Interpipe Contracting, Inc. v. Xavier Becerra

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

INTERPIPE CONTRACTING, INC.; No. 17-55248
ASSOCIATED BUILDERS AND
CONTRACTORS OF CALIFORNIA D.C. No.
COOPERATION COMMITTEE, INC., 3:16-cv-02247-
Plaintiffs-Appellants, BEN-NLS

v.

XAVIER BECERRA, in his official
capacity as Attorney General of the
State of California; CHRISTINE
BAKER, in her official capacity as
Director of the California
Department of Industrial Relations;
JULIE A. SU, in her official capacity
as California Labor Commissioner,
Division of Labor Standards
Enforcement,
Defendants-Appellees.
2 INTERPIPE CONTRACTING V. BECERRA

INTERPIPE CONTRACTING, INC., No. 17-55263
Plaintiff-Appellant,
D.C. No.
and 3:16-cv-02247-
BEN-NLS
ASSOCIATED BUILDERS AND
CONTRACTORS OF CALIFORNIA
COOPERATION COMMITTEE, INC., OPINION
Plaintiff,

v.

XAVIER BECERRA, in his official
capacity as Attorney General of the
State of California; CHRISTINE
BAKER, in her official capacity as
Director of the California
Department of Industrial Relations;
JULIE A. SU, in her official capacity
as California Labor Commissioner,
Division of Labor Standards
Enforcement,
Defendants-Appellees.
 INTERPIPE CONTRACTING V. BECERRA 3

Appeal from the United States District Court
for the Southern District of California
Roger T. Benitez, Senior District Judge, Presiding

Argued and Submitted February 5, 2018
Pasadena, California

Filed July 30, 2018

Before: Consuelo M. Callahan and Jacqueline H. Nguyen,
Circuit Judges, and Robert W. Pratt,* District Judge.

Opinion by Judge Callahan

*
The Honorable Robert W. Pratt, United States District Judge for the
Southern District of Iowa, sitting by designation.
4 INTERPIPE CONTRACTING V. BECERRA

SUMMARY **

Civil Rights

The panel affirmed the district court’s dismissal of an
action challenging a 2017 amendment to the California labor
code that imposed a wage-credit limitation on employers for
payments to third-party industry advancement funds (Senate
Bill 954).

Pursuant to the California’s labor code, employers must
pay public works employees either the prevailing wage or
pay a combination of cash wages and benefits. The list of
eligible benefits includes employer payments to third-party
industry advancement funds. Amendment SB 954 permits
employers to take a wage-credit for advancement fund
contributions only if their employees consent to doing so
through a collective bargaining agreement negotiated by a
union. Plaintiff is a contractor that favors open shop
employment arrangements and opposes project labor
agreements on public works projects. Prior to the
amendment, plaintiff took a wage credit for its contributions
to co-plaintiff ABC-CCC, an industry advancement fund
that opposes project labor agreements and supports open
shop arrangements. Since SB 954 went into effect, plaintiff
has ceased making payments to ABC-CCC.

The panel held that amendment SB 954 does not frustrate
the objectives of the National Labor Relations Act and is not
preempted under the doctrine set forth in Machinists v. Wis.

**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
 INTERPIPE CONTRACTING V. BECERRA 5

Emp’t Relations Comm’n, 427 U.S. 132 (1976). The panel
held that by setting a floor for employee pay while allowing
unionized employees to opt out of a particular provision,
California has acted well within the ambit of its traditional
police powers. SB 954 also does not violate ABC-CCC’s
alleged First Amendment rights. Contrary to its assertion,
ABC-CCC has no free-floating First Amendment right to
“amass” funds to finance its speech. And to the extent SB
954 implicates ABC-CCC’s speech interests at all, those
interests are not constitutional in nature because SB 954
merely trims a state subsidy of speech, and does so in a
viewpoint-neutral way. The panel concluded that the law
was therefore subject to rational basis review. Under that
lenient standard, because SB 954 was rationally related to a
legitimate government purpose—ensuring meaningful
employee consent before employers contribute portions of
their wages to third-party advocacy groups—it easily
withstood scrutiny. The panel further concluded that ABC-
CCC lacked standing to press its equal protection claim
because the law applied to employers, and so ABC-CCC
could not show that SB 954 causes an equal protection injury
to itself.

COUNSEL

David Wolds (argued), San Diego, California, for Plaintiff-
Appellant Interpipe Contracting, Inc.

Anastasia P. Boden (argued), Sacramento, California, for
Plaintiff-Appellant Associated Builders and Contractors of
California Cooperation Committee, Inc.

Seth Goldstein (argued), Sacramento, California, for
Defendant-Appellee Xavier Becerra
6 INTERPIPE CONTRACTING V. BECERRA

Ken Lau (argued), Oakland, California, for Defendants-
Appellees Christine Baker and Julie A. Su.

Elizabeth D. Parry, Littler Mendelson P.C., Walnut Creek,
California; Maurice Baskin, Littler Mendelson P.C.,
Washington, D.C.; for Amicus Curiae Associated Builders
and Contractors.

Scott A. Kronland and Rebecca C. Lee, Altshuler Berzon
LLP, San Francisco, California, for Amicus Curiae State
Building and Construction Trades Council of California.

OPINION

CALLAHAN, Circuit Judge:

California’s labor code requires employers on public
works projects to pay their employees a “prevailing wage.”
To comply with this requirement, employers must either pay
the prevailing wage itself or pay a combination of cash
wages and benefits, such as contributions to healthcare,
pension funds, vacation, travel, and other fringe benefits. In
2004, the California legislature expanded the list of eligible
“benefits” to include employer payments to third-party
industry advancement funds (“IAFs”). But there’s a catch.
Since 2017, employers may take a wage-credit for IAF
contributions only if their employees consent to doing so
through a collective bargaining agreement (“CBA”)
negotiated by a union.

Plaintiffs-Appellants Interpipe Contracting, Inc.
(“Interpipe”) and Associated Builders and Contractors of
California Cooperation Committee, Inc. (“ABC-CCC”)
challenge an amendment to the labor code that imposed the
 INTERPIPE CONTRACTING V. BECERRA 7

2017 wage-credit limitation on these types of contributions.
They argue that the amendment, SB 954, 2016 Leg., 2015–
2016 Reg. Sess. (Cal. 2016), violates their constitutional
rights because, they contend, it discriminates against pro-
open shop advocacy.

Appellants’ challenges require us to answer two
questions. First, we must decide whether SB 954 is
preempted by the National Labor Relations Act (“NLRA”)
because it regulates an aspect of labor relations that
Congress intended to leave to market forces, or because it
regulates non-coercive labor speech. Second, if SB 954 is
not preempted, we must decide whether it violates the First
Amendment and the Fourteenth Amendment’s Equal
Protection Clause by limiting the ability of certain IAFs to
raise funds to finance their speech. Because we conclude
that ABC-CCC lacks standing to press its equal protection
claim, and because we hold that SB 954 is neither preempted
by the NLRA nor infringes ABC-CCC’s First Amendment
rights, we affirm the district court’s judgment dismissing
Appellants’ action.

I.

A.

Since 1931, California has required contractors on public
works projects to pay their employees a “prevailing wage.”
Cal. Lab. Code § 1770; State Bldg. & Constr. Trades
Council of Cal., AFL-CIO v. City of Vista, 54 Cal. 4th 547,
554 (2012). “[P]revailing wage laws are based on the . . .
premise that government contractors should not be allowed
to circumvent locally prevailing labor market conditions by
importing cheap labor from other areas.” State Bldg. &
Const. Trades Council, 54 Cal. 4th at 555 (internal quotation
marks omitted). “In satisfying the prevailing wage,
8 INTERPIPE CONTRACTING V. BECERRA

employers can either pay all cash wages or pay a
combination of cash wages and benefits, like contributions
to pension funds, healthcare, vacation, travel, and other
fringe benefits.” Gomez v. Rossi Concrete, Inc., 270 F.R.D.
579, 584 (S.D. Cal. 2010); see also Cal. Lab. Code § 1773.1.
These “[e]mployer payments are a credit against the
obligation to pay the general prevailing . . . wages.” Cal.
Lab. Code § 1773.1(c).

Section 1773.1 allows certain employer contributions to
count toward the prevailing wage. Beginning in 2004, that
provision provided that

Per diem wages . . . shall be deemed to
include employer payments for the
following:

(1) Health and welfare.

(2) Pension.

(3) Vacation.

(4) Travel.

(5) Subsistence.

(6) Apprenticeship or other training programs
. . . so long as the cost of training is
reasonably related to the amount of the
contributions.

(7) Worker protection and assistance
programs or committees . . . to the extent that
the activities of the programs or committees
 INTERPIPE CONTRACTING V. BECERRA 9

are directed to the monitoring and
enforcement of laws related to public works.

(8) Industry advancement and [CBA]
administrative fees, provided that these
payments are required under a [CBA]
pertaining to the particular craft,
classification, or type of work within the
locality or the nearest labor market area at
issue.

(9) Other purposes similar to those specified
in paragraphs (1) to (8), inclusive.

Id. § 1773.1(a) (2004). Prior to 2004, employers could credit
contributions only to numbers (1) through (6) above. Id.
§ 1773.1(a) (2003). The 2004 version expanded the credit
to include contributions to IAFs—number (8)—subject to
approval under a CBA.

