Ninth Circuit Keeps California’s SB 399 Blocked: What Businesses Should Know

Labor Code section 1137 prohibits adverse action, or threats of adverse action, against employees who decline covered employer-sponsored meetings or communications expressing the employer’s opinions about political or religious matters. Political matters include legislation, regulation, elections, and decisions about joining or supporting political or labor organizations. Working employees who decline a covered meeting must continue to be paid during it. ²

SB 399 is not a ban on all workplace meetings or every employer discussion of politics or religion. Its exceptions include legally required communications and information necessary for employees to perform their duties. The statute provides a $500-per-employee, per-violation civil penalty; that provision should not be treated as presently enforceable without considering the injunction and its scope. ²

The panel treated SB 399 as content-based because it singles out political and religious subjects, and speaker-based because it regulates employer speech. It applied strict scrutiny, under which California needed a compelling justification and a narrowly tailored restriction. The court concluded that the challengers were likely to prevail on their First Amendment claim. ⁴

The competing interests matter. The associations asserted employers’ speech rights. California argued that employees should not have to endure covered communications as a condition of keeping their jobs. At this preliminary stage, the panel rejected the asserted captive-audience justification as sufficient to sustain the law. That conclusion concerns governmental restrictions on speech; it does not give employers unrestricted rights against employees. ⁴

The panel did not reach the separate claim that the National Labor Relations Act preempts SB 399. Its decision therefore should not be described as resolving that federal labor-law question. ¹

The injunction does not itself determine whether particular employer conduct is lawful under other applicable laws. Where the NLRA applies, threats, coercion, discrimination, and retaliation concerning protected employee activity present separate issues. The NLRB publishes employer-rights-and-obligations guidance addressing these protections; its current text could not be retrieved for this article. ³ These are separate issues, not additional holdings of the SB 399 panel.

NLRA coverage is not universal. Employers should not assume that all workplaces, all workers, or every meeting falls within the same federal rules. Nor should this First Amendment decision be read as universally permitting or prohibiting mandatory union-related meetings. That question requires separate review of the governing authority and the workplace involved.

Evaluate the meeting’s purpose, the proposed statements, whether attendance is expected, and any threatened or actual consequences for declining. Distinguish required job information from political or religious advocacy, and assess all applicable protections before changing policies. Written notices, manager instructions, and attendance practices should match the policy being evaluated.

This is a focused explanation of an appellate ruling, not a comprehensive labor-compliance guide. The October 29 affirmance should not be generalized to every nonparty or possible private enforcement action. The operative injunction and any later orders matter; the reporting cutoff and source limits are stated above. Our business-litigation and startup and business transactions pages describe the firm’s broader business practice.