New California Law Violates 1st and 14th Amendments, Business Groups Argue in Lawsuit

Hotel workers with Unite Here Local 11 picket outside the InterContinental hotel on the first day of a strike by union members at many major hotels in Southern California, in Los Angeles, on July 2, 2023. Mario Tama/Getty Images

Business groups in California filed a federal lawsuit on New Year’s Eve to challenge a new law that prohibits companies from firing or in any way disciplining workers who refuse to attend “captive audience” meetings, effectively undoing nearly 80 years of precedent protecting employer speech.

Senate Bill 399, which took effect on Jan. 1, adds section 1137 to the California Labor Code, prohibiting employers from taking any action against an employee who refuses to attend a meeting that addresses a company’s opinions on political or religious matters.

The California Chamber of Commerce and California Restaurant Association, which filed the suit, claim that the law violates employers’ First and 14th amendments rights by restricting employer speech and regulating their conversations with employees.

“Because of SB 399, employers in California are now subject to liability, penalties, and other administrative action when they exercise their federal constitutional and statutory rights to talk to employees about political issues,” the lawsuit said.

The bill discriminates against employers’ speech by regulating the content of employers’ communications with their employees and puts a chill on employer speech, the business organizations argued in the suit. The California Restaurant Association said it has the right to express its views on issues.

“Throughout legislative deliberations, we repeatedly underscored the fact that SB 399 was a huge overreach,” CalChamber President and CEO Jennifer Barrera said in an emailed statement to The Epoch Times. “SB 399 is clearly viewpoint-based discrimination, which runs afoul of the First Amendment. In addition, SB 399 is preempted by the NLRA.”

“Employers have the right to express their views and opinions on many issues,” Jot Condie, CRA president and CEO, said in a statement to The Epoch Times. “SB 399 creates restrictions that are unworkable and the unintended consequences of this new law outweigh any perceived benefit.”

The National Labor Relations Board in November 2024 said captive audience meetings—which take place during work hours, are mandatory, and often cover unionization matters—are illegal.

SB 399, authored by state Sen. Aisha Wahab, a Democrat, is geared toward stopping employers from intimidating employees who attempt to start or join a union.

It also bans employers from punishing employees who choose not to attend an employer-sponsored meeting or to not participate in communications of the employer’s opinion about religious or political matters.

Political matters refer to any communication regarding any politician, party, legislation, regulation, or labor organization. Religious matters refers to communications relating to religious affiliation and practice or support of any religious organization or association.

The new law prohibits workplaces from making those meetings mandatory. It also places new restrictions on communications about these issues between workers and their bosses.

Employers could be on the hook for a $500 civil penalty if they violate provisions. The bill also authorizes employees to bring a civil action and petition a court for injunctive relief.

The new law overrules a 1948 case, Babcock & Wilson Co., in which the National Labor Relations Board decision permitted employers to hold captive audience meetings during work hours to share the company’s views on unionization.