certainly inhibits the free play of economic forces by restricting an employer's freedom to make hiring decisions, but it is not clear whether this inhibition on free enterprise alone would be adequate to justify NLRA preemption.
Regardless of whether the DWPA's effect on free enterprise would raise preemption concerns, its collateral impact on collective bargaining so significantly alters the balance of power between labor and management that this Court must find that the DWPA is preempted by the NLRA. Machinists, 427 U.S. at 149-151. Unlike the statutes in Fort Halifax Packing Co. and Metropolitan Life Insurance Co., the DWPA does not simply set a minimum labor standard. Instead, it creates a system that impermissibly intrude[s] upon the collective bargaining process." Fort Halifax Packing Co., 482 U.S. at 23. By requiring employers to retain their predecessors' employees, the DWPA attempts to mandate that employers become "successors" for NLRA purposes. This serves to impose upon employers a duty to bargain that would not necessarily arise in the free market. The DWPA's effect will become even greater in some situations because the duty to bargain will arise immediately, precluding an employer from even setting the initial terms and conditions of employment. Such effects interfere significantly with the traditional collective bargaining positions of labor and management.
These collateral effects of the DWPA are not merely speculative. At least one of the plaintiffs has already received a demand from the SEIU seeking to bargain over initial terms and conditions of employment.
See Second Affidavit of Richard Thompson at P 2 and Attachments. P&R Enterprises, Inc. was awarded a contract to clean a building in May, 1994. Id. In a letter dated May 23, 1994, Jay Hessey, Executive Director of Local 82 of the SEIU, indicated that the workers at the building were represented by the union. Id. The letter further requested that P&R begin bargaining over the initial terms and conditions of employment. Id.19 As discussed supra, no duty to bargain ordinarily arises unless a majority of the employees of a successor employer were employees of the predecessor employer. Fall River, 482 U.S. at 41. Absent the DWPA, there is no question that there would be no duty to bargain with the union merely because P&R was awarded the contract. The DWPA alters this scenario by requiring contractors such as P&R to retain workers whom they may not wish to hire and triggering a duty to bargain with the union that represents these workers.
This hiring requirement and its role in triggering the duty to bargain serves to upset the balance of power between labor and management. The DWPA upsets this balance by placing nonunion companies in positions where they will be required to recognize unions when they take over contracts from predecessors with unionized workforces. This puts employers in a worse position than they would be in the free market as envisioned by the NLRA. It also serves to put unions in a better position by relieving them of the time and expense ordinarily related to seeking recognition and bargaining rights. Once a union gains a foothold in a particular site, the DWPA effectively serves to keep that site unionized, regardless of what company takes over the contract at that site. This is not consistent with the NLRA.
The DWPA does not interfere in collective bargaining relationships every time it applies. Its improper effect is limited to situations where a contractor takes over a contract at a site where the employees were previously organized and represented by a union. Nevertheless, the long-term effect of the DWPA's hiring requirements would be to entrench unions at particular sites. Under the law prior to the passage of the DWPA, a bargaining obligation would only arise if a new employer made "a conscious decision to maintain generally the same business and to hire a majority of its employees from the predecessor." Id. Under the DWPA, employers' hiring choices are no longer conscious decisions. The duty to bargain becomes a matter of course when a contractor takes over a new site. Such a result provides substantial additional power to labor unions.
Thus, in passing the DWPA, the District of Columbia "has put its thumb on the balance scale between management and labor in a private industry, which a local government may not do." Alameda Newspapers, Inc. v. City of Oakland, 1994 U.S. Dist. LEXIS 5960, at *16, No. C-93-3500-CAL, (N.D. Cal. April 29, 1994) (municipal resolution endorsing boycott of newspaper until labor dispute resolved preempted under Machinists).
Accordingly, the Court finds that the DWPA is preempted by the NLRA,
There being no genuine issue of material fact, the plaintiffs are thus entitled to summary judgment pursuant Fed. R. Civ. P. 56.
In attempting to require that contractors retain certain supervisors, the DWPA directly conflicts with § 14(a) of the NLRA. Additionally, the retention provisions of the DWPA are an unprecedented incursion into an area that was previously unregulated. In entering this area, the District's City Council has, whether consciously or not, upset the delicate balance between labor and management that is governed by the NLRA. Because the DWPA attempts to regulate an area that Congress has left unregulated and does so in a way that upsets the traditional balance of power in labor relations, the DWPA is preempted by the NLRA. Accordingly, the Court will grant summary judgment for the plaintiffs, deny the defendants' motion to dismiss, and deny the intervenors' motion for summary judgment. The Court will enter a declaratory judgment stating that the DWPA is unenforceable because it is preempted by the NLRA and permanently enjoin the defendants from enforcing the DWPA.
July 8th, 1994
Thomas F. Hogan
United States District Judge
For the reasons expressed in the Court's Memorandum Opinion, it is this July, 1994, hereby
ORDERED that the plaintiffs' motion for summary judgment is GRANTED and the defendants' motion to dismiss and the intervenors' motion for summary judgment are DENIED; and it is further
ORDERED that the Displaced Workers Protection Act of 1994, D.C. Code §§ 36-1501 et seq., is declared to be preempted by the National Labor Relations Act, 29 U.S.C. §§ 151 et seq., and therefore invalid and unenforceable; and it is further
ORDERED that the defendants, their officers, agents, employees, attorneys, and all other persons in active participation with them are permanently enjoined from enforcing the Displaced Workers Protection Act of 1994; and it is further
ORDERED that this case is DISMISSED.
Thomas F. Hogan
United States District Judge