The added IAF wage-credit option sparked controversy
when employers began interpreting subsection (9) as
allowing them to wage-credit contributions to IAFs without
employee consent, so long as the recipient IAFs were similar
to, but not covered by, a CBA, as set forth in subsection (8).
To close this loophole, in 2016 the state legislature amended
§ 1773.1 with SB 954—the law at issue here. SB 954
clarifies that subsection (9) allows wage crediting only for
“other purposes similar to those specified in paragraphs
(6) to (8), inclusive, if the payments are made pursuant to a
[CBA] to which the employer is obligated.” Id.
§ 1773.1(a)(9) (2017) (emphasis added). Thus, since SB 954
went into effect on January 1, 2017, it has been clear that
employers may reduce payments to employees to support
10 INTERPIPE CONTRACTING V. BECERRA

their contributions to IAFs only if doing so is approved by
their employees through a CBA.

Interpipe is a plumbing and pipeline contractor that
favors “open shop” employment arrangements and opposes
project labor agreements (“PLAs”) on public works projects.
“Open shop” is labor vernacular for projects involving an
employer that has no formal contracts with a labor union,
and where both unionized and non-unionized labor is
permitted. Del Turco v. Speedwell Design, 623 F. Supp. 2d
319, 326 (E.D.N.Y. 2009); Ray Angelini, Inc. v. City of
Philadelphia, 984 F. Supp. 873, 875 (E.D. Pa. 1997). A
PLA, by contrast, is a type of collective bargaining
relationship involving multiple employers and unions that
agree to abide by a uniform labor agreement in their bids on
public works projects. Bldg. & Constr. Trades Dep’t, AFL-
CIO v. Allbaugh, 295 F.3d 28, 30 (D.C. Cir. 2002).

Before SB 954 took effect, Interpipe took a wage credit
for its contributions to ABC-CCC—an IAF that opposes
PLAs and supports open shop arrangements. Since SB 954
went into effect, Interpipe has ceased making payments to
ABC-CCC.

B.

Interpipe and ABC-CCC brought this action against
California state officials (“Appellees” or “the State”) 1 in
federal district court challenging SB 954 on constitutional
grounds. Appellants claimed that SB 954 violates the
Supremacy Clause by frustrating the purposes of the NLRA,
1
Appellants named as Defendants Xavier Becerra, the Attorney General
of California, Christine Baker, the Director of the California Department
of Industrial Relations, Julie A. Su, the California Labor Commissioner,
and other state officials.
 INTERPIPE CONTRACTING V. BECERRA 11

29 U.S.C. § 151 et seq. They argued that the law regulates
in an area Congress intended to leave to the free play of
market forces, and is preempted by the NLRA’s prohibition
on regulating non-coercive labor speech. ABC-CCC alone
brought two additional claims: that SB 954 infringes its First
Amendment right to free speech and violates the Equal
Protection Clause. Appellants filed a motion for preliminary
injunction and Appellees filed motions to dismiss and a
motion for judgment on the pleadings.

On January 27, 2017, the district court denied
Appellants’ motion for a preliminary injunction and
dismissed their action. Associated Builders & Contractors
of Cal. Cooperation Comm., Inc. v. Becerra, 231 F. Supp. 3d
810, 828 (S.D. Cal. 2017). The court held that the NLRA
does not preempt SB 954, that SB 954 does not infringe
ABC-CCC’s First Amendment rights, and that ABC-CCC
lacked standing to bring its equal protection claim. Id. at
820–28. As to the NLRA claim, the court held that
Machinists 2 preemption—a doctrine deeming preempted
conduct that “‘Congress intended be unregulated,’” id. at
820 (quoting Chamber of Commerce of U.S. v. Brown,
554 U.S. 60, 65 (2008)), such as collective bargaining—did
not apply because the NLRA preserves States’ authority to
set minimum labor standards, and SB 954 is such a standard.
Id. at 821–24. The court further held that SB 954 does not
regulate non-coercive labor speech because it “does not
prevent employers or employees from speaking about any
issue.” Id. at 823. Finally, the court held that Garmon3
preemption—a doctrine deeming preempted state laws
regulating matters governed by the NLRA—did not apply

2
Machinists v. Wis. Emp’t Relations Comm’n, 427 U.S. 132 (1976).

3
San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236 (1959).
12 INTERPIPE CONTRACTING V. BECERRA

because SB 954 “places no substantive restrictions on the
terms of [CBAs] and does not regulate or preclude speech
about unionization or labor issues.” Id. at 825.

As to ABC-CCC’s First Amendment claim, the district
court found that SB 954 operates as a state subsidy of speech
and does not restrict anyone’s right to speak. Id. at 825–27.
Because “nothing requires government ‘to assist others in
funding the expression of particular ideas, including political
ones,’” id. at 825 (quoting Ysursa v. Pocatello Educ. Ass’n,
555 U.S. 353, 358 (2009)), the court held that “‘[the]
legislature’s decision not to subsidize the exercise of a
fundamental right does not infringe the right, and thus is not
subject to strict scrutiny,’” id. (quoting Regan v. Taxation
With Representation of Wash., 461 U.S. 540, 549 (1983)).
The court also rejected ABC-CCC’s claim that SB 954 is
viewpoint discriminatory. The court found that “the statute
is neutral and does not favor, target, or suppress any
particular speaker or viewpoint.” Id. at 826. Accordingly, it
applied rational basis review and held SB 954 to be a
permissible exercise of California’s police powers to
regulate employee wages. Id. at 827.

Finally, the court held that ABC-CCC lacked standing
on its equal protection claim because SB 954 “does not
discriminate against ABC-CCC—if it does discriminate, it
discriminates against employers not subject to CBAs, like
Interpipe.” Id. at 819.

Interpipe and ABC-CCC filed timely, separate appeals,
which were consolidated.

II.

Appellants bring a facial challenge to SB 954 as they
seek a declaration that SB 954 is unconstitutional in all
 INTERPIPE CONTRACTING V. BECERRA 13

circumstances. Our review therefore focuses on whether SB
954 is per se unlawful. See Cal. Coastal Comm’n v. Granite
Rock Co., 480 U.S. 572, 579 (1987).

We “review de novo a district court’s order granting a
motion to dismiss for failure to state a claim under Federal
Rule of Civil Procedure 12(b)(6),” L.A. Lakers, Inc. v. Fed.
Ins. Co., 869 F.3d 795, 800 (9th Cir. 2017), and apply the
same standard of review to a district court’s order granting a
motion for judgment on the pleadings under Federal Rule of
Civil Procedure 12(c). Fleming v. Pickard, 581 F.3d 922,
925 (9th Cir. 2009). We “will affirm a dismissal for failure
to state a claim where there is no cognizable legal theory or
an absence of sufficient facts alleged to support a cognizable
legal theory.” L.A. Lakers, 869 F.3d at 800 (internal
quotation marks omitted). We must “accept the factual
allegations of the complaint as true and construe them in the
light most favorable to the plaintiff.” Id. (internal quotation
marks omitted). Where the district court has considered
documents attached to the complaint, we review facts in
those documents together with the complaint itself. United
States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003); Durning
v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987).
We also review the district court’s denial of Appellants’
motion for a preliminary injunction de novo because the
court’s conclusion was based solely on conclusions of law.
Save Our Sonoran, Inc. v. Flowers, 408 F.3d 1113, 1121 (9th
Cir. 2005).

III.

A.

The NLRA codifies employees’ right to bargain
collectively, seeks to equalize bargaining power between
employers and employees, and preempts state laws that
14 INTERPIPE CONTRACTING V. BECERRA

frustrate the accomplishment of these goals. Fort Halifax
Packing Co. v. Coyne, 482 U.S. 1, 20–21 (1987); Metro. Life
Ins. Co. v. Massachusetts, 471 U.S. 724, 747–48, 753–54
(1985); NLRB v. City Disposal Sys., Inc., 465 U.S. 822, 835
(1984). “The NLRA’s declared purpose is to remedy ‘[t]he
inequality of bargaining power between employees who do
not possess full freedom of association or actual liberty of
contract, and employers who are organized in the corporate
or other forms of ownership association.’” Metro. Life Ins.,
471 U.S. at 753 (quoting NLRA § 1, 29 U.S.C. § 151); see
also Livadas v. Bradshaw, 512 U.S. 107, 117 & n.11 (1994)
(explaining that the NLRA is a “statutory scheme premised
on the centrality of the right to bargain collectively” and
preempts “a State’s penalty on those who complete the
collective-bargaining process”). Thus, the statute stresses
the “desirability of ‘restoring equality of bargaining power,’
among other ways, ‘by encouraging the practice and
procedure of collective bargaining . . . .’” Metro. Life Ins.,
471 U.S. at 753–54 (quoting NLRA § 1, 29 U.S.C. § 151).

While the NLRA contains no express preemption
provision, two categories of state action are implicitly
preempted: (1) laws that regulate conduct that is either
protected or prohibited by the NLRA (Garmon preemption),
and (2) laws that regulate in an area Congress intended to
leave unregulated or “‘controlled by the free play of
economic forces’” (Machinists preemption). Brown,
554 U.S. at 65 (quoting Machinists v. Wis. Emp’t Relations
Comm’n, 427 U.S. 132, 140 (1976)) (internal quotation
 INTERPIPE CONTRACTING V. BECERRA 15

marks omitted). Interpipe argues that SB 954 is preempted
under a Machinists theory. 4

Machinists preemption “protects against state
interference with policies implicated by the structure of the
[NLRA] itself, by pre-empting state law and state causes of
action concerning conduct that Congress intended to be
unregulated.” Metro. Life Ins., 471 U.S. at 749. The
doctrine bars states from interfering with the collective
bargaining process and from regulating non-coercive labor
speech by an employer, employee, or an employee’s union.
See id. at 751; Brown, 554 U.S. at 67–68. Interpipe argues
that SB 954 constitutes state interference with its labor
speech supporting pro-open shop advocacy by IAFs like
ABC-CCC.

