor law, right? And like you say, that has traditionally been federal you know, federal was in control. Certain slices were sort of sliced out of, you know, federal control. And so states so agriculture, you know, is a good example- but so there are there are some state labor laws that have been for a long time, but in general, most

Almost, you know, almost all labor law was federal, right? So maybe walk us through a little bit about how that has been historically, and then maybe a little bit of what’s happening now.

Alex MacDonald (02:59.801)
Yeah, and I don’t want to make it too much of a history lesson because I’m afraid people start hitting the stop button. But you do have to understand a little bit of the history to know where we’re coming from. And so you mentioned that some things are carved out of federal labor law today and that those are

Phil Wilson (03:05.239)
Yeah.

Alex MacDonald (03:13.987)
You know, for a long time it was considered state labor law, but historically, when we really think about this, there was no traditional state labor law. so like when we’re talking about labor law as we think about it today, the law of labor relations, the law of collective bargaining, et cetera, that all really starts in the early 20th century. because before that, what you had that regulated, you know, there were unions before then, there were employees who got together and c negotiated agreements, you know, collective agreements with employers. but all of that was governed by this

Weird hodgepodge of common law contract and tort actions. You’ve got like the common law conspiracy doctrines, there were prosecutions, et cetera. It’s really a mess at the state level. There wasn’t really anything we would have recognized as quote-unquote labor law until the early twentieth century. And then we start to get things like the Clayton Act. And the Clayton Act was just a law that was passed in 1914, I believe, when that carved out labor unions from federal antitrust law at the time.

Phil Wilson (03:52.611)
Mm.

Alex MacDonald (04:13.827)
There had been a lot of prosecutions under the Sherman Antitrust Act against unions, which essentially treated them as collections, like any business collection. They’re basically a labor cartel. And the Clayton Act was aimed at that particular issue. Then you get something called the Norris-LaGuardia Act, which did basically the same thing, but it was more like Congress was saying, and we mean it, because the courts had read the Clayton Act really narrowly. both, again, federal labor laws, not something that bubbled up from the state level, but stuff that came down from

Phil Wilson (04:34.936)
Yeah.

Alex MacDonald (04:43.777)
Congress. Actually, at the behest of some of the major labor organizations at the time, Sam Gompers, who was a longtime president of the AFL, made a push and an exception to his own doctrine, which was not to get involved in politics, to push for those particular laws because he saw a pressing need at the time. And then from there, we’ve sort of normalized the idea that regulating labor relations and collective bargaining is gonna be a federal policy. So we start to see

Things like the National Industrial Recovery Act. This is in 1932. For the very first time, Section 7A of that law recognizes a statutory right to bargain collectively and to join forum unions, etc. That’s really the again, we’re all talking about federal law, and shortly after that, the NRA gets struck down in a case called Schechter Poultry, and Congress follows up with what was the big one, the Wagner Act, which creates what we know today as the National.

National Labor Relations Act. But again, I mean the I keep emphasizing this, but it’s important to realize the thing all of these early labor law statutes have in common is that they’re federal laws. this isn’t, you know, the states moving first, this isn’t bubbling up from the bottom, it is a top-down thing, and it always has been. Like when I started as a lawyer, if somebody had said to me the phrase, state labor law.

I would have thought they were using the term loosely, the law of the workplace, right? Sometimes you hear labor law being used that way. Or maybe I would have thought they were using it in one of the exceptions that you mentioned, like the agricultural laws, which post-date the Wagner Act. All those laws were built on top of that. to sort of cover up these exceptions. But that’s not actually what people mean anymore when they say state labor law. They mean genuine labor law, the law of collective activity, union organizing,

collective bargaining, like states are e d i increasingly asserting that they have a role in this discussion, that they are creating rival structures that will counterbalance

Alex MacDonald (06:50.385)
or to cover over what they see as holes in the federal system. That’s a relatively new phenomenon. That’s not something that we’ve seen for that we saw at least for most of the twentieth century. And at least, you know, when I first started practicing that wasn’t something we were seeing. But we definitely are seeing it now. and we we go ahead.

Phil Wilson (06:55.395)
Right.

Phil Wilson (07:08.94)
Yeah, it’s a big trend, right? So like, there there’s sort of three slices that we’re gonna talk about today. Still, you’re right, just in general, this is yeah, it’s unusual for states to sort of like jump in and historically states have sort of not done that because they know like they’re just generally preempted, right? They’re that this is an area that is federal law and so states don’t get to you know, don’t get to rule in it. So so the

The three sort of big ones are like LPAs, so labor peace agreements, sectoral bargaining, and then there’s been a very recent development, which is this Harvard sort of model sectoral bargaining. And I want to kind of hit all three of those. Why don’t why don’t we start with the the labor peace agreements? So maybe lay out like what is that and sort of what’s the issue with these labor peace agreements.

Alex MacDonald (08:04.717)
Yeah. I think I’m gonna

Start with your second question. because it’s it’s appropriate to frame this up a little bit when we talk about preemption, what that actually means. labor preemption, it’s it’s notoriously weird. there’s like multiple overlaying like quote unquote doctrines of labor preemption. So I’m not gonna overcomplicate it. I’m just gonna give folks the couple of buckets they should be thinking about as we’re listening about these these various laws we’re gonna be talking about. One is Garmin, that’s the big one.

This was a case in the 1950s where the Supreme Court basically said it looked at the Wagner Act, or at that time had been amended by the Taft Harley Act, and really is closer to what the National Labor Relations Act is today. The court looked at that law and it said what we see here is an effort by Congress to create a uniform system. System that means the same thing in Sacramento as it does in Syracuse. We want one labor law for everybody. And to do that, we created one labor agency.

