On Thursday, September 21, 2006, a full panel of the Ninth Circuit overturned two previous federal court decisions and determined that the National Labor Relations Act does not preempt California Assembly Bill 1889. Chamber of Commerce of the U.S. v. Lockyer, No. 03-55166, (9th Cir. Sept. 21, 2006). The Ninth Circuit's decision clarifies that employers receiving state resources – including funds under the Medi-Cal program – must ensure that the funds are not spent in a way related to any labor dispute or union organizing campaign.
A.B. 1889, which was originally passed in September 2000 and became effective on January 1, 2001, prohibits any employer receiving more than $10,000 in state funds from using those funds on any union-related advocacy, whether in favor of or in opposition to employee organization and bargaining efforts. However, in upholding the law, the Ninth Circuit noted that A.B. 1889 does not require employer neutrality as a condition to receiving state funds, nor does
