Brown v. Hotel and Restaurant Employees

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1984 United States Supreme Court case

Brown v. Hotel and Restaurant Employees, 468 U.S. 491 (1984), is a 4-to-3 ruling by the United States Supreme Court which held that a New Jersey state gaming law requiring union leaders to be of good moral character was not preempted by the National Labor Relations Act (NLRA).

Background

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In 1976, New Jersey amended their state constitution to permit casino gambling in Atlantic City .

On June 2, 1977, Governor Brendan Byrne signed the Casino Control Act (N.J. Stat. Ann. Section 5:12-1 et seq.) into law. The act established the New Jersey Casino Control Commission and instituted comprehensive regulation of casino gambling—including the regulation of labor unions representing gaming industry employees. In an attempt to forestall organized crime influence over labor unions, Sections 86 and 93 of the act imposed certain qualifications on officials of labor organizations representing casino industry workers. Among these qualifications were that the official be of "good moral character," not been convicted of certain felonies, and was not associated with organized crime. If a labor union's leaders did not meet these criteria, the union was prohibited from collecting or receiving dues from its members and from administering pension and welfare funds.

Hotel Employees and Restaurant Employees Union Local 54 represented about 12,000 workers, 10,000 of whom were employed in Atlantic City casinos. Almost all of these casino workers had been organized since the legalization of gambling in the state.

On May 13, 1981, the Casino Control Commission found that Frank Gerace, president of Local 54, and Frank Materio, the local's grievance manager, were associated with organized crime. The commission also ruled that Karlos LaSane, the union's business agent, was ineligible to be a union officer or agent because he had previously been convicted of extortion . The commission also found that union officers refused to cooperate with Casino Control Commission investigators, and held stock in Resorts International, Inc. (which owned one of the casinos in which Local 54 represented workers). Both actions contravened state regulations. The commission feared that Local 54 was being influenced by Nicodemo "Little Nicky" Scarfo , a reputed leader of the Scarfo organized crime "family" based in Philadelphia .

National and state AFL–CIO officials, fearing the New Jersey law might open the door to extensive new state regulation of labor unions, asked Local 54 to test the New Jersey law in court. After a regulatory appeal, the Casino Control Commission unanimously rejected the union's contention that the law was unconstitutional and preempted by the NLRA.

Local 54 then filed suit in federal district court , seeking a permanent injunction prohibiting enforcement of the act. At trial, the union argued that the law infringed on its members' constitutional right of freedom of association and was preempted by federal labor law. The state countered that the regulation was a permissible infringement of the freedom of association because keeping criminal elements out of the gaming industry was a compelling governmental interest .

On March 22, 1982, the United States District Court for the District of New Jersey held that the New Jersey statute was not unconstitutionally vague and did not impermissibly infringe on union members' First Amendment rights.

The union appealed.

While the appeal was pending, the Casino Control Commission ordered Gerace and Materio to vacate their union positions. The commission demanded that both men relinquish their union offices by October 12, 1982, or the local would not be permitted to collect dues or administer its pension plan.

On June 30, 1983, a three-judge panel of the United States Court of Appeals for the Third Circuit ruled 2-to-1 that the district court had erred. The appellate court granted the union's injunction, finding that Section 93 of the act was preempted by Section 7 of the NLRA.

The Court of Appeals relied heavily on the Supreme Court's decision in _Hill v. Florida ex rel. Watson _, 325 U.S. 538 (1945), when it concluded that Section 7 conferred "an unfettered right on employees to choose the officials of their own bargaining representatives."

The state sought a rehearing en banc , but the entire court of appeals refused to rehear the case after it deadlocked in a 5-to-5 vote.

The state appealed to the U.S. Supreme Court, which granted certiorari (464 U.S. 990 (1983)).

Decision

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Justice Sandra Day O'Connor delivered the opinion of the Court, in which Chief Justice Burger and Justices Harry Blackmun and William Rehnquist joined. Justice Byron White , joined by Justices Lewis F. Powell, Jr. and John Paul Stevens , dissented. Justices William J. Brennan, Jr. and Thurgood Marshall did not participate in the hearing or decision of the case.

Majority opinion

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Justice O'Connor concluded that Section 7 of the NLRA did not contain explicit pre-emptive language nor indicate congressional intent to usurp a state role in labor-management relations. "[A]ppropriate consideration for the vitality of our federal system and for a rational allocation of functions belies any easy inference that Congress intended to deprive the States of their ability to retain jurisdiction over such matters."

O'Connor then rejected the appellate court's reading of Hill v. Florida ex rel. Watson. Subsequent to Hill, O'Connor noted, Congress had enacted the Labor Management Reporting and Disclosure Act (the "Landrum-Griffin Act"). Section 504(a) of the Landrum-Griffin Act explicitly barred from office for a five-year period union officers convicted of any number of crimes. By enacting Section 504(a), O'Connor concluded, Congress "unmistakably indicated that the right of employees to select the officers of their bargaining representatives is not absolute..." Citing the plurality opinion in De Veau v. Braisted , O'Connor noted that the Court had previously held that

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