Agency, the National Labor Relations Board. So there’s lots of questions that come up under the NLRA. The NLRA, it’s an old statute. It’s like

Hundred words long. I I’m I’m being facetious, but it’s a very short statute. So there’s a lot of stuff interpretation that goes on when we start applying it on the ground. And the main purpose of Garmin, what the court said, was no no no. If you’re interpreting the NLRA, if you’re trying to decide if something’s covered or protected or not protected, Congress wanted the NLRB to answer that question first. So states you can’t step in. Anything that’s arguably affecting some regulated subject under the NLRA, that’s that’s a federal question. second bucket is something

Alex MacDonald (09:46.016)
Called machinists, again named after a case. Essentially what the court said there was there are certain things that aren’t arguably covered or arguably prohibited by the NRA, but that Congress left out on purpose. For example, strikes, lockouts, you know, resorts to economic weapons, as we call them when we’re talking among us labor lawyers. those kinds of things Congress wanted to be, you know, open to free economic tests of strength, and so states can’t step in and

Phil Wilson (09:58.596)
Mm-hmm.

Alex MacDonald (10:15.949)
rebalance the way this works. If you try to like ban strikes, even though you know you’re not bumping up against any specific provision of the NLRA, the courts are going to say that’s preempted too. And then the last one is there’s a another law that was added to the the whole superstructure here was the Section 301 of the LMRA. And what that essentially says, the history’s really interesting. Up until that time, unions actually couldn’t sue or be sued in their own names. They weren’t technically

in many states legal entities that could do that. They were more like voluntary clubs. Like they were no more they could no more sue you than a book club could sue you, right? A voluntary group of people. And what the what the Section 301 did was A it gave federal courts jurisdiction to hear claims against and from labor unions, so to sort of recognize them as legal entities. And it said, well courts you can hear cases about labor contracts.

Phil Wilson (10:55.779)
Mm-hmm.

Alex MacDonald (11:13.633)
between a labor union and an employer. Because one of the things Congress was concerned about was labor unions could essentially walk away from a contract and because they couldn’t sue or be sued, there was no remedy for somebody if a labor union violated its own contract. So that’s the thing Congress was trying to fix. What that ultimately turns into is the Supreme Court interpreting that piece to say, well now Congress has effectively federalized the law of labor contracts.

So if we’re interpreting something about a labor contract, if if you know something about a state labor law turns on the meaning of a labor contract, then it’s preempted. and then together, all these things laying on top of themselves, we have a really broad umbrella of labor preemption. So when we talk about labor preemption as we’re going through these things, we’re not really talking about one case or even one doctrine or even one statute. We’re talking about this sort of net of things that that fits together and really makes labor law.

by and large a federal subject, at least historically, and you know, some of us still

Phil Wilson (12:14.03)
Like compared to a lot of other federal federal law, like that like the this this area of preemption has really been like fleshed out probably more than any area that I can think of. Like like you’ve just named, there is this sort of cascade of of law around, no, we really meant it like this is federal.

Alex MacDonald (12:39.725)
Yeah. Yeah. No, it is really well established, which is part of the reason I mean, I I will conf I’ll raise my hand, I was one of them. when you started to see a lot of these state labor laws popping up, some of us kinda sneered at them, right? And like, Well hold on you can’t do that, that’s silly. and yet and yet, we continue to see these statutes and many of them have been on the books for a little while now, years, because litigation being what it is, it’s slow.

Phil Wilson (12:50.371)
Mm-hmm.

Phil Wilson (12:55.598)
Mm-hmm.

Alex MacDonald (13:06.215)
it’s hard to get to the merits on some of these things. so I I mean look, it because of that well established framework, yeah, a lot of us didn’t t take these things seriously when they started popping up, but I don’t think you can do that anymore.

Phil Wilson (13:19.788)
No, for sure. For sure. Well let’s l so let’s hit let’s hit LPAs first. So so labor peace agreements, what is a labor peace agreement? And then yeah, they’ve been around for a while, but like they’re they’re really now sort of being, you know, imposed by by state and sometimes local governments. Just explain a little bit about what they are and kind of some of the recent litigation around them.

Alex MacDonald (13:21.826)
So

Alex MacDonald (13:43.596)
Yeah, for sure. Everything you said is exactly right. So l just headline. Labor peace agreements are we you know often use the acronym LPA. These are contracts, right? They’re contracts between a labor union and an employer that essentially change how the organizing process works. so it’s you know, the agreement may say, traditionally

hi, I’m the labor union, I’d like you to sign this agreement. This agreement says I won’t pick it outside your firm, I won’t d hand bill your customers, I won’t say nasty things about you. you know, this is where the peace part comes in. And then in exchange the employer says, Hey, that sounds great, I don’t want to disrupt my business. I’ll give you, union, some benefit that you wouldn’t normally have.

that might be I’ll stay neutral during your organizing campaign. I might give you access to my property so that you can talk to the employees. I might even give you contact information for the employees in case you want to ask them if they want to join the union. I might recognize you by card check instead of insisting on a on a election. I might even agree to something like arbitration to settle any disputes that we have about this contract or any other contract. so they can they’re sort of accordions, they can go in and out, but that’s like basically the framework.

of an LPA is. again, traditionally when the the original LPAs were private contracts, right? Because, you know, for whatever reason the employer and the union both made some calculation that it’s a a peaceful process would work better for everybody. But they haven’t stayed

Phil Wilson (15:22.092)
And and most commonly, most commonly they were c in the construction industry, right? So like i there’s gonna be a big public works project, and you know, the argument was sort of the the city or like whatever public sector entity that was acting as a as a market participant also had an interest in labor peace. And so they would make a requirement to be a a contractor on this project that you

you needed to enter into a labor peace agreement with the the labor unions, right? That was sort of the typical way that would come up.

