When confronted by a union organizing drive, the National Labor Relations Act has long-been interpreted to permit employers to hold what is known as a “captive audience speech.” During captive audience speeches—which must occur in the workplace and during work times—managers express their views to employees regarding the disadvantages of unionization. Employers usually make attendance at these meetings mandatory and discipline employees who fail to attend. Employers, however, cannot hold captive audience speeches within 24 hours of a union election.

In May 2010, the Wisconsin Legislature passed a law that prohibited employers from disciplining employees if they refused to attend an employer-sponsored meeting for which the primary purpose was to express the employer’s views on religious or political matters. The statute defined political matters to include an employee’s decision about whether to join or support a labor union.

Business groups sued the State of Wisconsin in federal court to prevent the statute’s enforcement, arguing that the NLRA preempted the Wisconsin statute to the extent that it prohibited captive audience speeches that the NLRA permitted. The Supremacy Clause of the United States Constitution requires that state laws must yield to federal law when Congress has intended to regulate an entire field of law, or when state laws and federal law directly conflict. The Supreme Court has said that in passing the NLRA, Congress did not intend to regulate the entire field of labor relations. Therefore, only state laws that directly conflict with federal labor law are vulnerable preemption challenges.

Interestingly, though far from a settled question, the State of Wisconsin did not put up a fight to defend its statute. Rather, it entered into an agreement with the plaintiff-business groups to end the lawsuit roughly a month after receiving notice of their challenge. Wisconsin agreed that the NLRA preempted its statute to the extent that it prohibited captive audience speeches. The Badger State even agreed to pay the plaintiff-business groups’ legal fees associated with their challenge. A few days later, the court entered a judgment based on the parties’ agreement and officially prohibited Wisconsin from enforcing its statute to extent it prohibited captive audience speeches. The remaining portions of the statute were left intact.

In 2009, the Oregon Legislature passed a similar law. Like in Wisconsin, business groups opposed the law on NLRA preemption grounds and sued in federal court to prohibit its enforcement. There, the court dismissed the case because it had not become ripe for review. Relying on the sometimes murky Constitutional requirement that an actual case or controversy exist, the court found the statute unripe for review because none of the employer groups or their constituent employers had actually held a captive audience speech and disciplined an employee for refusing to attend. The plaintiff-business groups did not appeal the court’s ruling, and the Oregon law currently remains in effect.

With the controversial Employee Free Choice Act seemingly permanently stalled in Congress, labor unions have turned some of their lobbying attention toward state legislatures. We will monitor these legislative developments as they continue to unfold.