On April 1, 2024, over 500,000 California workers saw an increase in their hourly wage to a minimum of $20 an hour. This increase—to nearly three times the federal minimum wage—was the product of years of organizing by fast food workers. In addition to the wage increase, the workers also won the creation of a new administrative council that gives them the right to help set industry standards going forward. The law enabling the wage increase and the council emerged from political negotiations between the Governor, fast food corporations, franchise owners, and the fast food workers’ union, which is part of the Service Employees International Union (SEIU).
Yet California fast food workers still haven’t won a collective bargaining agreement with their employers. Indeed, despite growing support for workers’ rights in the United States and an increase in labor organizing and strike activity, the unionization rate among private sector workers remains at only about six percent.
A primary reason for low levels of unionization despite widespread support for unions is the structure of federal labor law. The National Labor Relations Act (NLRA) promises to protect workers’ rights to organize, bargain, and strike, but in practice, it fails to do so. Weaknesses in the law, including minimal penalties and limited enforcement mechanisms, make it exceedingly difficult for workers to organize new unions and reach first contracts with their employers. And the NLRA’s orientation around worksite-by-worksite bargaining fails to give workers sufficient power to set wages and working conditions throughout their sector even when they do successfully organize at a given workplace. Moreover, the law excludes too many workers from its protections, including independent contractors, agricultural workers, and domestic workers, exclusions that are a legacy, in part, of institutionalized racism.
Efforts to reform labor law at the federal level have repeatedly failed, even when Democrats have controlled the presidency and the Congress, leading legal scholars to declare labor law ossified and political scientists to describe the statute’s “drift”—i.e., the transformation of labor policy due to the failure to update rules or structures to reflect changing socioeconomic circumstances.
As others in this series have explained in more detail, several distinctive features of the American political economy help explain these problems of ossification and drift. For one, the federal separation-of-powers system, featuring an outsize number of veto points, means that even when legislative majorities support reform, it cannot be enacted. Other features of our constitutional system, including the countermajoritarian nature of the Senate and Electoral College, further undermine the ability of popular majorities to achieve policy change. Meanwhile, an exceptionally powerful and politicized judiciary has interpreted the NLRA in ways that are pro-business and solicitous of common law property and managerial rights (as Warren Snead writes about in his post).
But another distinctive feature of the American political economy—federalism—is currently providing a path for a partial de-ossification and renovation of labor policy, as Dan Galvin has written in his book and post for this series. This is not always the case: the highly decentralized form of federalism that characterizes the United States has often contributed to the country’s deeply inegalitarian political economy. Yet, federalism can also be a tool for achieving progressive change when reform is blocked at the federal level. The California fast food example discussed above illustrates one way in which unions and worker advocates are engaged in significant innovation at the state and local level, albeit constrained by principles of federal preemption.
In the remainder of this post, I explain the legal constraints on what state and localities can do to build worker power and the avenues nonetheless available to them; offer some examples of recent efforts to take advantage of those avenues; and consider the extent to which state and local efforts are likely to make a difference in reshaping the political economy in the United States.
The Legal Constraints of Preemption
In the United States, federal law preempts most state and local legislation relating to union organizing and collective bargaining. Under what is known as Garmon preemption, states and localities are prohibited from regulating any activity that is protected or prohibited or arguably protected or prohibited by NLRA. Under Machinists preemption, they are also prohibited from regulating activity that Congress intentionally left unregulated. In addition, if a state law claim is dependent on analysis of the terms of a collective bargaining agreement, then it is typically preempted. As a result of these doctrines, states are largely unable to pass legislation that directly governs organizing and bargaining rights of most private sector employees.
However, states are permitted to legislate in the area of labor and employment law in several ways that can both improve workers lives and build worker power:
- First, federal law permits states and localities to enact generally applicable employment standards, like minimum wages and scheduling laws.
- Second, federal law allows states and localities to establish organizing, bargaining, and strike rights for industries excluded from NLRA, like domestic work, agricultural work, and public sector work.
- Third, federal law provides states and localities some authority to make decisions about labor relations when they are acting as market participants (i.e., when they are purchasing services or spending money).
State and Local Innovation to Build Worker Power
In the last few years, due to effective organizing by labor unions, particularly in the service sector, as well as worker centers and community groups, states and localities have been pursuing all three of the non-preempted legal strategies in an effort to improve working conditions for workers and give them more power in the political economy.
- Generally applicable employment law, including with union participation. States have passed a range of laws that improve labor standards for workers, including significant increases in the minimum wage, scheduling protections, and limitations on the use of non-compete agreements. A few jurisdictions have even passed “just cause” protections. Such legislation raises the floor above which workers can organize and bargain. It can also shift power dynamics at work so that workers are less vulnerable, although more research is needed to understand whether and under what conditions such changes ultimately facilitate organizing and bargaining.
In addition, states and localities have begun experimenting anew with employment legislation that allows for a form of sectoral standard setting—filling an important gap left by federal law. These new laws set up administrative mechanisms through which both worker organizations and businesses can participate in designing standards for their own industries.
Worker boards have long been part of U.S. employment law but were reinvigorated after the Fight for $15 campaign pushed for states and localities to engage fast food workers in worker boards. In the last few years, the model has been expanded in several jurisdictions. For example, the new California law discussed above significantly raises fast food worker wages while also establishing a state-appointed council to enact industry-wide minimum standards, including wages, hours, and working conditions, for fast food workers. In Minnesota, a 2023 law established the Nursing Home Workforce Standards Board, consisting of employers, workers, and government actors. The nursing home board is charged with establishing minimum labor standards for the industry.
