Labor Law And “Takings” Clause Collide

Monday, March 29, 2021
Agriculture
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Eyecandy Images, Thinkstock

Last week the Supreme Court heard oral argument in the highly contentious case of Cedar Point Nursery v. Hassid. The case lies at the troubled junction of labor and takings law, which operate from fundamentally different premises.

In this instance, state regulations under the California Agricultural Labor Relations Act of 1975 (CALRA) provide that “an agricultural employer’s property shall be available to any one labor organization for no more than four (4) thirty-day periods in any calendar year.” The period of access covers one hour before work, one hour after work, and one hour during lunch for employees to “meet and talk” about union representation.

In this case, however, the United Farm Workers (UFW) entered Cedar Point’s trim sheds one morning at 6 a.m. using bullhorns, during work hours, thereby disrupting the employer’s business operations. That simple action gives rise to two very different claims. The first, and more modest, claim is that the UFW engaged in an unfair labor act under CALRA by going beyond its regulation. The second is that the CALRA itself is unconstitutional. Any trespass onto the employer’s property, which the regulation explicitly authorizes, constitutes a taking of private property, Cedar Point argues, in violation of the Fifth Amendment that provides “nor shall private property be taken for public use without just compensation.”

This tension between labor and takings law first came to my attention when I was a junior at Columbia College in the spring of 1963. As part of a government class taught by Professor Hal Chase, we heard arguments before the Supreme Court. One hapless attorney observed that a union was not allowed on an employer’s property because its behavior amounted to a common law trespass. Justice William Brennan then peered down from the bench to ask, “What difference does that make?” This astonishing comment sent me on an intellectual odyssey that continues to this present day. I became instantly fascinated by the thought that a bedrock principle of ordinary life could be so easily cast aside in the highest court of the land.

Note that the common law action for trespass has a broad reach. In Entick v. Carrington, a famous 1765 case involving a search and seizure of the plaintiff’s house in England, Lord Camden wrote: “By the laws of England, every invasion of private property, be it ever so minute, is a trespass. No man can set his foot upon my ground without my license, but he is liable to an action, though the damage be nothing. . . .” In cases involving criminal investigations, the Fourth Amendment recognizes that the government is entitled to enter property for criminal investigations, especially when armed with a search warrant. But for private disputes, Kaiser Aetna v. United States (1979) classified the right to exclude other people from entering your private property against your will as “one of the most essential sticks in the bundle of rights.” After all, if other people could enter your property at will, day or night, in what sense could it be said to remain private?

How is that right not compromised when union organizers enter private property solely to advance their own interest in organizing employees? At common law, the size of any intrusion does not compromise the owner’s fundamental right to either exclude the entrant or recover damages in proportion to the harm. But this rule does not hold under the National Labor Relations Act of 1935 (NLRA), nor under CALRA, which covers agriculture workers who fall outside the NLRA. Historically, up until the New Deal revolution, the constitutional protection of private property and economic liberties followed the common law model. Thus both Adair v. United States (1908) and Coppage v. Kansas (1915) held that neither the United States nor any of the states had the power to force an employer to negotiate collectively with a labor union against its will, so that the principle of freedom of contract neatly dovetailed with the right to exclude.

That common law conception of labor relations, which I have long defended, was decisively rejected at the height of the New Deal in NLRB v. Jones & Laughlin Steel (1937).  That case upheld imposing on employers a duty to bargain in good faith with any union selected in a labor election by the majority of workers within any given bargaining unit. This duty was said to restore “industrial peace” and to promote the equality of bargaining power. When the duty to negotiate was forced on employers, no employer could refuse union organizers access to the plant floor. Once freedom of contract falls, so too does the common law right to exclude.

Thus, in Republic Aviation Corp. v. NLRB (1945), the employer was not allowed to discharge employees who violated the company’s anti-solicitation rule by passing out union application cards to fellow employees during lunch hours, a policy adopted long in advance of any labor activity. That activity was nonetheless protected under Section 7 of the NLRA that guaranteed to employees the right to engage in concerted activity for their “mutual aid or protection.” Even though the employer had maintained a policy of “strict neutrality” on all union issues, the Supreme Court upheld a National Relations Labor Board finding of multiple unfair labor practices, which necessarily abrogated the right to exclude.

Thereafter in 1956, the Supreme Court took half a step backwards in NLRB v. Babcock & Wilcox by holding that union organizers—who were not protected by the mutual aid and protection provision of Section 7—were entitled to limited access to an employer’s premises to organize workers only “if reasonable efforts by the union through other available channels of communication [would not] enable it to reach the employees with its message.”

In Cedar Point, one disputed matter is whether the union had reasonable alternative ways to reach the employer’s workers, all of whom were put up in nearby hotels by the employer—a point on which reasonable minds could easily disagree. After all, the workers’ early shift makes organization somewhat less convenient, but firm operations somewhat more efficient. Thus, looking at the case solely through a labor law lens, Cedar Point is likely to eke out a narrow victory on the basis that the bellicose union activities were outside its limited right of access under the California regulations.

But the high stakes game is whether the entire accommodation scheme should fall as unconstitutional given that the Supreme Court held in Loretto v. Teleprompter (1982) that “a permanent physical occupation” of private property by a private party authorized by government—in that instance a cable box on the roof of the plaintiff’s New York apartment complex—counts as a per se violation of the takings clause. The use of the term “permanent” was then picked up by Justice Antonin Scalia in Nollan v. California Coastal Commission (1987) to find a per se taking when the state demanded a permanent public right of way over the Nollans’ property as a condition for receiving a much needed building permit.

But in Cedar Point, a majority of the Ninth Circuit found that the intermittent rights to enter under a statutory scheme did not create an easement over the property, let alone a permanent one, and hence upheld the California regulation rather than striking it down on Fifth Amendment grounds. Just that position was echoed in the Supreme Court by Justice Elena Kagan during oral argument. But it is far from clear that parties are unable to limit easements, like time-share agreements, to intermittent use.

But even if they are not, the larger question is why is the per se prohibition against trespass tied to the permanence of the invasion or the creation of an easement? Suppose that the New York law in Loretto allowed the cable box to remain for only ninety-nine years, or that the useful life of the cable box was only ten years. These situations have to count as “permanent” in order to prevent the rules for per se takings from being gutted by senseless refinements. Under Entick, the common law rules offer complete protection against all trespasses, whether or not they rise to the level of a permanent or partial easement.

Indeed, as I argued in my 1985 book Takings, “the system of limited government and private property is not elastic enough to accommodate the massive reforms of the New Deal.” It is not that there are no justifications for government entry into private property. But those justifications are intended to stop common law nuisances or produce overall social gains by creating, for example, reciprocal easements of support that benefit all parties. But the labor laws have no such desirable welfare effects. Rather, they express a deeply flawed New Deal passion for creating state monopolies and cartels that necessarily reduce social welfare. For example, both the NLRA and the misnamed Fair Labor Standards Act of 1938, which imposes minimum wage and overtime regulations, undermine the efficiency of competitive markets in labor—and Village of Euclid v. Ambler Realty Co.  (1926) approved draconian zoning laws to inhibit ordinary land use development.

It is a major mistake to ignore the obvious disruptions to ordinary business operations caused by organizations pursuing a political agenda. Indeed, any collective refusal to deal, including those by unions, was held in Loewe v. Lawlor (1908) to constitute a per se violation of the antitrust laws, even when not backed by government power. In Cedar Point, if the Supreme Court strikes down CALRA, it can correct a long-standing constitutional error. But it will likely issue a timid, fact-bound decision that leaves the deep tension between our labor statutes and our constitutional principles unresolved.