California can’t stifle open-shop speech just because it doesn’t like the content

Today we filed our notice of appeal to the Ninth Circuit on behalf of Associated Builders & Contractors of California Cooperation Committee (ABC-CCC).  ABC-CCC is an organization that advocates on behalf of the “open-shop” industry—that is, on behalf of entities who do not require their employees to join a union.  Last year, California passed S.B. 954, which threatens the speech of open-shop organizations like ABC-CCC.

Under California labor law, all contractors for public projects must pay their workers the so-called “prevailing wage”—a pre-determined rate set by the Department of Industrial Relations.  Contractors can meet the prevailing wage requirement by paying a combination of wages, vacation time, and other benefits.  Formerly, contractors could satisfy the requirement, in part, by donating to an organization that advocates for the industry—including by donating to ABC-CCC.  S.B. 954 limits the types of contributions that qualify towards the prevailing wage requirement.  Now, only those donations made pursuant to a collective bargaining agreement, ie. donations made to advocacy groups that are pro-union, can be deducted from the prevailing wage credit.  The effect is to discriminate against open-shop speech and advocacy organizations like ABC-CCC.  In a highly competitive industry like public works contracting, employers will no longer donate to ABC-CCC if they can no longer receive a prevailing wage credit.  Several organizations have already told ABC-CCC that they can no longer support the organization if the prevailing wage credit is taken away.

ABC-CCC sued, arguing that California can’t discriminate against speech just because it doesn’t like the content—and all evidence points to the fact that S.B. 954 plainly was an effort to stifle disfavored speech.  Documents from legislative hearings on S.B. 954 show that it was supported by pro-union groups who sought to tilt the playing field in their own favor.  And in arguing against ABC-CCC’s lawsuit, the government argued that S.B. 954 was needed to prevent workers’ wages from being spent supporting speech that might be against their interests.  In other words, the government openly admitted that S.B. 954’s purpose was to disadvantage speech it considers undesirable.  Yet the district court dismissed the case on the basis that any harm to ABC-CCC was speculative, and the government could selectively subsidize whatever speech it liked.

The First Amendment does not permit the government to silence speech it deems objectionable.  PLF is urging the Ninth Circuit to reverse the district court’s decision in favor of free speech for all.