CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA et al. v. BROWN, ATTORNEY GENERAL OF CALIFORNIA, et al.

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60 OCTOBER TERM, 2007
Syllabus
CHAMBER OF COMMERCE OF THE UNITED STATES
OF AMERICA et al. v. BROWN, ATTORNEY GENERAL
OF CALIFORNIA, et al.
certiorari to the united states court of appeals for
the ninth circuit
No. 06–939. Argued March 19, 2008—Decided June 19, 2008
Organizations whose members do business with California sued to en
join enforcement of “Assembly Bill 1889” (AB 1889), which, among
other things, prohibits employers that receive state grants or more
than $10,000 in state program funds per year from using the funds “to
assist, promote, or deter union organizing.” Cal. Govt. Code Ann.
§§ 16645.2(a), 16645.7(a). The District Court granted the plaintiffs par
tial summary judgment, holding that the National Labor Relations Act
(NLRA) pre-empts §§ 16645.2 and 16645.7 because they regulate em
ployer speech about union organizing under circumstances in which Con
gress intended free debate. The Ninth Circuit reversed, concluding
that Congress did not intend to preclude States from imposing such
restrictions on the use of their own funds.
Held: Sections 16645.2 and 16645.7 are pre-empted by the NLRA.
Pp. 64–76.
(a) The NLRA contains no express pre-emption provision, but this
Court has held pre-emption necessary to implement federal labor policy
where, inter alia, Congress intended particular conduct to “be unregu
lated because left ‘to be controlled by the free play of economic forces.’ ”
Machinists v. Wisconsin Employment Relations Comm’n, 427 U. S.
132, 140. Pp. 64–66.
(b) Sections 16645.2 and 16645.7 are pre-empted under Machinists
because they regulate within “a zone protected and reserved for market
freedom.” Building & Constr. Trades Council v. Associated Build
ers & Contractors of Mass. /R. I., Inc., 507 U. S. 218, 227. In 1947, the
Taft-Hartley Act amended the NLRA by, among other things, adding
§ 8(c), which protects from National Labor Relations Board (NLRB) reg
ulation noncoercive speech by both unions and employers about labor
organizing. The section both responded to prior NLRB rulings that
employers’ attempts to persuade employees not to organize amounted
to coercion prohibited as an unfair labor practice by the previous version
of § 8 and manifested a “congressional intent to encourage free debate
on issues dividing labor and management.” Linn v. Plant Guard
Workers, 383 U. S. 53, 62. Congress’ express protection of free debate

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61 Cite as: 554 U. S. 60 (2008)
Syllabus
forcefully buttresses the pre-emption analysis in this case. California’s
policy judgment that partisan employer speech necessarily interferes
with an employee’s choice about union representation is the same policy
judgment that Congress renounced when it amended the NLRA to pre
clude regulation of noncoercive speech as an unfair labor practice. To
the extent §§ 16645.2 and 16645.7 actually further AB 1889’s express
goal, they are unequivocally pre-empted. Pp. 66–69.
(c) The Ninth Circuit’s reasons for concluding that Machinists did not
pre-empt §§ 16645.2 and 16645.7—(1) that AB 1889’s spending restric
tions apply only to the use of state funds, not to their receipt; (2) that
Congress did not leave the zone of activity free from all regulation, in
that the NLRB still regulates employer speech on the eve of union elec
tions; and (3) that California modeled AB 1889 on federal statutes, e. g.,
the Workforce Investment Act—are not persuasive. Pp. 69–76.
463 F. 3d 1076, reversed and remanded.
Stevens, J., delivered the opinion of the Court, in which Roberts, C. J.,
and Scalia, Kennedy, Souter, Thomas, and Alito, JJ., joined.
Breyer, J., filed a dissenting opinion, in which Ginsburg, J., joined, post,
p. 76.
Willis J. Goldsmith argued the cause for petitioners.
With him on the briefs were Michael A. Carvin, Noel J.
Francisco, Luke A. Sobota, Robin S. Conrad, Shane Bren
nan, Steven J. Law, and Stephen A. Bokat.
Deputy Solicitor General Hungar argued the cause for
the United States as amicus curiae urging reversal. With
him on the brief were former Solicitor General Clement,
Nicole A. Saharsky, Ronald Meisburg, John H. Ferguson,
and Linda Dreeben.
Michael Gottesman argued the cause for respondents.
On the brief for state respondents were Edmund G. Brown,
Jr., Attorney General of California, pro se, Janet Gaard,
Chief Assistant Attorney General, Manuel M. Medeiros, So
licitor General, Gordon Burns, Deputy Solicitor General,
Louis Verdugo, Jr., Senior Assistant Attorney General, and
Richard T. Waldow and Angela Sierra, Supervising Deputy
Attorneys General. Stephen P. Berzon, Scott A. Kronland,
and Jonathan P. Hiatt filed a brief for respondent American

