Thus, no fundamental right is implicated in this case.
In addition, non-residents do not constitute a suspect class. Baldwin, 436 U.S. at 389. A suspect class is one which is "saddled with such disabilities, or subjected to such a history of purposeful unequal treatment, or relegated to such a position of political powerlessness as to command extraordinary protection from the majoritarian political process." San Antonio Indep. Sch. Dist., 411 U.S. at 28. Non-residents of Jersey City are not disabled, historically discriminated against or politically powerless.
Because no fundamental right or suspect class is implicated, the proper test is whether City Ordinance 96-022 rationally furthers a legitimate state purpose. See id. at 17. Jersey City asserts that in enacting City Ordinance 96-022, its goal was to reduce unemployment among its residents. A factual question exists as to whether such a legitimate governmental interest is rationally furthered by the provisions of City Ordinance 96-022. Thus, summary judgment on the Trades Council's equal protection argument is inappropriate.
The Trades Council has referred the court to the case of Alaska v. Enserch Alaska Construction, Inc., 787 P.2d 624 (Alaska 1989) in support of its contention that the Equal Protection Clause is violated by City Ordinance 96-022. In that case, the Supreme Court of Alaska interpreted the constitutionality of an Alaska statute providing a hiring preference on public works projects to residents of economically distressed zones. Id. at 631-35. The court found that the statute violated Alaska's equal protection clause. Id.
Analysis under Alaska's equal protection clause requires a sliding scale approach which "often provides greater protection to individual rights" than the tiered approach used under the federal constitution. Id. at 631. The Supreme Court of Alaska opined that "while the right to earn a living is not a fundamental right under the federal equal protection clause, we have noted that the right to engage in an economic endeavor within a particular industry is an 'important' right for state equal protection purposes." Id. at 632. Accordingly, this interpretation of the constitutionality of an Alaska statute in accordance with the Alaska equal protection clause is inapplicable to the case at hand.
The Trades Council asserts that City Ordinance 96-022 is preempted by the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151, et seq. There is no statutory preemption provision contained within the NLRA. Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 747, 85 L. Ed. 2d 728, 105 S. Ct. 2380 (1985). It is the court's duty to determine the preemptive scheme intended by Congress. Id. This analysis starts with the basic assumption that Congress did not intend to preempt state law, and local regulations are preempted only where they conflict with the federal law, would frustrate the scheme behind the enactment of the federal law or the totality of the circumstances indicates that Congress intended to occupy the relevant field and completely exclude state legislation. Id.; Building and Constr. Trades Council of the Metro. Dist. v. Associated Builders and Contractors of Massachusetts, 507 U.S. 218, 223, 122 L. Ed. 2d 565, 113 S. Ct. 1190 (1993).
The Supreme Court has set forth two lines of preemption doctrine pursuant to the NLRA. Metropolitan Life Ins. Co., 471 U.S. at 748. The first line of preemption, "Garmon preemption," is based on the premise that the National Labor Relations Board possesses primary jurisdiction over the determination of "whether the particular activity regulated by the States was governed by § 7 or § 8 [of the NLRA] or was, perhaps, outside both these sections." San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 244-45, 3 L. Ed. 2d 775, 79 S. Ct. 773 (1959). Thus, "when it is clear or may fairly be assumed that the activities which a State purports to regulate are protected by § 7 of the National Labor Relations Act, or constitute an unfair labor practice under § 8, due regard for the federal enactment requires that state jurisdiction must yield." Id. at 244. "Garmon pre-emption prohibits regulation of activities that the NLRA only arguably protects or prohibits." Building and Constr. Trades Council of the Metro. Dist., 507 U.S. at 225.
The second line of preemption, "Machinists preemption," arose because Congress intended certain conduct to be "controlled by the free play of economic forces." Lodge 76, Int'l Ass'n of Machinists and Aerospace Workers, AFL-CIO v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 140, 49 L. Ed. 2d 396, 96 S. Ct. 2548 (1976) (citing NLRB v. Nash-Finch Co., 404 U.S. 138, 144, 30 L. Ed. 2d 328, 92 S. Ct. 373 (1971)). Machinists preemption "protects against state interference with the policies implicated by the structure of the [NLRA] itself, by pre-empting state law and state causes of action concerning conduct that Congress intended to be unregulated." Metropolitan Life Ins. Co., 471 U.S. at 749. This doctrine was initially designed "to govern pre-emption questions that arose concerning activity that was neither arguably protected against employer interference by §§ 7 and 8(a) of the NLRA, nor arguably prohibited as an unfair labor practice by § 8(b) of that Act." Id.
The Trades Council asserts that City Ordinance 96-022 is preempted by both Garmon preemption and Machinists preemption. A threshold question to preemption under either analysis, however, is whether Jersey City acted as a market regulator or as a market participant, because state actions as a market participant are not preempted by the NLRA. Building and Constr. Trades Council of the Metro. Dist., 507 U.S. at 226-27. In this regard, the Supreme Court noted that:
When we say that the NLRA pre-empts state law, we mean that the NLRA prevents a State from regulating within a protected zone, whether it be a zone protected and reserved for market freedom, see Machinists, or for NLRA jurisdiction, see Garmon. A State does not regulate, however, simply by acting within one of these protected areas. When a State owns and manages property, for example, it must interact with private participants in the marketplace. In so doing, the State is not subject to pre-emption by the NLRA, because pre-emption doctrines apply only to state regulation.
