The Fresno Business Journal ran a great editorial last week from NFIB’s Small Business Legal Center’s Executive Director, Karen Harned, on a hot-button issue that’s gotten a lot of attention lately. The case comes out of California’s Central Valley—America’s breadbasket. At issue is a controversial regime that literally forces business owners to enter collective bargaining agreements with union operatives.
Gerawan Farming is a long-running family owned business that built its success through innovative farming practices, by maintaining strong employer-employee relations, and by attracting motivated employees with generous compensation arrangements—well in excess of the state mandated minimum wage. But Gerawan Farming is now in a protracted legal battle with a union—United Farm Workers of America (UFW)—which is trying to force the company into a collective bargaining agreement that would require the company to change its business practices. Among other things the contested agreement would require the company to raise its rate of pay even higher, and would set working conditions above and beyond what is required by state law.
When Gerawan Farming refused to enter an agreement with UFW—on the legitimate ground that the proposed contract was not in the company’s best interest—the Union asked the State of California to force the parties into an agreement. And pursuant to California’s Agricultural Labor Relations Act, the State has authority to do just that: i.e. to compel a non-consenting business to enter a collective bargaining agreement. Accordingly, UFW got its way. The California Agricultural Labor Relations Board issued an order forcing the parties into “mandatory interest arbitration,” which culminated in a binding agreement—i.e. a compelled contract.
This might sound crazy on first blush because an “agreement” implies that the parties agree to the terms of a contract. In fact, by definition a contract requires a “meeting of the minds.” So there is something bizarre about the notion that government would seek to compel non-consenting parties into an “agreement.” And, as we argued in our amicus brief to the California Court of Appeal, government cannot compel a meeting of the minds without violating the First Amendment.
For one it would be downright Orwellian for government to seek to literally compel a “meeting of the minds.” And further, businesses have a First Amendment right to oppose unionization. This entails a right to refuse to ascend to an objectionable contract with a union because assent is by its nature a communicative act—i.e. an endorsement of something the company does not wish to endorse. Moreover, forcing a company into a contract with a union violates First Amendment protections guarantying freedom of association.
So as we argue, it really doesn’t make sense to say that California forced the parties into an agreement in this case. Gerawan Farming never agreed to anything. To the contrary, the company is fighting a legal battle for its right to reject government imposed directives.
We argue that in forcing a “collective bargaining agreement” upon Gerawan Farming, the State has simply imposed individualized rules governing how the company must run its operations. Under the State’s order, Gerawan must pay its employees more than the generally applicable statewide minimum wage, and the company must abide by special requirements governing working conditions. In other words, the company has been targeted for special regulatory burdens for no reason other than that UFW has asked for special regulations to be imposed. But this violates the Equal Protection Clause of the Fourteenth Amendment.
The Equal Protection Clause protects business owners from targeted regulatory impositions unless government has a rational basis for singling a business out. And the mere fact that a self-interested labor union has asked for special regulations is not a good enough reason. Simply put, compelled collective bargaining agreements are flat-out unconstitutional. Once again, NFIB is on the front lines – and literally court-side – fighting for your small business.