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62 CHAMBER OF COMMERCE OF UNITED STATES OF
AMERICA v. BROWN
Opinion of the Court
Federation of Labor and Congress of Industrial Organiza
tions et al.*
Justice Stevens delivered the opinion of the Court.
A California statute known as “Assembly Bill 1889” (AB
1889) prohibits several classes of employers that receive
state funds from using the funds “to assist, promote, or deter
union organizing.” See Cal. Govt. Code Ann. §§ 16645–
16649 (West Supp. 2008). The question presented to us is
whether two of its provisions—§ 16645.2, applicable to grant
recipients, and § 16645.7, applicable to private employers re
ceiving more than $10,000 in program funds in any year—
are pre-empted by federal law mandating that certain zones
of labor activity be unregulated.
I
As set forth in the preamble, the State of California
enacted AB 1889 for the following purpose:
*Briefs of amici curiae urging reversal were filed for the American
Hospital Association by F. Curt Kirschner, Jr., and Irving L. Gornstein;
for Associated Builders and Contractors, Inc., et al. by Maurice Baskin,
Robert Fried, and Thomas Lenz; for the Cato Institute by Ilya Shapiro;
and for the Healthcare Association of New York State, Inc., et al. by Jef
frey J. Sherrin, Cornelius D. Murray, and James A. Shannon.
Briefs of amici curiae urging affirmance were filed for the State of New
York et al. by Andrew M. Cuomo, Attorney General of New York, Barbara
D. Underwood, Solicitor General, Benjamin N. Gutman, Deputy Solicitor
General, and Sasha Samberg-Champion, Assistant Solicitor General, and
by the Attorneys General for their respective States as follows: Richard
Blumenthal of Connecticut, Bill McCollum of Florida, Lisa Madigan of
Illinois, Thomas Miller of Iowa, Jack Conway of Kentucky, G. Steven
Rowe of Maine, Martha Coakley of Massachusetts, Lori Swanson of Min
nesota, Jeremiah W. (Jay) Nixon of Missouri, Mike McGrath of Montana,
Catherine Cortez Masto of Nevada, Gary G. King of New Mexico, Marc
Dann of Ohio, Hardy Myers of Oregon, Patrick C. Lynch of Rhode Island,
Darrell V. McGraw, Jr., of West Virginia, and Bruce A. Salzburg of Wyo
ming; and for AARP et al. by Amy Howe, Kevin K. Russell, Pamela S.
Karlan, and Jeffrey L. Fisher.
Glenn M. Taubman filed a brief for the National Right to Work Legal
Defense Foundation, Inc., et al. as amici curiae.

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Opinion of the Court
“It is the policy of the state not to interfere with an
employee’s choice about whether to join or to be repre
sented by a labor union. For this reason, the state
should not subsidize efforts by an employer to assist,
promote, or deter union organizing. It is the intent of
the Legislature in enacting this act to prohibit an em
ployer from using state funds and facilities for the pur
pose of influencing employees to support or oppose
unionization and to prohibit an employer from seeking
to influence employees to support or oppose unionization
while those employees are performing work on a state
contract.” 2000 Cal. Stats. ch. 872, § 1.
AB 1889 prohibits certain employers that receive state
funds—whether by reimbursement, grant, contract, use of
state property, or pursuant to a state program—from using
such funds to “assist, promote, or deter union organizing.”
See Cal. Govt. Code Ann. §§ 16645.1 to 16645.7. This prohi
bition encompasses “any attempt by an employer to influence
the decision of its employees” regarding “[w]hether to sup
port or oppose a labor organization” and “[w]hether to be
come a member of any labor organization.” § 16645(a). The
statute specifies that the spending restriction applies to “any
expense, including legal and consulting fees and salaries of
supervisors and employees, incurred for . . . an activity to
assist, promote, or deter union organizing.” § 16646(a).
Despite the neutral statement of policy quoted above, AB
1889 expressly exempts “activit[ies] performed” or “ex
pense[s] incurred” in connection with certain undertakings
that promote unionization, including “[a]llowing a labor or
ganization or its representatives access to the employer’s
facilities or property,” and “[n]egotiating, entering into, or
carrying out a voluntary recognition agreement with a labor
organization.” §§ 16647(b), (d).
To ensure compliance with the grant and program restric
tions at issue in this case, AB 1889 establishes a formidable
enforcement scheme. Covered employers must certify that
no state funds will be used for prohibited expenditures; the

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64 CHAMBER OF COMMERCE OF UNITED STATES OF
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Opinion of the Court
employer must also maintain and provide upon request “rec
ords sufficient to show that no state funds were used for
those expenditures.” §§ 16645.2(c), 16645.7(b)–(c). If an
employer commingles state and other funds, the statute pre
sumes that any expenditures to assist, promote, or deter
union organizing derive in part from state funds on a
pro rata basis. § 16646(b). Violators are liable to the State
for the amount of funds used for prohibited purposes plus a
civil penalty equal to twice the amount of those funds.
§§ 16645.2(d), 16645.7(d). Suspected violators may be sued
by the state attorney general or any private taxpayer, and
prevailing plaintiffs are “entitled to recover reasonable attor
ney’s fees and costs.” § 16645.8(d).
II
In April 2002, several organizations whose members do
business with the State of California (collectively, Chamber
of Commerce) brought this action against the California De
partment of Health Services and appropriate state officials
(collectively, the State) to enjoin enforcement of AB 1889.
Two labor unions (collectively, AFL–CIO) intervened to de
fend the statute’s validity.
The District Court granted partial summary judgment in
favor of the Chamber of Commerce,1 holding that the Na
tional Labor Relations Act (NLRA or Wagner Act), 49 Stat.
449, as amended, 29 U. S. C. § 151 et seq., pre-empts Cal. Govt.
Code Ann. § 16645.2 (concerning grants) and § 16645.7 (con
cerning program funds) because those provisions “regulat[e]
employer speech about union organizing under specified cir
cumstances, even though Congress intended free debate.”
Chamber of Commerce v. Lockyer, 225 F. Supp. 2d 1199, 1205
(CD Cal. 2002). The Court of Appeals for the Ninth Circuit,
1 The District Court held that the Chamber of Commerce lacked stand
ing to challenge several provisions of AB 1889 concerning state contrac
tors and public employers. See Chamber of Commerce v. Lockyer, 225
F. Supp. 2d 1199, 1202–1203 (CD Cal. 2002).