B.

Virtually any labor standard—e.g., wage and hour
requirements—will affect the terms of a CBA, but the
pertinent question under Machinists is whether such a
standard interferes with the collective bargaining process.
Metro. Life Ins., 471 U.S. at 756. The Supreme Court has
explained that

there is no suggestion in the legislative
history of the [NLRA] that Congress
intended to disturb the myriad state laws then
in existence that set minimum labor
standards, but were unrelated in any way to
the processes of bargaining or self-

4
Interpipe abandoned its Garmon preemption claim by stating in its
opening brief that it would focus “exclusively on how Machinists
preempts SB 954.”
16 INTERPIPE CONTRACTING V. BECERRA

organization. To the contrary, we believe
that Congress developed the framework for
self-organization and collective bargaining of
the NLRA within the larger body of state law
promoting public health and safety . . . .
“States possess broad authority under their
police powers to regulate the employment
relationship to protect workers within the
State. Child labor laws, minimum and other
wage laws, laws affecting occupational
health and safety . . . are only a few
examples.”

Id. (quoting DeCanas v. Bica, 424 U.S. 351, 356 (1976)).
Minimum labor standards will necessarily affect employer-
employee relations by “form[ing] a backdrop”—i.e., setting
the statutory baseline—for collective bargaining
negotiations. Fort Halifax, 482 U.S. at 21 (internal
quotation marks omitted). But such effects differ in kind
from a State’s regulation of the bargaining process itself.
“[S]tate action that intrudes on the mechanics of collective
bargaining is preempted, but state action that sets the stage
for such bargaining is not.” Am. Hotel & Lodging Ass’n v.
City of L.A., 834 F.3d 958, 964 (9th Cir. 2016).

This accommodation of state labor law is of a piece with
the NLRA’s structure and generally applicable preemption
principles. It reflects that “[t]he NLRA is concerned
primarily with establishing an equitable process for
determining terms and conditions of employment, and not
with particular substantive terms of the bargain that is struck
when the parties are negotiating from relatively equal
positions.” Metro. Life Ins., 471 U.S. at 753; Fort Halifax,
482 U.S. at 20. It is also consistent with the presumption
against preemption that applies in areas of traditional state
 INTERPIPE CONTRACTING V. BECERRA 17

regulation, Wyeth v. Levine, 555 U.S. 555, 565 (2009), as
“the establishment of labor standards falls within the
traditional police power of the State,” Fort Halifax, 482 U.S.
at 21. Thus, “preemption should not be lightly inferred in
this area.” Id.

Interpipe and the State agree that SB 954 is a minimum
labor standard. But Interpipe argues that SB 954 is still
preempted under Machinists because, it reasons, the law
favors pro-union, pro-PLA speech over anti-union, pro-open
shop speech. Interpipe asserts that “SB 954 is a minimum
labor standards law that is inconsistent with the general
NLRA policy protecting labor speech and favoring open and
robust debate on matters dividing unions and employers
(including debate regarding ‘top down’ organizing through
PLAs).” Interpipe reasons that unionized employees might
consent to wage-crediting that benefits pro-union IAFs, but
would definitely not approve of wage-crediting that benefits
pro-open shop IAFs. Such discriminatory effects, Interpipe
argues, run afoul of the NLRA’s protection of labor speech.

Interpipe’s argument fails because SB 954 is a legitimate
minimum labor standard that regulates no one’s labor
speech. First, in arguing otherwise, Interpipe sails full steam
ahead into a flotilla of cases upholding generally applicable
labor laws that include opt-out provisions limited to CBAs. 5

5
Amicus Associated Builders and Contractors, Inc.’s (“ABC”) motion
to file an amicus brief is GRANTED. ABC asserts that California is the
only State to “impose[] . . . [a] discriminatory restrictive limitation on
non-union employer contributions to funds.” We find this statement
somewhat misleading based on a review of ABC’s citation to nine other
States’ prevailing wage laws. In fact, those States do not allow any
wage-crediting for contributions made to the particular types of “funds”
at issue here—IAFs. Instead, those States allow wage crediting only for
18 INTERPIPE CONTRACTING V. BECERRA

Consistent with the NLRA’s goal of promoting collective
bargaining, courts have long upheld state laws that permit
only unions to opt out of state labor standards. See, e.g., Fort
Halifax, 482 U.S. at 22 (upholding state law requiring
severance payments to laid-off employees but allowing
unionized workers to opt out through a CBA); Viceroy Gold
Corp. v. Aubry, 75 F.3d 482, 489–90 (9th Cir. 1996)
(upholding California law setting a maximum workday
standard for mineworkers but allowing unionized workers to
opt out through a CBA); Am. Hotel & Lodging, 834 F.3d at
965 (upholding county ordinance setting a minimum wage
and time-off compensation but allowing unionized workers
to opt out through a CBA); Nat’l Broad. Co. v. Bradshaw,
70 F.3d 69, 73 (9th Cir. 1995) (upholding state law setting
minimum overtime pay requirements but allowing unionized
workers to opt out through a CBA). Opt-out provisions
limited to unions are consistent with Congress’ objectives
under the NLRA because the risk of coercion is low where
bargaining power between employers and employees is in
equipoise. See Metro. Life Ins., 471 U.S. at 753; Fort
Halifax, 482 U.S. at 20.

Second, Interpipe conflates labor standards affecting
employers’ ability to fund their speech with unlawful
regulations of their speech. The NLRA provides that

The expressing of any views, argument, or
opinion, or the dissemination thereof,
whether in written, printed, graphic, or visual
form, shall not constitute or be evidence of an
unfair labor practice under any of the
provisions of this subchapter, if such

programs that inure directly to the benefit of employees, such as pension
plans and health benefit programs.
 INTERPIPE CONTRACTING V. BECERRA 19

expression contains no threat of reprisal or
force or promise of benefit.

NLRA § 8(c), 29 U.S.C. § 158(c). In enacting § 8(c),
Congress sought to encourage “free debate” on labor issues.
Brown, 554 U.S. at 67. To that end, the NLRA prohibits
government policies that frustrate “‘uninhibited, robust, and
wide-open debate in labor disputes’” and also “precludes
regulation of [non-coercive] speech about unionization.”6
Id. at 68 (quoting Letter Carriers v. Austin, 418 U.S. 264,
272–73 (1974)). Interpipe implicitly concedes that SB 954
does not regulate its own speech, but contends that neither
did the law in Brown, which the Supreme Court invalidated.

Interpipe’s reliance on Brown is misplaced. Brown
stands for the straightforward proposition that § 8(c) means
what it says: the government may not “regulate[]” non-
coercive labor speech. Id. Brown involved a California law
(AB 1889) that prohibited certain employers from using state
financial subsidies “‘to assist, promote, or deter union
organizing.’” Id. at 63 (quoting Cal. Gov’t Code
§§ 16645.1–16645.7). The Court did not dispute
California’s right to determine how such state “subsidies”
could be used, see id. at 73–74, nor did it rely on AB 1889’s
disparate treatment of certain pro-union activities, which
were exempt from the law’s restriction, 7 see id. at 70–71.

6
Section 8(c) does not protect “coercive” labor speech—i.e., speech that
“contain[s] a threat of reprisal or force or promise of benefit.’” Brown,
554 U.S. at 68 (quoting NLRB v. Gissel Packing Co., 395 U.S. 575, 618
(1969)).

7
To the contrary, the Court made plain that “a State may ‘choos[e] to
fund a program dedicated to advance certain permissible goals’” over
others. Brown, 554 U.S. at 73 (alteration in original) (quoting Rust v.
Sullivan, 500 U.S. 173, 194 (1991)).
20 INTERPIPE CONTRACTING V. BECERRA

Instead, the Court deemed AB 1889 preempted because its
complex and severe enforcement scheme chilled employers’
use of their own money to engage in protected labor speech.
See id. at 71–73. The law required employers to maintain
records ensuring segregation of state and private funds,
which was “no small feat” because the law drilled into
virtually every aspect of an employer’s operations. Id. at 72.
Moreover, AB 1889’s “[p]rohibited expenditures include[d]
not only discrete expenses such as legal and consulting fees,
but also an allocation of overhead, including salaries of
supervisors and employees, for any time and resources spent
on union-related advocacy.” Id. (internal quotation marks
omitted). Finally, the law imposed “deterrent litigation
risks.” Id. Any person could bring a civil action seeking
injunctive relief, damages, civil penalties, and other relief for
a suspected violation. Id. And liable employers could be
slapped with fines trebling the amount of state funds the
employer spent on “‘assist[ing], promot[ing], or deter[ring]
union organizing.’” Id. at 63, 72 (quoting Cal. Gov’t Code
Ann. §§ 16645.1–16645.7).