Alex MacDonald (15:57.326)
Yeah. Yeah, and so when the when we’re coming at from that framework, we often call them project labor agreements, but it’s basically the same thing, right? it’s a it’s th they can be pre hire agreements, they in a lot of different forms. and those

Phil Wilson (16:05.369)
Mm-hmm.

Alex MacDonald (16:11.181)
I mean look, those particular kinds of LPAs have been litigated. They actually went up to the Supreme Court and for exactly the reason you were just describing, in some cases they are consistent with federal labor law. And again, I don’t I don’t wanna complicate it too much. But what the courts have said is, you know, when the states actually involve so like let’s say I’m

I’m gonna pick on New Jersey because we’re gonna talk about New Jersey. I’m the state of New Jersey. I wanna build a new turnpike. but I’m really worried that I’m gonna spend all this taxpayer money and the project is gonna get held up with a strike. And so I’m gonna require all the businesses that are it performing some kind of work on this project to sign a LPA that says nope, no, no, no labor disruptions, no strikes, no picketing.

you’re gonna sign on to this you know, umbrella agreement, etc. And what the courts have said is because the state is really, you know, acting, they you know, the the buzzword is proprietary interest, right? But really it’s just going after the market and buying stuff. It’s allowed to use its pecuniary authority in that regard to to control its own purchases. that’s a really narrow exception though, because most of the stuff the state does is regulatory. And that’s where we’ve seen the LPA is starting to

Phil Wilson (17:14.499)
Mm-hmm.

Alex MacDonald (17:20.867)
migrate over. So we started to see like outside the construction, you know, maybe in the late late 1990s, we saw places like San Francisco and a few other cities start to slap these LPA requirements on things like okay, well you’re renting land that happens to be owned by the city and you want to establish a restaurant on the land. Well I’m gonna make you sign an LPA for that. And I’m gonna say I have a proprietary interest because I own the land. So we’re starting to stretch the doctrine

a little bit. Or maybe I run an airport. Right. I’m gonna make everybody in the airport sign an LPA. And then you start to see like, well I’ve got a bunch of

Phil Wilson (17:55.395)
Yeah, very common.

Alex MacDonald (18:01.485)
public contractors. You know, I’m I’m the city of Milwaukee, I’ll pick on them because it’s a real example. anybody who contracts with the city for anything, I’m gonna make you sign an LPA. now we’re really starting to stretch the doctrine. Like do I really have a proprietary interest in everything these people are doing? The Milwaukee example is interesting. That actually went up to that was litigated and struck down in part because that law didn’t just apply to people who were performing work for the city. Like you had to sign an LPA for all your employees. So if you had

Phil Wilson (18:15.203)
Yeah.

Alex MacDonald (18:31.419)
three people working on a city project, but you had 300 employees, those other 297 were going to be covered by the LPA. That was a requirement. And what the court said there was, I’m sorry, that doesn’t even pass the lap test. Like this is you don’t have a pecuniary interest here. And because you don’t have a pecuniary interest, this thing is a proprietary interest, this thing is preempted by the NLRA. So you know, again, baby steps, baby steps, but the real explosion in these LPAs, what we saw

Phil Wilson (18:38.882)
Yeah. Yeah.

Yeah.

Alex MacDonald (19:01.389)
the LPA requirements as a matter of law showed up once states started legalizing the the cannabis industry, the marijuana industry.

you know, more than a dozen states now the last time I counted have some kind of either LPA incentive or in places like California and New York and New Jersey, again, actually require an LPA. Like it’s a condition of getting a license. And you cannot operate a marijuana or a cannabis bin business in these places without getting a license. Ergo, to be a business, to operate in these states, you have to have an LPA.

And the proprietary interest thing, you know, it’s it th th it’s really hard to get there because the state doesn’t actually operate any of these cannabis retailers. I mean, you know, California is not in the business of selling marijuana. All it does is license

the facilities and licensing isn’t a proprietary activity. It’s a regulatory activity. you know every business you know has to get a business license, but not every business has to sign an LPA because that wouldn’t pass the laugh test. All of a sudden well hold on a second. You have a proprietary interest in every business that operates in the state of California just because you collect tax revenue, well that’s true of everything which would just blow a hole in the entire exception. Make the it the exception would become the rule. old saying so you know a lot

Phil Wilson (20:10.987)
Right.

Phil Wilson (20:20.77)
Yeah. It’s not and it’s it wasn’t like we need to make sure people can get their weed. Like there should be no strikes.

Alex MacDonald (20:27.363)
Yeah.

Well, I mean, we’re laughing. but you actually s have seen so these things have been challenged in court and you’ve seen some of those arguments made, like, well, you know, we have a strong public interest in preventing labor stoppages at cannabis facilities so that we can make sure they continue running and it’s usually not so that people can get their weed, right? We’re being a little facetious. It’s usually so that we can continue to ensure that we get the revenue we get from the licensing process and from the taxing process. I mean these these businesses are cash cows for

the states and they the taxes are exorbitant. They’re just using them. So yes, it’s an LPA is now extremely common LPA requirement is extremely common in the cannabis business. And a couple of for for years that was sort of the status quo. We didn’t see a lot of litigation over it. In part I think because I say I think it’s pretty clear that the reason those things weren’t challenged

Challenged immediately, even though they were kind of facially inconsistent with DNL, was the quasi-legal status at the time of the cannabis business. I mean, just imagine that you’re operating a cannabis company and the question is, all right, we just started this thing. The state just turned the lights on for this new nascent industry. I’m just trying to establish myself. Is the first thing I’m gonna do go and file a federal lawsuit challenging the constitutionality of the way this system has been set up? No. No, no.