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after twice affirming the District Court’s judgment, granted
rehearing en banc and reversed. See Chamber of Com
merce v. Lockyer, 463 F. 3d 1076, 1082 (2006). While the en
banc majority agreed that California enacted §§ 16645.2 and
16645.7 in its capacity as a regulator, and not as a mere pro
prietor or market participant, see id., at 1082–1085, it con
cluded that Congress did not intend to preclude States from
imposing such restrictions on the use of their own funds, see
id., at 1085–1096. We granted certiorari, 552 U. S. 1035
(2007), and now reverse.
Although the NLRA itself contains no express pre
emption provision, we have held that Congress implicitly
mandated two types of pre-emption as necessary to imple
ment federal labor policy. The first, known as Garmon pre
emption, see San Diego Building Trades Council v. Gar
mon, 359 U. S. 236 (1959), “is intended to preclude state
interference with the National Labor Relations Board’s
interpretation and active enforcement of the ‘integrated
scheme of regulation’ established by the NLRA.” Golden
State Transit Corp. v. Los Angeles, 475 U. S. 608, 613 (1986)
(Golden State I). To this end, Garmon pre-emption forbids
States to “regulate activity that the NLRA protects, prohib
its, or arguably protects or prohibits.” Wisconsin Dept. of
Industry v. Gould Inc., 475 U. S. 282, 286 (1986). The sec
ond, known as Machinists pre-emption, forbids both the Na
tional Labor Relations Board (NLRB) and States to regulate
conduct that Congress intended “be unregulated because left
‘to be controlled by the free play of economic forces.’ ” Ma
chinists v. Wisconsin Employment Relations Comm’n, 427
U. S. 132, 140 (1976) (quoting NLRB v. Nash-Finch Co., 404
U. S. 138, 144 (1971)). Machinists pre-emption is based on
the premise that “ ‘Congress struck a balance of protection,
prohibition, and laissez-faire in respect to union organization,
collective bargaining, and labor disputes.’ ” 427 U. S., at
140, n. 4 (quoting Cox, Labor Law Preemption Revisited, 85
Harv. L. Rev. 1337, 1352 (1972)).

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66 CHAMBER OF COMMERCE OF UNITED STATES OF
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Opinion of the Court
Today we hold that §§ 16645.2 and 16645.7 are pre-empted
under Machinists because they regulate within “a zone
protected and reserved for market freedom.” Building &
Constr. Trades Council v. Associated Builders & Contrac
tors of Mass. /R. I., Inc., 507 U. S. 218, 227 (1993) (Boston
Harbor). We do not reach the question whether the provi
sions would also be pre-empted under Garmon.
III
As enacted in 1935, the NLRA, which was commonly
known as the Wagner Act, did not include any provision that
specifically addressed the intersection between employee or
ganizational rights and employer speech rights. See 49
Stat. 449. Rather, it was left to the NLRB, subject to re
view in federal court, to reconcile these interests in its con
struction of §§ 7 and 8. Section 7, now codified at 29 U. S. C.
§ 157, provided that workers have the right to organize, to
bargain collectively, and to engage in concerted activity for
their mutual aid and protection. Section 8(1), now codified
at 29 U. S. C. § 158(a)(1), made it an “unfair labor practice”
for employers to “interfere with, restrain, or coerce employ
ees in the exercise of the rights guaranteed in section 7.”
Among the frequently litigated issues under the Wagner
Act were charges that an employer’s attempts to persuade
employees not to join a union—or to join one favored by the
employer rather than a rival—amounted to a form of coer
cion prohibited by § 8. The NLRB took the position that § 8
demanded complete employer neutrality during organizing
campaigns, reasoning that any partisan employer speech
about unions would interfere with the § 7 rights of employ
ees. See 1 J. Higgins, The Developing Labor Law 94 (5th
ed. 2006). In 1941, this Court curtailed the NLRB’s aggres
sive interpretation, clarifying that nothing in the NLRA
prohibits an employer “from expressing its view on labor pol
icies or problems” unless the employer’s speech “in connec
tion with other circumstances [amounts] to coercion within

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the meaning of the Act.” NLRB v. Virginia Elec. & Power
Co., 314 U. S. 469, 477. We subsequently characterized Vir
ginia Electric as recognizing the First Amendment right of
employers to engage in noncoercive speech about unioniza
tion. Thomas v. Collins, 323 U. S. 516, 537–538 (1945).
Notwithstanding these decisions, the NLRB continued to
regulate employer speech too restrictively in the eyes of
Congress.
Concerned that the Wagner Act had pushed the labor rela
tions balance too far in favor of unions, Congress passed the
Labor Management Relations Act, 1947 (Taft-Hartley Act).
61 Stat. 136. The Taft-Hartley Act amended §§ 7 and 8 in
several key respects. First, it emphasized that employees
“have the right to refrain from any or all” § 7 activities. 29
U. S. C. § 157. Second, it added § 8(b), which prohibits unfair
labor practices by unions. 29 U. S. C. § 158(b). Third, it
added § 8(c), which protects speech by both unions and em
ployers from regulation by the NLRB. 29 U. S. C. § 158(c).
Specifically, § 8(c) provides:
“The expressing of any views, argument, or opinion, or
the dissemination thereof, whether in written, printed,
graphic, or visual form, shall not constitute or be evi
dence of an unfair labor practice under any of the provi
sions of this subchapter, if such expression contains no
threat of reprisal or force or promise of benefit.”
From one vantage, § 8(c) “merely implements the First
Amendment,” NLRB v. Gissel Packing Co., 395 U. S. 575, 617
(1969), in that it responded to particular constitutional rul
ings of the NLRB. See S. Rep. No. 80–105, pt. 2, pp. 23–24
(1947). But its enactment also manifested a “congressional
intent to encourage free debate on issues dividing labor and
management.” Linn v. Plant Guard Workers, 383 U. S. 53,
62 (1966). It is indicative of how important Congress
deemed such “free debate” that Congress amended the
NLRA rather than leaving to the courts the task of correct