The Court found that AB 1889’s draconian enforcement
provisions effectively put employers to a coercive choice:
“either . . . forgo [their] ‘free speech right to communicate
[their labor] views to [their] employees,’ or else . . . refuse
the receipt of any state funds.” Id. at 73 (internal citation
omitted) (quoting NLRB v. Gissel Packing Co., 395 U.S.
575, 617 (1969)). In other words, AB 1889 effectively
forced employers to either relinquish their right to engage in
NLRA-protected speech with their own money in order to
avoid costly litigation and recordkeeping requirements, or
refuse the state subsidy, avoid the law’s enforcement scheme
altogether, and be free to exercise their NLRA speech rights.
The Court held that “[i]n so doing, the statute impermissibly
‘predicat[es] benefits on refraining from conduct protected
 INTERPIPE CONTRACTING V. BECERRA 21

by federal labor law,’ and chills one side of the ‘robust
debate which has been protected under the NLRA.’” Id.
(internal citation omitted) (quoting Livadas, 512 U.S. at 116
and Letter Carriers, 418 U.S. at 275).

SB 954 differs from AB 1889 in a crucial way. Unlike
AB 1889, SB 954 does not—either directly or indirectly
through coercion—limit employers’ use of their own funds
to engage in whatever labor speech they like. As the district
court observed, SB 954 imposes no “compliance burdens or
litigation risks that pressure Plaintiffs to forgo their speech
rights in exchange for the receipt of state funds.” Associated
Builders & Contractors of Cal. Cooperation Comm., 231 F.
Supp. 3d at 823. SB 954 simply bars employers from
diverting their employees’ wages to the employers’
preferred IAFs without their employees’ collective consent.

SB 954 is also unlike AB 1889 in that it is a minimum
labor standard, whereas AB 1889 was not. SB 954 therefore
falls into the category of state labor laws typically saved
from preemption, and so the presumption against
preemption applies with particular force. Fort Halifax,
482 U.S. at 21. As the Supreme Court made clear, “there is
no suggestion in the legislative history of the [NLRA] that
Congress intended to disturb the myriad state laws then in
existence that set minimum labor standards, but were
unrelated in any way to the processes of bargaining or self-
organization.” Metro. Life Ins., 471 U.S. at 756 (emphasis
added). Thus, absent compelling evidence—lacking here—
that SB 954 impairs Interpipe’s ability to engage in non-
coercive labor speech, we cannot invalidate a legitimate
exercise of California’s traditional police power to regulate
labor conditions. Accordingly, we hold that SB 954 does not
infringe employers’ NLRA-protected right to engage in
labor speech and is not preempted by the NLRA.
22 INTERPIPE CONTRACTING V. BECERRA

IV.

A.

Having determined that SB 954 is not preempted under
Machinists, we proceed to consider whether it is invalid
under the First Amendment. 8 ABC-CCC asserts that SB 954
“limits the way private speakers”—in this case IAFs like
ABC-CCC—“may raise money to fund their speech
activities,” and therefore infringes its right to free speech. 9

8
The First Amendment provides that “Congress shall make no law . . .
abridging the freedom of speech, or of the press; or the right of the people
peaceably to assemble, and to petition the Government for a redress of
grievances.” U.S. Const. amend. I.

9
Because Article III standing is jurisdictional, we must sua sponte assure
ourselves of ABC-CCC’s standing to pursue its First Amendment claim.
Gonzalez v. Thaler, 565 U.S. 134, 141 (2012). Article III standing
requires a party to show that it has (1) suffered a concrete and
particularized, actual or imminent injury-in-fact, (2) which is fairly
traceable to the challenged conduct, and (3) which is likely to be
redressed by a ruling in its favor. Lujan v. Defenders of Wildlife, 504
U.S. 555, 560 (1992). ABC-CCC clearly satisfies the first and second
prongs because it alleges facts showing it has suffered an economic
injury—diminution in funding—that is fairly traceable to SB 954. But
the redressability analysis requires more effort because ABC-CCC is not
the party being regulated—SB 954 regulates its benefactors. See id. at
562. “When, . . . as in this case, a plaintiff’s asserted injury arises from
the government’s allegedly unlawful regulation . . . of someone else,”
“causation and redressability ordinarily hinge on the response of the
regulated (or regulable) third party to the government action or inaction.”
Id. (first emphasis in original; second emphasis added). Even if we were
to enjoin enforcement of SB 954, ABC-CCC’s injury might persist
because contributors like Interpipe could decide not to resume their
funding. Nonetheless, because Interpipe and other employers have
submitted declarations testifying to their concrete intentions to resume
contributions to ABC-CCC should we enjoin SB 954, ABC-CCC has
 INTERPIPE CONTRACTING V. BECERRA 23

Notably, ABC-CCC does not dispute that SB 954 leaves it
free to speak and express itself at will. Nor does ABC-CCC
suggest that SB 954 prevents employers (and employees for
that matter) from contributing to ABC-CCC. Instead, it
advances a novel First Amendment theory: that it has a
protected First Amendment right to receive the employee-
subsidized funds from Interpipe and other employers. ABC-
CCC claims that “[l]aws that restrict the ability to fund one’s
speech are burdens on speech.” 10

ABC-CCC swerves off course straight out of the gate by
equating a contributor’s right to fund an entity’s speech with
a recipient’s right to receive another’s financial largesse.
The Supreme Court has said otherwise. In Regan, the Court
held that “[a]lthough [an organization] does not have as
much money as it wants, and thus cannot exercise its
freedom of speech as much as it would like, the Constitution
‘does not confer an entitlement to such funds as may be
necessary to realize all the advantages of that freedom.’”
461 U.S. at 550 (quoting Harris v. McRae, 448 U.S. 297, 318
(1980)). In other words, there exists no standalone right to
receive the funds necessary to finance one’s own speech.
ABC-CCC’s theory ignores this bedrock principle and, in so
doing, misapplies Supreme Court precedent addressing the
First Amendment rights of campaign contributors and
charitable organizations.

shown it to be likely that a favorable decision would redress its injury.
It therefore has standing to press its First Amendment claim.

10
To be sure, ABC-CCC elsewhere argues that SB 954 violates the First
Amendment by allegedly discriminating based on viewpoint. But ABC-
CCC also makes clear its belief that a broader constitutional right is at
stake: an asserted First Amendment right to be free from a legislative
“burden” on its “ability to receive contributions.”
24 INTERPIPE CONTRACTING V. BECERRA

i.

It is well-established that “‘contribution and expenditure
limitations operate in an area of the most fundamental First
Amendment activities.’” McCutcheon v. FEC, 134 S. Ct.
1434, 1444 (2014) (quoting Buckley v. Valeo, 424 U.S. 1, 14
(1976) (per curiam)); see also Randall v. Sorrell, 548 U.S.
230, 247–48 (2006). As concerns political contributions in
particular, this First Amendment right is reflected in the
“‘symbolic expression of support evidenced by a
contribution.’” McCutcheon, 134 S. Ct. at 1444 (quoting
Buckley, 424 U.S. at 21). The question in cases challenging
contribution limitations is whether the law “infringe[s] the
contributor’s freedom to discuss candidates and issues.’” Id.
at 1444 (quoting Buckley, 424 U.S. at 21).

ABC-CCC asserts that where monetary contributions are
involved, the First Amendment right applies equally to the
contributor and the recipient. In support, ABC-CCC looks
to Randall, where the Court observed that a Vermont
campaign finance law diminished candidates’ ability to
“‘amass[] the resources necessary for effective advocacy.’”
548 U.S. at 248 (alteration omitted) (quoting Buckley,
424 U.S. at 21). But ABC-CCC wrenches the quote out of
context. Randall is, at bottom, a case about the free speech
rights of contributors; it does not establish an independent
constitutional right of recipients to “amass” funds.

Randall involved a challenge to Vermont’s campaign
finance law setting contribution limits. Id. at 238–39. To
determine whether the restriction withstood First
Amendment scrutiny, the Court applied the test set forth
decades earlier in Buckley. That test requires assessing,
among other things, whether the “‘contribution restriction[]
could have a severe impact on political dialogue . . . [by]
prevent[ing] candidates and political committees from
 INTERPIPE CONTRACTING V. BECERRA 25

amassing the resources necessary for effective advocacy.’”
Id. at 247 (quoting Buckley, 424 U.S. at 21). The First
Amendment interest implicated, however, was the right of
an individual to contribute, not the right of a political
candidate or organization to amass funds. The question was
whether the restriction impermissibly affected contributors’
First Amendment rights—the determination of which turned
in part on measuring the impact on recipients of such
contributions. See id. An analogous fact pattern might
involve a claim by Interpipe that SB 954 violates its First
Amendment right to contribute to ABC-CCC’s advocacy, an
analysis of which might consider the effect of such a
restriction on ABC-CCC’s speech. But Interpipe brings no
such claim. 11

Our reading of Randall is confirmed by the Court’s later
decision in Davis v. FEC, 554 U.S. 724 (2008). There, the
Court invalidated a federal campaign finance law increasing
contribution limits for non-self-financing political
candidates if their self-financing opponent exceeded a
spending threshold in their own campaign. Id. at 729–30,
736. The Court found that the self-financing candidate’s
First Amendment rights were implicated not because their

11
Even if Interpipe did bring a First Amendment claim, it would still
have to show that (1) SB 954 regulates speech, not just conduct, and (2)
that it pares back a state subsidy of speech in a viewpoint discriminatory
way. Nor could ABC-CCC seek to advance Interpipe’s purported First
Amendment interests. ABC-CCC does not claim third-party standing to
assert Interpipe’s rights, let alone seek to vindicate those rights. Cf. Sec’y
of State of Md. v. Joseph H. Munson Co., Inc., 467 U.S. 947, 955–58
(1984) (holding that a fundraiser that contracted with charities could
assert the charities’ First Amendment rights because it had third-party
standing to do so); Viceroy Gold, 75 F.3d at 489 (finding no third-party
standing absent a showing of a “genuine obstacle” to the affected
individuals bringing their own claims). ABC-CCC argues only that SB
954 violates its own right to receive funds.
26 INTERPIPE CONTRACTING V. BECERRA

ability to receive funds was disproportionately impaired, but
because the law “impose[d] an unprecedented penalty on any
candidate who robustly exercises [her] First Amendment
right [to spend personal funds]”—i.e., it effectively
regulated the self-financing candidate’s own speech. Id. at
738–40; see also Emily’s List v. Fed. Election Comm’n,
581 F.3d 1, 4–5 (D.C. Cir. 2009) (invalidating limitation on
which types of contributions non-profits could spend on
election-related activities). SB 954, by contrast, leaves IAFs
free to spend their funds on expressive activities however
they wish without incurring a “penalty” for doing so.

ii.

