Business
Column: California employers wrap themselves in the 1st Amendment to kill a pro-worker law
It’s always heartening to see the business establishment stand up for constitutional principles.
Well, almost always. Among the exceptions is when business leaders wrap themselves in the Constitution to secure their own privileges at the expense of the public interest.
That’s the case with a curious little lawsuit the California Chamber of Commerce and California Restaurant Assn. dropped in Sacramento federal court on New Year’s Eve. Their target is Senate Bill 399, otherwise known as the California Worker Freedom from Employer Intimidation Act, which was signed by Gov. Newsom on Sept. 27 and took effect on New Year’s Day.
It should be clear…that a captive-audience meeting is an extraordinary exercise and demonstration of employer power over employees.
— National Labor Relations Board
The law is straightforward. It bans “captive audience meetings,” which are those scheduled by employers to ply workers with religious, political and (especially) anti-union propaganda. Nothing in the law bars employers from holding such meetings when worker attendance is voluntary. The “captive” part, the law specifies, is when employees face “discharge, discrimination, retaliation, or any other adverse action” for failing to attend.
As my colleague Suhauna Hussain has reported, 10 other states have implemented similar bans. So far, they’ve survived legal challenges. Bans on captive meetings are under consideration in at least five other states. They also were outlawed by the National Labor Relations Board with a ruling on Nov. 13, overturning an anti-union policy dating from 1948. The 3-1 ruling, with the board’s Democratic members in the majority and its sole Republican in dissent, involved Amazon.com’s campaign against a union organizing drive at New York-area facilities. Amazon has said it will appeal the ruling.
Captive audience meetings are among “the most pernicious and coercive tactics an employer can use to browbeat and intimidate workers into voting against a union,” says William B. Gould IV, an emeritus professor of law at Stanford and a former chairman of the NLRB and the California Agricultural Labor Relations Board.
The NLRB’s November ruling applied to captive meetings involving unionization drives, which fall within the board’s jurisdiction. The California law goes further by bringing meetings involving political and religious matters into the mix. But the state laws and the NLRB’s ruling make the same distinctions between meetings at which attendance is voluntary, and those that workers are required to attend on pain of discipline. The first are legal, the second illegal.
Since they were seemingly blessed by the NLRB in 1948, captive audience meetings have become “a common feature” of corporate anti-union campaigns, the board observed in the Amazon case. A 2009 study of 1,004 NLRB-supervised union representation elections cited in its ruling found that captive audience meetings had been held in 89% of cases; more than half of the employers had held more than five “in the runup to an election.”
The Amazon campaign is a good example. In opposing the unionization drive, which was ultimately successful, Amazon scheduled mandatory meetings every 45 minutes, six days a week at the Staten Island, N.Y., warehouse where the drive originated. At these meetings, company representatives delivered speeches attacking unions in general and the Amazon union drive specifically.
The NLRB found that “managers personally notified employees that they were scheduled to attend, escorted them to the meetings, and scanned their ID badges to digitally record attendance.”
Amazon’s activities prompted the board to reconsider the 1948 policy, which was set forth in a case involving the boiler company Babcock & Wilcox. The board noted that the 1948 finding that captive audience meetings didn’t violate labor law was “largely unexplained” and “flawed” under the law. So it was bound to be overturned.
In its detailed analysis of the topic, the board cited numerous past board rulings and Supreme Court decisions that say that employers have the right to express their opinions about unions and unionization, but not to compel employees to listen.
“It should be clear,” the board found, “that a captive-audience meeting is an extraordinary exercise and demonstration of employer power over employees,” especially when the employees’ decisions on whether to join the union is at issue.
That brings us back to the lawsuit the Chamber and Restaurant Assn. filed in Sacramento federal court. The lawsuit asserts that any ban on mandatory meetings infringes the employers’ free-speech rights as enshrined in the 1st Amendment. (State officials haven’t yet filed a response.)
“Because of SB 399,” the plaintiffs say, “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.”
We think the plaintiffs do protest too much, to quote Shakespeare. The California law does nothing of the kind.
