Int'l Union of Operating Eng'rs Local 399 v. Vill. of Lincolnshire

905 F.3d 995

INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 399, et al., Plaintiffs-Appellees, Cross-Appellants,

v.VILLAGE OF LINCOLNSHIRE, et al., Defendants-Appellants, Cross-Appellees.

Nos. 17-1300

17-1325

United States Court of Appeals, Seventh Circuit.

ARGUED MARCH 27, 2018

DECIDED SEPTEMBER 28, 2018

WOOD, Chief Judge.

The National Labor Relations Act and its amendments establish a national system of industrial-labor relations. The question before us in this case is whether a municipality—specifically, the Village of Lincolnshire, Illinois—can add to or change that system through a local ordinance. Lincolnshire passed an ordinance that purports to do three things: (1) forbid the inclusion of union-security or hiring-hall provisions in collective bargaining agreements, (2) forbid the mandatory use of hiring halls, and (3) forbid dues checkoff arrangements. The Village asserted that it had the right to do so under section 14(b) of the National Labor Relations Act, 29 U.S.C. § 164(b), which permits states to bar compulsory union membership as a condition of employment. Lincolnshire contends that, as a political subdivision of Illinois, it is entitled to exercise the state's power in this respect.

Whether a local law, rather than a state-wide law, falls within the scope of section 14(b) is a subject that has divided other courts. The Sixth Circuit, in United Automobile, Aerospace & Agricultural Implement Workers of America Local 3047 v. Hardin County, Kentucky , 842 F.3d 407 (6th Cir. 2016), agreed with the Village that it does, but only for union-security clauses. The Sixth Circuit found hiring-hall and dues-checkoff provisions comparable to those in the Lincolnshire ordinance to be outside the scope of section 14(b) and thus preempted by the NLRA. On the other side of the fence, Kentucky's highest court has held that section 14(b) does not permit local legislation on the topic of either union-security or mandatory use of hiring-halls or dues-checkoffs. See Kentucky State AFL-CIO v. Puckett , 391 S.W.2d 360 (Ky. Ct. App. 1965).¹ With all due respect to our sister circuit, on the union-security clause issue we find ourselves persuaded by the position that Kentucky took, although our reasons differ somewhat.² We agree with both courts that localities may not address the subjects of hiring halls or dues checkoffs. We thus conclude that the authority conferred in section 14(b) does not extend to the political subdivisions of states and affirm the judgment of the district court holding Lincolnshire's ordinance preempted and without force.

I

In 2015 Lincolnshire adopted Ordinance Number 15-3389-116 ("the Ordinance"). Section 4 of the Ordinance bans union-security agreements within the Village by forbidding any requirement that workers join a union, compensate a union financially, or make payments to third parties in lieu of such contributions. Section 4(B)–(D). Section 4 also bars any requirement that employees "be recommended, approved, referred, or cleared for employment by or through a labor organization." Section 4(E). Finally, section 5 prohibits employers from making any payments to unions on a worker's behalf except pursuant to a "signed written authorization" that "may be revoked by the employee at any time by giving written notice." Section 5. The Ordinance provides both civil remedies and criminal penalties for its violation.

A collection of unions sued Lincolnshire, asserting that the National Labor Relations Act of 1935 ("Wagner Act"), as amended by the Labor Management Relations Act of 1947 ("Taft-Hartley Act"), preempts the Ordinance. (The references in this opinion to the NLRA mean the Act as amended.) Their complaint asserts that sections 4(B)–(D), 4(E), and 5 of the Ordinance violate the Supremacy Clause and 42 U.S.C. § 1983.

The district court resolved the case on motions for summary judgment. It first found that all of the unions had standing to challenge the membership and fee provisions of section 4(A)–(D) and the checkoff regulation of section 5, but that only one of the unions could challenge the prohibition of hiring halls in section 4(E). We find the court's analysis in this respect to be sound, and there is no need to say more, since neither side has appealed from these rulings. The district court then held all three provisions to be preempted by the NLRA. In No. 17-1300, Lincolnshire has appealed from this determination. The district court also ruled that the unions failed to state a claim under section 1983, because it understood them to be asserting Garmon , rather than Machinists , preemption claims. See Golden State Transit Corp. v. City of L.A. , 493 U.S. 103, 110–13, 110 S.Ct. 444, 107 L.Ed.2d 420 (1989). Relying on that ruling, it prevented the unions from claiming attorney's fees under 42 U.S.C. § 1988. In No. 17-1325, the unions have cross-appealed the latter decision.