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68 CHAMBER OF COMMERCE OF UNITED STATES OF
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ing the NLRB’s decisions on a case-by-case basis. We have
characterized this policy judgment, which suffuses the
NLRA as a whole, as “favoring uninhibited, robust, and
wide-open debate in labor disputes,” stressing that “free
wheeling use of the written and spoken word . . . has
been expressly fostered by Congress and approved by the
NLRB.” Letter Carriers v. Austin, 418 U. S. 264, 272–273
(1974).
Congress’ express protection of free debate forcefully but
tresses the pre-emption analysis in this case. Under Ma
chinists, congressional intent to shield a zone of activity from
regulation is usually found only “implicit[ly] in the structure
of the Act,” Livadas v. Bradshaw, 512 U. S. 107, 117, n. 11
(1994), drawing on the notion that “ ‘[w]hat Congress left un
regulated is as important as the regulations that it im
posed,’ ” Golden State Transit Corp. v. Los Angeles, 493 U. S.
103, 110 (1989) (Golden State II) (quoting New York Tele
phone Co. v. New York State Dept. of Labor, 440 U. S. 519,
552 (1979) (Powell, J., dissenting)). In the case of noncoer
cive speech, however, the protection is both implicit and ex
plicit. Sections 8(a) and 8(b) demonstrate that when Con
gress has sought to put limits on advocacy for or against
union organization, it has expressly set forth the mechanisms
for doing so. Moreover, the amendment to § 7 calls attention
to the right of employees to refuse to join unions, which
implies an underlying right to receive information oppos
ing unionization. Finally, the addition of § 8(c) expressly
precludes regulation of speech about unionization “so long
as the communications do not contain a ‘threat of reprisal
or force or promise of benefit.’ ” Gissel Packing, 395 U. S.,
at 618.
The explicit direction from Congress to leave noncoercive
speech unregulated makes this case easier, in at least one
respect, than previous NLRA cases because it does not re
quire us “to decipher the presumed intent of Congress in the
face of that body’s steadfast silence.” Sears, Roebuck & Co.

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v. Carpenters, 436 U. S. 180, 188, n. 12 (1978). California’s
policy judgment that partisan employer speech necessarily
“interfere[s] with an employee’s choice about whether to join
or to be represented by a labor union,” 2000 Cal. Stats.
ch. 872, § 1, is the same policy judgment that the NLRB ad
vanced under the Wagner Act, and that Congress renounced
in the Taft-Hartley Act. To the extent §§ 16645.2 and
16645.7 actually further the express goal of AB 1889, the
provisions are unequivocally pre-empted.
IV
The Court of Appeals concluded that Machinists did not
pre-empt §§ 16645.2 and 16645.7 for three reasons: (1) The
spending restrictions apply only to the use of state funds,
(2) Congress did not leave the zone of activity free from all
regulation, and (3) California modeled AB 1889 on federal
statutes. We find none of these arguments persuasive.
Use of State Funds
In NLRA pre-emption cases, “ ‘judicial concern has neces
sarily focused on the nature of the activities which the States
have sought to regulate, rather than on the method of regu
lation adopted.’ ” Golden State I, 475 U. S., at 614, n. 5
(quoting Garmon, 359 U. S., at 243; brackets omitted); see
also Livadas, 512 U. S., at 119 (“Pre-emption analysis . . .
turns on the actual content of [the State’s] policy and its real
effect on federal rights”). California plainly could not di
rectly regulate noncoercive speech about unionization by
means of an express prohibition. It is equally clear that
California may not indirectly regulate such conduct by im
posing spending restrictions on the use of state funds.
In Gould, we held that Wisconsin’s policy of refusing to
purchase goods and services from three-time NLRA viola
tors was pre-empted under Garmon because it imposed a
“supplemental sanction” that conflicted with the NLRA’s
“ ‘integrated scheme of regulation.’ ” 475 U. S., at 288–289.

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Wisconsin protested that its debarment statute was “an ex
ercise of the State’s spending power rather than its regula
tory power,” but we dismissed this as “a distinction without
a difference.” Id., at 287. “[T]he point of the statute [was]
to deter labor law violations,” and “for all practical purposes”
the spending restriction was “tantamount to regulation.”
Id., at 287–289. Wisconsin’s choice “to use its spending
power rather than its police power d[id] not significantly
lessen the inherent potential for conflict” between the state
and federal schemes; hence the statute was pre-empted.
Id., at 289.
We distinguished Gould in Boston Harbor, holding that
the NLRA did not preclude a state agency supervising a
construction project from requiring that contractors abide
by a labor agreement. We explained that when a State acts
as a “market participant with no interest in setting policy,”
as opposed to a “regulator,” it does not offend the pre
emption principles of the NLRA. 507 U. S., at 229. In
finding that the state agency had acted as a market partici
pant, we stressed that the challenged action “was specifically
tailored to one particular job,” and aimed “to ensure an effi
cient project that would be completed as quickly and effec
tively as possible at the lowest cost.” Id., at 232.
It is beyond dispute that California enacted AB 1889 in its
capacity as a regulator rather than a market participant.
AB 1889 is neither “specifically tailored to one particular
job” nor a “legitimate response to state procurement con
straints or to local economic needs.” Gould, 475 U. S., at
291. As the statute’s preamble candidly acknowledges, the
legislative purpose is not the efficient procurement of goods
and services, but the furtherance of a labor policy. See 2000
Cal. Stats. ch. 872, § 1. Although a State has a legitimate
proprietary interest in ensuring that state funds are spent
in accordance with the purposes for which they are appro
priated, this is not the objective of AB 1889. In contrast to
a neutral affirmative requirement that funds be spent solely

