Attorney General: The Honorable Nancy Wyman, State Comptroller, 2001-007 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

March 21, 2001

The Honorable Nancy Wyman
State Comptroller
55 Elm Street
Hartford, CT 06106

Dear Comptroller Wyman:

You have asked whether the expenditure of state funds to pay for costs related to the nursing home strike, including the cost of mobilizing the National Guard and the expedited payment to nursing home operators of the cost of replacement workers, would violate any state or federal labor laws. Based on our review, the National Labor Relations Act (NLRA) raises the most signifcant issues in connection with the labor dispute.

As a basic premise, federal law preempts and prevails over any conflicting state law or regulation, and must be respected by state officials under the Supremacy Clause of the United States Constitution. New York Telephone Co. v. New York State Dept. Of Labor, 440 U.S. 519, 540 (1979); Dowling v. Slotnik, 244 Conn. 781, 791, cert. denied, 525 U.S. 1017 (1998).

At the core of federal protection in the area of labor law is the powerful and long-established principle that government must remain neutral in private labor disputes -- that it must not take action to favor or support one side over another. See generally, Lodge 76, Int’l. Ass’n. of Machinists & Aerospace Workers, AFL-CIO v. Wisconsin Employment Relations Comm’n, 427 U.S. 132 (1976). A narrow exception for government action may occur when there is an immediate, direct threat to public health and safety. There must be a showing and determination that the danger is imminent and specific, based on substantial, reliable factual evidence. This showing or determination must also consider other factors, such as less intrusive alternatives available to protect public health and safety.

The NLRA guarantees employees the right to organize, to bargain collectively and "to engage in other concerted activities for the purpose of .... mutual aid or protection." 29 U.S.C. § 157 ("Section 7").1 It also prohibits employers from interfering with employees in the exercise of the rights protected by section 7. See 29 U.S.C. § 158(a)(1) ("Section 8").2 The National Labor Relations Board ("NLRB") is vested with the power to enforce sections 7 and 8 of the NLRA and thus has exclusive jurisdiction to decide disputes concerning conduct that is subject to the NLRA. 29 U.S.C. § 160.

Although the NLRA contains no express preemption provision, Building Trades v. Associated Builders, 507 U.S. 218, 224, 113 S.Ct. 1190, 122 L.Ed.2d 565 (1993), the United States Supreme Court has articulated two distinct principles that make preemption under the NLRA nearly complete. The first, called "Garmon preemption," prevents states from regulating any conduct subject to the regulatory jurisdiction of the NLRA, including any activity that is even "arguably" within the reach of the NLRA:

When an activity is arguably subject to § 7 or § 8 of the [NLRA], the States as well as federal courts must defer to the exclusive competence of the National Labor Relations Board if the danger of state interference with national policy is to be averted.

San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 245, 79 S.Ct 773, 780, 3 L.Ed.2d 775 (1959). "The Garmon rule prevents States not only from setting forth standards of conduct inconsistent with the NLRA, but also from providing their own regulatory or judicial remedies for conduct prohibited or arguably prohibited by the Act." Wisconsin Department of Industry v. Gould, Inc. 475 U.S. 282, 286, 106 S.Ct. 1057, 89 L.Ed. 2d 223 (1986).

A second preemption principle, known as "Machinists preemption," prohibits state and municipal regulation of areas that have been left "to be controlled by the free play of economic forces." Machinists v. Wisconsin Employment Relations Commission, 427 U.S. 147, 96 S.Ct. 2548, 49 L.Ed.2d 396 (1976). At issue in Machinists was the State Labor Commission's attempt to designate the refusal of unionized workers to perform overtime during contract negotiations as an unfair labor practice under state law. The refusal to work overtime was aimed at putting economic pressure on the employer and was neither protected nor prohibited by the NLRA. The Court held that Congress did not intend such "self-help" activities to be regulated by the States because "the use of economic pressure by the parties to a labor dispute is ... part and parcel of the process of collective bargaining," and neither a state nor the NLRB is "afforded flexibility in picking and choosing which economic devices of labor and management shall be branded unlawful." Id. at 144, 149, 96 S.Ct. at 2555, 2557 (internal citations omitted).

Thus, well-established law makes clear that the scope of NLRA preemption is quite broad and states are severely circumscribed in their ability to intervene in labor disputes. Therefore, the expenditure of state funds, whether to pay for the mobilization of the National Guard, to provide expedited payment to nursing home operators for the hiring of replacement workers, or for any other purpose in the context of a labor dispute, would clearly implicate the NLRA, and unless permitted by an exception to the broad preemptive sweep of the NLRA’s statutory scheme, could very well be illegal. In this regard, we have been provided with a February 7, 2001 letter to nursing home owners from Michael F. Starkowski, Deputy Commissioner of the Department of Social Services, stating that DSS would consider providing expedited reimbursement for "the incremental additional costs associated with facility staffing ... [including] replacement worker overtime and contract labor agency costs as well as any related fringe benefit expenses." We will assume for purposes of this opinion that these costs are reimbursable under federal and state law.3 Authority cited in the letter for the expedited nature of the payments is Conn. Gen. Stats. § 17b-340.4

The Supreme Court has recognized very limited and narrow exceptions to the general rule of preemption where danger to life and safety is involved, on the theory that the "[p]olicing of actual or threatened violence to persons or destruction of property has been held most clearly a matter for the States." Machinists, 427 U.S. at 136. The Garmon Court further held that:

[D]ue regard for the presuppositions of our embracing federal system, including the principle of diffusion of power not as a matter of doctrinaire localism but as a promoter of democracy, has required us not to find withdrawal from the States of power to regulate where . . . the regulated conduct touched interests so deeply rooted in local feeling and responsibility that, in the absence of compelling congressional direction, we could not infer that Congress had deprived the States of the power to act.

