Brown v. Hotel and Restaurant Employees and Bartenders International Union Local 54 Danziger v. Hotel and Restaurant Employees and Bartenders International Union Local 54

Citation82 L.Ed.2d 373,468 U.S. 491,104 S.Ct. 3179
Decision Date02 July 1984
Docket NumberNos. 83-498,83-573,s. 83-498
PartiesG. Michael BROWN, etc., et al. v. HOTEL AND RESTAURANT EMPLOYEES AND BARTENDERS INTERNATIONAL UNION LOCAL 54 et al. Martin DANZIGER, etc., et al. v. HOTEL AND RESTAURANT EMPLOYEES AND BARTENDERS INTERNATIONAL UNION LOCAL 54 et al
CourtUnited States Supreme Court
Syllabus

Section 93 of the New Jersey Casino Control Act requires annual registration of unions representing persons employed in casinos or casino hotels, and provides that a union may be prohibited from receiving dues from such employees and from administering any pension or welfare funds if any union officer is disqualified under the criteria contained in § 86 for the licensing of various entities and persons. Those criteria include convictions for enumerated offenses, or any other offenses indicating that licensure would be inimical to the Act's policy, and association with other criminal offenders. Appellees, a union whose membership includes persons employed in casino hotels in Atlantic City and the union's president, instituted an action against certain state agencies and officials in Federal District Court, seeking declaratory and injunctive relief after state administrative proceedings had been begun to determine whether certain of the union's officers were disqualified under the criteria of § 86. The court denied appellees' motion for a preliminary injunction against the state proceedings, concluding that appellees were unlikely to succeed on the merits of their claims, which included a claim that §§ 86 and 93 were pre-empted by the National Labor Relations Act (NLRA). The state administrative proceedings resulted in a finding that certain of the union's officials were disqualified under § 86, and in an order that if the officials were not removed from office the union would be barred from collecting dues from any of its members who were casino hotel employees licensed or registered under the New Jersey Act. The state agency also concluded that it would be unnecessary to invoke the additional § 93 sanction of prohibiting the disqualified officials from administering pension and welfare funds. Thereafter, the Court of Appeals held, inter alia, that the District Court erred in refusing to grant the preliminary injunction, and that § 93, insofar as it authorizes disqualification of elected union officials, is pre-empted by § 7 of the NLRA.

Held:

1. The so-called "local interests" exception to the pre-emption doctrine does not apply if the state law regulates conduct that is actually protected by federal law. Where, as here, the issue is one of an asserted substantive conflict with a federal enactment, then the relative importance to the State of its law is not material, since the federal law must prevail by direct operation of the Supremacy Clause of the Federal Constitution. Pp. 500-503.

2. Section 93 of the New Jersey Act, to the extent that it regulates the qualifications of casino industry union officials, does not actually conflict with § 7 of the NLRA—which neither contains explicit preemptive language nor otherwise indicates a congressional intent to usurp the entire field of labor-management relations—and thus is not pre-empted by § 7. Although the 1945 decision in Hill v. Florida, 325 U.S. 538, 65 S.Ct. 1373, 89 L.Ed. 1782, interpreted § 7's express guarantee of the right of employees to choose their bargaining representative as also conferring an unfettered right on employees to choose the officials of their bargaining representative, Congress has subsequently disclaimed any intent to pre-empt all state regulation which touches upon the specific right of employees to decide which individuals will serve as officials of their bargaining representatives. Specifically, § 504(a) of the Labor-Management Reporting and Disclosure Act of 1959 generally prohibits persons convicted of specified crimes from serving as union officers, and § 603(a) of that Act is an express disclaimer of pre-emption of state laws regulating union officials' responsibilities except where such pre-emption is expressly provided. Moreover, in approving a compact between New York and New Jersey, Congress implicitly approved New York's restrictions (similar to those involved here) on unions representing waterfront employees, which restrictions were upheld against a pre-emption challenge based on § 7 of the NLRA in De Veau v. Braisted, 363 U.S. 144, 80 S.Ct. 1146, 4 L.Ed.2d 1109. Thus, Congress apparently has concluded that, at least where the States are confronted with the public evils of crime, corruption, and racketeering, more stringent state regulation of the qualifications of union officials is not incompatible with the national labor policy as embodied in § 7. Pp. 503-510.