“Under the bill, employers are not prevented from speaking to employees in any way on any subject, including about religious and political matters,” the AFL-CIO stated in a legal memo for the California Labor Federation, which supports the law.
It’s worth remembering that employers — notably restaurant owners — aren’t above using dubious claims to attack pro-worker initiatives. Back in June, I reported that fast food franchise owners asserted that California’s $20 minimum wage for fast food workers had cost the state 10,000 jobs in that sector, going back to September 2023, when Newsom signed the law.
I documented that the statistic was false; it was the product of a misinterpretation of government employment statistics that appeared initially in the Wall Street Journal and was repeated by UCLA economics professor Lee Ohanian for an essay on the Hoover Institution website. (Hoover subsequently retracted Ohanian’s essay, which had been specifically cited by the fast food camp for a newspaper ad.)
The plaintiffs may have a stronger argument in their assertion that California’s law governing employer rights in unionization cases is preempted by federal law, namely the 1935 National Labor Relations Act.
The AFL-CIO memo argues that California, like any state, has the right to set “minimum employment standards” for workers in the state. The examples it cites, however, are matters such as child labor laws, minimum wages and occupational safety and health standards, though it also maintains that since states can bar the firing of workers for improper reasons such as race, it can bar discharges for failing to attend a mandatory meeting.
Gould, for one, thinks the plaintiffs may have a point, based on a 1959 Supreme Court ruling that gave the NLRB exclusive jurisdiction over unionization issues unless the board disavows an interest. The issue might well be headed for the Supreme Court for another look.
That might not matter if the NLRB’s decision in the Amazon case stands. But a Trump-dominated labor board, which appears to be preordained, could overturn the Amazon ruling, just as the Biden board overturned Babcock & Wilcox. That might not be the worst change in labor policy for workers as Trump succeeds Biden, who may have been the most pro-union president in history. But it won’t be good.
Early in April, Ruben Hallali got an unusual alert on his phone: The evening temperature at Paris Charles de Gaulle International Airport had jumped about 6 degrees Fahrenheit in seconds.
Mr. Hallali, the chief executive of the weather risk company Sereno, had set up notifications for extreme weather swings. Then, nine days later, it happened again.
“It was an isolated jump, at one single station, early in the evening,” said Mr. Hallali, who added that he noticed another strange coincidence about the spikes: The timing was just right for somebody to reap a windfall on the betting site Polymarket.
He wasn’t the only one who sensed a problem. Météo-France, the country’s national meteorological service, filed a complaint last week with the police and local prosecutors, saying it had evidence that a weather sensor at Charles de Gaulle, the country’s largest airport, may have been tampered with.
The temperature swings, experts said, coincided with a period of unusual activity on Polymarket, one of the leading online prediction markets, which allow users to wager on the outcome of virtually anything.
One increasingly popular area is weather betting, where speculators can make real-time wagers on temperature readings, rainfall totals, the number of Atlantic hurricanes in a year and much more — with payouts in the thousands of dollars and higher.
As the stakes rise, so has the temptation to tamper with the instruments used to generate weather readings in hopes of engineering a lucrative outcome. Experts warn that this could have dangerous ripple effects, like degrading the information that underpins safe air travel.
Temperature data is used in a host of calculations at airports, helping determine correct takeoff distance, climb rate and whether crews need to apply frost treatment to planes. It’s crucial to airport safety, Mr. Hallali said.
“The Charles de Gaulle incident is not an isolated curiosity,” Mr. Hallali said. “It is what happens when financial incentives meet fragile data infrastructure.”
On April 6, the temperature reading at Charles de Gaulle jumped from 64 degrees Fahrenheit to 70 degrees at 7 p.m., before slowly falling over the next hour, according to data from Météo-France.
On April 15, the recorded temperature climbed even more sharply, from 61 degrees at 9 p.m. to 72 at 9:30 p.m., then dropping back to 61 a half-hour later.
In both instances, the spikes set the high temperature for the day, the metric on which some Polymarket wagers rest.
Laurent Becler, a spokesman for Météo-France, said the service contacted the police after noticing the discrepancies in temperature data. He declined to comment further on the case, saying it was under investigation.
