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SB519: Federal Court Calls Challenge To The "Employer Gag Law" Premature And Dismisses Suit

May 21, 2010


On May 6, 2010, U.S. District Court Judge Michael Mosman dismissed a lawsuit aimed at overturning Oregon SB 519 (known as either the “Workers Freedom Act” or the “Employer Gag Law”). Effective since January 1, 2010, the law prohibits employers from holding mandatory meetings for the primary purpose of communicating the employer’s views on religious or political issues, including unionization.

In dismissing the lawsuit filed by the U.S. Chamber of Commerce and Associated Oregon Industries, Judge Mosman stated that the legal challenge was premature because the plaintiffs were unable to show that any actual harm had taken place, or that they faced “real and imminent threat of prosecution” under SB 519. He held that the Chamber and AOI would have to wait until an actual controversy occurs – for instance, when an employer is actually charged with a complaint under SB 519. As a result, Judge Mosman did not reach or rule on the merits of the lawsuit filed by the Chamber and AOI.

As we reported in our December 28, 2009 Bullard Alert, the lawsuit filed by the Chamber and AOI sought a declaratory judgment that SB 519 violates employers’ constitutional (First Amendment) right of free speech and that it is preempted by the National Labor Relations Act. The Chamber and AOI also sought an order barring BOLI Commissioner Brad Avakian from taking action to enforce SB 519.

The preemption argument, which Judge Mosman described as premature, has merit and may be a winning argument in a future legal challenge. Among other things, the NLRA guarantees an employer’s right to communicate with employees, particularly for the purpose of sharing the employer’s views on unions generally or about a specific union. Both the United States Supreme Court and the National Labor Relations Board have consistently cited the need for nationally uniform labor law and have upheld the rights of employers to conduct mandatory meetings with employees.

For now, Oregon employers must continue complying with SB 519: avoid mandatory communications that have the “primary purpose” of sharing the employer’s views on religion or politics; and follow the posting requirement. See our April 30, 2010 Bullard Alert for compliant notice suggestions.

Bullard Law will continue to monitor developments related to SB 519, as well as other topics of importance to employers facing union organizing. Please also feel free to contact us with any questions or concerns about any other labor, employment or benefits issues.

- Sarah M. Petersen