In 2024, the California Legislature enacted Senate Bill 399, codified as California Labor Code § 1137, which became effective January 1, 2025. It was enacted in response to the Legislature’s concern about “captive audience meetings” held by employers during which employers share their opinions on political or religious matters unrelated to the employees’ job duties.

California Chamber of Commerce, California Restaurant Association and the Western Growers Association filed a legal action last December over the enactment of  Senate Bill 399, arguing that it violates the rights of employers under the First Amendment and that the state law is preempted by the National Labor Relations Act.

Plaintiffs contend that SB 399 unlawfully regulates non-coercive speech of employers through implementing a “sweeping” limitation on speaking to employees about religious and political matters. In particular, Plaintiffs are concerned about the inclusion of “the decision to join or support any . . .labor organization” within the list of topics included within the definition of “political matters.” Plaintiffs argue that in enacting such a statute, the Legislature has placed its thumb on the scale in favor of labor.

Defendants and the Amici argue that Plaintiffs are distorting the description of SB 399 in defining it as a law that regulates non-coercive speech of employer. Rather, SB 399 is an anti-retaliation law that does not prohibit employers from speaking on matters of religious or political issues but prevents employers from punishing employees with adverse employment action who do not wish to attend such meetings.

The Amici argue that Plaintiffs lack standing to seek injunctive relief. Particularly, they contend that Plaintiffs cannot bring a pre-enforcement challenge because they have not adequately alleged a “concrete plan” to violate SB 399.

After hearing oral argument, a federal judge has issued a preliminary injunction on September 30, 2025 as requested by the plaintiffs, to block enforcement of the 2024 state law placing limits on employer communications with workers on a variety of issues, including possible union representation.

The Court found that Plaintiffs have adequately stated an injury in fact for purposes of a pre-enforcement injury. The Court also concluded that it is likely that Plaintiffs have established a likelihood of success on their arguments that SB 399 is preempted by the NLRA, and also found that the Plaintiffs have shown a likelihood of success on the merits on their First Amendment argument.

“We are pleased the court agreed with the key issues in this case,” said CalChamber President & CEO Jennifer Barrera. “SB 399 sought to wrongly limit the speech of employers across California while also exposing companies of all sizes to new legal liabilities if their leaders communicate important political and legal updates that impact the workplace.”

CalChamber’s co-plaintiffs also issued statements on the ruling. “The Eastern District Court ruling is encouraging, because it recognizes the overstep of SB 399,” said Jot Condie, President & CEO of the California Restaurant Association. “This law would put employers in the impossible position of deciding what is ‘political’ and what is not and goes beyond regulating the so called ‘captive audience’ meetings already regulated at the Federal level.”

“This decision affirms what we have said from the beginning: SB 399 tramples on federal labor law and the First Amendment,” said Dave Puglia, President & CEO of the Western Growers Association. “By enjoining this unconstitutional law, the court has preserved the right of agricultural and all California employers to communicate openly with their employees without the State tipping the scales in union organizing campaigns. We are proud to stand with our coalition partners in defending these fundamental rights.”

Senate Bill 399 was identified by CalChamber as a ‘Job Killer’ during the 2024 legislative session, the only proposal on the organization’s list of problematic bills that was signed into law.