Id. State conduct as a proprietor which is tantamount to regulation or policy making is conduct as a market regulator, not as a market participant. Id. at 227-28; see Wisconsin Dept. of Industry v. Gould Inc., 475 U.S. 282, 287-90, 89 L. Ed. 2d 223, 106 S. Ct. 1057 (1986). State action as a proprietor is legitimate market participation in situations where the statute is "a legitimate response to state procurement constraints or to local economic needs" or a legitimate attempt to pursue "a task Congress intended to leave to the States." Id. at 291. The state's conduct as a proprietor is illegitimate market regulation when "the manifest purpose and inevitable effect of the [statute] is to enforce the requirements of the NLRA." Id.
In this case, Jersey City is not interacting in the market as the owner or manager of property. Any participation of Jersey City in the market pursuant to City Ordinance 96-022 is tantamount to regulation. Consequently, in enacting and enforcing the requirements of City Ordinance 96-022, Jersey City is acting as a market regulator, and it is necessary to determine the applicability of Garmon preemption and Machinists preemption to the present set of facts and circumstances.
The Trades Council asserts that City Ordinance 96-022 is subject to Garmon preemption because it regulates hiring hall procedures designated in collective bargaining agreements. In accordance with section 8(a)(5) of the NLRA, it is an unfair labor practice for an employer "to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 159(a) of this title." 29 U.S.C. § 158(a)(5). "An employer violates his § 8(a)(5) duty to bargain in good faith if he unilaterally changes the terms of a collective agreement." NLRB v. Southwest Security Equip. Corp., 736 F.2d 1332, 1337 (9th Cir. 1984), cert. denied, 470 U.S. 1087, 85 L. Ed. 2d 151, 105 S. Ct. 1854 (1985). Jersey City responds that City Ordinance 96-022 does not force the union to change or modify its hiring hall procedures.
The Trades Council alternatively argues that City Ordinance 96-022 is subject to Machinists preemption, because hiring hall provisions, a mandatory subject of negotiations, have been left to a free play of economic forces in the private sector. However, the "fact that a state statute pertains to matters over which the parties are free to bargain" is not enough alone to support a claim of Machinists preemption. Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 21, 96 L. Ed. 2d 1, 107 S. Ct. 2211 (1987). As noted by the amici curiae, Machinists preemption, like Garmon preemption, focuses upon the collective bargaining process, not on the substantive results of that process. See Metropolitan Life Ins. Co., 471 U.S. at 749, 753; Machinists, 427 U.S. at 140.
The issue of whether the provisions of City Ordinance 96-022 are preempted by either Garmon preemption or Machinists preemption is not amenable to summary judgment, as questions of material fact remain. For instance, the issue of Garmon preemption depends upon the factual question of whether and how City Ordinance 96-022 regulates the collective bargaining process. The factual question of whether City Ordinance 96-022 affects conduct of unions and employers in the collective bargaining process similarly precludes summary judgment on the issue of Machinists preemption.
Finally, the Trades Council looks to another preemption doctrine and asserts that City Ordinance 96-022 is preempted by section 301 of the Labor Management Relations Act. 29 U.S.C. § 185(a). Section 301 provides that:
(a) Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.
29 U.S.C. § 185(a). It is necessary to determine whether City Ordinance 96-022 frustrates the federal labor-contract scheme of section 301. Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 209, 85 L. Ed. 2d 206, 105 S. Ct. 1904 (1985).
The Supreme Court has interpreted section 301 "not only to grant federal courts jurisdiction over claims asserting breach of collective-bargaining agreements but also to authorize the development of federal common-law rules of decision." Livadas v. Bradshaw, 512 U.S. 107, 114 S. Ct. 2068, 2077, 129 L. Ed. 2d 93, 108 (1994). A major reason for this development of federal common law is to ensure the enforcement of agreements to arbitrate grievances, regardless of "the vagaries of state law and lingering hostility toward extrajudicial dispute resolution." 114 S. Ct. at 2077, 129 L. Ed. 2d at 108; Textile Workers Union of America v. Lincoln Mills of Alabama, 353 U.S. 448, 1 L. Ed. 2d 972, 77 S. Ct. 912 (1957). The outer limits of preemption under section 301 were set forth by the Court in Livadas:
The pre-emption rule has been applied only to assure that the purposes animating § 301 will be frustrated neither by state laws purporting to determine "questions relating to what the parties to a labor agreement agreed, and what legal consequences were intended to flow from breaches of that agreement," nor by parties' efforts to renege on their arbitration promises by "relabeling" as tort suits actions simply alleging breaches of duties assumed in collective bargaining agreements.