II

A

Before turning to the heart of the case, we note that the unions’ invocation of the Supremacy Clause was proper in this instance. Although the Supremacy Clause does not create a freestanding private right of action, Armstrong v. Exceptional Child Ctr., Inc. , ––– U.S. ––––, 135 S.Ct. 1378, 1384, 191 L.Ed.2d 471 (2015), a plaintiff may "sue to enjoin unconstitutional actions by state and federal officers" in violation of supreme federal law by invoking courts’ equitable powers or through the comparable mechanisms provided by the Declaratory Judgment Act. Restoration Risk Retention Grp., Inc. v. Gutierrez , 880 F.3d 339, 346 (7th Cir. 2018) (quoting Armstrong , 135 S.Ct. at 1384 ). That is what the unions have done here.

B

If it were not for section 14(b), the NLRA would preempt all three aspects of Lincolnshire's Ordinance. State law must give way to federal law, the Supreme Court has explained, in a number of instances: when Congress has enacted a statute expressly preempting state law; when there is "a framework of regulation so pervasive ... that Congress left no room for the States to supplement it or where there is a federal interest ... so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject"; and when state laws conflict with federal law, either because compliance with both is a physical impossibility, or because "the challenged state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress."

Arizona v. United States, 567 U.S. 387, 399, 132 S.Ct. 2492, 183 L.Ed.2d 351 (2012) (internal quotation marks and citations omitted); see Rice v. Santa Fe Elevator Corp. , 331 U.S. 218, 230, 67 S.Ct. 1146, 91 L.Ed. 1447 (1947).

The first of these possibilities is usually called field preemption, and we begin there. The Supreme Court has con-firmed that section 8 of the NLRA occupies the field for any activities that it "may fairly be assumed" fall within the ambit of the NLRA. San Diego Bldg. Trades Council v. Garmon , 359 U.S. 236, 244, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959). The negotiation and adoption of the types of provisions at issue here—union-security clauses, hiring-hall rules, and dues checkoffs—are such activities. E.g. , Amalgamated Ass’n of St., Elec. Ry. & Motor Coach Emps. of Am. v. Lockridge , 403 U.S. 274, 284, 91 S.Ct. 1909, 29 L.Ed.2d 473 (1971) ; see also id . at 296, 91 S.Ct. 1909 (noting that, with respect to union-security clauses, "federal concern is pervasive and its regulation complex"); Oil, Chem. & Atomic Workers, Int’l Union v. Mobil Oil Corp. , 426 U.S. 407, 409, 96 S.Ct. 2140, 48 L.Ed.2d 736 (1976).

Section 8(a)(3) of the NLRA bars, as an unfair labor practice, any "discrimination in regard to ... employment or any term or condition of employment to encourage or discourage membership in any labor organization." It also provides that nothing in the NLRA "or in any other statute of the United States, shall preclude" requiring new hires to join a union within 30 days, unless specified exceptions apply. 29 U.S.C. § 158(a)(3). That is enough to conclude—again, putting section 14(b) to the side for a moment—that the union-security provisions of the Ordinance impermissibly encroach on a field that has been occupied by section 8 of the NLRA. See Sweeney v. Pence , 767 F.3d 654, 661 (7th Cir. 2014) (finding analogous provisions in an Indiana statute governed union membership within the meaning of section 8). The same is true of the hiring-hall and dues-checkoff provisions, although our emphasis below will be on union-security clauses, as that is the only point of disagreement between the Sixth Circuit and us.

The Supreme Court has recognized that laws banning union-security agreements clash with section 8(a)(3) and thus can be saved only if they fall within the scope of section 14(b):

While § 8(a)(3) articulates a national policy that certain union-security agreements are valid as a matter of federal law ... [s]ection 14(b) allows a State or Territory to ban agreements "requiring membership in a labor organization as a condition of employment." We have recognized that with respect to those state laws which § 14(b) permits to be exempted from § 8(a)(3)'s national policy "[t]here is ... conflict between state and federal law; but it is a conflict sanctioned by Congress with directions to give the right of way to state laws ... . "

Mobil Oil Corp. , 426 U.S. at 416–17, 96 S.Ct. 2140 (quoting Retail Clerks Int’l Ass’n, Local 1625 v. Schermerhorn , 375 U.S. 96, 103, 84 S.Ct. 219, 11 L.Ed.2d 179 (1963) ) (alteration in original). The question before the Court in Mobil Oil was whether Texas's right-to-work laws could override an agency-shop requirement covering unlicensed seamen who were hired in Texas, but who spent "the vast majority of their working hours on the high seas." 426 U.S. at 410, 96 S.Ct. 2140. The Court concluded that Texas law did not reach this far and that "predominant job situs is the controlling factor in determining whether, under § 14(b), a State can apply its right-to-work laws to a...