Federal Court (Mostly) Blocks California’s Push into Labor Law

Last week, a U.S. district court blocked California from enforcing most of its expansive new labor law, AB 288. Had it taken effect, AB 288 would have allowed a state agency, the Public Employment Relations Board (PERB), to process cases previously handled by the National Labor Relations Board (NLRB). The NLRB sued on preemption grounds to protect its own authority, and the district court largely agreed that AB 288 was preempted by federal law. The court however, left some parts of AB 288 in place. The mixed ruling potentially sets up appeals from both sides. But in the meantime, labor law in California returns (mostly) to the status quo.

Why did California enact AB 288?

California enacted AB 288 against a backdrop of turmoil at the NLRB. In 2024, the NLRB came under fire in a series of lawsuits challenging its structure. These lawsuits argued that the NLRB’s members and/or its administrative law judges were improperly protected from removal by the president. By statute, neither the judges nor the members can be removed except for cause. The challengers argued that those removal protections interfered with the president’s ability to manage the executive branch. The results in court were mixed. Some courts found that private parties could not raise these arguments because the parties could not show they had been harmed by the removal protections. But in August, the U.S. Court of Appeals for the Fifth Circuit agreed with the challengers in one case and enjoined the NLRB. 

As these challenges proceeded, the NLRB also lost its statutory quorum. By law, the NLRB can act only when it has a quorum of at least three members. But in January, President Trump fired one member, Gwynn Wilcox, dropping the NLRB to two members. (That firing was later upheld by the D.C. Circuit.) In August, then-Member Marvin Kaplan’s term expired, dropping the NLRB to one member. 

AB 288 ostensibly responded to these developments. The law’s authors asserted that the NLRB had lost its “independence.” Independence, they said, was central to the NLRB’s mission and to Congress’s intended system of national labor law. They argued that without it, the NLRB could not protect employees’ rights to form unions, join them, or bargain collectively, leaving the state to fill the void.

What did AB 288 do?

AB 288 transferred authority to the PERB. It allowed the PERB to exercise jurisdiction over an employee or employer in six circumstances: (1) when a worker who was previously covered by federal labor law loses coverage; (2) when the NLRB expressly declines to exercise jurisdiction; (3) when the NLRB loses a quorum, (4) when the NLRB loses independence; (5) when the NLRB is enjoined from processing a case; and (6) when the NLRB unduly delayed in processing a case. In those circumstances, AB 288 allowed the PERB to take up the case. If the PERB took up such a case, it did not have to follow the NLRB’s procedures or doctrines. Instead, it could follow its own view of the law. 

Predictably, the NLRB objected to that change and sued to block the law. The NLRB argued that under longstanding case law, it had exclusive authority to process union-representation petitions and unfair labor practice charges. It also had a well-established duty to develop labor policy in the first instance. By giving that authority to a state agency, California was interfering with the NLRB’s ability to carry out its mission. It therefore asked the court to enjoin California from enforcing the law. 

What did the court hold?

The court mostly agreed with the NLRB. It recognized that under longstanding judicial precedent, the NLRB has exclusive authority to supervise union elections and to police unfair labor practices. That authority, the court explained, does not evaporate whenever the NLRB loses a quorum. To the contrary, Congress knew that the quorum requirement would sometimes prevent the NLRB from carrying out certain functions, but nevertheless made the NLRB’s authority exclusive. In other words, the loss of a quorum was part of Congress’s original statutory design.

Similarly, the NLRB did not lose its exclusivity whenever it took too long to process a case. Federal law, the court found, sets no deadline for the NLRB to act on a case. Instead, it leaves any deadlines up to the NLRB itself. California could not contradict that choice simply because it thought the NLRB was acting too slowly.

Nor, the court said, could California take over the NLRB’s responsibilities just because it thought the NLRB was no longer independent. The court disagreed with the premise that the NLRB was no longer independent because the NLRB’s members could be removed by the president. Further, the court saw nothing in the statute or the case law to suggest that the NLRB’s exclusive authority depended on its members’ removal protections. The state could not transfer authority to the PERB based on its own view of independence. 

The court did, however, agree with the state on some points. It agreed that the state could step in when the NLRB expressly declined jurisdiction; federal law itself says the state can do that much. The court also agreed that the state could exercise jurisdiction over workers who lost federal coverage. If a worker loses coverage, the court reasoned, there is no conflict with the NLRB’s jurisdiction; the worker sits in a legal vacuum, and the state is free to fill that vacuum with its own law. Finally, the court agreed that the state could step in when the NLRB is enjoined from processing a case. In that scenario, the NLRB is legally blocked from exercising its own authority, so there is no risk of conflict if the state steps in. 

What happens next?

Both sides could appeal. In the meantime, the law in California will return mostly to the status quo prior to AB 288. The court’s order blocks the most aggressive parts of AB 288 and while the court left the state free to act in some cases, none of those cases is present in California today. The NLRB has not expressly declined jurisdiction over the state’s workers, the workers have not lost coverage under federal law, and no court has enjoined the NLRB from processing cases in the Golden State. So while the court’s order left the state with some leeway, that leeway is (for now) academic. Moreover, the NLRB’s quorum will imminently return with the swearing in of new members Scott Meyer and James Murphy.

Similarly, last month a different federal district court blocked New York’s analogous law. For now, employers should understand that the labor-law landscape remains mostly unchanged. While some states are pushing to expand local authority over labor relations, those expansions have been largely blocked. Labor law remains (mostly) a matter of federal concern.