Cases & Deals

California Hospital Association wins summary judgment in labor law and health care case

Client(s) California Hospital Association

Jones Day secured a major win for the California Hospital Association (CHA) in a matter that has significant ramifications for labor law and the health care industry. The City of Inglewood passed an ordinance sponsored by the Service Employees International Union – United Healthcare Workers West (SEIU) that not only imposed a $25 minimum wage for "health care workers," but also prohibited an employer from responding to the increased minimum wage in a variety of ordinary ways. For example, the ordinance prohibited an employer from (1) reducing premium pay rates or shift differentials; (2) reducing vacation, healthcare, or other non-wage benefits; (3) reducing hours of work or laying off workers; and (4) increasing parking charges—if the minimum wage requirements served as a "motivating factor in the employer's decision to take any of the actions" just described.

Jones Day brought a lawsuit in federal district court in the Central District of California on behalf of CHA against the City of Inglewood (in which SEIU intervened) seeking to facially invalidate these "handcuff" provisions. In a motion for summary judgment, CHA contended that, because the provisions interfered with the free play of economic forces that Congress intended to leave unregulated and undermined the collective bargaining process between hospital employers and employees, the provisions are preempted by federal law under Machinists v. Wisconsin Employment Relations Comm'n, 427 U.S. 132 (1976). The district court adopted the reasoning advanced in CHA's briefing, granted its motion for summary judgment, and found the handcuff provisions to be facially invalid.

California Hospital Association v. City of Inglewood, et al., No. 23-cv-6187, 2024 WL 2208923 (C.D. Cal. Mar. 11, 2024)