{"id":117561,"date":"2025-03-07T10:08:23","date_gmt":"2025-03-07T10:08:23","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/legal\/mandatory-captive-rules-in-limbo-for-california-employers-2-federal-lawsuits-challenge-sb-399-and-looming-issue-before-the-nlrb\/"},"modified":"2025-03-07T10:08:23","modified_gmt":"2025-03-07T10:08:23","slug":"mandatory-captive-rules-in-limbo-for-california-employers-2-federal-lawsuits-challenge-sb-399-and-looming-issue-before-the-nlrb","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=117561","title":{"rendered":"Mandatory Captive Rules in Limbo for California Employers \u2013 2 Federal Lawsuits Challenge SB 399 and Looming Issue Before the NLRB"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<p>As discussed in our <a href=\"https:\/\/www.laboremploymentlawblog.com\/2024\/10\/articles\/nlrb\/mandatory-captive-audience-meetings-are-banned-in-california-in-2025\/\">recent article<\/a>, the introduction of SB 399 in California (approved and added as <a href=\"https:\/\/leginfo.legislature.ca.gov\/faces\/codes_displayText.xhtml?lawCode=LAB&amp;division=2.&amp;title=&amp;part=3.&amp;chapter=9.&amp;article=\">California Labor Code section 1137<\/a>) sparked significant discussion and concern among California employers with union employees. The legislation, which became effective January 1, 2025, restricts so-called \u201ccaptive audience meetings\u201d 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.<\/p>\n<p><span id=\"more-6832\"><\/span><\/p>\n<p>In response to SB 399, the California Chamber of Commerce and the California Restaurant Association filed a <a href=\"https:\/\/htv-prod-media.s3.amazonaws.com\/files\/sb-399-suit-6776d9ca9258a.pdf\">federal lawsuit<\/a> in the United States District Court for the Eastern District of California on December 31, 2024 (the \u201cLawsuit\u201d). The Lawsuit challenges the constitutionality of SB 399, arguing it infringes on employers\u2019 free speech rights and is otherwise preempted by the National Labor Relations Act (\u201cNLRA\u201d). On February 11, 2025, the Liberty Justice Center and California Justice Center filed a second federal lawsuit in the same court, raising similar constitutional arguments (\u201cSecond Lawsuit\u201d and collectively \u201cthe Lawsuits\u201d). The Lawsuits seek to enjoin SB 399 and restore employer free speech rights across the state of California.<\/p>\n<p>Relatedly, on February 14, 2025, the Acting General Counsel of the National Labor Relations Board (\u201cNLRB\u201d) William B. Cowen issued his first General Counsel Memorandum (\u201cGC Memo\u201d) <a href=\"https:\/\/www.laboremploymentlawblog.com\/wp-content\/uploads\/sites\/50\/2025\/03\/Rescission-of-Certain-General-Counsel-Memoranda-3.pdf\">GC 25-05<\/a>, rescinding multiple policies issued by the previous NLRB General Counsel. Among others, the GC Memo rescinded prior federal guidance concerning the right to refrain from captive audience and other mandatory meetings under the NLRA, <a href=\"https:\/\/www.laboremploymentlawblog.com\/wp-content\/uploads\/sites\/50\/2025\/03\/The-Right-to-Refrain-from-Captive-Audience-and-other-Mandatory-Meetings-1.pdf\">GC 22-04<\/a>.\u00a0<\/p>\n<p><strong>The California Worker Freedom from Employer Intimidation Act<\/strong><\/p>\n<p>SB 399, or the California Worker Freedom from Employer Intimidation Act (the \u201cCalifornia Act\u201d), 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 California 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.<\/p>\n<p>The California Act follows a larger trend among several states that have enacted similar captive audience bans.<\/p>\n<p><strong>The Constitutional Challenge to the California Act<\/strong><\/p>\n<p>The Lawsuits in the Eastern District of California challenge the California Act on essentially two grounds. <span style=\"text-decoration: underline\">First<\/span>, the Lawsuits argue the California Act violates the First and Fourteenth Amendments of the United States Constitution. <span style=\"text-decoration: underline\">Second<\/span>, the Lawsuits argue the California Act is preempted by the NLRA.<\/p>\n<p>The Lawsuits contend the California Act unfairly targets employers\u2019 viewpoints on political matters by regulating the content of their communications and suppressing their ability to speak freely, in violation of the First and Fourteenth Amendments. Specifically, by restricting speech on \u201cmatters 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,\u201d the Lawsuits argue that the California Act is overbroad and constitutes unconstitutional content-based discrimination aimed at chilling employers\u2019 speech. The Lawsuits also claim the California Act will potentially leave workers without a full understanding of the implications of unionization.