ABC-CCC also searches for support in decisions
addressing laws limiting solicitation of funds by charities. In
Schaumburg v. Citizens for a Better Environment, 444 U.S.
620, 623–24 (1980), the Court invalidated a state law
requiring “at least seventy-five percent of the proceeds of
[fundraising] solicitations [to] be used directly for the
charitable purpose of the organization” if the charity wished
to solicit funds in a public forum. The Court found that
solicitation activities were “intertwined” with the charities’
First Amendment rights because “charitable appeals for
funds, on the street or door to door, involve a variety of
speech interests—communication of information, the
dissemination and propagation of views and ideas, and the
advocacy of causes—that are within the protection of the
First Amendment.” Schaumburg, 444 U.S. at 631–32; see
also Riley v. Nat’l Fed’n of the Blind of N.C., Inc., 487 U.S.
781, 789 (1988) (“Our prior cases teach that the solicitation
of charitable contributions is protected speech . . . .”); Sec’y
of State of Md. v. Munson, 467 U.S. 947, 967 & n.16 (1984)
(holding that a law restricting the amount charities could
spend on fundraising activities infringed their ability to
 INTERPIPE CONTRACTING V. BECERRA 27

solicit funds, and amounted to “a direct restriction on
protected First Amendment activity”); cf. Cornelius v.
NAACP Legal Def. & Educ. Fund, Inc., 473 U.S. 788, 799
(1985) (extending Schaumburg to solicitation activities that
are not “in-person” but are accomplished through
dissemination of literature). These cases do not support
ABC-CCC’s claimed First Amendment right, however,
because laws limiting charitable solicitations target the
speaker’s rights, manifested through charities’ solicitation
activities. SB 954, by contrast, steers clear of regulating
IAFs’ solicitation of funds.

iii.

ABC-CCC’s reliance on a non-precedential district court
case is similarly unavailing. United Food and Commercial
Workers Local 99 v. Brewer, 817 F. Supp. 2d 1118, 1121–
22 (D. Ariz. 2011) (not appealed), concerned an Arizona law
restricting some unions’ ability to collect funds from
employees through employer payroll deductions. Before the
law took effect, employees could elect to have their
employers automatically deduct from their paychecks the
amount needed to pay for health insurance and union dues.
Id. at 1121. But under the challenged law, employees were
barred from doing so unless the unions either certified to
employers that they would not use any of their general funds
for “political purposes,” or if they specified what percentage
of their funds would be so used. Id. If a union spent any
funds on politicking after it had forsworn such activities, or
if it spent more than the specified percentage, it was subject
to a civil fine of $10,000. Id. at 1122. The court held that
the law implicated the unions’ First Amendment rights and
invalidated it as an impermissible viewpoint-based
restriction on speech because it applied only to—and thereby
discriminated against—particular unions. Id. at 1125.
28 INTERPIPE CONTRACTING V. BECERRA

At first blush, SB 954 might appear similar to Arizona’s
law in United Food. Both laws affect the contribution
decisions of third parties—employees in United Food and
employers here—which, in turn, affect another entity’s
ability to amass funds. But the constitutional interest in
United Food was in the law’s regulation of the unions, not in
the law’s effect of diminishing the funds the unions received.
See id. at 1125. Similar to the campaign finance law struck
down in Davis, Arizona’s law limited the unions’ speech by
tying payroll deduction contributions to their political
speech. Id. Moreover, if unions expressed their political
views “too much,” they incurred a fine, which further
evinced an objective to target union speech. 12 Id. SB 954,
by contrast, does not regulate the recipients of funds—
IAFs—let alone tie the funding IAFs receive to their own
expressive activities.

* * *

The cases discussed in this section share a common
characteristic: they address laws regulating the aggrieved
party’s speech. But while the First Amendment protects the
right of an individual to express herself through the medium
of finance, it does not establish a free-floating right to

12
The Supreme Court’s recent decision in Janus v. American Federation
of State, County, & Municipal Employees, 138 S. Ct. 2448 (2018) does
not affect our assessment of United Food. Janus invalidated state agency
shop laws requiring nonmembers of a union to pay a fee in support of
the union’s collective bargaining activities—activities performed on
behalf of union members and nonmembers alike. Id. at 2477–78. The
Court did not have occasion to address, nor did it question, unions’ well-
established First Amendment right “to participate in the electoral process
with all available funds other than [ ] state-coerced agency fees lacking
affirmative permission.” Davenport v. Wash. Educ. Ass’n, 551 U.S. 177,
190 (2007).
 INTERPIPE CONTRACTING V. BECERRA 29

receive the funds necessary to broadcast one’s speech.
Regan, 461 U.S. at 550. Accordingly, we reject ABC-CCC’s
theory of a First Amendment right to amass funds to finance
its speech.

B.

Even if ABC-CCC could show that SB 954 targets its
own rights as a speaker rather than as a recipient of others’
financial contributions, we would find no constitutional
violation because the law’s aim is employer conduct—the
payment of wages—that is not inherently expressive.

Conduct-based laws may implicate speech rights where
(1) the conduct itself communicates a message, see Holder
v. Humanitarian Law Project, 561 U.S. 1, 28 (2010);
Rumsfeld v. Forum for Academic & Institutional Rights, Inc.
(“FAIR II”), 547 U.S. 47, 65–66 (2006); (2) the conduct has
an expressive element, see Clark v. Cmty. for Creative Non-
Violence, 468 U.S. 288, 293 (1984); or where, (3) even
though the conduct standing alone does not express an idea,
it bears a tight nexus to a protected First Amendment
activity, see Minneapolis Star & Tribune Co. v. Minn.
Comm’r of Revenue, 460 U.S. 575, 585 (1983). Regardless
of the theory, the conduct must be “‘inherently expressive’”
to merit constitutional protection. Pickup v. Brown,
740 F.3d 1208, 1225 (9th Cir. 2014) (quoting FAIR II,
547 U.S. at 66).

SB 954 does not regulate conduct that communicates a
message or that has an expressive element. The Court’s
decision in FAIR II is instructive. FAIR II involved a claim
brought by law schools that federal legislation tying funding
to their decision whether to allow military recruiters on
campus violated their First Amendment rights. 547 U.S. at
51, 66. The schools argued that the law infringed their right
30 INTERPIPE CONTRACTING V. BECERRA

to express disagreement with military policy. Id. at 53. The
Court rejected their argument, reasoning that the law
targeted conduct—“treating military recruiters differently
from other recruiters”—that was not “inherently
expressive.” Id. at 66; cf. Clark, 468 U.S. at 296 (assuming
that sleeping overnight in public parks as part of a
demonstration was an expressive protest in support of the
homeless). Same here. A law regulating wages does not
target conduct that communicates a message nor does such
conduct contain an expressive element.

Nor does regulating wages bear a tight nexus to ABC-
CCC’s right to free speech. In Minneapolis Star, the Court
assessed a Minnesota law imposing a special use tax on
certain paper and ink products. 460 U.S. at 577. Purchasing
ink and paper is not expressive conduct, but the law applied
to ink and paper products used exclusively by news
publications. Id. at 578. Indeed, the law defined the
products taxed as those “‘used or consumed in producing a
publication as defined [by law].’” Id. at 578 n.2 (quoting
Minn. Stat. § 297A.14). Because the law “singled out the
press for special treatment” and impaired news publications’
ability to exercise their press freedoms, the law burdened
interests protected by the First Amendment. Id. at 582–85.

SB 954 has none of the hallmarks of the Minnesota tax.
Far from taking aim at IAFs’ speech, SB 954 is, instead, a
generally applicable wage law that targets employer use of
employee wages, does not single out pro-open shop IAFs,
and only indirectly affects one possible revenue source for
IAFs. Indeed, the law leaves ABC-CCC free to solicit funds
from employers, employees, or anyone else. That ABC-
CCC may now need to explore alternative means of raising
funds to finance its speech does not somehow transform a
minimum wage law into a regulation of expressive conduct.
 INTERPIPE CONTRACTING V. BECERRA 31

SB 954 is therefore more akin to generally applicable
economic regulations affecting rather than targeting news
publications that the Court has found pass constitutional
muster. 13 Id. at 581 (“It is beyond dispute that the States and
the Federal Government can subject newspapers to generally
applicable economic regulations without creating
constitutional problems.”).

