Idaho Building and Construction Trades Council, AFL-CIO et al v. Wasden

Filing 67

MEMORANDUM DECISION AND ORDER granting 31 Trade Coundils' Motion for Summary Judgment; denying 32 Wasden's Motion for Summary Judgment. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by cjm)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

IDAHO BUILDING AND
CONSTRUCTION TRADES COUNCIL,
AFL-CIO, and SOUTHWEST IDAHO
BUILDING AND CONSTRUCTION
TRADES COUNCIL, AFL-CIO,

Case No. 1:11-cv-00253-BLW
MEMORANDUM DECISION AND
ORDER

Plaintiffs,
v.
LAWRENCE G. WASDEN, in his
official Capacity as ATTORNEY
GENERAL FOR THE STATE OF
IDAHO.
Defendants.

INTRODUCTION
Plaintiffs Idaho Building and Construction Trades Council, AFL-CIO and the
Southwest Idaho Building and Construction Trades Council, AFL-CIO (collectively
“Trades Councils”) are unincorporated associations comprised of local unions affiliated
with the Building and Construction Trades Department, AFL-CIO, which represent
building trade workers throughout southern Idaho. Clay Decl. ¶ 2, Dkt. 2-2; Moore Decl.
¶ 2, Dkt. 2-3. They exist for the purpose of advancing the interests of building trade

MEMORANDUM DECISION AND ORDER - 1

unions and their members, advancing generally the union sector of the construction
market, and improving working conditions for workers in the building trades. Clay Decl.
¶ 3, Dkt. 2-2; Moore Decl. ¶ 3, Dkt. 2-3. In this suit against Idaho Attorney General
Lawrence G. Wasden, the Trades Councils challenge two recent amendments to Idaho’s
Right-to-Work Act: the “Open Access to Work Act,” codified as Idaho Code §44-2013,
and the “Fairness in Contracting Act,” codified as Idaho Code §44-2012. The Trades
Councils allege that both laws interfere with the rights created by the National Labor
Relations Act and are therefore preempted.
Both the Trades Councils and Wasden have filed cross-motions for summary
judgment. In addition, Inland Pacific Chapter of Associated Builders and Contractors
(“IPC ABC”), a construction industry trade association with members in Idaho, and the
National Right to Work Legal Foundation (“NRTW”), a nonprofit organization with a
mission of fighting compulsory unionism, have filed amicus briefs in support of the two
challenged statutes. For the reasons set forth below, the Court will grant the Trades
Councils’ Motion for Summary Judgment (Dkt. 31) and deny Wasden’s Motion for
Summary Judgment (Dkt. 32).
BACKGROUND
The first statute the Trades Councils challenge, the Open Access to Work Act,
applies to public works construction in Idaho. It forbids state agencies and cities,
counties, school districts, and other political subdivisions from requiring contractors to
pay a specified wage scale or provide specified employee benefits to its employees for
work on public works projects in Idaho, except as may be required by federal wage laws

MEMORANDUM DECISION AND ORDER - 2

applicable to public works projects supported by federal funds. It also prohibits Idaho
government agencies from requiring contractors, subcontractors and suppliers to sign
collective bargaining or other union agreements as a condition of bidding on or
performing contracts for construction of public works projects. The construction industry
commonly refers to these types of agreements when used on a particular project as
“project labor agreements.”
The second statute, the Fairness in Contracting Act, is aimed at “market recovery
programs.” Unions began adopting market recovery programs, also known as “job
targeting programs,” in the early 1980s to enable signatory employers to compete for
“targeted” jobs. Typically, unions carry out their market recovery programs by selecting
projects to target and guaranteeing subsidies to union contractors who submit successful
bids. The purpose of the subsidies is to reduce the unionized contractor’s labor costs
while allowing the union to maintain its collectively-bargained wage scale on the job and
secure additional employment opportunities for its members. Clay Decl. ¶ 3, Dkt. 2-2;
Moore Decl. ¶ 3, Dkt. 2-3.
All market recovery programs in Idaho are maintained through voluntary
contributions, which are deducted from the gross earnings of workers represented by the
unions that operate the programs. Clay Decl. ¶ 11, Dkt. 2-2; Moore Decl. ¶ 5, Dkt. 2-3;
Oveson Decl. ¶ 3; White Decl. ¶ 3. In some instances, such contributions are paid
directly by union members to the union. Moore Decl. ¶¶ 5,6. By allocating the
contributions among all members, local building trade unions seek to spread the
economic concessions over the entire union membership in an equitable fashion. Id.

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The Fairness in Contracting Act prohibits three types of conduct relating to job
targeting programs by labor organizations and contractors in the competitive bidding
process. Specifically, it prohibits (1) contractors and subcontractors from receiving any
wage subsidy, bid supplement or rebate on behalf of its employees or from providing
subsidies, bid supplements or rebates to its employees; (2) labor organizations from
paying a wage subsidy or rebate to its members in order to subsidize a contractor or
subcontractor; and (3) the use of any fund derived from wages collected by or on behalf
of labor organizations to subsidize contractors or subcontractors in Idaho. A violation of
the Fairness in Contracting Act carries substantial penalties: up to $10,000 for the first
offense, $25,000 for the second, and $100,000 per violation for each additional
offense. Any interested party, including any bidder, contractor, subcontractor, or
taxpayer has standing to challenge any violation of the new act and entitles the challenger
to an award of attorney’s fees and costs in the event the challenge succeeds.
ANALYSIS
The Trades Councils argue that both statutes are preempted under the NLRA. In
passing the NLRA, Congress largely displaced state regulation of labor relations. Golden
State Transit Corp. v. City of Los Angeles (“Golden State II”), 493 U.S. 103, 108 (1989).
While the NLRA contains no statutory preemption provision, the Supreme Court has
found that Congress implicitly mandated two types of preemption: Garmon preemption
and Machinists preemption.
The first, Garmon preemption, precludes several kinds of state intrusions on the
NLRA’s “integrated scheme of regulation,” including “potential conflict of rules of law,

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of remedy, and of administration.” San Diego Bldg. Trades Council v. Garmon, 359 U.S.
236 (1959). Different dangers attend each conflict: (1) “[t]he danger from the first kind
of conflict is that the State will require different behavior than that prescribed by the
NLRA (the substantive concern)”; (2) “the danger from the second is that the State will
provide different consequences for the behavior (the remedial concern)”; and (3) “the
danger from the third is that Congress's design to entrust labor questions to an expert
tribunal – the NLRB – would be defeated by state tribunals exercising jurisdiction over
labor questions (the primary jurisdiction concern).” Healthcare Ass'n of New York State,
Inc., v. Pataki, 471 F.3d 87, 94-95 (2nd Cir. 2006). To protect against such conflicts,
Garmon preemption prohibits states from regulating activity that the NLRA protects,
prohibits, or arguably protects or prohibits. Wis. Dep’t of Indus., Labor & Human
Relations v. Gould, Inc., 475 U.S. 282, 286 (1986).
The purpose of Garmon preemption is to preserve the integrity of the
“comprehensive and integrated regulatory framework” Congress established in the
NLRA. Garmon, 359 U.S. at 239-40. Under the NLRA, “Congress did not merely lay
down a substantive rule of law to be enforced by any tribunal competent to apply law
generally to the parties.” Garner v. Teamsters, Chauffeurs & Helpers Local Union No.
776, 346 U.S. 485, 490 (1953). Rather, “Congress evidently considered the NLRB, with
its centralized administration and specially designed procedures, necessary to obtain
uniform application of its substantive rules and to avoid these diversities and conflicts
likely to result from a variety of local procedures and attitudes toward labor
controversies.” Garmon, 359 U.S. at 239-40.

