Regulatory Updates

The 2007 California Compacts... and the Latest From Organized Labor

John H. Douglas
John H. Douglas

John H. Douglas, Attorney at Law
Foley & Lardner LLP

It would not be an overstatement to say that, particularly in California, the concerted opposition to the expansion of tribal gaming of many groups within organized labor has been inextricably intertwined with the political history of tribal gaming from the start. Though this may hardly be surprising in California where unions have considerable political clout due to longstanding Democratic control of the legislature (and, at least at times, the governor's mansion) ­– what is more surprising are the unexpected political alliances that have arisen as labor's opposition to tribal gaming has matured and grown in sophistication. Tribal leaders should make no mistake - the greater the success of tribal gaming, the more attractive a target it becomes to organized labor - and the more political influence and “corporate campaign” tactics will be brought to bear on tribes by unions seeking their goals. Tribal leaders should expect that both tribal sovereignty and solidarity will bear the brunt of this attack.

As virtually all tribal leaders are well aware by now, on the federal front, the San Manuel tribe has been locked in a near decade-long legal struggle pitting it against UNITE/HERE - the labor union with the largest presence - and most to lose – in Las Vegas. At stake has been whether tribal gaming enterprises - on a nationwide basis - will become subject to the jurisdiction of the National Labor Relations Board (NLRB) - the federal agency that administers and adjudicates labor disputes within the private sector.

In the latest battle in this struggle, a three judge panel of the United States Court of Appeals for the District of Columbia Circuit (the court immediately below the United States Supreme Court in the judicial pecking order) found that the NLRB could indeed exercise such jurisdiction over tribal casinos nationwide. San Manuel's petition for so-called “rehearing en banc” of that decision by all of the fourteen judges of that Court was denied on June 8, 2007. So now, unless San Manuel files a petition for a writ of certiorari with the United States Supreme Court within 90 days, that decision will become final. At that point, absent legislative amendment of the National Labor Relations Act (NLRA) – a doubtful prospect at best given the current composition of Congress - the application of the NLRA to - and federal agency jurisdiction over – tribal casinos will become a fact of life at least for the foreseeable future.

On the state front as well, as the tribes involved in the latest compact negotiations with the State of California can no doubt attest, organized labor has been equally busy pushing its agenda. At issue now are “card check” and “neutrality” - two key features of organized labor's so-called “corporate campaigns” that have become a kind of Holy Grail - and the centerpiece of its political agenda.

What are “card check” and “neutrality” – and why have they become so important to organized labor? To understand the answers to these questions, a brief detour into labor law history is necessary.

As passed (and currently under the NLRA), when a union wants to become the “exclusive bargaining representative” of a group of workers, it typically goes about procuring signed “authorization” cards from them in a process commonly referred to as “organizing.” Sometimes, this process is spearheaded by union employees who attempt to make contact with the employees being targeted at a variety of locations (typically the company parking lot) and persuade them to sign such cards. More often, the effort is led by a combination of employees with some kind of ax to grind against their employer (who are sympathetic to the union's message) along with an “organizer” assigned to push the union's effort with the employees being targeted. Typically, pro-union employees and organizers use a combination of promises of benefits (the carrot) and peer pressure (the stick) to encourage the signing of union authorization cards. Employees are typically told, moreover, that signing an authorization card does not even necessarily signify that the employee supports the union - much less that the union will win. Rather, it simply means that a (secret ballot) election can occur.

In fact, unions rarely file petitions seeking secret ballot elections unless well over fifty percent of an employer's employees have signed such cards, since the best chance the union will have at lining up support is early on when the employer may be unaware of its activities - and it is therefore free to make promises to employees without employer response- and to minimize the potential consequences of signing an “authorization” card. In order for the NLRB to hold a secret ballot election among the employees following the filing of a petition, the union must be able to show that it has cards from at least thirty per cent of the workers who it believes make up an appropriate “bargaining unit.” When and if it has finally gathered what it believes are sufficient authorization cards, rather than file a petition for a secret ballot election with the NLRB, however, a union frequently instead first contacts the employer with a demand that the employer recognize it as the representative of the majority of its workers based on the signed authorization cards that it claims it can present. Some employers - particularly those lacking any stomach for a fight with a union - will agree. And so the authorization cards that employees sign based on their belief that they will at most guarantee an election can sometimes result in a union becoming their representative. Currently, however, all employers in the private sector do have the legal right to insist that a secret ballot election be held after a period of time during which it too will have an opportunity to present to its employees its views of the potential costs and benefits of unionization.

