By Tim Ryan

Law360 (April 19, 2021, 7:53 PM EDT ) Federal labor law does not prevent the city of Long Beach, California, from requiring certain grocery stores to pay a hazard pay premium during the COVID-19 pandemic, a food workers' union has told the Ninth Circuit, defending the ordinance against a grocers association's challenge.

The filing United Food and Commercial Workers Union Local 324 filed on Friday urged the Ninth Circuit to keep in place a lower-court ruling that denied the California Grocers Association's request for an injunction against the ordinance, which temporarily requires certain grocery stores in the city to pay workers a $4-per-hour pandemic premium. The union argued the rule is not preempted by federal labor law because it is merely a background requirement against which employers and unions must negotiate, not an interference with the collective bargaining process.

"Federal labor law does not preempt state substantive employment standards, because those standards do not regulate the process of collective bargaining, which is the [National Labor Relation Act]'s subject," Local 324 argued.

Like other cities on the West Coast, Long Beach passed an ordinance in January requiring grocery stores that meet certain conditions to give their workers a temporary raise during the ongoing pandemic. CGA sued to block enforcement of the ordinance the day after the city enacted it and has taken similar action against other measures adopted throughout California.

A federal judge rejected CGA's request for an injunction, saying it was unlikely to succeed on its argument that the ordinance was preempted by federal labor law and violated the equal protection clauses in the U.S. and California constitutions. Local 324 has intervened in the case to defend the ordinance alongside Long Beach.

CGA argued the ordinance is preempted under a doctrine known as Machinists preemption. Drawing its name from the 1976 U.S. Supreme Court decision in International Association of Machinists and Aerospace Workers v. Wisconsin Employment Relations Commission, the doctrine says state laws that regulate collective bargaining are preempted under the NLRA.

But Local 324 said CGA's argument "misunderstands" the Machinists doctrine, which permits state and local governments to enact minimum labor standards. The union compared the ordinance to the general rule in California that workers are subject to at-will employment, calling it a background principle to collective bargaining.

The union also told the Ninth Circuit to reject CGA's argument that ongoing negotiations between one of its members and Local 324 mean the ordinance is preempted because it interferes with bargaining. The Supreme Court has considered and rejected that argument before, Local 324 argued, including in a 1987 case called Fort Halifax Packing Company v. Coyne , which upheld a severance pay statute in Maine.

In addition, Local 324 said CGA's argument against a provision in the ordinance that bars employers from reducing workers' compensation to offset the hazard pay is meritless. The union compared the requirement to other California rules that courts have upheld, including the state's prohibition on workers adjusting workers' pay for regularly scheduled hours to compensate for their overtime obligations.

Even if CGA was correct and the court found the prohibition on shifting pay was preempted, Local 324 argued that would not require the entire ordinance to fall.

Beyond preemption issues, Local 324 said CGA's constitutional arguments were meritless, as the Supreme Court has for years said that employers do not have a right to contract without regulation from governments. Accepting the association's argument, Local 324 argued, would allow companies to evade minimum-wage, overtime and other commonplace regulations by "contracting around them."

In addition, the union said CGA has failed under the standards for obtaining an injunction in federal court, in particular arguing the association was unable to show any of its members face irreparable harm from the ordinance. Local 324 said while two CGA member stores did close after the rule was enacted, they were struggling well before the ordinance and could not blame it for their demise.

Long Beach filed a brief of its own on Friday, making similar arguments about why the requirement is not preempted by the NLRA. The city also argued the ordinance is the type of law that falls within states' long recognized police powers, citing the Fort Halifax case.

Counsel for the union, city and CGA did not immediately return requests for comment. None of the parties immediately responded to requests for comment themselves.

The California Grocers Association is represented by James Sigel, Tritia Murata, Byung-Kwan Park, Robert Sandoval and William Tarantino of Morrison & Foerster LLP.

The city of Long Beach is represented by Christopher Pisano of Best Best & Krieger LLP.

Local 324 is represented by Paul More of Davis Cowell & Bowe.

The case is California Grocers Association v. City of Long Beach et al., case number 21-55174, in the U.S. Court of Appeals for the Ninth Circuit.

--Editing by Vincent Sherry. 

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