California Court of Appeal: California's Laws Protecting Union Speech On Private Property Are Unconstitutional

In a vindication of employer property rights, the California Court of Appeal in Ralph's Grocery v. UFCW, Local 8 (Case No. C060413, July 19, 2010), struck down the California Moscone Act as unconstitutional under the First and Fourteenth Amendments to the United States Constitution.

The Moscone Act, enacted in 1975, sharply limits a court's jurisdiction to intercede in trespass disputes involving union speech on private property. The Moscone Act decrees that conduct relating to a "labor dispute" is legal and divests any court of jurisdiction to issue a temporary restraining order, or preliminary or permanent injunction against such conduct. Cal. Code Civ. Proc. § 527.3. A separate statute, California Labor Code Section 1138.1 ("Section 1138.1"), enacted in 1999, imposes further restrictions. Under Section 1138.1, before issuing an injunction, a court must first conduct a live hearing and find that, inter alia, "the public officers charged with the duty to protect complainant's property are unable or unwilling to furnish adequate protection."

Practically speaking, the Moscone Act and Section 1138.1 have "shut the courthouse doors" to California employers seeking to enjoin union trespass on private property.

The Court's Analysis

In Ralph's, a union targeted a non-union grocery located in a retail complex for picketing. The union picketers walked back and forth in front of the entrance, encouraging customers to avoid the non-union store. The grocery store distributed a memorandum advising the union of its rules for speech on the premises. The store's rules prohibited the distribution of literature, physical contact with any person, display of signs larger than two feet by three feet, speech within 20 feet of the store entrance, and all speech during specified hours of the day and holidays.

The union agents did not adhere to the store's rules. As a result, the store requested that the local police department remove union agents who did not comply with the store's rules. The police department, for its part, refused to remove or detain union agents for peaceful picketing.

The store petitioned the California superior court to enjoin the union from using its premises as a forum for expression of union views. The trial court, while opining that the Moscone Act and Section 1138.1 were likely unconstitutional, considered itself bound by earlier precedent, and held that the grocery store had failed to adduce sufficient evidence to warrant an injunction under Section 1138.1.

On appeal, the Court of Appeal decided two key issues for employer property rights.

First, the Court of Appeal held that the store's entrance and "apron" (i.e., the 15-foot wide sidewalk between store and its parking lot) were private and not public areas. The Court of Appeal further held that the store's apron and perimeter areas were not the "functional equivalent" of a public forum. (citing Van v. Target Corp., 155 Cal. App. 4th 1375 (2007), and Albertson's, Inc. v. Young, 107 Cal. App. 4th 106, 113-120 (2003)). As a result, the store could limit the speech allowed on its property and exclude anyone seeking to engage in prohibited speech. Even though the store had granted other groups access to its property for speech, the Court of Appeal held that the store was within its rights to restrict the union's speech on store property. As the Court of Appeal held, "[a] private owner may selectively permit speech or prohibit speech in a private forum without affecting the private nature of the forum."

Second, the Court of Appeal deemed the Moscone Act and Section 1138.1 unconstitutional under the United States Constitution.

The Court of Appeal first observed that the effects of the Moscone Act and Section 1138.1 are to favor one type of speech over another. Specifically, by limiting equity jurisdiction in labor disputes, the statutes favor speech related to labor disputes over speech related to other matters. The statutes effectively deny a property owner access to equitable relief in a labor dispute, but allow such access in any other type of dispute.

Applying the Equal Protection Doctrine, the Court of Appeal held, "[g]overnmental discrimination based on content of speech is subject to strict scrutiny." (quoting Fashion Valley Mall, LLC v. NLRB, 42 Cal. 4th 850, 865 (2007)).

A law only passes strict scrutiny if "the government can show that the regulation is a precisely drawn means of serving a compelling state interest." (citing Consolidated Edison v. Public Service Comm'n, 447 U.S. 530, 541 (1980)).

The Court of Appeal concluded that there was no compelling government interest in forcing a property owner to allow speech related to a labor dispute on its property while allowing private property owners to prohibit other types of speech. Of note, the union did not even attempt to argue that the Moscone Act advanced a compelling government interest.

Implications for Employers

For employers, the Ralph's decision is a boost of confidence in their private property rights. The decision sanctions the ability of private property holders to establish rules restricting public speech on their property, and to enforce those rules using the equity jurisdiction of the courts. Principles of federal labor law, not addressed by the Ralph's court, may also affect an employer's ability to restrict union access and speech rights. Employers are advised to revisit their access rules and seriously weigh judicial enforcement options the next time those rules are tested by a third party.

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