Phil Wilson (21:55.885)
Right.

Alex MacDonald (22:00.315)
No rational business is going to do that. And so we experienced, you know, years I first started looking at this issue, I recall, in twenty nineteen, I believe. and you know, we we had seen a lot of the things prop up in all of us, you know, from a labor law perspective, this is illegal, they can’t do this. but you didn’t see a lot of lawsuits. And I think in part because of the hesitancy. People were more just willing to go along to get along than to fight. but that changed.

Phil Wilson (22:12.558)
Mm-hmm.

Phil Wilson (22:29.922)
This this this is a this is a huge problem across all of this, right? Like getting, you know, before these laws get challenged, someone has to decide to challenge them. And and even a lot of times you might have like an employer association.

Alex MacDonald (22:30.325)
So

Phil Wilson (22:46.284)
try to challenge it, but but lots of those lawsuits get bounced because they don’t have standing, right? Like the person harmed is the one who really needs to bring the lawsuit and there’s all kinds of reasons that the person harmed doesn’t want to sue.

Alex MacDonald (23:00.983)
Yeah, the fear I’ll just say

the the fear of retaliation in the business community and this is not just cannabis, this is, you know, in general when you’re talking about some of these more aggressive state laws, it’s it’s real, right? And folks feel like, well if I’m the one who steps out and challenges this thing, even if I win, things are not gonna go well for me because everything’s local. You’re still dealing with the same regulator. These people aren’t going away. They’re gonna remember that you’re the one who sued them and got a piece of their law knocked out in court. that’s a common fear. It’s a reason a lot of these things don’t get litigated.

and people are, you know, if I’m running a business, I’m not running a business because I have an ideological interest in in labor law purity, right? To me, labor, I mean labor law and local labor law, if you’re running a business, it’s just a cost, right? and so it’s a cost-benefit analysis you have to do. how much is it gonna cost me, not only in paying the legal fees, like how much do I have to pay Alex McDonald to go file this lawsuit? not just that, but in reputation.

Phil Wilson (23:41.858)
Right.

Alex MacDonald (24:03.259)
both nationally and in the local industry, in you know the relationships you have, just long term, you know, what’s the likelihood of actual retaliation? And they’re not gonna say they’re retaliating against you, but are they gonna, you know, look at your license r renewal application a little more closely because you filed that lawsuit? I mean that’s the thing I think people have to play out in their mind. and this is you’re right, it it’s extremely common. It’s not just cannabis, it’s not just LPAs.

Phil Wilson (24:25.197)
Yeah.

Phil Wilson (24:31.192)
But in New Jersey, so there there’s there’s a little bit of you know some some recent news there. So what’s happened there, and do you see this as maybe at least a trend on the LPA front?

Alex MacDonald (24:45.899)
Yeah. and I have to give your
listeners full disclosure, I actually represent a couple of New Jersey cannabis businesses in various lawsuits, one of which resulted most recently in a decision by the district of New Jersey that found that the labor peace agreement requirement for cannabis businesses was preempted, which I think was the obvious right answer on the black letter law. and it followed it wasn’t the first court to find that there was a court earlier in Oregon.

that found that Oregon was preempted. that’s on appeal, our case is on appeal too. There have been a couple other challenges filed after that. One case I should mention did go the other way. It was a challenge against California’s LPA requirement. And the the case is it’s a little weird. It was called I I love the name, Control Alt Destroy was the name of the the business. So that’s the way the captioned Control Alt Destroy. But the what the judge found is

Phil Wilson (25:43.982)
This is

Alex MacDonald (25:48.896)
in that case was that there was this this old equitable doctrine called unclean hands. and equity for folks who don’t know is like the courts used to be divided into two halves. One half was the legal half, the common law half that just gave you your money, right? It’s very rigid. You had to go in there and file the right pleading, you know, put it in the right form, and if you did the right brain dance, you would get your money. And then on the other side was the equity courts who had a little more flexibility. They could just, you

kind of do justice, right? And so that’s where these equity doctrines come from. And one of the doctrines on the equity side was well, hold on, if you show up and you’ve contributed, you actually did something wrong that caused this whole thing. Like the classic example. Let’s say that I steal some intellectual property and treat it as my own and then somebody else misuses the intellectual property. I can’t sue them right because I stole that intellectual property. So even if they are misusing

Phil Wilson (26:47.233)
Mm-hmm. Mm-hmm.

Alex MacDonald (26:48.699)
it, I have unclean hands, so I can’t then go and say federal court give me an injunction or some kind of equitable relief. And what the the court in control destroy said was well you cannabis business are operating by selling a product that is illegal under the Controlled Substances Act, federal law. So you can’t get any equitable relief from me, the court. Have a nice day.

And like we I I don’t wanna like bog this this podcast down by getting into why that was wrong. pretty pretty, you know, continuous application of an old doctrine. But I I should flag it because there is one decision out there that has gone the other way. Not on the merits, but on this sort of equitable point. no other question.

Phil Wilson (27:19.426)
Yeah.

Phil Wilson (27:24.684)
Yeah.

Phil Wilson (27:35.682)
Sounds like the kind of decision that might get co control alt destroyed itself as it as it works its way through the appeal process.

