This case involved a challenge by various labor unions to a "right to work" ordinance enacted by Hardin County, Kentucky. The unions argued that the ordinance, which prohibited employers from requiring employees to join or pay dues to a union as a condition of employment, was preempted by the National Labor Relations Act (NLRA). The district court agreed, holding that the ordinance was invalid because it was preempted by the NLRA and not saved by the Section 14(b) exception.

The NLRA permits union-security agreements (requiring union membership or dues payment) but allows states and territories to prohibit them through "right to work" laws, as codified in Section 14(b). The central legal question was whether a law enacted by a political subdivision of a state, such as a county ordinance, qualified as "State or Territorial law" within the meaning of Section 14(b), thereby falling within the exception to federal preemption.

The Court of Appeals, analyzing the issue under de novo review, reversed the district court's ruling on this point. The court found the district court's statutory construction flawed. Relying on the Supreme Court's decisions in Wisconsin Public Intervenor v. Mortier and City of Columbus v. Ours Garage and Wrecker Service, the Sixth Circuit held that the term "State" in federal statutes, particularly in the context of exceptions from preemption, should generally be interpreted to include its political subdivisions unless Congress has clearly indicated otherwise. The Court reasoned that states typically have the prerogative to delegate their governmental powers, and absent a clear statement of congressional intent to the contrary, federal statutes allowing states to regulate should be read to preserve this delegation of authority. The Court found no such clear intent to preempt local authority in Section 14(b). Therefore, Hardin County's ordinance, as a law of a political subdivision, was considered "State law" for the purposes of Section 14(b) and was thus excepted from NLRA preemption.

The unions also argued that the NLRA, through its comprehensive scheme of regulation, preempted state and local laws that touched upon activities arguably protected or prohibited by Sections 7 or 8 of the Act, a doctrine known as "Garmon preemption." The Court acknowledged this doctrine but held that even if Garmon preemption would otherwise apply, Section 14(b)'s explicit exception for state right-to-work laws superseded implicit field preemption. The Court found that Congress, by enacting Section 14(b), explicitly chose to allow a diversity of state approaches to union-security agreements, even if it meant sacrificing uniformity and potentially creating conflicts with the broader goals of the NLRA. The Supreme Court's decision in Retail Clerks Int’l Ass’n v. Schermerhorn was cited to support the idea that Section 14(b) recognized the power of states to outlaw union security agreements notwithstanding Garmon preemption.

However, the Court affirmed the district court's ruling that two other provisions of the ordinance were preempted. These provisions prohibited "hiring hall" agreements (requiring union referral for employment) and "dues checkoff" provisions (requiring employer deduction of union dues). The Court found that these provisions were not encompassed within the literal meaning of Section 14(b) and that existing case law, including SeaPak v. Industrial, Technical & Professional Employees and Simms v. Local 1752, Int’l Longshoremen’s Ass’n, held that such regulations were preempted because they overlapped with or conflicted with federal regulation under the NLRA and LMRA, without the protection of the Section 14(b) exception. The Court concluded that dual regulation of these matters would undermine congressional purposes and that these provisions were therefore unenforceable.

Significant Cases Cited

• Wisconsin Public Intervenor v. Mortier, 501 U.S. 597 (1991): The Supreme Court held that a federal law allowing "States" to regulate pesticides did not preempt regulation by local governments, emphasizing that political subdivisions are components of the state and absent a clear intent to preempt, states can delegate authority to them.
• City of Columbus v. Ours Garage and Wrecker Service, Inc., 536 U.S. 424 (2002): The Supreme Court reiterated that a federal law's reference to "the regulatory authority of a State" should be read to preserve the states' traditional right to delegate authority to their political subdivisions, absent a clear statement to the contrary.
• San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236 (1959): The Supreme Court established the doctrine of "Garmon preemption," holding that states cannot regulate activities that are arguably protected or prohibited by Sections 7 or 8 of the NLRA, as such regulation would interfere with the federal regulatory scheme.
• Retail Clerks Int’l Ass’n v. Schermerhorn, 375 U.S. 96 (1963): The Supreme Court held that Section 14(b) of the NLRA gives states the power to outlaw union-security agreements, and this power overrides Garmon preemption in that specific area.
• NLRB v. Nash-Finch Co., 404 U.S. 138 (1971): The Supreme Court stated that the NLRA was intended to create a uniform national policy for labor relations and that states impinging upon areas Congress intended to be free from state control would obstruct federal policy.

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