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Of course, Garmon preemption does not apply when the activity a state seeks to
regulate falls beyond the arguable reach of the NLRA. This, however, does not mean that
activities ungoverned by the NLRA can be controlled by the states. More than indicating
Congress’ desire for centralized administration and uniformity in the application of its
provisions, the NLRA reveals that Congress intended certain concerted activities to
remain unfettered by any governmental interference, including the NLRB. “Congress
formulated a code whereby it outlawed some aspects of labor activities and left others
free for the operation of economic forces.” Weber v. Anheuser–Busch, Inc., 348 U.S. 468,
480 (1955).
Thus, the Supreme Court recognized a second line of preemption analysis known
as Machinist preemption, which forbids both the NLRB and the states from regulating
conduct or activities that Congress intended to leave to “the free play of economic
forces.” Machinists v. Wis. Employment Relations Comm’n, 427 U.S. 132, 140 (1976).
Machinists preemption reflects the NLRA’s broader purpose of restoring equal
bargaining power between labor and management, and it prevents both the states and the
NLRB from “picking and choosing which economic devices of labor and management
shall be branded as unlawful.” Nat’l. Labor Relations Bd. v. Ins. Agents' Internat’l.
Union, AFL–CIO, 361 U.S. 477, 498 (1960).
1.

Open Access to Work Act
The Trades Councils argue that the Open Access to Work Act is preempted under

both Garmon and Machinists. Wasden and amici, however, raise several procedural

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issues that must be addressed before reaching the merits of the Trades Councils’
challenge to the Act.
A.

Ex Parte Young

As a threshold matter, the Court must decide whether Wasden is properly named
as a defendant under the Ex Parte Young doctrine. This issue is intertwined with whether
the Trades Councils have standing to bring suit against him.
The Eleventh Amendment generally bars the federal courts from entertaining suits
brought by a private party against a state or its instrumentality in the absence of state
consent. Los Angeles Cty. Bar Ass’n v. Eu, 979 F.2d 697, 704 (9th Cir. 1992). A
plaintiff does not avoid this bar by naming an individual state officer as a party in lieu of
the state. “Yet, few rules are without exceptions, and the exception to this rule allows
suits against state officials for the purpose of enjoining the enforcement of an
unconstitutional state statute.” Okpalobi v. Foster, 244 F.3d 405, 411 (5th Cir. 2001).
This exception relies on the fiction constructed in Ex parte Young – that because a
sovereign state cannot commit an unconstitutional act, a state official enforcing an
unconstitutional act is not acting for the sovereign state and therefore is not protected by
the Eleventh Amendment. Ex parte Young, 209 U.S. 123, 155-56) (1908). Ex Parte
Young mandates that a party suing a state official in challenge to an allegedly
unconstitutional statute may only seek prospective declaratory or injunctive relief, and
not relief for past violations. “The rule of Ex Parte Young ‘gives life to the Supremacy
Clause’ by providing a pathway to relief from continuing violations of federal law by a
state or its officers.” Los Angeles Cty. Bar Ass’n, 979 F.2d at 704.

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A plaintiff is not free to randomly select a state official to sue in order to challenge
an allegedly unconstitutional statute. Instead, Ex parte Young imposed a second
condition on parties bringing such claims: the state officer sued must have “some
connection with the enforcement of the allegedly unconstitutional act, or else it is merely
making…the state a party.” Ex parte Young, 209 U.S. at 155-56 (emphasis added).
Moreover, “[t]his connection must be fairly direct; a generalized duty to enforce state law
or general supervisory power over the persons responsible for enforcing the challenged
provision will not subject an official to suit.” Los Angeles Cty. Bar Ass’n, 979 F.2d at
453.
In Planned Parenthood of Idaho, Inc. v. Wasden, the Ninth Circuit addressed
whether General Wasden had “some connection” to the enforcement of a parental consent
statute for minors’ abortions. 376 F.3d 908, 920 (9th Cir. 2004). The statute exposed
physicians performing abortions on minor patients to criminal penalties if the physician
failed to fulfill certain duties specified in the statute. The Ninth Circuit held that Wasden
was a proper defendant because, by law, he could “deputize himself” to enforce the
statute in place of the county attorney. Id. at 920. That power gave Wasden the requisite
connection between the attorney general’s office and enforcement of the statute for
standing purposes. Id.
Here, Wasden likewise maintains that he is not a proper defendant under Ex Parte
Young because he lacks any connection to the enforcement of the challenged statute. But,
he argues, unlike the abortion statute in Planned Parenthood of Idaho, the Open Access
to Work Act does not contain a criminal enforcement provision. He contends that the Act

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only provides a private right of action for any interested party, and Wasden “does not fall
within the identified roster of ‘interested part[ies],’” as defined in Idaho Code § 442013(5). Def.’s Opening Br. at 5, Dkt. 32-1.
The Court is not convinced. The Open Access to Work Act was codified as part
of Idaho’s Right-to-Work Act, which contains a criminal enforcement provision:
PENALTIES. Any person who directly or indirectly violates any provision
of this chapter shall be guilty of a misdemeanor, and upon conviction
thereof shall be subject to a fine not exceeding one thousand dollars
($1,000) or imprisonment for a period of not more than ninety (90) days, or
both such fine and imprisonment.
I.C. § 44-2007 (emphasis added). The Open Access to Work Act is part of “this chapter”
referenced in Section 44-2007. This provision empowers local county prosecutors to
initiate criminal proceedings against such violators. Thus, under the plain language of
the statute, local county prosecutors may bring criminal charges against violators of the
Open Access to Work Act. Because Wasden may “deputize himself” to enforce the
statute in place of the county attorney, the connection needed under Ex Parte Young
between Wasden and enforcement of the statute exists.
Wasden argues with some force that the criminal liability provision in Section 442007 does not apply to violations of the Open Access to Work Act. Rather, says Wasden,
the Open Access to Work Act contains a discrete remedial provision that applies
exclusively to violators of that statute, and this remedial provision does not contain a
criminal enforcement provision. But the language of the criminal liability provision
found in Section 44-2007 of the Idaho Right-to-Work is broad enough to encompass
violators of the Open Access to Work Act, which is part of that chapter; and nothing in

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the Open Access to Work Act states that its violators are exempt from this criminal
liability provision. Given the plain language of the statute, the Court must conclude that
the criminal liability provision applies to the Open Access to Work Act. The question of
whether this Court’s jurisdiction over Wasden is proper under the doctrine of Ex Parte
Young therefore has been answered in the affirmative: “some connection” between
Wasden and enforcement of the Open Access to Work Act exists.
This conclusion does not end the inquiry of whether Wasden is a proper defendant,
however. This question “is really the common denominator of two separate inquiries,”
only one of which is whether the Court’s jurisdiction over Wasden is proper under the Ex
Parte Young doctrine. Planned Parenthood of Idaho, 376 F.3d at 919. There is a second
inquiry, which remains unanswered: “whether there is the requisite causal connection
between [Wasden’s] responsibilities and any injury that the plaintiffs might suffer, such
that relief against the defendant[] would provide redress.” Id. This issue is coextensive
with the issue of whether the Trades Councils have standing to sue under Article III of
the Constitution.
B.

