Vorys on Labor : Labor Relations Lawyer & Attorney: Vorys, Sater, Seymour and Pease Law Firm: National Labor Relations

In an earlier post on this site, we told you about the executive order New Jersey Governor Christie issued on the second day of his administration. It made unions subject to the same rules re political donations as businesses in New Jersey.

On Friday, however, an appellate court in New Jersey ruled that the governor exceeded his authority in issuing the executive order. Click here for the Businessweek story. The court reasoned that the governor invaded the province of the state legislature.

The court's decision in New Jersey invalidates the Executive Order. Thus, for those in New Jersey, it is no longer of any substantive effect. We will continue to monitor developments in the event a further appeal is taken or Gov. Christie responds with a legislative effort to counter the Court's ruling.

In the meantime, many of the points made in the first post about this development remain applicable. The practicing labor professional should keep in mind the potential impact of executive action, whether at the state or the federal level, on union organizing and labor relations.

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On his first day in office, newly elected Governor of New Jersey, Chris Christie (R), signed a number of Executive Orders applicable to New Jersey state agencies. One of the Executive Orders extends the scope of New Jersey’s restrictions on the campaign contributions of those who contract with the state and other public entities. These rules are often referred to as "pay to play."

Under prior Executive Orders, labor unions were excluded from the definition of a "Business Entity," to whom the "pay to play" restrictions applied. Gov. Christie's order Executive Order No. 7, signed on January 20, 2010, amends previous Executive Orders to include labor unions, labor organizations, and any political committee formed by a labor union or organization, in the definition of "Business Entity." The full text of Executive Order No. 7 can be found here. This action makes labor unions with contracts with New Jersey public employers subject to the same laws as other businesses who have contracts with the state.

This is significant to the practicing labor professional for at least three reasons:
 

1. It is a recognition of the reality that unions are businesses and have interests that can be advanced through governmental action, just like other businesses.
2. It is a reminder that developments at the state level can have a significant impact on labor organizing. Executive orders in other states have opened up whole new arenas for organizing activity (see, e.g., Illinois and Ohio (EO 2008-02-S)). Indeed, these actions are also good examples of the first point.
3. It reminds us that executive orders at the federal level can also have an impact. For example, one of the first executive orders President Obama signed permits the use of project labor agreements between contractors and trades unions on construction projects with more than $25 million in federal government funding. President Bush had signed an order that prohibited such agreements.

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