Working Around Cedar Point: How California Can Get the Last Word on Union Access

https://onlabor.org/working-around-cedar-point-how-california-gets-the-last-word-on-union-access/

July 22, 2024

By Benjamin Sachs

Three years ago, the Supreme Court decided Cedar Point Nursery and held that a California regulation granting union organizers limited access to farm owner property constitutes a taking. As a result, in order for California to continue enforcing this Agricultural Labor Relations Act (ALRA) regulation and guaranteeing union organizers access to farm property, the state must now compensate farm owners for that access. In other writing, one of us has argued that Cedar Point was wrongly decided on its own terms. Other commentators have discussed what compensation is due to the farm owners for the grant of access rights required by the regulation: Lee Anne Fennell suggests it could be less than five dollars per grower annually, while Niko Bowie contends it could be much higher, reflecting the potential decrease in profits that might follow a successful union campaign.

Here, we wish to take up a different analysis. Granting for the sake of this discussion that Cedar Point is good law, and agnostic as to the amount of compensation due to farm owners, we instead wish to call attention to a mechanism that would enable California to generate significant revenue from the parties regulated by the ALRA. Although not possible to say with certainty, this mechanism could generate more revenue than the takings clause requires the state to pay for the grant of access rights. (We assume for purposes of this discussion that the amount of compensation due – and the administrative costs involved in calculating and distributing that compensation – is not de minimis. If these costs are in fact de minimis, then California should be able to continue enforcing access rights as it did prior to Cedar Point.)

The mechanism we have in mind is known in California as a “regulatory fee” and is common across multiple regulatory contexts in the state. For example, family farms pay regulatory fees to offset the costs the state incurs in supervision of water usage, paint manufacturers pay regulatory fees to offset the state’s cost of mitigating the adverse health effects of lead paint products, and utility companies pay regulatory fees to offset municipalities’ costs of monitoring emissions. Our fee would require parties regulated by the Agricultural Labor Relations Board (ALRB) – farm owners and unions – to offset the state’s costs of investigating unfair labor practices (ULPs) under the ALRA. As we discuss below, the fee could be apportioned in various ways that would capture the parties’ ULP track record or their total number of employees. And while California cannot simply charge farm owners for the compensation the state owes those farm owners under the takings clause, a regulatory fee that acts as a pooling mechanism designed to pay for ALRB investigations does not amount to such a charge.

The California courts have made clear that the legislature has fairly wide discretion in implementing regulatory fees, despite ballot initiatives limiting governmental authority to raise taxes. For example, in California Building Industry Association v. State Water Resources Control Board the California Supreme Court held that regulatory fees are permissible if they do not exceed reasonable costs related to administering a state program, are not for unrelated revenue purposes, and bear a reasonable relationship to the burdens created by fee payers’ activities. Moreover, the appellate court in Cal. Ass’n of Prof, Scientists v. Dep’t of Fish & Game clarified that a regulatory fee can be imposed for purposes “broader than the privilege to use a service or obtain a permit.” Indeed, a regulatory fee can be imposed to support a “regulatory program” whose purpose is the “protection of the health and safety of the public.”

FULL story at link above.