Standing

Article III standing “focuses on the party seeking to get his complaint before a
federal court and not on the issues he wishes to have adjudicated.” Flast v. Cohen, 392
U.S. 83, 99 (1968). To establish standing under Article III, the party in question must
prove: (1) an injury-in-fact that is concrete and particularized, and actual or imminent; (2)
a fairly traceable causal connection between the injury alleged and the conduct in dispute;

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and (3) a sufficient likelihood that the relief sought will redress the injury. Lujan v.
Defenders of Wildlife, 504 U.S. 55 5, 560–61 (1992).
With regard to the injury-in-fact requirement, “[a] plaintiff who challenges a
statute must demonstrate a realistic danger of sustaining a direct injury as a result of the
statute's operation or enforcement.” Babbitt v. United Farm Workers Nat'l Union, 442
U.S. 289, 298. Where the plaintiff challenging a regulatory action is “an object of the
action (or foregone action) at issue ... there is little question” that the plaintiff has been
injured as a result of the government regulation. Lujan v. Defenders of Wildlife, 504 U.S.
555, 560–61 (1992). For example, a party has a standing to challenge a statute that
subjects him to a threat of prosecution. Planned Parenthood of Idaho, 376 F.3d at 91617. Here, however, the Trades Councils do not allege that they have been threatened with
prosecution, that a prosecution is likely, or even that prosecution is remotely possible –
because they cannot. The Open Access to Work Act only poses a direct threat to a
political subdivision for noncompliance.
But even when a regulation is not directed at a party, it can be “an object” of
government regulation so long as the “injury alleged, in addition to being actual and
personal,” is caused by the challenged action and is “likely to be redressed by a favorable
decision.” Los Angeles County Bar Ass'n, 979 F.2d at 701 (internal quotation marks
omitted). A party seeking to invoke the court’s powers must demonstrate that more than
“speculative inferences” connect the injury to the challenged action. Id. And even “if
causation and redressability depend upon unfettered choices made by independent actors
not before the courts,” it does not exclude injury produced by determinative or coercive

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effect upon the action of someone else. Id. See also Bennett v. Spear, 520 U.S. 154, 169
(1997).
The Building Trades Councils have “a legally protected interest in both
negotiating and enforcing a [project labor agreement].” Building and Const. Trades
Dept., AFL-CIO v. Allbaugh, 172 F.Supp.2d 67, 75 (D.D.C. 2001). By discouraging
political subdivisions from negotiating a project labor agreement they would otherwise
seek, enforcement of the Open Access Act could therefore result in a primary injury to
Building Trades Councils. For example, should a political subdivision desiring to enter
into a project labor agreement decline to negotiate such an agreement for fear that it will
be criminally charged under the Open Access to Work Act, the Trades Councils’ interests
will be concretely affected as a result of the Act’s enforcement. While the chain of
causation leading from enforcement of the Act against the political subdivision to the
Building Trades Councils’ injury may appear attenuated, at no point does it depend on
the “unfettered choices of third parties not before the Court.” Nor is the threatened injury
either “speculative” or “inchoate.”
This point is illustrated by Planned Parenthood of Idaho. In that case, the Ninth
Circuit found that the physician had standing to challenge the allegedly unconstitutional
abortion statute because he faced criminal prosecution under the statute. 376 F.3d at 916.
The court also found that the physician had standing to challenge all of the provisions of
the statute – even those that were not on their face directed toward physicians. Id.
In reaching this conclusion, the court reasoned that if any of the statutory
provisions discouraged potential patients from seeking the physician’s care, these

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provisions could cause a primary injury to the physician because the patient may refuse
an abortion that the physician would recommend as medically indicated. Such a decision
by the patient would impact the physician’s interests, both financial and professional. In
its decision, the court explained its conclusion in further detail:
[S]hould any aspect of the bypass provisions, including those not on their
face directed toward physicians, prevent or chill a minor from seeking an
abortion she would otherwise seek, she will not seek his care. By
discouraging potential patients from engaging his services, these provisions
could result in a primary injury to Weyhrich. For example, should a minor
desiring an abortion decline to seek a bypass for fear that her boyfriend will
be sent to prison if a judge learns that the boyfriend impregnated her, she
may never consult Weyhrich and never obtain a procedure Weyhrich would
recommend as medically indicated. Weyhrich's own interests, both
financial and professional, in practicing medicine pursuant to his best
medical judgment, are thus affected by a statutory provision that he alleges
violates the federal constitutional rights of potential abortion patients.
Id. According to the court, “[s]uch a threatened injury in fact is neither speculative nor
inchoate.” Id. It therefore concluded that the physician had Article III standing to raise
each of his challenges – even against those provisions not directed toward him.
Similarly, in this case, the Trades Councils have standing to challenge the Open
Access to Work Act even though they could not criminally be prosecuted under the
statute. For standing purposes, it is enough that enforcement of the Act against the
political subdivisions would prevent the Trades Councils from engaging in federally
protected activity. If the Court were to find the Act is preempted, the obstacle it imposes
on the Trades Councils’ alleged right to seek project labor agreements with the State of
Idaho and its political subdivisions would be removed. And the Trades Councils’ alleged
injury would be redressed.

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This conclusion also leads the Court to conclude that this action is ripe for review.
“The constitutional component of the ripeness inquiry is often treated under the rubric of
standing and, in many cases, ripeness coincides squarely with standing’s injury in fact
prong.” Thomas v. Anchorage Equal Rights Com'n, 220 F.3d 1134, 1138 (9th Cir. 2000).
Indeed, some legal commentators have suggested that the doctrines are often
indistinguishable. Id. And courts, when measuring whether the litigant has asserted an
injury that is real and concrete rather than speculative and hypothetical, merge the
ripeness inquiry almost completely with standing. Id.
Here, the Court has already determined that the threat of injury stemming from
enforcement of the Open Access to Work Act is neither hypothetical nor speculative.
The Court has also determined that any potential injury could be redressed by a favorable
ruling. “If the injury is impending, that is enough….Nothing would be gained by
postponing a decision, and the public interest would be well served by a prompt
resolution of the constitutionality of [the Open Access to Work Act].” Id. (internal
quotation marks and citations omitted). Thomas v. Union Carbide Agr. Products Co.,
473 U.S. 568 (1985).
C.

Application of the Market Participant Doctrine

While the Court has determined that this case is justiciable, it must decide yet
another threshold issue before assessing the Trades Councils’ preemption claims: whether
the Open Access to Work Act constitutes an impermissible regulation of labor relations
between employers and employees.

