New York, California Put 90-Year US Labor Law Framework in Limbo

Businesses will reckon with more pro-union approaches to resolving labor disputes after New York and California enacted laws empowering state agencies to handle matters long reserved for the National Labor Relations Board, if the states can overcome preemption challenges.

In recently-enacted legislation, the states asserted broad jurisdiction over private-sector union cases that the federal board has taken up under the National Labor Relations Act since 1935.

If the laws survive litigation, state boards in certain instances will oversee union representation elections and adjudicate unfair labor practice charges, potentially applying different statutory language and administrative processes. Handling these claims will be each state’s Public Employment Relations Board, which focused up to now on state and local government employees’ labor disputes.

Passage of the laws, combined with uncertainty at the NLRB—which lacks a quorum and faces lawsuits over its structure—risks a shift away from a nearly century-old federal framework and toward a state-by-state patchwork.

“It’s a whole different system that employers would have to be part of,” said Daniel D. Schudroff, a principal at Jackson Lewis PC in New York. “You would have different states interpreting issues in different ways.”

New York’s law is already the subject of two legal challenges, with the NLRB and Amazon each suing to claim the NLRB remains the proper forum for these disputes and that the state laws are preempted. California’s law may draw a similar challenge, as the California Chamber of Commerce told state lawmakers before its passage that federal law should usurp it, and voiced concerns about its business impact.

If California’s law largely takes effect as planned in 2026, “the consequence would be two different entities interpreting federal law with PERB having the explicit right to disregard NLRB precedent,” Ashley Hoffman, the chamber’s senior policy advocate, said in a June letter to legislators.

For Amazon, the concerns aren’t hypothetical. The Amazon Labor Union, a Teamsters affiliate that represents warehouse employees, filed an unfair labor practice charge with New York’s PERB on Sept. 17, shortly after Gov. Kathy Hochul (D) signed the state’s legislation. Amazon attached a copy of the charge to its lawsuit and said it mirrors a claim already at the NLRB.

The union accused Amazon of firing a worker because of his labor advocacy, including organizing a December 2024 strike, according to the charge document. The union on Oct. 2 filed letters in both New York lawsuits signaling it will seek to intervene in defense of the state law. It said New York’s PERB stayed processing of the charge against Amazon pending the outcome of Amazon’s motion for an injunction blocking the law’s enforcement.

Asserting Jurisdiction

Possible preemption of the state laws “is a complicated issue, but the states have the right to protect the workers in their boundaries,” said Jeanne Mirer, the New York attorney who filed the Amazon Labor Union charge with the state PERB.

New York’s new law starts with an assumption of state authority over labor disputes, unless the NLRB wins a court order to assert purview over a particular employer, industry, or group of employees.

The California law signed Sept. 30 triggers jurisdiction where the state determines the NLRB is impaired or has ceded its authority. This includes when a court ruling or congressional action repeals or rewrites federal labor protections or the NLRB’s power to enforce them. California would also step in when the NLRB lacks a quorum or the agency delays action on an unfair labor practice charge for more than six months.

Litigation has paused the board’s work on charges in other parts of the country. SpaceX won a court decision from the US Court of Appeals for the Fifth Circuit in August that found the NLRB’s structure violates the Constitution’s separation of powers, and froze the agency’s proceedings against the company.

The NLRB is also down to just one member, after President Donald Trump fired Democrat Gwynne Wilcox in January and the term of then-Chair Marvin Kaplan expired in August. Two nominees for board members who would restore quorum are scheduled for a Senate committee confirmation vote Oct. 9.

The federal board’s Acting General Counsel William Cowen has rejected the notion that the NLRB is currently impaired.

The agency continues to carry out the bulk of its duties through its regional offices and the general counsel. Most cases are resolved before reaching the full board, with only about 2% requiring a panel decision, Cowen said previously.

Key Differences

Jurisdiction aside, Amazon said in its challenge to the New York law that the state’s underlying labor statutes differ from the NLRA in ways that are likely to disadvantage employers.

The state law explicitly bans employers from a list of unfair labor practices, but unlike federal law there’s no corresponding list of unfair practices for employees or unions.

California’s recently enacted law says the state can force employers into binding arbitration if they fail to reach a collective bargaining agreement after six months of negotiating with their employees’ union, a provision that’s absent from federal law.

Procedural differences in the way state boards certify elections or handle ULP charges also could create headaches for both employers and unions, Schudroff said.

California’s process for handling ULP charges deviates from the NLRB’s approach, said J. Felix De La Torre, general counsel at the state’s PERB.

If the PERB initially investigates a claim and decides not to dismiss it, the charging party—often the union—then argues its case before an administrative law judge. At the NLRB, on the other hand, agency staff members act as the prosecutors for unfair labor practice charges.

The PERB is likely to issue regulations implementing the new California law that should address some of those procedural questions, De La Torre said.

“That’s one place the law doesn’t provide us with clarity or direction,” he said.