Scholar argues that state labor regulation can substitute for weak federal governance.
A federal appeals court recently ruled that the structure of the nearly 100-year-old agency responsible for enforcing federal labor law, the National Labor Relations Board (NLRB), is likely unconstitutional. And with just one sitting member, the Board cannot even decide cases to enforce that law.
In a forthcoming article, Gali Racabi calls for the labor movement to “come to terms” with a “broken” federal regime and focus on expanding state labor law. Racabi, a professor at Cornell University School of Industrial and Labor Regulations, argues that states have a unique opportunity to regulate private-sector labor relations.
The NLRB-enforced National Labor Relations Act (NLRA) exclusively governs most private-sector labor relations. As a result, the NLRA largely preempts—that is, makes unenforceable—many state laws governing private-sector labor relations.
Although preempted, Racabi argues, these laws provide useful examples for designing labor regulation without federal enforcement. He notes that, like the NLRA, state laws aim to facilitate peaceful resolution of labor disputes and promote equal bargaining power. Many state laws, he explains, mirror the NLRA’s protections for union organizing and collective bargaining. These laws also often cover and exclude the same categories of workers as the NLRA, Racabi adds. But some state laws differ in important respects—by covering workers not covered by the NLRA, such as agricultural workers, or conferring rights only on employees, not employers.
Racabi explains that federal law gives only the appearance of desirable uniformity. He argues that that the NLRA has never actually standardized national labor law because it excludes significant sectors such as agriculture, the Board has regional differences in administration, and federal appeals courts in different parts the country have interpreted the NLRA inconsistently.
Without federal regulatory capacity, Racabi argues, enforcement and expansion of state laws is necessary and appropriate. Racabi acknowledges the traditional argument that states cannot compete with federal labor regulation, but argues the demise of federal enforcement means the NLRA cannot preempt state action. He describes how regional office reorganization at the NLRB and unexpected changes in the federal workforce have caused a dysfunctional regulatory system. That dysfunction, Racabi argues, should weaken the case for federal preemption.
Racabi argues that employers that claim their workers are not covered by the NLRA or that the Board’s structure is unconstitutional should not be allowed to insist on NLRA preemption. He argues that employers that want preemption must concede that their workers should receive the NLRA’s protections. If the NLRA does not govern because it is unconstitutional or inapplicable, he explains, then it cannot preempt state laws. Racabi describes this obstacle as the price employers pay for the strategic choice to attack the federal structure.
Because a system of purely state-level labor regulation would result in a patchwork of laws, Racabi emphasizes that state action is not the full solution to the problems Congress intended to address with the NLRA. Instead, he argues, state labor law offers an “up-for-grabs path” to regulating labor relations, and states should both enforce their existing laws and develop new ones.
Racabi proposes modifications to state laws in light of weakened federal preemption. States can adopt novel systems for regulating atypical sectors such as farmwork and gig driving. Some advocates, Racabi explains, are pushing for explicit language in state labor laws that clarifies when a state has jurisdiction. A Massachusetts bill, for example, claims that the state has authority to act “should federal law cease to preempt.”
Racabi imagines a future system of labor regulation that assumes states, by default, have the power to regulate labor. He identifies the federal minimum wage and hour law as a “floor preemption rule” under which states can set higher wages for employees, but not lower ones. Since labor relations regimes cannot be reduced to a choice of numbers, Racabi suggests that workers could choose to operate under the state or federal system, unless employers and their employees select one system by agreement. He argues that offering that choice would encourage early negotiation and coordination.
Racabi explains how regional coordination may help states regulate labor relations. He argues that a voluntary collaboration between groups of nearby states could reduce the risk that employers would move to whatever neighboring state had the least worker-friendly protections. He compares this model to voluntary regional pacts formed by states to address the COVID-19 pandemic.
“Bottom-up coordination,” whether between employees and their employers or among neighboring states, will empower workers and protect collective action rights, according to Racabi. He concludes that meaningful state-level action, rather than the “five rotating labor lawyers in D.C.” who make up the Board, will facilitate necessary labor solutions.
