Episode #52
Who's In Charge of Labor Law? States, Sectoral Bargaining, and the End of Federal Preemption As We Knew It
For most of the last century, labor law meant federal law: one system, applied the same way whether the dispute was in Sacramento or Syracuse. Alex MacDonald , co-chair of Littler Mendelson's Workplace Policy Institute (WPI), joins Phil Wilson to explain why that assumption no longer holds, and why the shift from Washington to the states is accelerating faster than most employers realize. MacDonald walks through the legal architecture that made federal preemption durable under the National Labor Relations Act (NLRA): the Garmon and Machinists doctrines, and Section 301 of the Labor Management Reporting Act (LMRA), decades of case law that turned labor relations into what he calls "a net of things" rather than a single rule. That foundation is exactly why so many labor lawyers, MacDonald included, dismissed the first wave of state labor peace agreements (LPAs) as legally unserious. Years later, with LPA requirements now baked into cannabis licensing in more than a dozen states and actively being litigated in New Jersey, California, and Oregon, that dismissal looks premature. The conversation's center of gravity is sectoral bargaining, the industry-wide model now law in Massachusetts and California for rideshare drivers, with Illinois close behind. MacDonald breaks down how these statutes route around NLRA preemption by never using the word "bargaining," and how low the certification thresholds are once you account for who counts as an "active" worker. He then previews the Harvard model legislation that would extend this framework well past gig work into any industry, sketching a path through Section 14(c)(2) of the NLRA that could eventually pull sectoral bargaining into industries the NLRA already covers. If you work in labor relations and haven't been tracking the state-level shift, this is the fastest way to catch up on where the fight is heading next. Key Takeaways: Federal labor preemption rests on three overlapping doctrines — Garmon, Machinists, and Section 301 of the LMRA — that together made labor relations a near-exclusively federal subject for most of the 20th century. Labor peace agreements started as narrow, proprietary-interest exceptions (public construction projects) but have expanded dramatically through cannabis licensing, where the "proprietary interest" argument is legally shakier and now being tested in court. New Jersey's federal district court recently found the state's cannabis LPA requirement preempted; Oregon's is on appeal; California's went the other way on a separate "unclean hands" theory the state has since abandoned on appeal. Massachusetts and California have legalized sectoral bargaining for rideshare drivers by routing around NLRA preemption — regulators adopt union-negotiated terms as industry regulation rather than calling it a contract. Certification thresholds in these laws are strikingly low: Massachusetts requires signatures from just 25% of "active" drivers (drivers above the median ride count), meaning as little as 12.5% of the full driver population can trigger union certification with no election at all. A Harvard-drafted model bill would generalize this sectoral framework across any industry, requiring as few as 1,000 signatures to certify a bargaining representative regardless of industry size — and includes a "heavy version" allowing a state board to impose contract terms when negotiations stall. Section 14(c)(2) of the NLRA gives the Board discretion to decline jurisdiction when it finds no meaningful effect on interstate commerce — a mechanism labor law scholars argue could let a future, sympathetic Board defer to comprehensive state sectoral laws, effectively extending this model into NLRA-covered industries. Notable Quotes: "When I first started as a lawyer, if somebody had said to me the phrase 'state labor law,' I would have thought they were using the term loosely." — Alex MacDonald "They won't even say the word bargaining when they're describing it." — Phil Wilson "This thing is a glide path. The union doesn't even have to raise a finger." — Alex MacDonald, on the Massachusetts rideshare certification thresholds "If you are in the fifty-one percent quartile, just below the cutoff, you might get a union, you might not — it's up to everybody else." — Alex MacDonald Chapters: [00:02] Welcome and Introductions Phil welcomes Alex MacDonald to the show. [00:29] Meet Alex MacDonald and the Workplace Policy Institute MacDonald's path from the U.S. Postal Service's Office of General Counsel to co-chairing WPI at Littler Mendelson, and WPI's shift from a DC-focused to a state-and-local-focused practice. [02:59] A Short History of Federal Labor Preemption From the Clayton Act and Norris-LaGuardia through the Wagner Act — why labor law has been a top-down, federal creation from the start. [08:04] The Three Doctrines: Garmon, Machinists, and Section 301 Breaking down the legal "net" that made labor relations a near-exclusively federal subject. [13:19] What Is a Labor Peace Agreement? The basic mechanics of an LPA and its roots in public construction project labor agreements. [19:01] The Cannabis Industry LPA Explosion Why LPA requirements became standard practice in state cannabis licensing — and why nobody challenged them until recently. [24:31] New Jersey, Oregon, and the "Control Alt Destroy" Case Recent litigation outcomes, including the district of New Jersey's preemption ruling and California's "unclean hands" detour. [28:42] Sectoral Bargaining Arrives: Massachusetts and Gig Workers How Massachusetts and California built rideshare regulatory frameworks specifically designed to avoid the word "bargaining" — and avoid NLRA preemption. [35:56] The Math Behind the Thresholds Why "active driver" definitions and low turnout mean a small fraction of workers can determine representation for everyone. [40:51] The Harvard Model: Sectoral Bargaining for Every Industry The Harvard Center for Labor and a Just Economy's proposal to generalize sectoral bargaining well beyond gig work. [46:01] The "Heavy Version": Board-Imposed Contracts How the model legislation's stronger form lets a state board dictate contract terms when negotiations stall — and its relationship to the Faster Labor Contracts Act. [48:19] Section 14(c)(2) and the Path Into NLRA-Covered Industries Why this obscure jurisdictional provision could eventually let sectoral bargaining reach industries the NLRA already covers. [51:05] Where to Find WPI How to follow the Workplace Policy Institute's newsletter and Alex MacDonald's work.