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for the purposes of the relevant grant or program, AB 1889
imposes a targeted negative restriction on employer speech
about unionization. Furthermore, the statute does not even
apply this constraint uniformly. Instead of forbidding the
use of state funds for all employer advocacy regarding union
ization, AB 1889 permits use of state funds for select em
ployer advocacy activities that promote unions. Specifically,
the statute exempts expenses incurred in connection with,
inter alia, giving unions access to the workplace, and volun
tarily recognizing unions without a secret ballot election.
§§ 16647(b), (d).
The Court of Appeals held that although California did not
act as a market participant in enacting AB 1889, the NLRA
did not pre-empt the statute. It purported to distinguish
Gould on the theory that AB 1889 does not make employer
neutrality a condition for receiving funds, but instead re
stricts only the use of funds. According to the Court of Ap
peals, this distinction matters because when a State imposes
a “use” restriction instead of a “receipt” restriction, “an em
ployer has and retains the freedom to spend its own funds
however it wishes.” 463 F. 3d, at 1088.
California’s reliance on a “use” restriction rather than a
“receipt” restriction is, at least in this case, no more conse
quential than Wisconsin’s reliance on its spending power
rather than its police power in Gould. As explained below,
AB 1889 couples its “use” restriction with compliance costs
and litigation risks that are calculated to make union-related
advocacy prohibitively expensive for employers that receive
state funds. By making it exceedingly difficult for employ
ers to demonstrate that they have not used state funds and
by imposing punitive sanctions for noncompliance, AB 1889
effectively reaches beyond “the use of funds over which Cali
fornia maintains a sovereign interest.” Brief for State
Respondents 19.
Turning first to the compliance burdens, AB 1889 re
quires recipients to “maintain records sufficient to show that

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no state funds were used” for prohibited expenditures,
§§ 16645.2(c), 16645.7(c), and conclusively presumes that any
expenditure to assist, promote, or deter union organizing
made from “commingled” funds constitutes a violation of the
statute, § 16646(b). Maintaining “sufficient” records and en
suring segregation of funds is no small feat, given that AB
1889 expansively defines its prohibition to encompass “any
expense” incurred in “any attempt” by an employer to “in
fluence the decision of its employees.” §§ 16645(a), 16646(a).
Prohibited expenditures include not only discrete expenses
such as legal and consulting fees, but also an allocation of
overhead, including “salaries of supervisors and employees,”
for any time and resources spent on union-related advocacy.
See § 16646(a). The statute affords no clearly defined safe
harbor, save for expenses incurred in connection with activi
ties that either favor unions or are required by federal or
state law. See § 16647.
The statute also imposes deterrent litigation risks. Sig
nificantly, AB 1889 authorizes not only the California attor
ney general but also any private taxpayer—including, of
course, a union in a dispute with an employer—to bring a
civil action against suspected violators for “injunctive relief,
damages, civil penalties, and other appropriate equitable re
lief.” § 16645.8. Violators are liable to the State for three
times the amount of state funds deemed spent on union
organizing. §§ 16645.2(d), 16645.7(d), 16645.8(a). Prevailing
plaintiffs, and certain prevailing taxpayer intervenors, are
entitled to recover attorney’s fees and costs, § 16645.8(d),
which may well dwarf the treble damages award. Conse
quently, a trivial violation of the statute could give rise to
substantial liability. Finally, even if an employer were con
fident that it had satisfied the recordkeeping and segregation
requirements, it would still bear the costs of defending itself
against unions in court, as well as the risk of a mistaken
adverse finding by the factfinder.

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In light of these burdens, California’s reliance on a “use”
restriction rather than a “receipt” restriction “does not sig
nificantly lessen the inherent potential for conflict” between
AB 1889 and the NLRA. Gould, 475 U. S., at 289. AB
1889’s enforcement mechanisms put considerable pressure on
an employer either to forgo his “free speech right to commu
nicate his views to his employees,” Gissel Packing, 395 U. S.,
at 617, or else to refuse the receipt of any state funds. In
so doing, the statute impermissibly “predicat[es] benefits on
refraining from conduct protected by federal labor law,” Li
vadas, 512 U. S., at 116, and chills one side of “the robust
debate which has been protected under the NLRA,” Letter
Carriers, 418 U. S., at 275.
Resisting this conclusion, the State and the AFL–CIO con
tend that AB 1889 imposes less onerous recordkeeping
restrictions on governmental subsidies than do federal re
strictions that have been found not to violate the First
Amendment. See Rust v. Sullivan, 500 U. S. 173 (1991);
Regan v. Taxation With Representation of Wash., 461 U. S.
540 (1983). The question, however, is not whether AB 1889
violates the First Amendment, but whether it “ ‘stands as
an obstacle to the accomplishment and execution of the full
purposes and objectives’ ” of the NLRA. Livadas, 512 U. S.,
at 120 (quoting Brown v. Hotel Employees, 468 U. S. 491, 501
(1984)). Constitutional standards, while sometimes analo
gous, are not tailored to address the object of labor pre
emption analysis: giving effect to Congress’ intent in enact
ing the Wagner and Taft-Hartley Acts. See Livadas, 512
U. S., at 120 (distinguishing standards applicable to the
Equal Protection and Due Process Clauses); Gould, 475 U. S.,
at 290 (Commerce Clause); Linn, 383 U. S., at 67 (First
Amendment). Although a State may “choos[e] to fund a pro
gram dedicated to advance certain permissible goals,” Rust,
500 U. S., at 194, it is not “permissible” for a State to use its
spending power to advance an interest that—even if legiti
mate “in the absence of the NLRA,” Gould, 475 U. S., at