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“A prerequisite to preemption under either Garmon or Machinists is a finding that
the state or local action in question constitutes regulation of labor relations between
employers and employees.” Alameda Newspapers, Inc. v. City of Oakland, 95 F.3d 1406,
1413 (9th Cir. 1996). The NLRA preempts only state regulation, and not actions a state
takes as a mere proprietor or market participant. Bldg. & Constr. Trades Council of the
Metro. Dist. v. Associated Builders & Contractors of Mass./R.I., Inc., 507 U.S. 218, 227
(1993) (“ Boston Harbor ”). Because the Court concludes that Idaho has acted as a
regulator in forbidding political subdivisions from making a project labor agreement a bid
condition on a public works project, the market participant doctrine does not save the Act
from preemption scrutiny.
Two Supreme Court cases bookend the scope of the market participant doctrine:
Wisconsin Department of Industry v. Gould Inc., 475 U.S. 282 (1986), and Boston
Harbor, 507 U.S. at 218. In Gould, the Supreme Court considered whether a Wisconsin
statute debarring repeat labor law violators from doing business with the state was
preempted under the NLRA. The Court expressed “little doubt that the NLRA would
prevent Wisconsin from forbidding private parties within the State to do business with
repeat labor law violators.” Id. at 286-287. Wisconsin argued, however, that the
statutory scheme escaped preemption because it represented an exercise of the state’s
spending power rather than its regulatory power. Id. at 287.
The Court dismissed this argument as “a distinction without a difference,” finding
that the statute on its face served “plainly as a means of enforcing the NLRA.” Id.
Emphasizing the “rigid and undiscriminating manner” in which the statute operated, the

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Court explained that “[n]o other purpose could credibly be ascribed” given that firms
charged with violating the NLRA three times were “automatically deprived of the
opportunity to compete for the State's business.” Id. at 287-288. Because the statute
flatly prohibited state purchases from repeat labor law violators, the Court found that
Wisconsin was not functioning as a private purchaser of services, and “for all practical
purposes, Wisconsin’s debarment scheme [was] tantamount to regulation.” Id.
In contrast, in Boston Harbor, the Supreme Court held that the NLRA did not
preempt a state agency’s bid specification requiring that any contractor working on a
state-sponsored cleanup of Boston Harbor enter into a project labor agreement. 507 U.S.
at 232. The Court concluded that the state agency was acting as a proprietor, and not a
regulator: “there is no question that [the state agency] was attempting to ensure an
efficient project that would be completed as quickly and effectively as possible at the
lowest cost.” Id. It also noted that “the challenged action in this litigation was
specifically tailored to one particular job, the Boston Harbor cleanup project,” and there
was no reason to believe that the state agency was motivated by anything more than its
proprietary interests. Id.
Using Gould and Boston Harbor as the backdrop for the market participant
analysis, the Ninth Circuit in Johnson v. Rancho Santiago Community College Dist.
offered two questions designed to aid the determination of whether state action
constitutes market participation, which it borrowed from the Fifth Circuit’s decision in
Cardinal Towing & Auto Repair, Inc. v. City of Bedford, 180 F.3d 686, 693 (5th Cir.
1999). 623 F.3d 1011, 1023 (9th Cir. 2010). The first question asks, “does the

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challenged action essentially reflect the entity's own interest in its efficient procurement
of needed goods and services, as measured by comparison with the typical behavior of
private parties in similar circumstances?” The second asks in the alternative, “does the
narrow scope of the challenged action defeat an inference that its primary goal was to
encourage a general policy rather than address a specific proprietary problem?”
The second question Cardinal Towing poses does not apply here. That is because
“[t]he second question looks to the scope of the expenditure and protects narrow
spending decisions that do not necessarily reflect a state's interest in the efficient
procurement of goods or services, but that also lack the effect of broader social
regulation.” American Trucking Ass'ns, Inc. v. City of Los Angeles, 660 F.3d 384,
398 (9th Cir. 2011). In general, “‘[n]arrow spending decisions’ tend to be expressly
limited in time and scope—for example, they apply to one city contract or to a number of
contracts of a particular size and funded by a particular finite source.” Id. at 399.
For example, in Rancho Santiago, the Ninth Circuit found that a project labor
agreement between a community college and labor union that “could be characterized as
covering the single project of improving campus facilities” was sufficiently narrow in
scope to qualify for the market participation exemption. 623 F.3d at 1028-29. The
agreement only applied to construction projects for campus improvement projects costing
over $200,000 and for a three-year period, and funded by a specific initiative. Here,
however, the Open Access to Work Act applies to all public works projects – it is not
limited to projects of a particular size, a particular time period, or a particular funding
source. These factors indicate that the Act does not fall within the narrow scope prong.

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American Trucking Ass'ns, Inc., 660 F.3d at 399 (holding that concession agreement that
applied to all operations, regardless of size, funding source, or time frame were not
“narrow spending decisions”).
The Court must therefore consider whether the Act reflects the state’s “own
interest in its efficient procurement of needed goods and services, as measured by
comparison with the typical behavior of private parties in similar circumstances.” Id.
The focus of this inquiry is on whether the state is making procurement decisions in a
similar manner to a private party participating in the market. In Boston Harbor, the
Supreme Court determined that the state acted as a market participant when it required
that all contractors enter into a project labor agreement on a specific project in order “to
ensure an efficient project that would be completed as quickly and effectively as possible
at the lowest cost.” 507 U.S. at 232.
This case, however, presents a more difficult question because it involves a
blanket rule that applies to all public construction projects. On first review, it seems the
D.C. Circuit’s holding in Building Trades v. Allbaugh resolves this quandary. 295 F.3d
28 (D.C. Cir. 2002), cert. denied, 537 U.S. 1171 (2003). In Albaugh, the court held that
the use of a blanket rule made no difference. Id. at 34. That case involved an Executive
Order that barred all federal agencies and any entity receiving federal assistance for a
construction project from either requiring bidders or contractors to enter, or prohibiting
them from entering, into a project labor agreement. The court concluded that the
Executive Order embodied just “the type of decision regarding the use of labor agreement
that a private project owner would be free to make.” Id. at 35 (citation omitted). The

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court in Albaugh reached this conclusion despite the fact that the Government had acted
through a blanket rule. According to the Albaugh court, creating a blanket rule regarding
use of project labor agreements on government projects was not inconsistent with the
action of a proprietor. Id.
But this case differs from Albaugh in one critical respect. The Executive Order in
Albaugh stated that its principal purpose was to promote “the economical,
nondiscriminatory, and efficient administration and completion of Federal and federallyfunded or assisted construction projects . . . .” 66 Fed. Reg. at 11,225. By contrast, the
Open Access to Work Act “on its face does not purport to reflect [Idaho’s] interest in the
efficient procurement of goods and services.” Chamber of Commerce of the United
States v. Lockyer, 463 F.3d 1076, 1084 (9th Cir. 2006) (en banc), rev’d on other grounds
sub nom. Chamber of Commerce v. Brown, 554 U.S. 60 (2008), vacated by 543 F.3d
1117 (2008). Instead, the Senate Bill 1006’s preamble makes clear that the statute’s
purpose relates to the right to work; and Section 1 of Senate Bill 1006 states that the
legislature enacted the Act “to maintain and strengthen state law to protect open access to
work for all Idahoans.”
On this basis, the Open Access to Work Act more closely approximates the
statutes in Lockyer than the Executive Order in Albaugh. In Lockyer, the Ninth Circuit
held that California was not acting as a market participant when it enacted a statute
forbidding certain employers receiving state funds from using those funds to assist,
promote, or deter union organizing. 464 F.3d at 1080. To reach this conclusion, the
court noted that the statute “on its face” did not purport to reflect California’s interest in