Alex MacDonald (27:43.288)
Well, it’s funny you say that. It is on appeal and the state of California, who’s on the other side of the V, has actually abandoned that. So if you read their briefs, they say, No, no, no, no. We’re not relying on that. We’re we’re relying on a whole bunch of other different stuff. So it’s it’s out there if if folks want to read it themselves. So I go ahead.

Phil Wilson (27:51.339)
really? That’s good. That’s good. Yeah, so so so on the LPA front, I think we’ve we yeah, we’ve we’ve there’s there’s certainly some you know some progress being made. The the other like big area where things are happening is around sectoral bargaining and so

most recently sort of the big developments there around gig workers, especially like Uber and Lyft drivers. but but definitely more broad than that. And then and then we’ll end on sort of the, you know, this this model law, but why don’t we talk a little bit tell tell me a little bit about what’s happening with gig workers and some of the state laws around that.

Alex MacDonald (28:42.519)
Yeah, this I I it might have been a little bit of hyperbole, I’m not I’m still not sure it is. when so two laws have been passed so far that authorize for the very first time in the United States at a statewide level

what’s called sectoral bargaining. and when Massachusetts passed this, I called it the most important labor law passed in a generation. because it’s it’s a big deal and it’s a big change. so like taking a step back, I mean what what what is sectoral bargaining it’s not gonna be familiar to people who came up in the United States system, which is what we like to contrast it, we don’t usually think in these terms because when you ask a fish what water is, he says what’s water, right? All around him. So we don’t think of our system as quote unquote enterprise

Phil Wilson (29:22.711)
Yeah.

Alex MacDonald (29:26.497)
Bargaining because we’re not thinking of the alternatives. But when you’re comparing sectoral bargaining to our system, the way to think about our system is enterprise bargaining. And what that means is the the unit of division, the people the unit that elects, the people who bargain together, etc., that’s all like workplace level. So we’re the people who work together in a workplace are the ones who choose whether to join a union, who bargain collectively. You know, mostly they know each other. Some units are very big, so they may not all know each other, but it’s mostly the the locus is

is the workplace. and we designed that system intentionally. We thought, you know, the people who know their workplace the best are going to be closest to the ground and are going to be able to make more informed decisions about what’s going to work for their workplaces as opposed to at the time they’re thinking is some regulator in Washington, DC. Now we kind of have to think about okay, some bargaining unit that’s sitting, you know, four cities away. So that’s that’s what we have sectoral bargaining flips that. It elevates bargaining to the industry level.

So now all the car manufacturers are gonna sit down in one election unit. All the car construction or excuse me, manufacturing workers are going to bargain in one unit. those workers are gonna I’m picking on cars, I don’t know why, but that was the first thing that came to mind. they’re all gonna bargain in one unit. They’re gonna choose one union and all the companies are gonna negotiate with that union. this has been, you know

There are systems like this in other countries. the one that usually gets pointed to or pointed to is Germany. there are systems in France, Italy, there are a few in Latin America too, the Netherlands. but what I’ll tell you is, you know, the details of those are very different from what we just saw in Massachusetts. So zooming back in a little bit on Massachusetts, that law applies specifically to ride share drivers, right? The TNC drivers, transportation network company drivers.

The folks who, you know, you pull up an app, you you call for a ride, and the person who shows up. Those are the people who are covered by this new law. all independent contractors, which is important. And that law groups them all into one election unit. that unit elects a union or doesn’t elect a union. We’ll talk about how this works in a second. then the union negotiates with all the rideshare operators, all the companies that are operating these apps.

Alex MacDonald (31:48.08)
for one, you know, I’m gonna put scare quotes around a contract because it isn’t really a contract. What happens is once they basically get a term sheet, that term sheet goes over to a state regulator, the labor commissioner, who then adopts it as an industry ride regulation. I’m sure like even people listening they’re still scratching their heads thinking, why would you create a such a backdoor system that, you know, works around just a private negotiation that seems very strange? and the reason is all legal. Right. So there are there are

Phil Wilson (31:52.814)
Yeah.

Alex MacDonald (32:17.421)
We’ve already talked about N L R A preemption. So folks are trying to avoid that and they think they can avoid it by avoiding quote unquote bargaining. Right? What we’re doing is really co regulating. so we think like, well

Phil Wilson (32:28.642)
Yeah. They won’t even say the word bargaining when they’re describing it.

Alex MacDonald (32:33.111)
That’s right. They’re very nervous about that challenge. so they think, no, what we’re doing is we’re just creating sort of this co regulatory structure where everybody sits down and talks about what the regulation should be, and then we’re adopting minimum labor standards, just like a minimum wage law. that’s all we’re doing. which is a obvious fiction. like I don’t use the word obvious a lot. but I think even I I won’t say his name, but I was in the elevator with somebody who worked on one of these laws.

And he’s like oddly trying to convince me in an elevator that this is a good idea. And his his pitch to me was, Well, you know, and when they bargain, etcetera but wait, no, they’re not bargaining, because if it was bargaining

Phil Wilson (33:15.896)
Right. It’s true. I’ve yeah, it’s true.

Alex MacDonald (33:19.965)
You know, the mask slips so easy. but so that’s that’s the way this thing works and the reason they did it was they’re trying to get around labor preemption and they’re trying to get around antitrust preemption. and I I mentioned antitrust again because there actually was a law or an ordinance that was passed in Seattle, I think in twenty fifteen, that created a structure like this. And that one ultimately got blocked under on antitrust grounds. what state or what the the court said in that case was the city just couldn’t meet

the requirements for again, I’m not gonna make this more complicated than it needs to be, but just there are exemptions under antitrust law. The the law didn’t fit into those exemptions, so the law got struck down. So the they built this to try to this weird backdoor structure to get around those you know those decisions and the requirements of antitrust law. If you ever want to have a podcast about Parker immunity and the state action doctrine or anti you know you let me know. But I I don’t think we should go down that road at this point.

