Brown v. Hotel and Restaurant Employees
Encyclopedia
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).
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 (536 F. Supp. 317, (1982)) 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 (709 F.2d 815 (1983)) 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)).
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.
[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
, 363 U.S. 144 (1960), O'Connor noted that the Court had previously held that the Landrum-Griffin Act had not preempted the role of state legislation in regulating union officials.
O'Connor next addressed the New Jersey statute's enforcement mechanism. O'Connor recognized the continuing controlling nature of Hill in this regard, and acknowledged that questions of constitutionality and preemption must "be assessed independently in terms of its potential conflict with the federal enactment." O'Connor concluded, however, that the record was too incomplete on this issue, and remanded the issue to the appellate court so that it could order further proceedings.
White noted that although Section 7 of the NLRA granted employes the absolute right to choose collective bargaining representatives of their choosing, that right was not coextensive with the less absolute right to determine who should serve as officers in that organization. In the current case, White noted, the workers had chosen an organization rather than an individual as their collective bargaining agent. White agreed with the majority that the state can permissibly impose qualifications on the officers of Local 54. But the language of Section 7 of the NLRA as well as the Court's ruling in Hill permitted the state to impose sanctions only on the officers, not on the union. Interfering with the relatively untrammeled right of the union to carry out its duties as collective bargaining agent was impermissible as a matter of federal law:
The record, White noted, was quite clear in showing that Local 54 would not be able to function if either of the Casino Control Commission's sanctions were imposed. Thus, White would have overturned the statute on grounds of preemption under Section 7 of the NLRA:
ruled that the gaming commission had the right to force Gerace's resignation. Gerace initially fought the court's order, but eventually resigned after concluding that the continuing legal battle would "be disruptive to the operation of the union." Materio and LaSane also resigned, but were later hired by the union as business agents to handle non-casino related matters.
Five years after the ruling in Brown v. Hotel and Restaurant Employees Union, an academic study concluded that the Casino Control Act had been only marginally successful in preventing or eliminating organized crime influence in New Jersey's casino unions. The study noted that the law had not been used since its initial 1981 enforcement action, and that many union officials were merely rehired as consultants rather than as elected officers. The state gaming commission never again attempted to use its two statutory sanctions against any union, and relied instead on the threat of injunctions to remove officials it suspected of links to organized crime.
New Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...
state gaming law
Gaming law
Gaming law can be described as the set of rules and regulations that apply to the gaming or gambling industry. Gaming law is not a branch of law in the traditional sense but rather is a collection of several areas of law that include criminal law, regulatory law, constitutional law, administrative...
requiring union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...
leaders to be of good moral character was not preempted
Federal preemption
Federal preemption refers to the invalidation of US state law when it conflicts with Federal law.-Constitutional basis:According to the Supremacy Clause of the United States Constitution,...
by the National Labor Relations Act
National Labor Relations Act
The National Labor Relations Act or Wagner Act , is a 1935 United States federal law that limits the means with which employers may react to workers in the private sector who create labor unions , engage in collective bargaining, and take part in strikes and other forms of concerted activity in...
(NLRA).
Background
In 1976, New JerseyNew Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...
amended their state constitution
New Jersey State Constitution
The Constitution of the State of New Jersey is the basic governing document of the State of New Jersey. In addition to three British Royal Charters issued for East Jersey, West Jersey and united New Jersey while they were still colonies, the state has been governed by three constitutions...
to permit casino
Casino
In modern English, a casino is a facility which houses and accommodates certain types of gambling activities. Casinos are most commonly built near or combined with hotels, restaurants, retail shopping, cruise ships or other tourist attractions...
gambling
Gambling
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods...
in Atlantic City
Atlantic City, New Jersey
Atlantic City is a city in Atlantic County, New Jersey, United States, and a nationally renowned resort city for gambling, shopping and fine dining. The city also served as the inspiration for the American version of the board game Monopoly. Atlantic City is located on Absecon Island on the coast...
.
On June 2, 1977, Governor Brendan Byrne
Brendan Byrne
Brendan Thomas Byrne is an American Democratic Party politician from New Jersey, who served as the 47th Governor of New Jersey, from 1974 to 1982.-Early life and education:...
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
New Jersey Casino Control Commission
The Casino Control Commission is a New Jersey state governmental agency that was founded in 1977 as the state's gaming control board, responsible for administering the Casino Control Act and its regulations to assure public trust and confidence in the credibility and integrity of the casino...
and instituted comprehensive regulation of casino gambling—including the regulation of labor unions representing gaming industry employees. In an attempt to forestall organized crime
Organized crime
Organized crime or criminal organizations are transnational, national, or local groupings of highly centralized enterprises run by criminals for the purpose of engaging in illegal activity, most commonly for monetary profit. Some criminal organizations, such as terrorist organizations, are...
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
Hotel Employees and Restaurant Employees Union
The Hotel Employees and Restaurant Employees Union , was a United States labor union representing workers of the hospitality industry, formed in 1891. In 2004, HERE merged with the Union of Needletrades, Industrial, and Textile Employees to form UNITE HERE. HERE notably organized the staff of Yale...