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74 CHAMBER OF COMMERCE OF UNITED STATES OF
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Opinion of the Court
290—frustrates the comprehensive federal scheme estab
lished by that Act.
NLRB Regulation
We have characterized Machinists pre-emption as “creat
[ing] a zone free from all regulations, whether state or fed
eral.” Boston Harbor, 507 U. S., at 226. Stressing that the
NLRB has regulated employer speech that takes place on
the eve of union elections, the Court of Appeals deemed Ma
chinists inapplicable because “employer speech in the con
text of organizing” is not a zone of activity that Congress
left free from “all regulation.” See 463 F. 3d, at 1089 (citing
Peoria Plastic Co., 117 N. L. R. B. 545, 547–548 (1957) (bar
ring employer interviews with employees in their homes im
mediately before an election); Peerless Plywood Co., 107
N. L. R. B. 427, 429 (1953) (barring employers and unions
alike from making election speeches on company time to
massed assemblies of employees within the 24-hour period
before an election)).
The NLRB has policed a narrow zone of speech to ensure
free and fair elections under the aegis of § 9 of the NLRA, 29
U. S. C. § 159. Whatever the NLRB’s regulatory authority
within special settings such as imminent elections, however,
Congress has clearly denied it the authority to regulate the
broader category of noncoercive speech encompassed by AB
1889. It is equally obvious that the NLRA deprives Califor
nia of this authority, since “ ‘[t]he States have no more au
thority than the Board to upset the balance that Congress
has struck between labor and management.’ ” Metropolitan
Life Ins. Co. v. Massachusetts, 471 U. S. 724, 751 (1985).
Federal Statutes
Finally, the Court of Appeals reasoned that Congress
could not have intended to pre-empt AB 1889 because Con
gress itself has imposed similar restrictions. See 463 F. 3d,
at 1090–1091. Specifically, three federal statutes include

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75 Cite as: 554 U. S. 60 (2008)
Opinion of the Court
provisions that forbid the use of particular grant and pro
gram funds “to assist, promote, or deter union organizing.” 2
We are not persuaded that these few isolated restrictions,
plucked from the multitude of federal spending programs,
were either intended to alter or did in fact alter the “ ‘wider
contours of federal labor policy.’ ” Metropolitan Life, 471
U. S., at 753.
A federal statute will contract the pre-emptive scope of
the NLRA if it demonstrates that “Congress has decided to
tolerate a substantial measure of diversity” in the particular
regulatory sphere. New York Telephone, 440 U. S., at 546
(plurality opinion). In New York Telephone, an employer
challenged a state unemployment system that provided ben
efits to employees absent from work during lengthy strikes.
The employer argued that the state system conflicted with
the federal labor policy “of allowing the free play of economic
forces to operate during the bargaining process.” Id., at
531. We upheld the statute on the basis that the legislative
histories of the NLRA and the Social Security Act, which
were enacted within six weeks of each other, confirmed that
“Congress intended that the States be free to authorize, or
to prohibit, such payments.” Id., at 544; see also id., at 547
(Brennan, J., concurring in result); id., at 549 (Blackmun, J.,
concurring in judgment). Indeed, the tension between the
Social Security Act and the NLRA suggested that the case
could “be viewed as presenting a potential conflict between
two federal statutes . . . rather than between federal and
state regulatory statutes.” Id., at 539–540, n. 32.
2 See 29 U. S. C. § 2931(b)(7) (“Each recipient of funds under [the Work
force Investment Act of 1998] shall provide to the Secretary assurances
that none of such funds will be used to assist, promote, or deter union
organizing”); 42 U. S. C. § 9839(e) (“Funds appropriated to carry out [the
Head Start Programs Act] shall not be used to assist, promote, or deter
union organizing”); § 12634(b)(1) (“Assistance provided under [the National
Community Service Act of 1990] shall not be used by program participants
and program staff to . . . assist, promote, or deter union organizing”).

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76 CHAMBER OF COMMERCE OF UNITED STATES OF
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Breyer, J., dissenting
The three federal statutes relied on by the Court of Ap
peals neither conflict with the NLRA nor otherwise establish
that Congress “decided to tolerate a substantial measure of
diversity” in the regulation of employer speech. Unlike the
States, Congress has the authority to create tailored excep
tions to otherwise applicable federal policies, and (also unlike
the States) it can do so in a manner that preserves national
uniformity without opening the door to a 50-state patchwork
of inconsistent labor policies. Consequently, the mere fact
that Congress has imposed targeted federal restrictions on
union-related advocacy in certain limited contexts does not
invite the States to override federal labor policy in other
settings.
Had Congress enacted a federal version of AB 1889 that
applied analogous spending restrictions to all federal grants
or expenditures, the pre-emption question would be closer.
Cf. Metropolitan Life, 471 U. S., at 755 (citing federal mini
mum labor standards as evidence that Congress did not in
tend to pre-empt state minimum labor standards). But none
of the cited statutes is Governmentwide in scope, none
contains comparable remedial provisions, and none contains
express pro-union exemptions.
* * *
The Court of Appeals’ judgment reversing the summary
judgment entered for the Chamber of Commerce is reversed,
and the case is remanded for further proceedings consistent
with this opinion.
It is so ordered.
Justice Breyer, with whom Justice Ginsburg joins,
dissenting.
California’s spending statute sets forth a state “policy” not
to “subsidize efforts by an employer to assist, promote, or
deter union organizing.” 2000 Cal. Stats. ch. 872, § 1. The
operative sections of the law prohibit several classes of em