Phil Wilson (34:17.774)
That would be our most watched episode, I am sure.

Alex MacDonald (34:19.769)
yeah, I was gonna make a joke, like probably the only person who would watch it is my mom. but I think my mom would turn it off once she But what doctrine like so

Phil Wilson (34:28.238)
She’s like, what is this? yeah, so so that so that is and then like some crazy things you you mentioned raw off the top, you know, WPI, but like and and I think I I meant to say this then. if you don’t follow the Workplace Policy Institute and the work that WPI is doing, mu much of which is written by you, Alex.

You really should follow them. They there’s a a ton of great content. But when it when this you know statute went into place in Massachusetts, you know, one of the big points that you make, you know, that so there’s there’s all of the there’s all all of the the things that they did so to try to avoid, like you just said, antitrust and and preemption issues. But beyond that, you know, there’s one thing that they for sure want.

which is to sort of be able to say that like we represent this entire population of people who they then and by they I mean unions, like are you know, there there are are fees and that you know they get that get paid. And so and unlike the National Labor Relations Act, the federal law, the number of people that have to sort of say I wish to be part of this association is is far, far from a majority.

What maybe just kind of quickly run us through that?

Alex MacDonald (35:56.802)
Yeah, it they set very low thresholds. and I like when I first saw this thing, I remember the first comment I made to somebody after reading it was like, Well, this thing is a glide path. the union doesn’t even have to raise a finger. because let’s talk about what that means, okay? So baseline, under federal law, you have to get at least thirty percent of the employees in a unit to sign on and say they want your representation, you in this sentence being the union, if you wanna even trigger an election.

to file that petition you need a quote unquote showing of interest and that’s gotta be thirty percent. usually Yes, the all the employees to be represented, right, in that unit. you gotta get those signatures to even start the process. And then once you have the election you have to get fifty percent plus one to win. Now those are votes actually cast, so it’s not always fifty percent of the people who are gonna be represented, but everybody’s got a chance to vote, right? If you wanna show up, you can vote. that’s not true in Massachusetts.

Phil Wilson (36:31.884)
Of all the employees that you wish to represent. Yeah.

Alex MacDonald (36:56.323)
so let’s just break apart how the Massachusetts statute work and frankly we you can copy and paste this on to California because they follow the same model. so you’ve got five percent, they say, of quote unquote active drivers. The union has to go out and get five percent of quote unquote active drivers, I’m emphasizing that for a reason, so that they can get contact information. They get they have a statutory right to contact information of all the drivers, once they get that five percent. then they need to get ten percent.

of active drivers. At 10%, the union can trigger an election. At which point, you know, they can win with 50% plus one of the votes actually cast. And if you have a really low turnout election, that could be a very small percentage of the the drivers. Because frankly, I mean look, many rideshare drivers use the platform casually. These are not people who use it full time. You know, they pick up a ride between other obligations.

they might, you be a retiree who takes it a couple of times. They might be a student. they might be somebody with you know, mobility issues who can only work at certain times of the day. The population is really diverse, but you know, the majority, the vast majority of folks who do that kind of work are not full time, so they may not be paying full time attention, right?

Phil Wilson (38:09.644)
My favorite Uber driver story ever, I always chat up the Uber driver whenever I’m in an Uber. I was in California and I’m going back from this client to the airport and I’m like, hey, how do you like driving for Uber? I love it. And so he starts telling me about himself. He’s the mayor of this town. And he and and so he lives out by the airport. So every day on his way home, he will

Alex MacDonald (38:29.291)
Ha ha ha.

Phil Wilson (38:38.09)
open up the app and he will drive somebody to the airport basically to like pay his gas on his on his on his way home.

Alex MacDonald (38:47.693)
That’s great. That’s great. But I mean that’s exactly what I’m talking about. Do you think that guy is really focused on, you know, he might get an email that says there’s gonna be an election on, you know, two Tuesdays from now? I I’m skeptical of that, right? There’s gonna be a big big turnout. but we don’t actually know what the turnout would be because even though the union has now been certified in Massachusetts, there was no election. And there was no election because the law says that once the union gets twenty five percent of active drivers, it can just apply for certification.

Phil Wilson (39:01.11)
Yeah, agreed.

Alex MacDonald (39:16.995)
In which case now it’s the union. So you’ve got a quarter of folks of qu a quarter of active drivers deciding. Yeah, so I’ve said this a couple of times. What is an active driver? An active driver is a driver who has completed more than the median number of rides in the last six months. Think about what that means. It means we’re we’re drawing a line in the middle. Everybody below that threshold is not an active driver. It’s only the people above that count.

Phil Wilson (39:23.33)
Yeah, begs the question, what’s an active driver?

Alex MacDonald (39:45.476)
For all of the things I’ve been describing. They’re the only people who have a right to vote. So only half actually even get counted for these purposes. So that 5% is actually 2.5%. That 10% is actually 5%. That 25% is actually 12.5%. The other half don’t get to vote. But here’s the kicker. Once the union becomes the representative, it doesn’t just represent active drivers. It represents all drivers. So if you’re in that bottom percentage, you have literally no voice.

you never get a say. So if you are the in the the fifty one percent quartile, right, just below the cutoff, sorry, you might get a union, you might not, it’s up to everybody else. that’s really different from the way the federal system works. and it’s it’s you know, one of the the less publicized aspects of this law, but it’s also one of the ones that’s the biggest change from the way we’ve done labor law in in throughout history.