To be sure, the Supreme Court has not drawn a bright
line distinguishing conduct-based laws that permissibly
burden speech from those that do not. But three
considerations back a requirement that, in order to trigger
First Amendment scrutiny, a conduct-based law must
(1) target a particular type of entity for differential treatment,
and (2) regulate the ingredients necessary to effectuate that
entity’s First Amendment rights. First, a law regulating
conduct that merely alters incentives rather than restricts the
ingredients necessary for speech does not regulate conduct
that is “inherently expressive”—a necessary trait of an
impermissible conduct-based regulation. FAIR II, 547 U.S.
at 66; Pickup, 740 F.3d at 1225. Second, applying the First
Amendment to conduct that has only an indirect effect on
speech would task the courts with unwieldy line drawing
exercises: how indirectly related to speech must a conduct-
based restriction be to avoid First Amendment scrutiny?
Third, scrapping conduct-based laws that have only an
attenuated relationship to speech would have the perverse
effect of invalidating legitimate exercises of state authority

13
Indeed, Minneapolis Star observed that the Minnesota tax’s burden on
press freedoms did not, in and of itself, trigger First Amendment
scrutiny. Minneapolis Star, 560 U.S. at 581, 583 (noting that economic
regulation of the press through anti-trust and other laws does not
implicate constitutional freedoms). The law offended the First
Amendment because it “singled out the press for special treatment.” Id.
at 582–85.
32 INTERPIPE CONTRACTING V. BECERRA

to protect the general health and welfare. A labor standard
like SB 954 that ensures employee approval before their
wages are rerouted to third-party advocacy groups would,
under ABC-CCC’s theory, be subject to scrutiny simply
because it affects ABC-CCC’s ability to finance its speech.
That cannot be the law. Accordingly, because SB 954
regulates conduct that is not “inherently expressive,” we
hold that it does not regulate ABC-CCC’s speech.

C.

Finally, we consider whether SB 954 limits a state
subsidy on speech in a viewpoint discriminatory way. “[A]
legislature’s decision not to subsidize the exercise of a
fundamental right does not infringe the right . . . .” Regan,
461 U.S. at 549. Because speech subsidies are not coated
with constitutional protection, the government is typically
free to limit or remove speech subsidies at its discretion, and
such limitations are generally subject to rational basis
review. Ysursa, 555 U.S. at 358–59. Further, the legitimacy
of a State’s limitation on a speech subsidy is all the more
apparent where it withdraws a policy that facilitates
compulsory subsidization of others’ expression. As the
Supreme Court recently made clear, “[c]ompelling a person
to subsidize the speech of other private speakers raises []
First Amendment concerns.” Janus v. Am. Fed’n of State,
Cnty., & Mun. Employees, Council 31, 138 S. Ct. 2448, 2464
(2018) (emphasis in original). On the other hand, where a
State limits a speech subsidy in a viewpoint discriminatory
way, we generally apply strict scrutiny. 14 Rosenberger v.

14
We do not have occasion to decide whether a condition placed on a
state subsidy that remedies a limitation on others’ expression would, if
targeted at only certain viewpoints, be subject to strict scrutiny. We need
 INTERPIPE CONTRACTING V. BECERRA 33

Rector & Visitors of Univ. of Va., 515 U.S. 819, 834–35, 837
(1995) (“Having offered to pay the third-party contractors on
behalf of private speakers who convey their own messages,
the University may not silence the expression of selected
viewpoints.”).

With this framework in mind, we assess first whether SB
954 limits a state subsidy on speech or instead burdens First
Amendment rights. We then evaluate whether SB 954 is
viewpoint discriminatory.

i.

ABC-CCC argues that SB 954 burdens its constitutional
right to free speech rather than limits a state subsidy of its
speech. ABC-CCC begins with the premise that state
subsidies of speech are inherently financial in nature.
Because SB 954 “restricts the way private parties obtain
private funding for their speech, at no cost to the
government,” ABC-CCC reasons that the law is a direct
affront to its constitutional rights and must be subject to strict
scrutiny.

ABC-CCC misconceives the nature of state subsidies of
speech. A speech subsidy need not be financial; it may be a
non-monetary means of facilitating an entity’s speech—e.g.,
by creating a mechanism that assists the entity in funding its
own speech. Ysursa, 555 U.S. at 358 (2009); see also
Rosenberger, 515 U.S. at 835 (rejecting the argument that,
“from a constitutional standpoint, funding of speech differs
from provision of access to facilities”). And because the
State has no constitutional duty to subsidize speech in the

not address that question because we conclude that SB 954 does not
discriminate based on viewpoint.
34 INTERPIPE CONTRACTING V. BECERRA

first place, it may restrict that assistance without triggering
constitutional scrutiny. As the Chief Justice explained in
Ysursa,

While in some contexts the government must
accommodate expression, it is not required to
assist others in funding the expression of
particular ideas, including political ones.
“[A] legislature’s decision not to subsidize
the exercise of a fundamental right does not
infringe the right, and thus is not subject to
strict scrutiny.” Regan v. Taxation With
Representation of Wash., 461 U.S. 540, 549
(1983); cf. Smith v. Highway Employees,
441 U.S. 463, 465 (1979) (per curiam)
(“First Amendment does not impose any
affirmative obligation on the government to
listen, to respond or, in this context, to
recognize [a labor] association and bargain
with it”).

555 U.S. at 358 (alterations in original). Put simply, what
the government giveth it can taketh away.

Ysursa involved a challenge to an Idaho law barring
public employees from authorizing a payroll deduction for
contributions to their union’s political action committee. Id.
at 355. In so doing, the law did not involve any
governmental financial subsidy, but it did restrict a
mechanism by which the State facilitated private funding (by
employees) of private speech (by the unions)—the same
factual circumstance ABC-CCC identifies in the instant
matter. The Court held that Idaho’s law did not violate the
First Amendment because,
 INTERPIPE CONTRACTING V. BECERRA 35

While publicly administered payroll
deductions for political purposes can enhance
the unions’ exercise of First Amendment
rights, Idaho is under no obligation to aid the
unions in their political activities. And the
State’s decision not to do so is not an
abridgment of the unions’ speech; they are
free to engage in such speech as they see fit.
They simply are barred from enlisting the
State in support of that endeavor. Idaho’s
decision to limit public employer payroll
deductions as it has “is not subject to strict
scrutiny” under the First Amendment.
Regan, 461 U.S., at 549, 103 S. Ct. 1997.

Id. at 359. In a statement that is acutely on point here, the
Court added that “[a] decision not to assist fundraising that
may, as a practical matter, result in fewer contributions is
simply not the same as directly limiting expression.” Id. at
360 n.2. Indeed, California’s decision to limit assistance for
IAFs’ fundraising activities under SB 954 “is simply not the
same as directly limiting [IAFs’] expression.” Id.; see also
Davenport v. Wash. Educ. Ass’n, 551 U.S. 177, 187 (2007)
(approving a law that placed a condition “upon [a] union’s
extraordinary state entitlement to acquire and spend other
people’s money” (emphasis in original)); cf. Janus, 138 S.
Ct. at 2464 (“the compelled subsidization of private speech
seriously impinges on First Amendment rights”).

Ysursa relied on the Court’s decision in Davenport to
distinguish speech subsidies from First Amendment rights.
In Davenport, the Court upheld a state ban on unions using
agency fees of non-union members on political activities
absent employees’ affirmative approval. 551 U.S. at 182,
188–91. Because unions have no First Amendment right to
36 INTERPIPE CONTRACTING V. BECERRA

collect fees from nonmembers in the first place, the State’s
limitation on unions’ ability to collect those fees merely
restricted a state subsidy. Id. at 185–87. The Court reasoned
that “[w]hat matters is that public-sector agency fees are in
the union’s possession only because Washington and its
union-contracting government agencies”—rather than the
self-executing operation of the First Amendment—“have
compelled their employees to pay those fees.” Id. at 187.

Finally, in Regan, the Court considered a federal law
barring non-profit organizations engaged in lobbying
activities from accepting tax-deductible donations. 461 U.S.
at 543–44. The Court began by explaining that “tax-
deductibility [is] a form of subsidy that is administered
through the tax system.” Id. at 544. It then considered the
challenger’s argument “that the government may not deny a
benefit to a person because he exercises a constitutional
right”—there, the right to lobby. Id. at 545. The Court
rejected that argument, concluding that the government had
not denied the challenger’s right to lobby because he could
still do so; “Congress has merely refused to pay for the
lobbying out of public monies.” Id.

Ysursa, Davenport, and Regan are controlling. As in
those cases, SB 954 trims a state subsidy rather than
infringes a First Amendment right. The subsidy here takes
the form of a state-authorized entitlement allowing
employers to reduce their employees’ wages to support the
employers’ favored IAFs. It does not restrict IAFs’ right to
free speech. ABC-CCC’s contrary argument relies on the
faulty premise that a state subsidy operates like a one-way
ratchet: once California offered wage-crediting for IAFs, the
state entitlement became imbued with constitutional
protections and could not be restricted. Not so. As
 INTERPIPE CONTRACTING V. BECERRA 37

discussed, ABC-CCC’s argument flies in the face of the
Supreme Court’s clear statements to the contrary:

While [the wage credit] can enhance [ABC-
CCC’s] exercise of First Amendment rights,
[California] is under no obligation to aid
[ABC-CCC] in [its expressive] activities.
And the State’s decision not to do so is not an
abridgment of [ABC-CCC’s] speech; [it is]
free to engage in such speech as [it] see[s] fit.