Mr. Hallali said that after the first instance, experts and commenters on the French weather forum Infoclimat began to search answers. Theories were floated, including user error. But after the second spike, commenters zeroed in on the unusual Polymarket wagers, which totaled nearly $1.4 million over the two days, according to the company’s data.
The sums bet on April 6 and 15 were hundreds of thousands of dollars higher than on typical days this month.
It is not the first time that strange bets on prediction markets have raised accusations of insider trading.
On Thursday, a U.S. Army special forces soldier who helped capture President Nicolás Maduro of Venezuela in January was charged with using classified information to bet on outcomes related to Venezuela, making more than $400,000 on Polymarket. Late last year, another trader on the site made roughly $300,000 betting on last-minute pardons from President Joseph R. Biden Jr. before he left office.
Polymarket did not immediately respond to a request for comment. While the site used to tie some bets to temperature readings at Charles de Gaulle, this week, after Météo-France filed its complaint, the platform began using temperatures taken at another airport near the city, Paris-Le Bourget, according to recent bets on the site.
Representatives for Charles de Gaulle airport declined to comment beyond saying that the case was under investigation. The airport police also declined to comment. The Bobigny Public Prosecutor’s Office, which is handling the case, declined to answer questions about the investigation but said that no complaint had been filed against Polymarket.
As to how the instruments could have been tampered with, a number of theories have been offered online, including by use of a hair dryer or a lighter. Mr. Hallali said that the precision of the spike on April 15 suggested the use of a calibrated portable heating device, although he declined to speculate about what kind.
“Markets are expanding into every domain where an outcome can be observed, measured, and settled,” he said. “As these markets multiply, so does the surface area for manipulation.”
As the war in Iran strangles the flow of oil around the globe, California’s jet fuel reservoirs are running low.
The state — which refines much of its own fuel in El Segundo and elsewhere but still relies on crude oil imports — has seen its jet fuel stock decline by more than 25% from last year’s peak to a level not seen since 2023, according to data from the California Energy Commission.
The supply is shrinking as a global shortage is already affecting travelers’ summer plans with canceled flights and higher fares. It could even affect plans for people coming to Los Angeles for the 2026 World Cup, which starts in June, said Mike Duignan, a hospitality expert and professor at Paris 1 Panthéon-Sorbonne University.
“People don’t know exactly how this is going to escalate,” he said. “There’s a huge black cloud over the sea for the World Cup and the travel slump that we’re seeing is all linked to this oil shortage.”
As fuel supplies shrink, flight prices are rising. Airlines are adding baggage surcharges to cover fuel costs. Several routes leaving from smaller California hubs, including Sacramento and Burbank, have already been canceled.
Air Canada has suspended flights for this summer, cutting routes from JFK to Toronto and Montreal.
“Jet fuel prices have doubled since the start of the Iran conflict, affecting some lower profitability routes and flights which now are no longer economically feasible,” the airline said in a statement last week.
Europe had just more than a month’s supply of jet fuel left last week, the International Energy Agency said. In an effort to cut costs, the German airline Lufthansa slashed 20,000 flights from its summer schedule this week.
Without a fresh oil supply flowing through the Strait of Hormuz, the situation is unlikely to improve, experts said. The oil reserves countries and companies have in storage are helping fill shortfalls, but the squeezed supply chain could still wreak economic havoc.
“When there’s a shortage somewhere, everything is affected,” said Alan Fyall, an associate dean of the University of Central Florida Rosen College of Hospitality Management. “Airlines are being cautious, and I would say that is a very wise strategy at the moment.”
California’s jet fuel stock reached its lowest levels in two and a half years at 2.6 million barrels last week, down from a peak of more than 3.5 million barrels last year.
The California Energy Commission, which tracks fuel inventory, said the state’s current jet fuel stock is sill sufficient.
“Current production and inventory levels of jet fuel are within historical ranges,” a spokesperson said. “Although supply is tight, no structural deficit has emerged yet. The present tightness reflects short‑term global market stress. As long as refinery operations remain stable, California is positioned to meet regional jet fuel needs.”