Phil Wilson (40:39.394)
Yeah. And weirdly enough, it was drafted by unions. So that might explain sort of how this structure came into place in the first place.

Alex MacDonald (40:51.379)
I’m I may date date myself, but every time you know I hear that I think of the scene in Blazing Saddles where they walk in and they say to the mayor, there’s gambling in this establishment. I cannot believe there’s gambling. They You’re y Sir, you’re winning, right? Like I’m I’m shocked that the unions were the ones who wrote this law.

Phil Wilson (41:05.46)
Yeah right. So so so there there’s been these successes in in gig work and you know and they’re and they’re definitely gonna you know, it’s not just Uber and Lyft, right? It’s gonna be you know, it’s gonna be DoorDash and and you know and then and then it’ll be any app based you know, they’re they’re not going to stop with with the the

the gig drivers. And I think this is a good sort of segue into this sort of broader proposal to do sectoral bargaining in in all sectors. So maybe talk a little bit about you know, all good ideas come out of Harvard. So like what what is this Harvard Harvard plan for changing labor law?

Alex MacDonald (41:56.376)
Yeah. I mean it’s it’s exactly as you say, right? I mean so the and even the folks who wrote these rideshare laws, the SEIU which’s been behind a lot of them,

They say, you know, this is not something they’re trying to hide. You know, they say the quiet part out loud, that this is a test case, they see sectoral solutions as the future of labor law. And so they’re just you know they’re moving piecemeal, right? And this is not where it’s gonna stop. They don’t think of this as a rise share specific solution. And this Harvard proposal really puts that out there. so what this is, is it it’s model legislation that was worked up by the Harvard Center for a Just Economy or Labor and Adjust Economy, something along those lines. It’s a mouthful. It’s it’s really a little

Phil Wilson (42:33.763)
Mm-hmm.

Alex MacDonald (42:35.375)
think tank that they set up at Harvard. It’s you know, run by some look some very smart people. Ben Sachs is in

Phil Wilson (42:39.97)
Very smart people.

Alex MacDonald (42:41.523)
yeah, you know, there’s some really you know, experienced, deep labor law thinkers who have come up behind this. So it’s like I don’t say anything I’m about to say to be pejorative of the people who came up with this. They’re very smart. The proposal’s insane. so you walk through it and so it’s another industry level proposal where you were overlaying sectoral bargaining across not just rideshare now. Now we’re talking about really in the industry. it’s a sort of a modular structure where we can

Apply this anywhere. Theoretically, it wouldn’t work in an industry. I say theoretically it shouldn’t, speaking as a labor lawyer, in an industry that’s covered by the NLRA. But let’s say today somebody wanted to adopt this for home care workers who are not covered by the NLRA, or wanted to adopt it for agricultural workers who are not covered by the NLRA. That’s ostensibly where they’re leading, right? They say, well, this could apply in places where the NLRA doesn’t apply. It has these, and I I actually want to put a pin in that because I don’t actually think it stops.

stops there. But we’ll just we’ll just take that that ex explanation for what it is. It is another one that sets extremely low thresholds to sort of glide path the union into representation. And these thresholds are actually lower, believe it or not, than the ones that we see in the rideshare laws. How this starts. So the union has to get 200 signatures for to get a petition that it can file with the state state board that set up a new regulator. And that petition

This is regardless, mind you, of how big the industry is. So let’s say we’ve got an industry with two million people in it. I can trigger this petition requirement with 200 signatures. This doesn’t go up or down. It can be measured by a percentage, but it’s whichever is lower. So we’re just going to assume 200 is lower because that’s pretty low. Now I can petition, I get contact information for everybody in the industry, all the covered workers. Everybody’s got to give me email addresses and phone numbers, et cetera, so that I can reach out to individuals. So now we’re already triggered.

These privacy concerns which have been raised with the rideshare laws. At that point, I engage in some degree of organizing. I make some phone calls, I send some emails, I create a Facebook page. And then once I get a thousand, one thousand, one zero zero zero signatures, regardless of the size of the industry, I can apply to be certified as a bargaining representative, the bargaining representative in this industry.

Alex MacDonald (45:10.843)
Nobody else steps forward and challenges me and says, well, hey, hey, wait on a second, I also want to be the representative. Then I become the representative on a thousand signatures. And let’s say I’m exaggerating a little bit, but not really, because it does work this way. If there are two million workers in the industry, I can be certified to represent all of them with a thousand signatures. So kind of wild. And at that point it works a lot like the rideshare bills do. One union, the certified union, negotiates with all the companies. We come up with this agreement.

is sent to the board, the board stamps with approval, adopts it as a regulation. It’s in place for like four to five years. and there’s a lot of other stuff in this bill. It’s a

Phil Wilson (45:47.416)
Yeah. Well and then and and then it’s it’s got like you know it’s got the you know the light version and the you know heavy version where the heavy version is that group can impose a contract, which is you know, Faster Labor Contracts Act.

Alex MacDonald (46:01.249)
Yeah.

