By David Wilson, Timothy M. Hoppe, Nick Geannacopulos, and Jeffrey Berman

Seyfarth Synopsis: California agricultural employers won big before the United States Supreme Court on Wednesday. In Cedar Point Nursery v. Hassid, the Court deemed unconstitutional a California labor regulation which required agricultural employers to allow union organizers onto their property to solicit membership. The case, while focused on private property not opened to the public, could provide employers a tool to limit labor access to other types of private property as well.

In a 6-3 decision authored by Chief Justice John Roberts, the United States Supreme Court held that California Code of Regulation title 8, section 20900(e) amounts to a per se taking under the Fifth Amendment. The regulation requires agricultural employers to allow union organizers onto their property for the purpose of meeting and soliciting union membership. Specifically, it permits labor organizers to “take access” to the employer’s property for up to three hours per day, during four 30-day periods in a calendar year. An employer’s violation of the regulation amounts to an unfair business practice under the California Labor Relations Act of 1975.

Precedential Background

In 1976, this same regulation was upheld by the California Supreme Court in Agricultural Labor Relations Board v. Superior Court. Justice Mosk penned the 4-3 decision, emphasizing the fact that “incidental damages to property resulting from governmental activities, or laws passed in the promotion of the public welfare are not considered a taking.” However, the ensuing 45 years has seen a shift in Takings Clause jurisprudence which ultimately paved the way for Cedar Point Nursery. The Rehnquist and Roberts Courts established a per se takings rule when a regulation imposes a permanent physical occupation or deprives an owner of all economically beneficial use of the property. This stands in contrast to the Penn Central three-factor test, in which courts consider (1) the economic impact of the regulation, (2) its interference with reasonable investment-backed expectations, and (3) the character of the government action in determining whether a regulation has “gone too far.”

The Facts

The Petitioners are two California farms. Cedar Point Nursery is a strawberry farm near the Oregon border, and Fowler Packing is a Fresno-based grower of table grapes and citrus. The farms employ roughly 500 and 2,500 workers, respectively. At both facilities, none of the workers live on the premises. In 2015, organizers from the United Farm Workers attempted to access Fowler’s property in order to solicit membership, but the company blocked them from entering. In anticipation of another visit by UFW, the growers filed suit, requesting declaratory and injunctive relief prohibiting the Board from enforcing the regulation and allowing the union onto their farm.

The Decision

The Court held that a physical invasion of real property, even if temporary, can constitute a per se appropriation of property and require just compensation under the Takings Clause. This holding is founded on two related premises: first, that private property consists of several discrete rights, and second, that the ability to exclude is “one of the most essential sticks in the bundle of rights.” Since the regulation interfered with one of the most important aspects of owning private property, it did more than merely restrain the grower’s use of the land. An appropriation like this, the Court said, deserves per se treatment under the Fifth Amendment.

It is not dispositive, Roberts noted, that the invasion was only temporary and intermittent, as “[t]he duration of an appropriation—just like the size of an appropriation—bears only on the amount of compensation,” and not whether an appropriation has occurred. It is also irrelevant that there was no formal easement granted to union representatives. In the majority’s view, an easement and the revocation on the right to exclude are two sides of the same coin.

The Dissent

In his dissent, Justice Breyer took issue with the majority’s characterization of section 20900(e) as an appropriation of property. Instead, he viewed the regulation as a restriction on the use of the land—an aspect of the police power which is typically evaluated under the more deferential Penn Central test. Further, as a matter of administrability and policy, Breyer expressed concern that the majority’s reasoning could be used to restrict health and safety inspections, since these also involve temporary restrictions on the right to exclude.

What Should Employers Do

This decision is significant for agricultural employers, as well as other private property owners faced with the prospect of labor activities on their properties. For agriculture businesses, a burdensome labor code regulation has been struck down which restricted the activities they could exclude from their workplaces.

And while Cedar Point Nursery involved access to rural agricultural sites, the reasoning of the case—in particular the protection of the private property right to exclude—may affect current and future legislation aimed at restricting other property owners’ ability to exclude labor activities from their premises. For example, California’s Moscone Act (Cal. Code of Civil Procedure § 527.3), which the California Supreme Court has construed to allow for union activities on private retail properties, and other regulations like it, may now be subject to challenge.