Ysursa, 555 U.S. at 359.

ii.

We turn next to evaluating whether SB 954 targets
certain IAFs based on their open shop advocacy. If it does,
then the law is likely subject to strict scrutiny
notwithstanding its limitation on a state subsidy rather than
a constitutional right. Rosenberger, 515 U.S. at 834–35,
837; Davenport, 551 U.S. at 189.

“A regulation engages in viewpoint discrimination when
it regulates speech ‘based on the specific motivating
ideology or perspective of the speaker.’” First Resort, Inc.
v. Herrera, 860 F.3d 1263, 1277 (9th Cir. 2017), cert.
denied, No. 17-1087 (June 28, 2018) (quoting Reed v. Town
of Gilbert, 135 S. Ct. 2218, 2230 (2015)) (internal quotation
marks omitted); see also Moss v. U.S. Secret Serv., 572 F.3d
962, 970 (9th Cir. 2009) (“[V]iewpoint discrimination
occurs when the government prohibits speech by particular
speakers, thereby suppressing a particular view about a
subject.” (internal quotation marks omitted)). Viewpoint
discrimination is the most noxious form of speech
suppression. Rosenberger, 515 U.S. at 829. By targeting
not only “subject matter, but particular views taken by
38 INTERPIPE CONTRACTING V. BECERRA

speakers on a subject,” it constitutes “an egregious form of
content discrimination.” Id.

If a law is facially neutral, we will not look beyond its
text to investigate a possible viewpoint-discriminatory
motive. See First Resort, 860 F.3d at 1278 (“‘[t]he Supreme
Court has held unequivocally that it will not strike down an
otherwise constitutional statute on the basis of an alleged
illicit legislative motive’” (quoting Menotti v. City of Seattle,
409 F.3d 1113, 1130 n.29 (9th Cir. 2005)) (internal quotation
marks omitted)). If, however, the law includes indicia of
discriminatory motive, we may peel back the legislative text
and consider legislative history and other extrinsic evidence
to probe the legislature’s true intent. See, e.g., Sorrell v. IMS
Health Inc., 564 U.S. 552, 565 (2011) (considering
legislative findings where the challenged law favored some
entities over others); cf. Ridley v. Mass. Bay Transp. Auth.,
390 F.3d 65, 87 (1st Cir. 2004) (considering statements by
government officials to help determine legislative intent).
Two indicia of discriminatory motive relevant here are
underinclusiveness and overinclusiveness. See Williams-
Yulee v. Florida Bar, 135 S. Ct. 1656, 1670 (2015); Ridley,
390 F.3d at 87. The presence of either indicates potential
viewpoint discrimination, which would prompt us to
consider extrinsic evidence to help determine whether the
California legislature did, in fact, act with discriminatory
intent. Cf. Ridley, 390 F.3d at 87–88.

ABC-CCC argues that SB 954 discriminates against
organizations that favor open shop arrangements because it
“burdens based on the recipient’s status and viewpoint.”
ABC-CCC asserts that “the requirement that prevailing
wage contributions be made pursuant to a CBA acts as a
proxy for union-backed speech” because unionized
employees are unlikely to approve of a wage credit that
 INTERPIPE CONTRACTING V. BECERRA 39

benefits an organization whose purpose is pro-open shop
advocacy. 15 As evidence, ABC-CCC claims that SB 954 is
overinclusive because it does not allow an employer to take
a wage credit for IAF contributions even if an individual
employee approves of doing so. It also argues that the law
is underinclusive because it does not require the consent of
all unionized employees, and because it leaves in place wage
credits for contributions that do not require employee
consent—e.g., contributions to pension funds and health
insurance plans.

We are unpersuaded. First, that only unionized
employers may have an opportunity to take a credit against
their employees’ wages for IAF contributions does not
facially discriminate against certain recipients of that credit:
SB 954 is indifferent to which IAFs—if any—employees
elect to subsidize. Second, that unionized employees are
unlikely to fund an anti-union IAF over a pro-union one is
beside the point: A facially neutral statute restricting
expression for a legitimate end is not discriminatory simply
because it affects some groups more than others. See R.A.V.
v. City of St. Paul, 505 U.S. 377, 385 (1992). That
employees may consent to wage deductions only in support
of pro-union IAFs merely reflects a choice made by
employees, not a mandate imposed by the California
legislature. For example, “an ordinance against outdoor
fires” is legitimate even though it might affect anti-
government protesters more than pro-government ones

15
Amicus ABC goes a step further, arguing that SB 954 “allow[s] credits
for contributions to union [IAFs], while denying the same rights to non-
union employers.” But SB 954 does no such thing. The law allows
credits to any type of IAF. The fact that pro-union IAFs may benefit
disproportionately is simply a function of employees’ decision to spend
their money supporting the speech of certain IAFs over others.
40 INTERPIPE CONTRACTING V. BECERRA

because only the former are likely to engage in the
expressive activity of flag burning. Id.

Our decision in First Resort is instructive. There, we
considered a city ordinance prohibiting limited services
pregnancy centers (“LSPCs”) from providing false or
misleading statements about their abortion-related services.
860 F.3d at 1267–68. The record included evidence that
LSPCs misled women into believing they provided abortion
services and “unbiased counseling” when, in fact, they
offered no such services and sought to discourage women
from getting abortions. Id. at 1267–69 (internal quotation
marks omitted). First Resort, Inc., an LSPC, challenged the
ordinance as discriminating against its anti-abortion views.
Id. at 1277.

We rejected First Resort’s theory. We explained that a
law affecting entities holding a particular viewpoint is not
viewpoint discriminatory unless it targets those entities
because of their viewpoint. Id. at 1277–78. The ordinance
in First Resort did not cross that line because it targeted false
and deceptive advertising—a legitimate, non-speech-
suppressing purpose—and not the views held by LSPCs. Id.
Indeed, the ordinance in no way limited LSPCs in expressing
their anti-abortion views. Id.

Put differently, it may be true that LSPCs
engage in false or misleading advertising
concerning their services because they hold
anti-abortion views. However, the Ordinance
does not regulate LSPCs based on any such
anti-abortion views. Instead, the Ordinance
regulates these entities because of the threat
 INTERPIPE CONTRACTING V. BECERRA 41

to women’s health posed by their false or
misleading advertising.

Id. at 1278.

Like the ordinance in First Resort, SB 954 targets a
legitimate area of state regulation and does not discriminate
based on viewpoint. Just as LSPCs remain free to express
their anti-abortion views however they wish, SB 954 leaves
ABC-CCC and other IAFs—regardless of viewpoint—free
to engage in whatever speech they like.

In fact, SB 954 is planted on even firmer constitutional
ground than the ordinance in First Resort for two reasons.
First, whereas the law there regulated the aggrieved party,
First Resort, SB 954 does not regulate ABC-CCC or other
IAFs at all. At most, SB 954 indirectly affects ABC-CCC.
This fact attenuates any concern that the law targets ABC-
CCC’s speech. Second, whereas First Resort concerned
possible infringement of LSPCs’ First Amendment rights,
SB 954 goes some way toward remedying an encumbrance
on the First Amendment rights of others—namely,
employees on public works projects. Indeed, if ABC-CCC
were to prevail here and California’s prevailing wage law
reverted to its pre-SB 954 state—whereby employers could
deduct employee wages to support the employers’ favored
IAFs without employee consent—the result would likely be
an infringement of employees’ First Amendment right to
contribute to causes of their choosing. “As Jefferson
famously put it, ‘to compel a man to furnish contributions of
money for the propagation of opinions which he disbelieves
and abhor[s] is sinful and tyrannical.’” Janus, 138 S. Ct. at
2464 (quoting A Bill for Establishing Religious Freedom, in
2 Papers of Thomas Jefferson 545 (J. Boyd ed. 1950)
(emphasis deleted and footnote omitted)).
42 INTERPIPE CONTRACTING V. BECERRA

ABC-CCC also argues that discriminatory motive can be
inferred from SB 954’s text because, it asserts, the law is
over- and underinclusive. A showing that a law regulates a
greater or lesser number of entities than is reasonable to
serve its objectives could indicate such a motive. Williams-
Yulee, 135 S. Ct. at 1668.

Whether a law is overinclusive or underinclusive
requires first ascertaining the law’s declared purpose. See
Perry Educ. Ass’n v. Perry Local Educators’ Ass’n, 460 U.S.
37, 48–51 (1983) (upholding law restricting access to
teacher mailboxes to a particular union because doing so was
“compatible with the intended purpose of the property”). SB
954’s averred objective is to close a loophole in California’s
prevailing wage law by requiring collective employee
consent before an employer may divert employee wages to
IAFs. ABC-CCC argues that SB 954 is overinclusive
because it disallows individual employees from agreeing to
the IAF wage-credit.