3. The issue whether the dues collection sanction authorized by § 93 of the New Jersey Act to effect the removal of disqualified union officials abridges the employees' separate rights under § 7 of the NLRA to organize, and thus is pre-empted, cannot be decided now because of the procedural posture of this litigation. Appellees' factual allegations as to this issue were never addressed by the courts below. On remand, the District Court should make the requisite findings of fact to determine whether imposition of the dues collection ban will so incapacitate appellee union as to prevent it from performing its functions as the employees' chosen bargaining agent. Also, the issue of the validity of § 93's second sanction—prohibition of a union's administration of its pension or welfare funds—cannot be decided now, despite the Court of Appeals' holding that the sanction is expressly pre-empted by provisions of the Employee Retirement Income Security Act. Because the state agency never imposed this sanction on appellee union, no concrete application of state law is presented, and the issue is hence not ripe for review. Pp. 510-512.

709 F.2d 815 (CA3 1983), vacated and remanded.

Anthony J. Parrillo, Trenton, N.J., for appellants.

Laurence Gold, Washington, D.C., for appellees.

Justice O'CONNOR delivered the opinion of the Court.

In 1976, the citizens of New Jersey amended their State Constitution to permit the legislative authorization of casino gambling within the municipality of Atlantic City.1 Determined to prevent the infiltration of organized crime into its nascent casino industry and to assure public trust in the industry's integrity, the New Jersey Legislature enacted the Casino Control Act (Act), N.J.Stat.Ann. § 5:12-1 et seq. (West Supp.1983-1984), which provides for the comprehensive regulation of casino gambling, including the regulation of unions representing industry employees. Sections 86 and 93 of the Act specifically impose certain qualification criteria on officials of labor organizations representing casino industry employees. Those labor organizations with officials found not to meet these standards may be prohibited from receiving dues from casino industry employees and prohibited from administering pension and welfare funds. The principal question presented by these cases is whether the National Labor Relations Act (NLRA), as amended, 29 U.S.C. § 141 et seq., precludes New Jersey from imposing these criteria on those whom casino industry employees may select as officials of their bargaining representatives. We hold that it does not.

I
A.

The advent of casino gambling in New Jersey was heralded with great expectations for the economic revitalization of the Atlantic City region, but with equally great fears for the potential for infiltration by organized crime. The state legislature conducted extensive hearings and, in cooperation with the Governor, commissioned numerous studies on how best to prevent infiltration by organized crime into the casino industry.2 These studies confirmed the fact that the vast amount of money that flows daily through a casino operation and the large number of unrecorded transactions make the industry a particularly attractive and vulnerable target for organized crime. The New Jersey Commission of Investigation (NJCI), for example, found that there was a "well-organized highly functional organized crime network in [New Jersey]" which had become more interested in investing funds in legitimate enterprises.3 The NJCI feared that such an incursion by organized crime into the Atlantic City casinos might also be accompanied by extortion, loansharking, commercial bribery, and tax and antitrust violations. It was on the basis of these hearings and empirical studies that New Jersey finally adopted the Act, a comprehensive statutory scheme that authorizes casino gambling and establishes a rigorous system of regulation for the entire casino industry.

In order to promote "public confidence and trust in the credibility and integrity of the regulatory process and of casino operations," the Act "extend[s] strict State regulation to all persons, locations, practices and associations related to the operation of licensed casino enterprises and all related service industries." N.J.Stat.Ann. § 5:12-1(b)(6) (West Supp.1983-1984). The Casino Control Commission (Commission), an independent administrative body, possesses broad regulatory authority over the casinos and other related industries, §§ 5:12-63 to 5:12-75. The Division of Gaming Enforcement (Division), a part of the Attorney General's Office, is charged with the responsibility for investigating license and permit applicants and for prosecuting violators of the Act, §§ 5:12-76 to 5:12-79.

The Act imposes strict licensing requirements on any business seeking to own and operate a casino hotel, §§ 5:12-84(a)-(c); on suppliers of goods and services to casino hotels, §§ 5:12-12, 5:12-92; on all supervisory employees involved in casino operations, §§ 5:12-9, 5:12-89; and on all employees with access to the casino floor, §§ 5:12-7, 5:12-90. The Act requires registration, rather than licensing, for...

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