MEMORANDUM DECISION AND ORDER - 19

the efficient procurement of goods and services. “Rather,” the court explained, “the
statute's preamble makes clear that the legislation's purpose is to prevent ‘state funds and
facilities’ from being used to subsidize an employer's attempt to influence employee
choice about whether to join a union.” Id . at 1084. Because the statute on its face
sought to regulate labor relations rather than the efficient procurement of goods and
services, and also because it swept broadly, applying to all employers in California
receiving state funding, the Court found the statute was a regulatory measure that fell
outside the market participant exception.
Similarly in this case, because the Open Access to Work Act, like the statute in
Lockyer and unlike the Executive Order in Albaugh, makes clear that its purpose is not to
further the state’s interest in the efficient procurement of goods and services but rather to
further Idaho’s Right-to-Work Act, the Court concludes that the statute is a regulatory
measure. It is therefore not exempt from preemption scrutiny.
Wasden’s slightly different cast on the traditional market participant analysis does
not change the Court’s conclusion. Wasden seeks to distinguish Gould and Boston
Harbor on the grounds that the state activity at issue in those cases involved the
regulation of private parties while the Open Access to Work Act “‘regulates’ at most,
political subdivisions.” Def’s Opening Br. at 13, Dkt. 32-1. “A fortiori,” he says, “no
“pretext of ‘regulation’ as that term was used in Gould and Boston Harbor exists.” Id.
This is a false distinction. Gould, like this case, involved a statute that only
purported to proscribe conduct by state procurement agents. 475 U.S. at 283-84.
However, as already discussed, the Supreme Court rejected the state’s argument that the

MEMORANDUM DECISION AND ORDER - 20

statute escaped preemption because it regulated the state’s spending powers only.
Focusing instead on the purpose of the statute, the Court held that the NLRA preempted
the state law even though the law constrained only the state’s participation in the market.
Id. at 287.
Similarly, in this case, simply because the Open Access to Work Act purports to
regulate only political subdivisions, it does not preclude answering the question whether
the Act also interferes with employee rights protected by the NLRA. Golden State
Transit Corp. v. City of Los Angeles, 493 U.S. 103, 109 (1989) (holding the NLRA
“creates rights in labor and management both against one another and against the State”).
Indeed, this is the very question that preemption analysis seeks to answer. And to
accomplish this, the Court must look beyond what entity the Open Access to Work Act
“regulates” to understand what impact the statute has on private parties, who are
promised protection from government interference with their NLRA rights.
D.

NLRA Preemption

The Court’s conclusion that the Open Access to Work Act is not exempt from
preemption scrutiny does not mean that it is in fact preempted by the NLRA. Indeed, the
Supreme Court has instructed the lower courts to use caution in inferring preemption.
Boston Harbor, 507 U.S. at 224. “Consideration under the Supremacy Clause starts with
the basic assumption that Congress did not intend to displace state law.” Id. (quoting
Maryland v. Louisiana, 451 U.S. 725, 746 (1981)). While heeding the Supreme Court’s
admonition, the Court nevertheless finds that the Act is preempted.

MEMORANDUM DECISION AND ORDER - 21

(1)

Garmon Preemption

Preemption by actual conflict exists when “compliance with both federal and state
regulations is a physical impossibility,” or when state law “stands as an obstacle to the
accomplishment and execution of the full purposes and objectives of Congress.” Brown
v. Hotel & Rest. Employees & Bartenders, 468 U.S. 491, 501(1984). “If employee
conduct is protected under Section 7 of the NLRA, then state law which interferes with
the exercise of these federally protected rights creates an actual conflict and is preempted
by direct operation of the Supremacy Clause.” Id.
Section 7 of the NLRA protects an employee’s right to engage in concerted
activities for the purpose of collective bargaining and other mutual aid and protection. 29
U.S.C. § 157. Here, the question is whether the Open Access to Work Act interferes with
employees’ right to secure project labor agreements – a form of concerted activity
protected under Section 7.
A project labor agreement has been described as “a pre-hire agreement between a
construction project owner and a union or unions that a contractor must agree to before
accepting work on the project and that establishes the terms and conditions of
employment for the project.” Rancho Santiago, 623 F.3d at 1017. Such agreements are
not uncommon in the construction industry, because “the short-term nature of
employment impedes post-hire collective bargaining, and where contractors need
predictable costs and a steady supply of skilled labor.” Id. To ensure that a project labor
agreement achieves the parties’ objectives, all contractors on the project must become
parties to the agreement. For this reason, the bid specifications for a project often require

MEMORANDUM DECISION AND ORDER - 22

that all contractors agree to the project labor agreement. Boston Harbor, 507 U.S. at 23233.
The Open Access to Work Act, however, prohibits a state agency or political
subdivision from requiring that a contractor on a public works project become a party to a
project labor agreement “as a condition of bidding, negotiating, being awarded or
performing work on a public works project.” I.C. § 44-2013(4). The Act also forbids the
State and its political subdivisions from designating the wages and benefits their
contractors and subcontractors will pay on public works projects. This prohibition
prevents construction workers throughout the state from ever seeking project labor
agreements with the State and its political subdivisions, effectively precluding the use of
such agreements on public works projects with the State. But Sections 8(e) and (f) of the
NLRA explicitly permit employers in the construction industry to enter into prehire
agreements. 29 U.S.C. § 158(e) and (f). Idaho therefore, by enacting the Open Access to
Work Act, has erected an impermissible obstacle to the right to bargain project labor
agreements on public works projects.
Although Sections 8(e) and (f) do not apply specifically to the State,1 “the general
goals behind passage of §§ 8(e) and (f) are still relevant to determining what Congress
intended with respect to the State and its relationship to the agreements authorized by

1

The NLRA specifically exempts the States from the definition of “employer.” 29 U.S.C.

§ 152(2)

MEMORANDUM DECISION AND ORDER - 23

these sections.” Boston Harbor, 507 U.S. at 231. And as discussed above, it does not
matter if the Act only purports to regulate political subdivisions if it also blocks
employees from engaging in concerted activity protected under the NLRA. Because the
NLRA and the Open Access to Work Act “cannot move freely within the orbits of their
respective purposes without impinging upon another,” state jurisdiction must yield. Hill
v. Florida ex rel. Watson, 325 U.S. 538 (1945).
(2)

Machinists Preemption

Even if the Open Access to Work Act were not preempted under Garmon, it
would be preempted under Machinists. Machinists preemption preserves Congress’
“intentional balance between the uncontrolled power of management and organized labor
to advance their respective interests in negotiating the terms and conditions of
employment.” Lockyer, 463 F.3d at 1087 (quoting Boston Harbor, 507 U.S. at 226)
(internal quotation marks omitted). “The States have no more authority than the Board to
upset the balance that Congress has struck between labor and management in the
collective-bargaining relationship.” Id. at 1086 (quoting Golden State Transit Corp. v.
City of Los Angeles, 475 U.S. 608 (1986). More recently, Machinists has been used “to
determine the validity of state rules of general application that affect the right to bargain
or to self-organization.” Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 749,
fn. 27. (1985).
In this case, the Open Access to Work Act’s blanket prohibition against the use of
project labor agreements on public works projects restricts Congress’ intended free play
of economic forces identified in Machinists. In enacting Section 8(e) and (f), Congress

