The U.S. Supreme Court Finds California Organizing Regulation is a Per Se Physical Taking

James S. Korte

On June 23, 2021, the U.S. Supreme Court reversed the Ninth Circuit and held that a California state law allowing limited organizing activity on employer’s farms is unlawful because it is a physical taking of the employer’s property. Cedar Point Nursery v. Hassid, No. 20–107 (June 23, 2020). The California regulation at issue granted labor organizations a “right to take access” an agricultural employer’s property in order to solicit support for unionization. Cal. Code Regs., tit. 8, §20900(e)(1)(C). California’s regulation required agricultural employers to allow union organizers onto their property for up to three hours per day, 120 days per year.

The majority explained that “whenever a regulation results in a physical appropriation of property, a per se taking has occurred…” In applying this principle, the majority held that California’s access regulation appropriates a right to invade the growers’ property for the enjoyment of third parties, and therefore, constitutes a per se physi­cal taking. The majority rejected the National Labor Relations Board’s argument that NLRB v. Babcock & Wilcox Co.’s approach of balancing property and organizational rights should guide the Court’s analysis. 351 U. S. 105, 113 (1956). In rejecting the Board’s argument, the majority recognized that Babcock was not a taking case, and “[w]hatever specific takings issues may be presented by the highly contingent access right we recognized under the NLRA, California’s access regulation effects a per se physical taking under our precedents.” (Emphasis added).

Justice Breyer dissented from the majority opinion and was joined by Justice Sotomayor and Justice Kagan. The dissent’s primary argument was that the regulation does not “appropriate” anything; rather, it regulates the right to exclude. The dissent argues that a regulation that only temporarily limits an owner’s right to exclude others from property does not constitute an automatic Fifth Amendment taking.

When and whether an employer has to permit union representatives to come onto their private property (whether physically or electronically) has long been a battleground in labor law.  While the Supreme Court’s most recent ruling involves access to farms, the majority opinion may have wide-ranging impacts on this access fight across other industries burdened with similar state and local organizing laws.