Europe has been affected more directly because it relies on the Middle East for the vast majority of its crude oil and many refined products, experts said. California gets crude oil from the Middle East but also from Canada, Argentina and Guyana.
The state has the capacity to refine around 200,000 barrels of jet fuel per day, most of it from refineries in El Segundo and Richmond.
The amount of crude oil originating in the state has been declining since the early 2000s, as state regulations and drilling costs have led to more imports.
California has become particularly vulnerable to supply-chain shocks like the war in Iran, says Chevron, one of the companies that provides jet fuel in the state.
“The conflict in the Mideast Gulf has exposed the danger of California’s decision to offshore energy production,” said Ross Allen, a Chevron spokesperson. “Taxes, red tape and burdensome regulations cost the state nearly 18% of its refinery capacity in just the past year, and we urge policymakers to protect the remaining manufacturing capacity.”
In 2025, 61% of crude oil supply to California’s refineries came from foreign sources, according to the California Energy Commission. Around 23% came from inside the state, down from 35% five years ago.
The state’s refining capacity has also been declining, said Jesus David, senior vice president of Energy at IIR Energy. The West Coast region’s refining capacity has decreased from 2.9 million to 2.3 million barrels a day since 2019, he said.
“California’s had issues prior to the war,” David said. “Nothing new has been built over the past 30 years, and California has closed a lot of capacity.”
The result is higher prices for both gasoline and jet fuel in the state. Jet fuel at LAX costs close to $15 per gallon this week, compared with almost $10 at Denver International Airport and $11 at Newark International Airport.
Gasoline prices have also been hit hard by the global conflict. Average gas prices in California are close to $6 a gallon, around $2 higher than the national average.
The West Coast is a “fuel island” because it’s not connected by pipelines to the rest of the country, United Airlines chief executive Scott Kirby said in an interview last month. That means oil and refined products have to be brought in by ships.
“Fuel price is more susceptible to supply weakness on the West Coast than anywhere else in the country,” Kirby said.
Some airlines might not survive the turmoil if oil prices don’t level out soon, he said. Spirit Airlines, a budget carrier based in Florida, is reportedly facing imminent liquidation if it isn’t bailed out by the Trump administration.
Nike is cutting about 1,400 jobs in its operations division, mostly from its technology department, the company said Thursday.
In a note to employees, Venkatesh Alagirisamy, the chief operating officer of Nike, said that management was nearly done reorganizing the business for its turnaround plan, and that the goal was to operate with “more speed, simplicity and precision.”
“This is not a new direction,” Mr. Alagirisamy told employees. “It is the next phase of the work already underway.”
Nike, the world’s largest sportswear company, is trying to recover after missteps led to a prolonged sales slump, in which the brand leaned into lifestyle products and away from performance shoes and apparel. Elliott Hill, the chief executive, has worked to realign the company around sports and speed up product development to create more breakthrough innovations.
In March, Nike told investors that it expected sales to fall this year, with growth in North America offset by poor performance in Asia, where the brand is struggling to rejuvenate sales in China. Executives said at the time that more volatility brought on by the war in the Middle East and rising oil prices might continue to affect its business.
The reorganization has involved cuts across many parts of the organization, including at its headquarters in Beaverton, Ore. Nike slashed some corporate staff last year and eliminated nearly 800 jobs at distribution centers in January.
“You never want to have to go through any sort of layoffs, but to re-center the company, we’re doing some of that,” Mr. Hill said in an interview earlier this year.
Mr. Alagirisamy told employees that Nike was reshaping its technology team and centering employees at its headquarters and a tech center in Bengaluru, India. The layoffs will affect workers across North America, Europe and Asia.
The cuts will also affect staffing in Nike’s factories for Air, the company’s proprietary cushioning system. Employees who work on the supply chain for raw materials will also experience changes as staff is integrated into footwear and apparel teams.
Nike’s Converse brand, which has struggled for years to revive sales, will move some of its engineering resources closer to the factories they support, the company said.
Mr. Alagirisamy said the moves were necessary to optimize Nike’s supply chain, deploy technology faster and bolster relationships with suppliers.
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