MEMORANDUM DECISION AND ORDER - 24

established the parameters within which construction employers and unions could
bargain, influenced only by their own economic power, and the “free play of economic
forces.” The Act skews those forces by robbing unions of the opportunity to even seek a
project labor agreement on a public works project.
A public entity when acting as a “purchaser” also should be permitted to “choose
a contractor based upon that contractor's willingness to enter into a prehire agreement” to
the same extent as a private purchaser. Boston Harbor, 507 U.S. at 231. As the Supreme
Court suggested in Boston Harbor, “denying an option to public owner-developers that is
available to private owner-developers itself places a restriction on Congress' intended free
play of economic forces identified in Machinists.” Id. at 231. Because the Act upsets the
balance Congress struck “between the uncontrolled power of management and organized
labor to advance their respective interests in negotiating the terms and conditions of
employment,” id. at 226, it conflicts with the NLRA based on the principles espoused in
Machinists.
Amicus NRTW counters that permitting the states to interfere with the collective
bargaining process by imposing project agreements on private employers and employees
turns Machinists “on its head.” Amicus Br. at 2, Dkt. 29-1. This argument ignores the
Supreme Court’s explanation in Boston Harbor that project labor agreements are “the
very sort of labor agreement that Congress explicitly authorized and expected frequently
to find” in the construction industry. 507 U.S. at 233. And when a public entity, acting
as a proprietor, conditions its purchasing on a project labor agreement, it “exemplifies”
the “workings of the market forces Congress expected to find.” Id. Thus, never allowing

MEMORANDUM DECISION AND ORDER - 25

a state agency or political subdivision, acting in the role of purchaser of construction
services, to choose to use a project labor agreement on a public works project interferes
with the very market forces Congress intended to leave unregulated. Id.
The Court acknowledges that the State and its political subdivisions may never
decide to use a project labor agreement on a public work project. But this is a choice
they should be allowed to make based on their assessment of the best and most efficient
use of government funds on a particular project – free from the handcuffs of the flat
prohibition mandated by the Open Access to Work Act. There was no evidence that the
Idaho legislature enacted the Open Access to Work Act to advance the State and its
political subdivisions’ “proprietary goals” in procuring construction services. Instead, the
Court agrees that the Act “is an unabashed expansion of the State’s Right-to-Work Act,
intended to regulate construction industry project labor agreements.” Pl.’s Resp. at 30,
Dkt. 50.
Because the State seeks to regulate what Congress intended to remain unregulated,
the Open Access to Work Act is preempted under Machinists.
2.

Fairness in Contracting Act
A.

Garmon Preemption

The Fairness in Contracting Act is facially invalid because there is “no set of
circumstances” under which the Act would not be preempted. U.S. v. Salerno, 481 U.S.
739, 745 (1987). This Court found in its decision preliminarily enjoining the Act under
Garmon preemption principles that (1) every application of the Act will reach conduct
that is either “actually” or “arguably” preempted by the NLRA; and (2) to the extent the

MEMORANDUM DECISION AND ORDER - 26

conduct it bars is only “arguably” preempted, the Act does not fall within an exception to
Garmon. Memorandum Decision and Order at 9-17, Dkt. 23. The Court finds no reason
to deviate from its earlier decision.
State regulation is presumptively preempted by the NLRA when it concerns
conduct that is actually or arguably either protected or prohibited by the NLRA. Belknap,
Inc. v. Hale, 463 U.S. 491, 498 (1983). First, states must yield to the National Labor
Relations Board’s exclusive jurisdiction over conduct “actually” protected or prohibited
under Sections 7 or 8 of the NLRA. Garmon, 359 U.S. 243. If the state law regulates
conduct actually protected by federal law, preemption follows as a matter of substantive
right. Brown v. Hotel & Restaurant Employees & Bartenders Int’l. Union Local 54, 468
U.S. 491, 501-503 (1984). Second, “[w]hen an activity is arguably subject to § 7 or § 8
of the [NLRA], the States as well as the federal courts must defer to the exclusive
competence of the National Labor Relations Board if the danger of state interference with
national policy is to be averted.” Garmon, 359 U.S. at 245.
Unlike the “actually protected” preemption rule, which is categorical, the
“arguably” protected rule is subject to exception in limited circumstances: (1) the NLRA
does not preempt state action that regulates activity of “a merely peripheral concern” to
the Act; and (2) the NLRA does not preempt state action “where the regulated conduct
touche[s] interests so deeply rooted in local feeling and responsibility,” it cannot be
inferred that Congress intended to deprive states of the power to act. Id. at 243-44.
Everyone agrees here that most job targeting programs are “actually” protected
under the NLRA. In re Manno Elec., Inc., 321 NLRB 278, 298 (1996). The Attorney

MEMORANDUM DECISION AND ORDER - 27

General, however, reprises his argument that a certain class of market recovery programs
– those that are partially funded by dues exacted from employees working on projects
subject to the Davis-Bacon Act – is neither actually nor arguably protected under Section
7. Wasden points to a series of administrative and federal court decisions holding that the
Davis-Bacon Act bars wage deductions pursuant to job targeting programs on public
work projects. See NLRB v. IBEW Local 48, 345 F.3d 1049 (9th Cir. 2003); IBEW Local
48 (Kingston Constructors, Inc.), 332 N.L.R.B. 1492, 1502 (2000).
In IBEW Local 48, for example, the Ninth Circuit enforced an NLRB order
finding a union’s attempts to require payment of market recovery program dues on
Davis-Bacon projects was unlawful. 345 F.3d at 1058. The Davis-Bacon Act requires
that workers on certain government projects receive the prevailing wage “without
subsequent deduction or rebate.” 40 U.S.C.A. § 276(a). But unions often fund market
recovery programs by requiring union contractors subject to the Davis-Bacon Act to
deduct a percentage of workers’ wages, which they forward to the union for use in
subsidizing bids for targeted contractors. Id. The NLRB has found that such deductions
violate the Davis-Bacon anti-kickback provision, and therefore are “inimical to public
policy.” Id.
The Court agrees that a question exists whether market recovery programs lose
Section 7 protection when funded with dues paid by employees working on Davis-Bacon
jobs. However, this question has not been definitively answered.
In Can-Am Plumbing, Inc. v. NLRB, the D.C. Circuit reviewed a NLRB decision
finding that a nonunion construction contractor violated the NLRA by filing and

MEMORANDUM DECISION AND ORDER - 28

maintaining a state court lawsuit concerning a union’s job targeting program that was
preempted by the Act. 321 F.3d 145 (D.C. Cir. 2003). The court found that the Board’s
“conclusory findings that these moneys did not taint the job targeting program [were]
inadequate to support its determination that the operation of the program as a whole was
protected conduct under section 7.” Id. at 146. However, upon remanding the case to the
Board, the D.C. Circuit acknowledged that the Board could conclude that the job
targeting program, even if “tainted” by Davis-Bacon funds, did not lose its protected
status under Section 7: “Additional evidence may also provide support for the Board's
conclusion that the Union's conduct is excusable or makes no difference to the Board's
section 7 determination. Thus, the Board on remand may yet determine that the JTP is
protected under section 7.” Id at 153-54.
On remand, the original petitioners submitted additional evidence and arguments
to the Board to support their conclusion that job targeting is protected concerted activity
under Section 7 even if the program uses funds collected from workers employed on
Davis-Bacon jobs. Absent any authority finding that the inclusion of dues from DavisBacon projects rendered a job targeting program unprotected by the NLRA, the
petitioners argued that the source of job targeting funds has nothing to do with whether
the job targeting programs aimed to “protect employees jobs and wage scales” – activity
that falls squarely within the protections of Section 7. However, the NLRB never
considered the petitioners’ argument; it found instead that the nonunion contractor had
waived the issue by not raising it in the original hearing and affirmed its previous

