CalChamber Challenges Recent Law Chilling Employer Speech in Federal Court

The California Chamber of Commerce and the California Restaurant Association (CRA) are urging a federal court to stop the implementation of a new California law that chills employer speech on a broad range of matters, known as SB 399 (Wahab; D-Hayward).

“Throughout legislative deliberations, we repeatedly underscored the fact that SB 399 was a huge overreach,” said CalChamber President and CEO Jennifer Barrera. “SB 399 is clearly viewpoint-based discrimination, which runs afoul of the First Amendment. In addition, SB 399 is preempted by the NLRA.”

According to the complaint for declaratory and injunctive relief filed on December 31, 2024, with the U.S. Eastern District Court in California, SB 399 violates the First and Fourteenth Amendments to the U.S. Constitution by discriminating against employers’ viewpoints on political matters, regulating the content of employers’ communications with their employees, and by chilling and prohibiting employer speech.

SB 399 also is preempted by the National Labor Relations Act (NLRA).

“Employers have the right to express their views and opinions on many issues,” said CRA President and CEO Jot Condie. “SB 399 creates restrictions that are unworkable, and the unintended consequences of this new law outweigh any perceived benefit.”

SB 399

SB 399 was signed into law last September and went into effect on January 1, 2025. Specifically, the law provides that: “An employer … shall not subject, or threaten to subject, an employee to discharge, discrimination, retaliation, or any other adverse action because the employee declines to attend an employer-sponsored meeting or affirmatively declines to participate in, receive, or listen to any communications with the employer or its agents or representatives, the purpose of which is to communicate the employer’s opinion about religious or political matters. An employee who is working at the time of the meeting and elects not to attend a meeting described in this subdivision shall continue to be paid while the meeting is held.” Moreover, SB 399, subdivision (b)(3) defines “political matters” broadly as: “matters relating to elections for political office, political parties, legislation, regulation, and the decision to join or support any political party or political or labor organization.”

When SB 399 was being considered by the state Legislature last year, the CalChamber’s position was that the proposal effectively prohibits discussions regarding “political matters” in the workplace.

“As we saw during the COVID-19 pandemic, it is often crucial that employers be able to communicate with their workers on pending new rules and what it would mean for the workplace. Similarly, if there is legislation pending that would have either a positive impact or detrimental impact on the business or workers’ job security, this is something workers would want to know about. This bill will chill that speech and is sure to make companies fearful of weighing in support of or opposition to legislation, candidates, ballot measures, and more,” the CalChamber warned in an opposition letter sent to legislators.

Other State Laws and Litigation

Laws similar to SB 399 have been unsuccessfully put forward in other states. One local ordinance was struck down, one was repealed because the state agreed that the provision was preempted by the NLRA, one lawsuit was dismissed solely based on a ripeness issue, and two more are presently in litigation.

A copy of the lawsuit is available here. Though subject to this legal challenge, SB 399 law remains in effect until further notice.