Yeah, yeah. so the in in the heavy version that you’re talking about, this board that we’re setting up, if let’s say that we we have a union certified, tries to negotiate, and very likely that’s gonna be a difficult negotiation because now you’re talking about every every employer in the industry has to sit down with this union. The same terms are not gonna work for everybody in this industry. They’re not all gonna agree on what a fair contract is. so now say we negotiate for months and months and months, they can say, Well, we tried really

hard but we couldn’t get an agreement. Hey you board tell us what the what the contract’s gonna be. And the board can do that in this heavy version. So it’s it’s not even pretending to be a contract. It’s just it’s just a regulation what the board thinks is fair. so I don’t know. I mean probably people are thinking this is you know crazy, this will never pass, except now that we’ve seen it pass in two states. and it I I say two states, but Illinois just passed its own. So we’ve got three. And

Phil Wilson (47:00.331)
Yeah. Yeah. Yeah. And they’ll and they’ll and they’ll they’ll just jump right from rideshare to this, right? Like that like this is a this is this is like the logical next step. And you already brought this up, but I think it’s worth putting a pin in the you know, it’s not just independent contractors or people that the NLRB has specifically said we don’t cover.

Alex MacDonald (47:04.011)
Yeah.

Phil Wilson (47:25.823)
It’s also like they have these trigger laws, right? So like so if let’s just say hypothetically, yeah, the board doesn’t have a quorum for two years, like they are saying that also is a trigger for these sectoral laws. So they’re it it’s it it’s it’s much, much, much broader than just particular industries that the NLRA doesn’t cover.

Alex MacDonald (47:50.136)
Yeah. And the we could actually spend an entire episode just on that point ’cause it’s so important. but the one other thing I’ll flag for folks.

Again, I mentioned there’s some really you know, this this thing is a serious proposal. There’s some really important people attached to it. Jennifer Arusa is a is a co signer on this thing. I don’t know how much shit on Yep, Sharon Bloch. you know, some some inf influential people, but it’s not just about non co it’s not even just about losing a quorum, right, or being a trigger. because Sent but Ben Sachs, who’s also involved in this effort, he’s he’s written a lot of stuff about it’s a really recondite piece of the the law, section fourteen C two

Phil Wilson (48:03.585)
Yeah. Sharing block.

Phil Wilson (48:19.649)
Yeah, and so yeah.

Alex MacDonald (48:27.503)
of the law, of the National Labor Relations Act. essentially what that that piece says is that the board sometimes is allowed to decline its own jurisdiction. It can say, yeah, I don’t it doesn’t make sense for us to step in here, we’re gonna step back. and it can do that when it decides. And remember this was originally written with like really small businesses in mind, really small industries like horse racing and horse tracks, right? that just didn’t have a lot of spillover across state lines. and that just to frame that up, the

The NLRA was passed as a labor peace statute, right? The idea was we were trying to prevent labor disruptions across state lines from interfering with interstate commerce. there’s a commerce clause law. and so the the the law allows the board to decline in a situation where it looks at a an industry and says, I don’t think this affects interstate commerce, so we’re not gonna do anything. And what Congress said in 14C was, well, we’re not intending to create a regulatory donut hole here.

Phil Wilson (49:17.377)
Mm-hmm.

Alex MacDonald (49:24.565)
So if the board declines jurisdiction because it doesn’t see that effect on interstate commerce, then a state can step in. And Sachs’s theory is that if a state goes out and passes one of these laws, one of these sectoral laws, the board can then now we’ve got a friendly board. Let’s say the administration changes over, you have some different thinkers who come in and they’re occupying the board. They can look at this state law and say, huh, well this state law is so good. It’s so well thought out.

Phil Wilson (49:52.225)
Yeah.

Alex MacDonald (49:54.19)
That if we decline jurisdiction, there’s gonna be no effect on interstate commerce because the state law covers everything. This is great. So we’re declining jurisdiction because we think there’s gonna be no effect on interstate commerce. Boom, now you have sectoral bargaining in an industry that is ostensibly covered by the NLRA. that’s where this is going. that’s

Phil Wilson (50:15.041)
And they could theoretically say they could theoretically say we think California’s got this handled. We’re just not going to assert jurisdiction in California. And then all the businesses in California get sectoral bargaining. Yeah. Well, yeah. Alex, we could our normal episodes are like thirty minutes. I’m I’m I can’t read the clock here, but we’re we’re definitely past that. and I think we could do this all day long.

Alex MacDonald (50:24.3)
Mm-hmm. That’s right.

Alex MacDonald (50:28.921)
Correct. That’s the long term plan.

Phil Wilson (50:44.373)
So you’ve already mentioned a couple of future episodes, so we’ll definitely have to have you have you back on. I I’d like to maybe end where we started with WPI. maybe maybe just you know, how do people contact you? if they’re interested in WPI, where do they where do they where do they find you? Just kind of we’ll we’ll end there.

Alex MacDonald (51:05.599)
easiest way is to go to littler dot com, look for WPI. You can sign up for a newsletter. We put out one every week. It’s the WPI policy pulse. you can get all of the the latest policy developments in the labor and employment world right there just packaged neatly for you in little tiny paragraphs. we’re not we’re not competing with you Phil. you’ve got your own great newsletter, but that’s the easiest way to get in contact with us. also if you just email me my page is on the on the firm’s website, I can link you up and get you signed up, you know.

We’re always trying to get the word out, so it we’re easy to find.

Phil Wilson (51:39.649)
You’re a great follow on LinkedIn. So if you aren’t already connected to Alex, I would encourage you to to do that as well. Super you know great content, very, very sharp analysis. And I really appreciate the opportunity to get to talk about this really important subject of you know how states are kind of jumping into what should be federal law. so thanks thanks again for joining us. I really appreciate having you on the show.

Alex MacDonald (52:07.905)
No, of course, and thanks for having me. This was great. A lot of fun.