MEMORANDUM DECISION AND ORDER - 29

decision finding that the nonunion contractor had violated the NLRA by prosecuting its
preempted lawsuit.
Even though the NLRB has never directly addressed whether job targeting
programs that rely on Davis-Bacon project wages retain their protected status under
Section 7, this Court finds that valid arguments exist supporting this conclusion. A party
claiming preemption based on arguably protected conduct must only show that its case is
one that the NLRB could legally decide in its favor. International Longshoremen’s
Association v. Davis, 476 U.S. 380, 395 (1986). To meet this burden, the party claiming
preemption “must advance an interpretation of the [NLRA] that is not plainly contrary to
its language and that has not been ‘authoritatively rejected’ by the courts or the Board.”
Id. ( internal citations omitted). Because the Trades Councils have advanced a viable
argument that job targeting programs using wages collected from Davis-Bacon projects
retain their protected status, and because this argument “has not been ‘authoritatively
rejected’ by the courts or the Board,” they have therefore satisfied their burden of
establishing that job targeting programs are “arguably protected” activity.
As explained in Garmon, absent “the Board's clear determination that an activity
is neither protected nor prohibited or of compelling precedent applied to essentially
undisputed facts, it is not for this Court to decide whether such activities are subject to
state jurisdiction.” Garmon, 359 U.S. at 244-46. Courts are not primary tribunals to
adjudicate such issues. Id. at 244. Rather, Garmon mandates “that these determinations
be left in the first instance to the National Labor Relations Board” to preserve the

MEMORANDUM DECISION AND ORDER - 30

integrity of the “comprehensive and integrated regulatory framework” Congress
established in the NLRA. Garmon, 359 U.S. at 239-40.
B.

Exceptions to Garmon Preemption

Both Wasden and Amicus IP ABC suggest that even if the conduct alleged is
arguably protected by the NLRA, this is not a case in which preemption should be
applied.
(1)

Application of Section 14(b)

Amicus IP ABC contends that NLRA Section 14(b), 29 U.S.C. §164(b), exempts
the Anti-Job Targeting Act from preemption because the Act is part of Idaho’s Right-toWork law. IPC ABC describes Idaho’s Right-to-Work law as “legislation that goes far
beyond merely proscribing union security provisions requiring union membership for its
citizens to work.” IPC ABC Opening Br. at 13, Dkt. 35. The Court disagrees.
Section 8(a)(3) of the NLRA permits unions and employers to negotiate union
security agreements, i.e., agreements that “require as a condition of employment,
membership in the labor organization.” 29 U.S.C. § 158(a)(3). “Membership,” for
purposes of Section 8(a)(3), means only the obligation to pay initiation fees and dues.
NLRB v. General Motors, 373 U.S. 734, 742 (1963).
Conversely, Section 14(b) allows states to, in essence, opt out of Section 8(3) by
enacting right-to-work laws which ban “agreements requiring membership in a labor
organization as a condition of employment.” 29 U.S.C. § 164(b). Section 14(b) can best
be described as an exception to the general rule that the federal government has
preempted the field of labor relations regulation. See, e.g., Retail Clerks Int'l v.

MEMORANDUM DECISION AND ORDER - 31

Schermerhorn, 375 U.S. 96, 99-102 (1963). It makes “clear and unambiguous the
purpose of Congress not to preempt the field . . . ‘in this regard so as to deprive the states
of their powers to prevent compulsory unionism.”’ Id., at 101, 101 n. 9 (quoting
H.R.Rep.No.510, 80th Cong., 1st Sess., p. 60).
But state right-to-work laws cannot be construed to prevent concerted activity
protected under Section 7 not properly reserved to state regulation by Section 14(b). For
example, Section 14(b) does not permit states to prohibit collectively-bargained
arrangements such as a union-operated referral system simply because the state perceives
such arrangements as unduly encouraging union membership or contravening an
individual’s “right-to-work.” N. L. R. B. v. Tom Joyce Floors, Inc., 353 F.2d 768, 770 771 (9th Cir. 1965).
IPC ABC’s argument therefore raises the question whether “job targeting
programs” are a form of “compulsory unionism” that Section 14(b) allows states to
prohibit. Nothing about a job targeting program, however, makes union membership
compulsory. Because Idaho is a right-to-work state, membership in any local in Idaho is
entirely voluntary. Clay Decl. ¶ 11, Dkt. 2-2. While union contractors agree to hire only
through the hiring halls operated by the locals, non-members are permitted to use the
hiring halls and sometimes do. Id.; Moore Decl. ¶ 6, Dkt. 2-3. And only union members
must pay the special assessment that the locals use to fund their job targeting programs.
Members choose to pay this special assessment through a membership vote. Moore Decl.
¶ 6, Dkt. 2-3. The members approve a job targeting program and agree to fund it out of

MEMORANDUM DECISION AND ORDER - 32

their own wages despite knowing that the program may benefit members and nonmembers alike. Id.
By contrast, IPC ABC presents no evidence that job targeting programs force
employees to choose between joining a union and facing termination of their
employment. There is no evidence that employees must join unions to work on a job
supported by a job targeting program. Job targeting programs do not require an employer
receiving wage supplements to hire only union workers. Nor is there evidence that such
employers choose to, or are somehow required to, violate the nondiscrimination
provisions of the NLRA or Idaho’s Right-to-Work law by hiring only union employees.
Thus, contrary to IPC ABC’s suggestion, there is no proof that job targeting programs
“drive from employment all persons who cannot or will not participate in unions.” IPC
ABC Resp. Br. at 5, Dkt. 48.
IPC ABC counters that because job targeting programs help generate employment
opportunities for union members, such programs force nonunion workers to choose
between joining a union and sitting at home with no work. But as just noted, employers
on targeted jobs are not required to hire union members exclusively. Conversely,
nonunionized employees are not required to join a union as a condition of working for a
union employer who used job targeting funding to win the project bid. So, contrary to
IPC ABC’s suggestion, a union employer winning a project bid through the use of job
targeting funding does not automatically mean that a nonunionized worker is left only
with the option of sitting at home or joining a union.

MEMORANDUM DECISION AND ORDER - 33

In other words, attempts to enhance employment opportunities for unionized
employees through programs that lower labor costs for unionized employers does not
transform voluntary unionism into compulsory unionism. At most, enhancing
employment opportunities for union workers merely encourages union membership. And
protected employee conduct, even in a right-to-work state, includes attempts to encourage
union membership so long as it is not achieved through discriminatory means. See, e.g.,
Teamsters Local v. Labor Bd., 365 US 667, 675-76 (1961) (explaining that union
benefits, such as hiring halls, are not unlawful merely because they “encourage union
membership”). Just as exclusive but nondiscriminatory hiring halls do not fall within the
ambit of Section 14(b), Tom Joyce Floors, Inc., 353 F.2d at 770 -771, neither do job
targeting programs.
(2)

Local Interest Exception

In the alternative, IPC ABC argues that Idaho has a deeply rooted state interest
against “compulsory unionism,” which outweighs the “peripheral” federal interest in
protecting job targeting programs. This argument is flawed for several reasons.
First, protecting job targeting programs is not merely a “peripheral” federal
concern. Job targeting programs constitute actually, or at least arguably, protected
activity under Section 7, and preventing state interference in employees’ right to engage
in concerted protected activity lies at the core of NLRA concerns. Also, the fact that
certain job targeting programs may only be “arguably protected” has nothing to do with
“deeply-rooted” state concerns, but rather with the Davis-Bacon Act – a federal statute.