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77 Cite as: 554 U. S. 60 (2008)
Breyer, J., dissenting
ployers who receive state funds from using those funds to
“assist, promote, or deter union organizing.” Cal. Govt.
Code Ann. §§ 16645–16649 (West Supp. 2008). And various
compliance provisions then require maintenance of “records
sufficient to show that no state funds were used” for pro
hibited expenditures, deter the use of commingled funds for
prohibited expenditures, and impose serious penalties upon
violators. §§ 16645.2(c), 16645.7(b)–(c).
The Court finds that the National Labor Relations Act
(NLRA) pre-empts these provisions. It does so, for it be
lieves the provisions “regulate” activity that Congress has
intended to “be unregulated because left to be controlled
by the free play of economic forces.” Machinists v. Wis
consin Employment Relations Comm’n, 427 U. S. 132, 140
(1976) (internal quotation marks omitted; emphasis added).
The Chamber of Commerce adds that the NLRA pre-empts
these provisions because they “regulate activity that the
NLRA protects, prohibits, or arguably protects or prohib
its.” Wisconsin Dept. of Industry v. Gould Inc., 475 U. S.
282, 286 (1986) (summarizing the pre-emption principle set
forth in San Diego Building Trades Council v. Garmon, 359
U. S. 236 (1959); emphasis added). Thus the question before
us is whether California’s spending limitations amount to
regulation that the NLRA pre-empts. In my view, they
do not.
I
The operative sections of the California statute provide
that employers who wish to “assist, promote, or deter union
organizing” cannot use state money when they do so. The
majority finds these provisions pre-empted because in its
view the sections regulate employer speech in a manner that
weakens, or undercuts, a congressional policy, embodied in
NLRA § 8(c), “ ‘to encourage free debate on issues dividing
labor and management.’ ” Ante, at 67 (quoting Linn v. Plant
Guard Workers, 383 U. S. 53, 62 (1966)).

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78 CHAMBER OF COMMERCE OF UNITED STATES OF
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Breyer, J., dissenting
Although I agree the congressional policy favors “free
debate,” I do not believe the operative provisions of the
California statute amount to impermissible regulation that
interferes with that policy as Congress intended it. First,
the only relevant Supreme Court case that found a State’s
labor-related spending limitations to be pre-empted differs
radically from the case before us. In that case, Wisconsin
Dept. of Industry v. Gould Inc., 475 U. S. 282, the Court con
sidered a Wisconsin statute that prohibited the State from
doing business with firms that repeatedly violated the
NLRA. The Court said that the statute’s “manifest purpose
and inevitable effect” was “to enforce” the NLRA’s require
ments, which “role Congress reserved exclusively for the
[National Labor Relations Board].” Id., at 291. In a word,
the Wisconsin statute sought “to compel conformity with the
NLRA.” Building & Constr. Trades Council v. Associated
Builders & Contractors of Mass. /R. I., Inc., 507 U. S. 218,
228 (1993) (emphasis added).
California’s statute differs from the Wisconsin statute be
cause it does not seek to compel labor-related activity. Nor
does it seek to forbid labor-related activity. It permits all
employers who receive state funds to “assist, promote, or
deter union organizing.” It simply says to those employers,
do not do so on our dime. I concede that a federal law that
forces States to pay for labor-related speech from public
funds would encourage more of that speech. But no one can
claim that the NLRA is such a law. And without such a
law, a State’s refusal to pay for labor-related speech does not
impermissibly discourage that activity. To refuse to pay for
an activity (as here) is not the same as to compel others to
engage in that activity (as in Gould).
Second, California’s operative language does not weaken
or undercut Congress’ policy of “encourag[ing] free debate on
issues dividing labor and management.” Linn, supra, at 62.
For one thing, employers remain free to spend their own
money to “assist, promote, or deter” unionization. More im

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Breyer, J., dissenting
portantly, I cannot conclude that California’s statute would
weaken or undercut any such congressional policy because
Congress itself has enacted three statutes that, using identi
cal language, do precisely the same thing. Congress has
forbidden recipients of Head Start funds to use the funds
to “assist, promote, or deter union organizing.” 42 U. S. C.
§ 9839(e). It has forbidden recipients of Workforce Invest
ment Act of 1998 funds to use the funds to “assist, promote,
or deter union organizing.” 29 U. S. C. § 2931(b)(7). And it
has forbidden recipients of National Community Service Act
of 1990 funds to use the funds to “assist, promote, or deter
union organizing.” 42 U. S. C. § 12634(b)(1). Could Con
gress have thought that the NLRA would prevent the States
from enacting the very same kinds of laws that Congress
itself has enacted? Far more likely, Congress thought that
directing government funds away from labor-related activity
was consistent, not inconsistent, with the policy of “encour
ag[ing] free debate” embedded in its labor statutes.
Finally, the law normally gives legislatures broad author
ity to decide how to spend the people’s money. A legisla
ture, after all, generally has the right not to fund activities
that it would prefer not to fund—even where the activities
are otherwise protected. See, e. g., Regan v. Taxation With
Representation of Wash., 461 U. S. 540, 549 (1983) (“We have
held in several contexts that a legislature’s decision not to
subsidize the exercise of a fundamental right does not in
fringe the right”). This Court has made the same point in
the context of labor law. See Lyng v. Automobile Workers,
485 U. S. 360, 368 (1988) (holding that the Federal Govern
ment’s refusal to provide food stamp benefits to striking
workers was justified because “[s]trikers and their union
would be much better off if food stamps were available,”
but the “strikers’ right of association does not require the
Government to furnish funds to maximize the exercise of
that right”).