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
Extortion
Extortion is a criminal offence which occurs when a person unlawfully obtains either money, property or services from a person, entity, or institution, through coercion. Refraining from doing harm is sometimes euphemistically called protection. Extortion is commonly practiced by organized crime...
. The commission also found that union officers refused to cooperate with Casino Control Commission investigators, and held stock in Resorts International, Inc.
Colony Capital LLC
Colony Capital is a private, international investment firm based in Los Angeles, California. The company, founded in 1991, has over 250 employees operating in 11 offices around the world. The company focuses on real estate opportunities around the world either on its own, through funds run by the...
(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
Nicodemo Scarfo
Nicodemo "Little Nicky" Domenico Scarfo is a member of the American Mafia who eventually became the Boss of the Philadelphia crime family after the death of Angelo Bruno and Phil Testa...
, a reputed leader of the Scarfo organized crime "family" based in Philadelphia
Philadelphia, Pennsylvania
Philadelphia is the largest city in the Commonwealth of Pennsylvania and the county seat of Philadelphia County, with which it is coterminous. The city is located in the Northeastern United States along the Delaware and Schuylkill rivers. It is the fifth-most-populous city in the United States,...
.
National and state AFL-CIO
AFL-CIO
The American Federation of Labor and Congress of Industrial Organizations, commonly AFL–CIO, is a national trade union center, the largest federation of unions in the United States, made up of 56 national and international unions, together representing more than 11 million workers...
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
United States district court
The United States district courts are the general trial courts of the United States federal court system. Both civil and criminal cases are filed in the district court, which is a court of law, equity, and admiralty. There is a United States bankruptcy court associated with each United States...
, seeking a permanent injunction
Injunction
An injunction is an equitable remedy in the form of a court order that requires a party to do or refrain from doing certain acts. A party that fails to comply with an injunction faces criminal or civil penalties and may have to pay damages or accept sanctions...
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
Strict scrutiny
Strict scrutiny is the most stringent standard of judicial review used by United States courts. It is part of the hierarchy of standards that courts use to weigh the government's interest against a constitutional right or principle. The lesser standards are rational basis review and exacting or...
.
On March 22, 1982, the United States District Court for the District of New Jersey
United States District Court for the District of New Jersey
The United States District Court for the District of New Jersey is the federal district court whose jurisdiction is the state of New Jersey....
held (536 F. Supp. 317, (1982)) that the New Jersey statute was not unconstitutionally vague
Void for vagueness
Void for vagueness is a legal concept in American constitutional law that states that a given statute is void and unenforceable if it is too vague for the average citizen to understand. There are several ways, senses or reasons a statute might be considered vague...
and did not impermissibly infringe on union members' First Amendment
First Amendment to the United States Constitution
The First Amendment to the United States Constitution is part of the Bill of Rights. The amendment prohibits the making of any law respecting an establishment of religion, impeding the free exercise of religion, abridging the freedom of speech, infringing on the freedom of the press, interfering...
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
United States Court of Appeals for the Third Circuit
The United States Court of Appeals for the Third Circuit is a federal court with appellate jurisdiction over the district courts for the following districts:* District of Delaware* District of New Jersey...
ruled (709 F.2d 815 (1983)) 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
En banc
En banc, in banc, in banco or in bank is a French term used to refer to the hearing of a legal case where all judges of a court will hear the case , rather than a panel of them. It is often used for unusually complex cases or cases considered to be of greater importance...
, 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
Certiorari
Certiorari is a type of writ seeking judicial review, recognized in U.S., Roman, English, Philippine, and other law. Certiorari is the present passive infinitive of the Latin certiorare...
(464 U.S. 990 (1983)).
Decision
Justice Sandra Day O'ConnorSandra Day O'Connor
Sandra Day O'Connor is an American jurist who was the first female member of the Supreme Court of the United States. She served as an Associate Justice from 1981 until her retirement from the Court in 2006. O'Connor was appointed by President Ronald Reagan in 1981...
delivered the opinion of the Court, in which Chief Justice Burger
Warren E. Burger
Warren Earl Burger was the 15th Chief Justice of the United States from 1969 to 1986. Although Burger had conservative leanings, the U.S...
and Justices Harry Blackmun
Harry Blackmun
Harold Andrew Blackmun was an Associate Justice of the Supreme Court of the United States from 1970 until 1994. He is best known as the author of Roe v. Wade.- Early years and professional career :...
and William Rehnquist
William Rehnquist
William Hubbs Rehnquist was an American lawyer, jurist, and political figure who served as an Associate Justice on the Supreme Court of the United States and later as the 16th Chief Justice of the United States...
joined. Justice Byron White
Byron White
Byron Raymond "Whizzer" White won fame both as a football halfback and as an associate justice of the Supreme Court of the United States. Appointed to the court by President John F. Kennedy in 1962, he served until his retirement in 1993...
, joined by Justices Lewis F. Powell, Jr. and John Paul Stevens
John Paul Stevens
John Paul Stevens served as an Associate Justice of the Supreme Court of the United States from December 19, 1975 until his retirement on June 29, 2010. At the time of his retirement, he was the oldest member of the Court and the third-longest serving justice in the Court's history...