ABC-CCC’s argument is unavailing because it loses
sight of the law’s purpose. SB 954 is part of a larger
statutory scheme setting a wage floor for employees on
public works projects. The prevailing wage requirement
means an employer may not deny an individual employment
because she is unwilling to negotiate down a minimum wage
and instead hire an employee who is. Allowing individual
employees to negotiate wage credits for employers’ IAF
contributions as ABC-CCC suggests would effectively
circumvent this prohibition. Employers could pit
prospective employees against each other and hire only those
who agreed to take the wage deduction, thereby rendering
employee “consent” illusory. That risk is relatively low
under a unionized CBA arrangement because employers in
that context cannot coerce individual employees into
 INTERPIPE CONTRACTING V. BECERRA 43

agreeing to a below-floor wage. Thus, because the
legislature did not unreasonably determine that individual
employees are not similarly situated to unions in negotiating
wage credits, SB 954 is not overinclusive. 16

A law’s underinclusiveness may also indicate viewpoint
discrimination. 17 “Underinclusiveness raises serious doubts
about whether the government is in fact pursuing the interest
it invokes, rather than disfavoring a particular speaker or
viewpoint.” Brown v. Entm’t Merchants Ass’n, 564 U.S.
786, 802 (2011). But while a “law’s underinclusivity raises
a red flag, the First Amendment imposes no freestanding
‘underinclusiveness limitation.’” Williams-Yulee, 135 S. Ct.
at 1668 (quoting R.A.V., 505 U.S. at 387) (internal quotation
marks omitted). “A State need not address all aspects of a

16
At any rate, SB 954 does nothing to bar individual employees from
contributing to ABC-CCC or any other IAF. Just as restricting automatic
payroll deductions does not infringe unions’ free speech rights, Ysursa,
555 U.S. at 360–61, neither does limiting a wage deduction infringe
IAFs’ free speech rights.

17
ABC-CCC argues that the Court’s recent decision in National Institute
of Family & Life Advocates v. Becerra, 138 S. Ct. 2361 (2018) supports
its position that SB 954 discriminates based on viewpoint. National
Institute invalidated a California law compelling medical clinics to post
information about State-provided reproductive services. Id. at 2376.
ABC-CCC observes that National Institute criticized the law as
underinclusive because it applied only to certain clinics and not to others
providing some of the same reproductive services. Id. at 2375–76.
ABC-CCC’s reliance on National Institute is misplaced. First, National
Institute expressly did not reach the issue of viewpoint discrimination.
Id. at 2370 n.2. Second, the law there was underinclusive because
exempting some clinics from the information requirement fit poorly with
its objective of “providing low-income women with information about
state-sponsored services.” Id. at 2375. As we explain, SB 954 is, by
contrast, reasonably tailored to the objective of ensuring that employer
credits taken against employee wages inure to the benefit of employees.
44 INTERPIPE CONTRACTING V. BECERRA

problem in one fell swoop; policymakers may focus on their
most pressing concerns. We have accordingly upheld
laws—even under strict scrutiny—that conceivably could
have restricted even greater amounts of speech in service of
their stated interests.” Id.

ABC-CCC argues that SB 954 is underinclusive because
it (1) fails to ensure all employees’ consent and (2) does not
require employee consent for wage credits related to pension
plans, health insurance, and other statutorily-enumerated
employee benefit programs. ABC-CCC’s arguments are
unpersuasive. First, although SB 954 does not require the
unanimous consent of all employees, it certainly ensures a
greater degree of consent than if employers could—as they
were doing—freely reduce employees’ wages without any
form of employee consent. Thus, while SB 954 might not
“address all aspects of a problem,” it at least addresses
lawmakers’ “most pressing concerns.” Id. Moreover, the
fact that some employees may disapprove of their union’s
decision not to agree to a wage deduction in support of a
particular IAF simply reflects the inherently representative
nature of unions. As with any representative arrangement, if
a majority of employees disagrees with the outcome of a
negotiated CBA, they can vote for a new union
representative or dump the union entirely.

Second, the notion that deductions for pension plans and
the like must be subject to the same consent requirement fails
to account for SB 954’s declared purpose. See id. Pension
plans, training programs, and worker assistance programs all
share a common denominator: they directly benefit
employees. Allowing wage credits for those programs is
therefore reasonably tailored to the purpose of the prevailing
wage law: setting a compensation floor for employee pay.
IAFs like ABC-CCC, by contrast, focus not on programs
 INTERPIPE CONTRACTING V. BECERRA 45

directly benefitting employees, but on public policy
advocacy and, as ABC-CCC puts it, “precedential issues of
importance to the construction industry.” To that end, ABC-
CCC spends funds on distributing mailers to voters,
underwriting academic articles, providing testimony to
governmental bodies, and hosting seminars for contractors
that promote open shop employment arrangements. These
activities, which are geared at promoting the interests of the
construction industry, have only an attenuated relationship
to employee interests. Treating IAFs differently from
employee-focused programs therefore makes sense in light
of the objectives of California’s prevailing wage law.
Accordingly, requiring employee consent for IAF
contributions and not others fits snugly with SB 954’s
purpose and is not underinclusive. 18

18
Because SB 954 is neutral on its face, we do not proceed to consider
ABC-CCC’s argument that the legislative record reveals a
discriminatory motive. First Resort, 860 F.3d at 1278. But we observe
that even if we did go the distance, we do not discern a pro-union
motivation by the California legislature in the legislative record. The
record shows that proponents of SB 954 in the legislature were intent on
closing a loophole allowing employers to take a wage credit without their
employees’ consent. For example, an analysis by the Senate Rules
Committee states that the bill would

revise[] the definition of acceptable employer
payments toward benefits, and thus what counts as
payment of the prevailing wage. The author feels that
the current broad definition of these employer
payments allows non-union employees who are not
party to a CBA to have part of their wages deducted
for industry advancement purposes. As such,
employers can deduct and use these wages without the
input or consent of the employees or their labor
representatives.
46 INTERPIPE CONTRACTING V. BECERRA

V.

“Given that [SB 954 does] not infringe[] [ABC-CCC’s]
First Amendment rights, the State need only demonstrate a
rational basis to justify the ban on [wage-crediting IAF
contributions].” Ysursa, 555 U.S. at 359. SB 954 easily
clears this low bar. California has a legitimate interest in
enacting a prevailing wage law to protect its workers, and
SB 954 is rationally related to that purpose because it
prevents employers from deducting their employees’ wages
to support the employers’ preferred IAFs absent their
employees’ collective consent. Because workers have
greater negotiating power when bargaining collectively,
California’s decision to allow such wage-crediting only for
IAF contributions made pursuant to a CBA is “plainly
reasonable.” See id. at 360.

VI.

Finally, we address ABC-CCC’s equal protection claim.
“Article III requires ‘a plaintiff [to] demonstrate standing for
each claim he seeks to press and for each form of relief that
is sought.’” Or. Prescription Drug Monitoring Program v.
U.S. Drug Enf’t Admin., 860 F.3d 1228, 1233 (9th Cir. 2017)
(alteration in original) (quoting Davis, 554 U.S. at 734).
Thus, ABC-CCC’s standing to pursue its First Amendment
claim is not determinative of its standing for all purposes,
and we must independently assess its standing to bring an
equal protection challenge.

The legislature’s concern with employers reducing their employees’
wages for industry advancement purposes does not plausibly reflect a
discriminatory motive. To the contrary, it supports the State’s averred
objective of closing a loophole in the law’s employee consent provision.
 INTERPIPE CONTRACTING V. BECERRA 47

ABC-CCC argues that it has standing because, “[b]y
permitting some [IAFs] to obtain prevailing wage payments,
but not others, SB 954 discriminates against funds like ABC-
CCC.” ABC-CCC’s argument flows from the same flawed
premise anchoring its First Amendment claim: a perceived
right to “obtain” funding. As discussed in Part IV.A, supra,
however, such a right is alien to the First Amendment. To
have standing to press its equal protection claim, ABC-CCC
must instead show that the law deprives it of some
cognizable fundamental right guaranteed to other similarly
situated entities. See, e.g., Ne. Fla. Chapter of Associated
Gen. Contractors of Am. v. City of Jacksonville, 508 U.S.
656, 666 (1993) (noting that equal protection claims derive
from a discriminatory policy that impairs the rights of one
entity vis-à-vis another); Sang Yoon Kim v. Holder, 603 F.3d
1100, 1104 (9th Cir. 2010) (noting that the party bringing the
equal protection claim must “belong to the class of [entities]
who are allegedly similarly situated to” the party). But SB
954 neither regulates IAFs nor treats certain IAFs
differently. The law applies to employers, and so ABC-CCC
cannot show that SB 954 causes an equal protection injury
to itself. 19 We therefore agree with the district court that
ABC-CCC lacks standing to press its equal protection claim.

CONCLUSION

SB 954 does not frustrate the objectives of the NLRA
and is not preempted under the Machinists doctrine. By
setting a floor for employee pay while allowing unionized

19
Interpipe might have standing to bring an equal protection claim based
on SB 954’s disparate treatment of unionized employers, but Interpipe
brings no such claim.
48 INTERPIPE CONTRACTING V. BECERRA

employees to opt-out of a particular provision, California has
acted well within the ambit of its traditional police powers.

SB 954 also does not violate ABC-CCC’s alleged First
Amendment rights. Contrary to its assertion, ABC-CCC has
no free-floating First Amendment right to “amass” funds to
finance its speech. And to the extent SB 954 implicates
ABC-CCC’s speech interests at all, those interests are not
constitutional in nature because SB 954 merely trims a state
subsidy of speech, and does so in a viewpoint-neutral way.
The law is therefore subject to rational basis review. Under
that lenient standard, because SB 954 is rationally related to
a legitimate government purpose—ensuring meaningful
employee consent before employers contribute portions of
their wages to third-party advocacy groups—it easily
withstands scrutiny.

AFFIRMED.