Although both California’s and Minnesota’s new boards will raise wages and help govern industries characterized by numerous small worksites and employers, they otherwise face different circumstances: California’s fast-food industry has almost no union density, making the council the primary means for worker voice. Minnesota’s nursing homes are much more unionized. There, the council is a vehicle for organized workers and employers to discuss industry standards, while they simultaneously bargain at the firm level.
Ultimately, however, both states’ boards are limited by federal preemption doctrine. The states cannot authorize actual collective bargaining at a sectoral level for workers covered by the NLRA. Time will tell whether, despite these limitations, the boards will increase worker voice and complement organizing efforts.
- Union rights for Excluded Workers. States have also been creating new pathways to organization and voice for workers not covered by the NLRA. For example, over the last couple of decades, unions have used innovative lawyering and legislative strategies to transform state-funded homecare and childcare workers into state employees, or quasi-state employees, in numerous jurisdictions (see also Trevor Brown's post for this series). After doing so, they won the right to hold representational elections for these workers and to bargain on a sector-wide basis. This has helped significantly expand the ranks of union members in states including Illinois, Minnesota, and California.
More recently, due to efforts by worker centers, alt-labor groups, and some traditional unions, several progressive states and localities have expanded protections for domestic workers and farmworkers, long excluded from federal labor law (see especially Dan Galvin's piece for this series). For example, New York state recently enacted bargaining rights for farmworkers after the state supreme court held that the state constitution required such rights. Domestic worker organizations have successfully pushed for new “Bills of Rights” and protections in numerous states and cities, including California, Connecticut, Illinois, Nevada, New York, and Seattle.
Other groups of workers, including so-called gig workers who provide app-based driving and delivery services, are currently working with unions to push for organizing rights at the state level. These workers are currently considered outside the NLRA’s definition of “employee,” thus granting states and cities the opportunity to legislate on their behalf, albeit with attention to antitrust law and its preemptive force.
Finally, a few states have recently strengthened protections for public sector workers. For example, Illinois recently passed a constitutional amendment affirming the right of workers to organize unions and engage in collective bargaining. Michigan recently repealed laws that constrained public employees’ ability to bargain.
- Good jobs through contracting and spending. As noted above, federal law provides states and localities some room to make decisions about labor relations when they are acting as market participants and not as regulators. As such, numerous states and localities set labor standards for their contracts in order to further labor peace. For instance, a 2021 New Jersey law requires a prevailing wage to be paid on many state contracts. Due to the work of the Communication Workers of America and other unions and advocacy groups, several recipients of contracts have agreed to labor peace provisions in order to ensure no disruptions to work, including in new manufacturing industries like off shore wind. Because these provisions are relatively new, however, their efficacy at increasing worker power and improving labor conditions is hard to measure. There may well be difficulties with implementation and enforcement.
Limitations and Counter-Movements
The innovations described above are significant. Yet they are also limited in important ways. Because of labor law preemption doctrine, in most cases, states cannot legislate to better protect private sector employees’ organize, bargain, and strike. So while the reforms will certainly improve workers’ lives, with the exception of the organizing and bargaining reforms that apply to non-NLRA workers, it is too early to tell whether they will significantly increase worker power.
In addition, these innovations are largely limited to “blue” states. Indeed, in red states, business interests have effectively mobilized to undermine worker rights. Florida passed a law reducing protections for public sector workers who join unions and forbidding automatic dues deduction from public employees’ pay. And the Iowa legislature is considering a bill that would decertify public sector unions if their employer fails to timely file certain paperwork.
Indeed, because of the way the Court has interpreted the NLRA, preemption doctrine helps employers more frequently than it helps unions. For example, the Court has interpreted the NLRA to allow states to enact “right to work” laws that prohibit employers and unions from negotiating fair-share fees—fees that require all employees who benefit from a contract to contribute to the cost of administering and negotiating it. In 2017, Kentucky became the twenty-seventh state to adopt a right to work law, and other states have recently considered similar legislation. The Court also recently allowed a tort action to proceed against a union for engaging in arguably protected strike activity, threatening to chill future strike activity in spite of the protection that preemption should provide.
Further illustrating federalism’s double-edged sword, conservative states are legislating to preempt progressive local labor and employment legislation. This has become more common in recent years, with conservative (often majority-White) state legislatures seeking to limit the ability of liberal (often majority-Black) cities to protect workers’ rights and other civil rights. In 2016, for example, after an organizing campaign by low-wage workers led by SEIU, the city of Birmingham increased its minimum wage to $10.10 per hour. The state of Alabama responded by prohibiting localities from raising the minimum wage higher than the federal minimum of $7.25. More recently, the State of Texas enacted a bill that strips cities of the ability to set standards for local workplaces (and to ensure civil rights or improve their environments).
Assessing the Impact—and the Future—of State and Local Reform Efforts
What are likely to be the enduring effects of efforts at the state and local level? While it is too soon to offer a definitive answer, state and local innovation appears to be an important tool for building worker power. The extent of the effect will depend on whether unions and their allies continue to enact new, ambitious statutes along the lines of those discussed above—and then use the frameworks to organize workers.
The success of these efforts will also depend on who is in power in state government, and whether workers continue to engage in political activity at the state and local level. The Supreme Court and the White House will also help determined success. For example, the Biden Administration has sought to facilitate state and local innovation to protect workers. For example, it recently announced new Uniform Guidance on contracting, changing the way states, cities, tribal governments, non-profits, and most entities that receive federal funding can use those funds. Federal grantees will now be permitted to use many innovative policies like local hire, local sourcing PLA's, job scoring policies, labor peace in service contracts, and other strategies to incentivize the creation of good jobs, equity, sustainability, and community participation in contracting. The Biden administration has also embedded labor standards in federal contracting. A new Republican Administration would likely to take the opposite approach.
* This post draws in part from forthcoming work to be published in the Wisconsin Law Review.