, dissented. Justices William J. Brennan, Jr.
William J. Brennan, Jr.
William Joseph Brennan, Jr. was an American jurist who served as an Associate Justice of the United States Supreme Court from 1956 to 1990...
and Thurgood Marshall
Thurgood Marshall
Thurgood Marshall was an Associate Justice of the United States Supreme Court, serving from October 1967 until October 1991...
did not participate in the hearing or decision of the case.
Majority opinion
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. "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
Labor Management Reporting and Disclosure Act
The Labor Management Reporting and Disclosure Act of 1959 , is a United States labor law that regulates labor unions' internal affairs and their officials' relationships with employers.-Background:...
(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
De Veau v. Braisted
De Veau v. Braisted, 363 U.S. 144 is a 5-to-3 ruling by the Supreme Court of the United States that an interstate compact restricting convicted felons from holding union office is not preempted by the National Labor Relations Act or the Labor Management Reporting and Disclosure Act, does not...
, 363 U.S. 144 (1960), O'Connor noted that the Court had previously held that the Landrum-Griffin Act had not preempted the role of state legislation in regulating union officials.
O'Connor next addressed the New Jersey statute's enforcement mechanism. O'Connor recognized the continuing controlling nature of Hill in this regard, and acknowledged that questions of constitutionality and preemption must "be assessed independently in terms of its potential conflict with the federal enactment." O'Connor concluded, however, that the record was too incomplete on this issue, and remanded the issue to the appellate court so that it could order further proceedings.
Dissenting opinion
Justice White, writing for the dissent, argued that the linkage between Section 93 and Section 86 of the New Jersey act rendered the act preempted by federal law. If Section 86 merely imposed qualifications on union officials, White concluded, the law would not be preempted by the NLRA. But the act went far beyond that, and imposed sweeping penalties on the union. For the dissent, this proved critical:- It is not clear what portion of the statute the Court upholds since it expressly refuses to decide whether the dues prohibition and fund administration provisions are valid. Section 93(b) does nothing more than impose those two restrictions on unions whose officials are disqualified under the criteria set forth in § 86. It does not, by its terms, provide a mechanism for disqualifying any union officer. Therefore, while it appears that the Court holds that a State is free to disqualify certain individuals from acting as union officials as long as it does not impose sanctions on the union itself, it is not clear that anything in § 93(b) enables the State to do that.
White noted that although Section 7 of the NLRA granted employes the absolute right to choose collective bargaining representatives of their choosing, that right was not coextensive with the less absolute right to determine who should serve as officers in that organization. In the current case, White noted, the workers had chosen an organization rather than an individual as their collective bargaining agent. White agreed with the majority that the state can permissibly impose qualifications on the officers of Local 54. But the language of Section 7 of the NLRA as well as the Court's ruling in Hill permitted the state to impose sanctions only on the officers, not on the union. Interfering with the relatively untrammeled right of the union to carry out its duties as collective bargaining agent was impermissible as a matter of federal law:
- Allowing the State to so restrict the union's conduct infringes on the employees' right to bargain collectively through the representative of their own choosing because it prevents that representative from functioning as a collective-bargaining agent. ... A union which cannot sustain itself financially obviously cannot effectively engage in collective-bargaining activities on behalf of its members.
The record, White noted, was quite clear in showing that Local 54 would not be able to function if either of the Casino Control Commission's sanctions were imposed. Thus, White would have overturned the statute on grounds of preemption under Section 7 of the NLRA:
- I am willing to hold that, as a matter of law, a statute like § 93(b), which prohibits a union from collecting dues from its members, impairs the union's ability to represent those members to such an extent that it infringes on their § 7 right to bargain through the representative of their choice.
Consequences of the ruling
Gerace resigned shortly after the Supreme Court's ruling. However, Local 54 immediately rehired Gerace as a $48,000-a-year "consultant." The Casino Control Commission declared this "a subterfuge." The gaming commission declined to impose either of its statutory sanctions, and instead sought a court injunction forcing Gerace to resign his consultancy. In November 1984, a New Jersey state superior courtSuperior court
In common law systems, a superior court is a court of general competence which typically has unlimited jurisdiction with regard to civil and criminal legal cases...
ruled that the gaming commission had the right to force Gerace's resignation. Gerace initially fought the court's order, but eventually resigned after concluding that the continuing legal battle would "be disruptive to the operation of the union." Materio and LaSane also resigned, but were later hired by the union as business agents to handle non-casino related matters.
Five years after the ruling in Brown v. Hotel and Restaurant Employees Union, an academic study concluded that the Casino Control Act had been only marginally successful in preventing or eliminating organized crime influence in New Jersey's casino unions. The study noted that the law had not been used since its initial 1981 enforcement action, and that many union officials were merely rehired as consultants rather than as elected officers. The state gaming commission never again attempted to use its two statutory sanctions against any union, and relied instead on the threat of injunctions to remove officials it suspected of links to organized crime.