Can Government Single a Business Out for Special Legal Burdens?

Date: February 22, 2016 Last Edit: February 23, 2016

We previously pronounced victory for small business in Gerawan v. Agricultural Labor Relations Board. In that case a California court of appeal struck-down controversial amendments to California’s Agricultural Labor Relations Act (ALRA). The Amendments authorized a state agency to force targeted businesses to enter collective bargaining agreements. But, not surprisingly, the California Supreme Court has granted review.

We still maintain that the Constitution flatly forbids government from forcing non-consenting parties to enter into a contract against their will. To be sure, there is Supreme Court precedent directly on point. But of course, the unions and the State of California maintain that this precedent is no longer good law.

In any event, the California Supreme Court will not squarely address that question, at this time, because that was not the ground on which the lower court struck-down the Mandatory Mediation and Conciliation provisions of the ALRA. Instead, the California Supreme Court is set to determine whether the lower court was correct in holding that the statute violates the Equal Protection Clause of the U.S. Constitution and the Nondelegation Doctrine under California law. We defend the lower court decision on both points.

Luke Wake, Senior staff attorney for the NFIB Small Business Legal Center in Sacramento, explains the issues in more detail in a recent post on the official blog for the California Supreme Court here. But for those who would prefer the cliff-notes version, it is simple enough to say that government cannot single a business out for unique legal burdens without some special justification. If government wants to impose legal obligations on business, it must do so through general legislation applicable to an entire class of businesses. And for that matter, it’s unconstitutional for a state to confer broad authority on a state agency, or a private entity, to impose legally binding rules on businesses without some discernable guiding principle because only the Legislature can make law.

Check out Wake’s commentary on Gerawan here.

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