&nbsp;<\/p>\n<p>Additionally, the Lawsuits argue the California Act is preempted by the NLRA, as the NLRA already provides a comprehensive framework for labor relations. Specifically, the Lawsuits argue that the California Act conflicts with and intrudes on an area that the federal government has decided to exclusively regulate, as evidenced by NLRA Section 8(c), which protects employers\u2019 rights to express views on unionization, provided there are no threats or promises of benefits.<\/p>\n<p>The Lawsuits ask for a temporary and permanent injunction blocking enforcement of the California Act.<\/p>\n<p><strong>Federal Law &#8211; The Looming NLRA Issue Under the NLRB<\/strong><\/p>\n<p>On November 13, 2024, the NLRB overturned decades of precedent by finding that requiring employees \u201cto attend a meeting at which the employer expresses its views on unionization\u201d violates the NLRA. That NLRB ruling was appealed and is pending before the United States Court of Appeals for the Eleventh Circuit.<\/p>\n<p>This NLRB ruling and its applicability to state-sponsored \u201ccaptive audience\u201d meeting ban laws, including the California Act, may be short-lived once the five-member NLRB regains a Republican majority. However, the NLRB currently lacks a quorum after Trump fired former NLRB Member, Gwynne Wilcox, leaving the NLRB with one Democrat, one Republican, and three vacancies. The termination of former Member Wilcox is currently being litigated.<\/p>\n<p>In addition, on February 14, 2024, the new Acting General Counsel of the NLRB signaled a new policy direction for federal labor law under the Trump administration by issuing GC Memo 25-05, rescinding over a dozen policies endorsed by previous leadership, including GC Memo 22-04 concerning captive audience meetings. (We discussed GC Memo 25-05 <a href=\"https:\/\/www.laboremploymentlawblog.com\/2025\/02\/articles\/national-labor-relations-act\/acting-general-counsel-of-nlrb-issues-first-gc-memorandum-rescinding-controversial-pro-labor-memoranda\/\">here<\/a>.) While GC memos are not binding law, they act to inform Regional NLRB offices of the General Counsel\u2019s priorities in enforcing the NLRA. Significantly, GC Memo 25-05 does not reverse the current application of the NLRB\u2019s November 13, 2024 decision concerning captive audience meetings, but it does indicate a new NLRB may view the current rule of federal labor law differently.&nbsp;<\/p>\n<p><strong>Key Takeaways for California Employers<\/strong><\/p>\n<p>The outcome of the Lawsuits are uncertain and the NLRB is in a state of flux. California employers should reassess meeting policies and practices and develop an approach that makes sense for their individual business and risk profile given the current state and federal law considerations. California employers should monitor developments in this area, and companies with questions concerning SB 399 should contact experienced labor counsel.<\/p>\n\n","protected":false},"excerpt":{"rendered":"<p>As 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 \u201ccaptive audience meetings\u201d by prohibiting employers from discharging or disciplining employees for [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":117562,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[97],"tags":[531,27113,4027,13856,11558,15294,25801,52123,43081,33565,30655,11149],"dealstore":[],"offerexpiration":[],"class_list":["post-117561","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legal","tag-california","tag-captive","tag-challenge","tag-employers","tag-federal","tag-issue","tag-lawsuits","tag-limbo","tag-looming","tag-mandatory","tag-nlrb","tag-rules"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Mandatory Captive Rules in Limbo for California Employers \u2013 2 Federal Lawsuits Challenge SB 399 and Looming Issue Before the NLRB - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=117561\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Mandatory Captive Rules in Limbo for California Employers \u2013 2 Federal Lawsuits Challenge SB 399 and Looming Issue Before the NLRB - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"As 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. 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