San Diego Building Trades Council v. Garmon, 359 U.S. at 243-44 (emphasis supplied).

In a case involving a potential strike of a nursing home, the United States District Court for the eastern district of New York applied the Garmon principle and concluded that "[t]he State’s primary concern is to protect and promote the health of its inhabitants. An interest more 'deeply rooted in local feeling and responsibility' would be difficult to find." 436 F. Supp. 335, 338 (E.D.N.Y.1977), aff’d, 591 F.2d 1331 (2d Cir. 1978), cert. denied, 440 U.S. 950 (1979).

At issue in N.L.R.B. v. State of New York was whether the State of New York could obtain an injunction enjoining nursing home workers from going on strike. The State argued that if the employees were permitted to strike, the health and welfare of the nursing home residents would be seriously jeopardized. The court denied the injunction as preempted by the NLRA, concluding that even if the State’s concerns were true, the injunction would directly interfere with the union’s right to strike as protected by section 7 of the NLRA. According to the court, "where §7 guarantees employees the right to engage in concerted activities, the guarantee applies to nearly all peaceful primary strikes and picketing in support of normal collective bargaining objectives even when they occur in a dispute threatening to cut off essential public services." Id. at 339, quoting Cox, Labor Law Preemption Revisited, 85 Harv. L. Rev. 1337, 1340 (1972).

The court explicitly recognized that "NLRA supremacy over the economic rights of unionized employees does not strip the State of its residual powers to protect the lives and health of [nursing home] residents." Id. at 339 (emphasis in original). As the court stated:

Given the vulnerable state of the residents of nursing homes should there be a cessation of services by those who are charged with their care, note must be taken that NLRA supremacy over the economic rights of unionized employees does not strip the State of its residual powers to protect the lives and health of those residents. While the State may not prohibit the employees from going out on strike or engaging in peaceful picketing, when it appears that the lives and health of nursing home residents are threatened, the State remains free, in the exercise of its local responsibility, to take whatever reasonable steps are necessary to protect the residents from the effects of strike activity.

Id. at 339 (underscoring emphasis supplied).

Thus, the court concluded, in the extremely narrow and extraordinary circumstance of danger to the lives and health of state residents, the state retained a limited power to take reasonable actions necessary to the protection of its residents. Application of this exacting standard to the present situation is necessarily fact-specific and requires an examination of whether the health and safety of residents are directly and imminently imperiled, whether alternatives to state intervention exist, and whether these alternatives would be adequate to protect the health and lives of affected individuals.

I have not been provided sufficient factual information about the current situation to enable me to make a determination as to whether this exacting standard could be met here; that is, whether the expenditure of state funds to pay for mobilization of the National Guard would be necessary to protect nursing home residents from direct, imminent danger to their lives and health or whether the State’s expedited payment of the costs of replacement workers, an expense traditionally borne by employers in labor disputes, is necessary to protect the health, safety and lives of nursing home patients. One issue is whether the nursing homes lack effective alternative means to assure that the lives and safety of the nursing home residents would not be directly and seriously imperiled at this time. We have not been informed whether alternatives to state intervention exist or have been explored, or whether such alternatives would be adequate to protect the health and lives of the affected nursing home residents. In connection with this inquiry, the anticipated duration of the strike would be relevant to the determination of the danger to the nursing home residents.

These relevant factors and others must be assessed to decide whether the very narrow exception to preemption exists.5

In conclusion, the NLRA has broad preemptive scope. The State and its agencies may expend state funds in the context of a private labor dispute only under extremely limited circumstances, and only to the extent necessary to protect the lives and health of the residents of the affected nursing homes from direct, imminent danger. Such expenditures must be narrowly tailored to meet those objectives. They must be based on a factual showing or determination supported by substantial, reliable evidence. If the expenditure of state funds cannot be justified under this test, it would be preempted by the NLRA and in conflict with Conn. Gen. Stats. § 27-14.

In the event more facts or specific expenditures must be considered, we would endeavor to provide further guidance.

I trust that this opinion answers your inquiry.

Very truly yours,

RICHARD BLUMENTHAL
ATTORNEY GENERAL


129 U.S.C. §157 provides in pertinent part: "Employees shall have the right to self-organization, to form, join or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection."

2Section 158(a)(1) of the NLRA states: "It shall be an unfair labor practice for an employer ... to interfere with, restrain or coerce employees in the exercise of [§ 7] rights."

3According to the Medicare Provider Reimbursement Manual, Part 1 Section 2180.1, "Reasonable costs incurred by providers in activities consistent with the National Labor Relations Act (NLRA) may represent allowable costs of operation, provided such costs are not directly related to influencing employees with respect to unionization and further provided such costs are not unreasonable in amount.... Unless the provider’s activities are unauthorized or prohibited by the NLRA or these guidelines, or unless the costs incurred for such activities are unreasonable in acount or unnecessary, they will be allowable." Hence, any such expenditures must be reconciled and consistent with the standards of the NLRA.

4Deputy Commissioner Starkowski’s February 7, 2001 letter cites Conn. Gen. Stats. § 17b-340 for the State’s authority to provide expedited payments for strike related costs. Generally, such expenses would be included in the facilities’ cost report, and would be considered for reimbursement under the normal statutory process. It is unclear whether §17b-340 provides authority for expedited payments. Even if there is such authority, it must be exercised in conformance with the NLRA standards discussed in this opinion

5It is unclear what role would be played by the National Guard. Use of the Guard for patient care could implicate a broad range of state and federal regulatory provisions. We have not addressed these issues here.


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