“Card check” and “neutrality” seek to eliminate this option. The former requires employers, among other things, to give up their right to insist on a secret ballot election - and to accept the union's authorization cards at face value and as the product of an informed and uncoerced choice by the employees who have signed. “Neutrality” likewise requires employers to agree, when faced with a union organizing campaign, to a kind of “gag order” that prevents them from expressing any negative opinion about unionization.

Readers who followed the Spring, 2007 Congressional debate on the AFL-CIO-backed “Employee Free Choice Act” - which passed the House of Representatives only to then die in the Senate - will recognize “card check” and “neutrality” as organized labor's current legislative answer to decades of declining membership (other than in the public sector). In this - the “corporate campaign” – model of union organizing - rather than organize from the grass roots (the workers) up, the union first uses political muscle and carefully orchestrated negative public relations campaigns to force the employer to agree up front to provide the union access to its employees, to say nothing negative about the union and to recognize it based on cards even in the absence of a secret ballot election. Particularly for unions that have had an embarrassing history of internal corruption over the years, the silencing of the targeted employer can be a very valuable and effective tactic.

The initial round of California gaming compacts signed in 1999 during the administration of Democratic Governor Gray Davis required tribal casinos to agree to a “model” tribal labor relations ordinance whereby unions had “access” rights to come onto the property of tribes with in excess of 250 employees to communicate with the workers during non-work time and to post materials on employee bulletin boards. Unions that could show evidence of support by thirty per cent or more also had a right to receive a list of the names and home addresses of the tribal casino's employees. Ironically, around 2004, Republican Governor Arnold Schwarzenegger negotiated compacts (notably with the Pala and Viejas tribes) with provisions even more friendly to labor. Under the latter compacts, unions got not only rights of access, but also – for the first time – “neutrality” and “card check” provisions (not to mention, binding “interest” arbitration to resolve impasses in collective bargaining negotiations).

In fact, also ironically, none of these provisions that give unions a “leg up” in the organizing process (or while negotiating a contract) are actually available, in the absence of voluntary employer agreement, to unions under the NLRA - which the San Manuel decision of the D.C. Circuit Court of Appeals now says applies to tribal casino employers. Moreover, landmark Supreme Court decisions interpreting the NLRA also (at least arguably) limit the legal ability of state governments to intervene on behalf of unions in their dealings with private employers (which is what, according to the San Manuel decision, tribal employers have become).

Despite its recent success in the D.C. Circuit Court of Appeals, during California's latest round of compact negotiations with Agua Caliente, Morongo, Pechanga, San Manuel and Sycuan, UNITE/HERE was nonetheless demanding that the state secure, in addition to the access rights successfully secured during the 1999 compact negotiations, card check and neutrality provisions. To his credit, this time around, Governor Schwarzenegger declined to do so. UNITE/HERE was nonetheless apparently able to influence California Assembly Speaker Fabian Nunez to insist on a “verbal” side agreement whereby tribal casinos purportedly agreed not to “retaliate” against individuals trying to organize their workers.

Ultimately, new compacts (each allowing considerable slot machine expansion) were approved by the California legislature for four of the five tribes on June 28 – and signed by the Governor on August 10. The exception - San Manuel - reportedly because it would not agree to the side “deal” Speaker Nunez was offering. (One can only speculate about the effect, if any, San Manuel's ongoing litigation with UNITE/HERE had during the negotiations.)

For its part, UNITE/HERE is not satisfied with the outcome either, and on August 6, it filed petitions with the California Secretary of State seeking to put these compact amendments up to a vote during the February 5 presidential primary election. In an ominous development for tribal solidarity, moreover, it appears that UNITE/HERE has secured not only the financial support of Bay Meadows Land Co., a horse racing operator, but also the potential financial support of several other tribes for the effort to secure the signatures that will be required to qualify the ballot measures. Stay tuned.

John H. Douglas is a management-side labor and appellate lawyer, and a partner in the San Francisco office of Foley & Lardner LLP, a law firm founded in Wisconsin in 1842 - and now with close to 1,000 attorneys in offices coast to coast, Asia and Europe. He can be reached by calling (415) 984-9879 or email jdouglas@foley.com.