MEMORANDUM DECISION AND ORDER - 34

Second, as described above, there is no proof that job targeting programs promote
“compulsory unionism.” Workers choose to be union members. Workers choose,
through a membership, to fund job targeting programs. Employers choose to enter into
pre-hire agreements that allow them to participate in job targeting programs. And
employers receiving job targeting funds choose whether to hire union or nonunion
workers through nondiscriminatory hiring halls. This is not compulsion.
Given the Court’s finding that job targeting programs do not raise concerns of
“compulsory unionism,” the Court finds no basis to conclude that undermining unionsponsored market recovery programs falls within the category of claims “touch[ing]
interests deeply rooted in local feeling and responsibility.” Belknap, 463 U.S. at 498.
These cases have most often involved threats to public order such as violence, threats of
violence, intimidation and destruction of property. See, e.g., Machinists, 427 U.S. at 136.
The Supreme Court has extended this exception to cover acts of trespass, see Sears,
Roebuck & Co. v. San Diego County Dist. Council of Carpenters, 436 U.S. 180, 190-98
(1978), and certain personal torts, such as intentional infliction of emotional distress and
malicious libel, see Farmer v. United Broth. of Carpenters, Local 25, 430 U.S. 290, 297
(1977) (listing types of cases where exception applied). “These exceptions in no way
undermine the vitality of the pre-emption rule.” Farmer, 430 U.S. at 297.
In this case, IPC ABC has cited no authority supporting its argument that
prohibition of market recovery programs is an area “traditionally subject to state
regulation.” Sears, 436 U.S. at 188. To the contrary, regulation of union-sponsored
market recovery programs is an area of particular concern to the NLRA. But even were

MEMORANDUM DECISION AND ORDER - 35

the Court to conclude that the issue presented is one of particular state concern, the
Supreme Court has cautioned that in such circumstances, any state concern must be
balanced against the risk that the exercise of state jurisdiction over the tort claim would
interfere with the regulatory jurisdiction of the NLRB:
The critical inquiry ... is not whether the State is enforcing a law relating
specifically to labor relations or one of general application but whether the
controversy presented to the state court is identical to (as in Garner) or
different from (as in Farmer) that which could have been, but was not,
presented to the Labor Board. For it is only in the former situation that a
state court's exercise of jurisdiction necessarily involves a risk of
interference with the unfair labor practice jurisdiction of the Board which
the arguably prohibited branch of the Garmon doctrine was designed to
avoid.
Sears, 436 U.S. at 197.
Here, a state court presented with a claim under the Fairness in Contract Act
would have to decide, first, whether the challenged market recovery program derived
funds from Davis-Bacon project, and second, whether the program in question was
nonetheless protected under the NLRA before it could reach the issue of whether the
defendant contractor or union had violated the Act. Such issues could form the basis of
an unfair labor practice charge before the Board. This creates a risk of conflicting rulings
from the state court and the Board, and threatens state interference with the NLRB's
enforcement of national labor relations policy. See Jones, 460 U.S. at 682 (state claim
preempted where fundamental element of claim also had to be proved to make out a case
under § 8(b)(1)(B) of the NLRA).
Because the conduct that the Fairness in Contracting Act seeks to regulate would
overlap with NLRB issues, this case is distinguishable from Sears. In Sears, the

MEMORANDUM DECISION AND ORDER - 36

employer filed a trespass action in state court in an effort to end the union's picketing on
its property. The Supreme Court rejected the union's claim that the action was preempted,
noting that the controversy regarding the location of the picketing was unrelated to the
issue Sears might have presented to the Board. To make out a state-law claim of trespass,
Sears needed only to prove the location of the Union's picketing. An unfair labor practice
charge, on the other hand, would have focused on the objectives of the picketing – an
issue “completely unrelated to the simple question whether a trespass had occurred.” 436
U.S. at 198. Thus “permitting the state court to adjudicate Sears’ trespass claim would
create no realistic risk of interference with the Labor Board's primary jurisdiction to
enforce the statutory prohibition against unfair labor practices.” Id. Such is not the case
here; because the issues that a state court and the Board would have to consider overlap,
the risk of conflicting rulings and interference with Board enforcement of national labor
policy is evident.
(3)

Filing of Complaint

The Court again rejects Wasden’s argument, raised during the earlier hearing on
injunctive relief, that NLRA primary jurisdiction does not preempt state regulation until
and unless the NLRB General Counsel files a complaint. In reprising this argument,
Wasden maintains that the Building Trades Council failed to meet its burden of
establishing that job targeting programs funded in whole or part by Davis-Bacon funds
are “arguably protected.” Sears, Roebuck & Co. v. San Diego County Dist. Council of
Carpenters, 436 U.S. 180, 206 (1978). But, as discussed previously, the Court has found
that the Building Trades Council has met this burden. The Court further finds that

MEMORANDUM DECISION AND ORDER - 37

enforcement of the Fairness in Contracting Act poses a real danger of interfering with the
protections afforded by Section 7 because the Building Trades Council has presented a
sufficiently strong argument that job targeting programs are protected. Thus, the Court
concludes that the Fairness in Contracting Act is preempted, even in the absence of Board
Action. C.f., Sears, Roebuck & Co. v. San Diego County Dist. Council of Carpenters,
436 U.S. 180, 206 (1978)
This conclusion is supported by the Ninth Circuit’s decision in Bud Antle, Inc. v.
Barbosa, 45 F.3d 1261, 1269 (9th Cir. 1994). While Bud Antle did not involve the exact
issues at play here, it remains instructive. In Bud Antle, the Ninth Circuit held that “a
private party may seek injunctive relief against the enforcement statute scheme on the
ground of federal preemption” even absent Board action and despite the fact the state
defendant was neither an employer nor employee able to initiate unfair labor practice
proceedings. This holding suggests that a federal court need not wait for Board action
before finding that regulation of an arguably protected or prohibited activity is
preempted.
C.

Conclusion

Having determined that the claim at issue here (1) involves activity that is actually
or arguably protected by the NLRA; (2) does not involve an issue deeply rooted in local
feeling and responsibility; and (3) would risk substantial interference with the jurisdiction
of the NLRA were it litigated in the state courts, the Court concludes that summary
judgment should be granted in favor of the Building Trades Council on the grounds that
the Fairness in Contracting Act is preempted.

MEMORANDUM DECISION AND ORDER - 38

ORDER
IT IS ORDERED:
1.

The Trades Councils’ Motion for Summary Judgment (Dkt. 31) is
GRANTED.

2.

Wasden’s Motion for Summary Judgment (Dkt. 32) is DENIED.

DATED: December 22, 2011

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

MEMORANDUM DECISION AND ORDER - 39