Federal Court Largely Suspends California’s New Labor Law

On December 26, 2025, a federal court temporarily blocked major provisions of a new California labor law that would have given the California Public Employment Relations Board (PERB) — the state agency within the Labor and Workforce Development Agency that is responsible for overseeing government employer/employee labor relations — authority to handle private-sector labor disputes, which have traditionally been under the exclusive jurisdiction of the National Labor Relations Board (NLRB).

California’s New Labor Law

Signed by Governor Gavin Newsom on October 1, 2025, AB 288 seeks to substantially expand the PERB’s jurisdiction, giving it the ability to enforce labor laws affecting private-sector employees, including, for example, deciding unfair labor practice cases, certifying bargaining representatives, conducting elections and ordering “any appropriate remedy.”

The law provides that employees could petition the PERB under the following circumstances:

• When the worker is employed in a position that would be covered by the National Labor Relations Act (NLRA), but they lose coverage because the NLRA is repealed or narrowed, or its enforcement is enjoined by a court.
• When the NLRB is deemed to have “expressly or impliedly ceded jurisdiction,” which may include when the NLRB lacks quorum (has less than three members on the Board), loses its “independence” because of the U.S. Supreme Court finding that NLRB members are not protected from removal, and experiences certain processing delays.

The law also states that once PERB took up a case, it would maintain jurisdiction, even if the conditions above no longer apply, unless ordered by a court to cede jurisdiction. Additionally, PERB would be allowed to follow its own procedures and NLRA precedents.

NLRB Files Legal Challenge

As previously reported, on October 15, 2025, the NLRB filed a lawsuit against California challenging the law as being preempted by the NLRA. The California Chamber of Commerce, with several other organizations including the U.S. Chamber of Commerce, filed an amicus brief in support.

Rooted in the Supremacy Clause of the U.S. Constitution, preemption is a legal doctrine that invalidates state laws that conflict with federal laws to ensure a consistent legal standard across the country. Although the NLRA doesn’t have an express preemption provision, the U.S. Supreme Court, in a doctrine known as the Garmon preemption, has held that conduct involving NLRA rights falls under the exclusive jurisdiction of the NLRB, to which states and federal courts must defer.

California argued that AB 288 doesn’t infringe on the NLRB’s authority because under the circumstances described in the law, the NLRB no longer has jurisdiction. The federal district court disagreed, however, with respect to several key provisions of the law.

Court Grants Preliminary Injunction

The court granted a preliminary injunction barring California from enforcing the new law’s provisions that would have given PERB jurisdiction over private-sector disputes based on:

• The lack of NLRB quorum,
• Loss of independence, and
• Processing delays.

Contrary to the state’s arguments, the court concluded that the NLRB has not ceded its jurisdiction and given up its authority under any of those circumstances.

On the issue of quorum, the court noted that the NLRA itself anticipates periods where the Board lacks a quorum. During such times, federal law requires the NLRB to carry on, which it does through delegating certain functions to the General Counsel, Regional Directors, Regional Offices and Administrative Law Judges. While some functions cannot be performed without a quorum, the court concluded that the loss of quorum doesn’t equate to the NLRB ceding its jurisdiction.

Similarly, for processing delays, the NLRA doesn’t have fixed deadlines. Investigating complaints, issuing decisions and performing other functions take time and may be delayed for numerous reasons. Delay, however, is nothing new, and it doesn’t mean the NLRB has given up its authority over a matter.

Lastly, while the court agreed generally with the idea that Congress intended the NLRB to be independent, it can’t get behind the notion that Congress’ interest in the NLRB’s independence was so strong that in its absence, Congress intended the NLRB to be stripped of authority.

In sum — California can’t simply take over labor law enforcement in the private sector when the federal process is slow or bogged down in politics. As such, the AB 288 provisions purporting to give jurisdiction to PERB in these instances are preempted by the NLRA and cannot be enforced.

The court left some narrow provisions of the state law standing, finding that California could step in under the following limited circumstances:

• When the employee is no longer covered by the NLRA.
• Cases in which the NLRB expressly ceded jurisdiction.
• Cases in which a court has enjoined NLRA enforcement.

What Happens Now?

The court’s ruling is temporary, and appeals are likely. But for now, the NLRB will continue to have jurisdiction over private-sector labor issues. Employers should note that the Senate recently confirmed two new NLRB Board members — restoring a quorum and allowing the Board to resume operations — which means the NLRB can start issuing decisions again.

James W. Ward, J.D., Employment Law Subject Matter Expert/Legal Writer and Editor, CalChamber

CalChamber members can read more about National Labor Relations Act in the HR Library. Not a member? See how CalChamber can help you.

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