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80 CHAMBER OF COMMERCE OF UNITED STATES OF
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Breyer, J., dissenting
As far as I can tell, States that do wish to pay for employer
speech are generally free to do so. They might make clear,
for example, through grant-related rules and regulations
that a grant recipient can use the funds to pay salaries and
overhead, which salaries and overhead might include ex
penditures related to management’s role in labor organizing
contests. If so, why should States that do not wish to pay
be deprived of a similar freedom? Why should they be con
scripted into paying?
I can find nothing in the majority’s arguments that con
vincingly answers these questions. The majority says that
California must be acting as an impermissible regulator be
cause it is not acting as a “market participant” (a role we all
agree would permit it broad leeway to act like private firms
in respect to labor matters). Ante, at 70. But the regula
tor/market-participant distinction suggests a false dichot
omy. The converse of “market participant” is not necessar
ily “regulator.” A State may appropriate funds without
either participating in or regulating the labor market. And
the NLRA pre-empts a State’s actions, when taken as an
“appropriator,” only if those actions amount to impermissible
regulation. I have explained why I believe that California’s
actions do not amount to impermissible regulation here.
The majority also complains that the statute “imposes a
targeted negative restriction,” one applicable only to labor.
Ante, at 71. I do not find this a fatal objection, because
the congressional statutes just discussed (which I believe are
consistent with the NLRA) do exactly the same. In any
event, if, say, a State can tell employers not to use state
funds to pay for a large category of expenses (say, overhead),
why can it not tell employers the same about a smaller cate
gory of expenses (say, only those overhead expenses related
to taking sides in a labor contest). And where would the
line then be drawn? Would the statute pass muster if Cali
fornia had said, do not use our money to pay for interior
decorating, catered lunches, or labor relations?

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Breyer, J., dissenting
The majority further objects to the fact that the statute
does not “apply” the constraint “uniformly,” because it per
mits use of state funds for “select employer advocacy activi
ties that promote unions.” Ante, at 71. That last phrase
presumably refers to an exception in the California statute
that permits employers to spend state funds to negotiate a
voluntary recognition of a union. But this exception under
scores California’s basic purpose—maintaining a position of
spending neutrality on contested labor matters. Where
labor and management agree on unionization, there is no
conflict.
II
I turn now to the statute’s compliance provisions. They
require grant recipients to maintain “records sufficient to
show that no state funds were used” for prohibited expendi
tures; they deter the use of commingled funds for prohibited
expenditures; and they impose serious penalties upon viola
tors. Cal. Govt. Code Ann. §§ 16645.2(c), 16645.7(b)–(c).
The majority seems to rest its conclusions in part upon its
belief that these requirements are too strict, that, under the
guise of neutral enforcement, they discourage the use of non
state money to engage in free debate on labor/management
issues. Ante, at 71.
I agree with the majority that, should the compliance pro
visions, as a practical matter, unreasonably discourage ex
penditure of nonstate funds, the NLRA may well pre-empt
California’s statute. But I cannot say on the basis of the
record before us that the statute will have that effect.
The language of the statute is clear. The statute requires
recipients of state money to “maintain records sufficient to
show that no state funds were used” for prohibited expendi
tures. §§ 16645.2, 16645.7(c). And the class of prohibited
expenditures is quite broad: It covers “any expense” in
curred in “any attempt” by an employer to “influence the
decision of its employees,” including “legal and consulting
fees and salaries of supervisors and employees” incurred

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during research for or the preparation, planning, coordina
tion, or execution of activities to “assist, promote, or deter”
union organizing. § 16646(a) (emphasis added). And where
an employer mingles state funds and nonstate funds (say, to
pay a particular employee who spends part of her time deal
ing with unionization matters) the employer must determine
“on a pro rata basis,” the portion of the labor-related expend
iture paid for by state funds, and maintain sufficient support
ing documentation. § 16646(b). Any violation of these pro
visions is then subject to strict penalties, including treble
damages and attorney’s fees and costs. § 16645.8.
What is less clear is the degree to which these provisions
actually will deter a recipient of state funds from using non
state funds to engage in unionization matters. And no
lower court has ruled on this matter. In the District Court,
the Chamber of Commerce moved for summary judgment
arguing that the statute, by placing restrictions on state
funds, was pre-empted by Machinists and Garmon and also
arguing that the compliance provisions are so burdensome
that they would chill even private expenditures. California
opposed the motion. And California submitted expert evi
dence designed to show that its “accounting and recordkeep
ing requirements . . . are similar to requirements imposed in
other contexts,” are “significantly less burdensome than the
detailed requirements for federal grant recipients,” and
allow “flexibility in establishing proper accounting proce
dures and controls.” App. 282–283.
The District Court granted the Chamber of Commerce’s
motion for summary judgment in part, finding that the oper
ative sections of the statute were pre-empted for the reasons
I have discussed in Part I, namely, that the operative provi
sions interfered with the NLRA’s policy of encouraging “free
debate.” 225 F. Supp. 2d 1199, 1204 (CD Cal. 2002). But
in doing so, it did not address the Chamber of Commerce’s
argument that the California statute’s compliance provisions
affected non-state-funded speech to the point that the NLRA

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pre-empted the statute. Neither did the Court of Appeals
address the question whether the compliance provisions
themselves constitute sufficient grounds for finding the stat
ute pre-empted.
I do not believe that we can, and I would not, decide this
question until the lower courts have had an opportunity to
consider and rule upon the compliance-related questions.
Accordingly, I would vote to vacate the judgment of the
Ninth Circuit and remand for further proceedings on this
issue.
I respectfully dissent.