Supreme Court Decision: Regulation Requiring Employers to Permit Union Access to Property is an Unconstitutional Taking

The Fifth Amendment, which applies to states via the Fourteenth Amendment, forbids federal and state governments from taking private property for public use, without just compensation. In a recent decision, Cedar Point Nursery v. Haddid, the Supreme Court addressed a California labor regulation that granted labor unions “a right to take access” to agricultural employers’ property up to three hours a day, 120 days a year, to solicit support for unionization.  The Court held that the regulation was an unconstitutional taking of private property for public use without compensation. 

Generally, the physical taking of private property requiring compensation under the Fifth Amendment involves limited situations where the government uses its power of eminent domain to acquire an interest in property.  Additionally, a physical taking may occur where the government accesses property, whether inadvertently or by mistaken understanding as to ownership, without acquiring title first. In these situations, the government must pay “just compensation” for what it takes.  A taking may also occur under the Fifth Amendment where there is no physical presence on the property. A non-physical taking may occur, for example, by regulations on the use of property and zoning ordinances.  Whether such a taking has occurred is evaluated under a standard that takes into account the economic impact on the property, expectations as to use of the property, and the character of government action. If a taking is found to have occurred, compensation is also required.

In Cedar Point, the Court concluded that the California access regulation was a per se physical taking – a taking of the owners’ right to exclude third parties from their property – even though the taking permitted by the regulation was temporary and sporadic.  The Court held that the duration or size of the taking was an issue relating to the amount of compensation due – not whether there has been a taking. In heading off concerns that its ruling opened the flood gates to takings claims, the Court insisted that its decision would not impact laws regarding speech and discrimination by property owners and expressly distinguished regulations that impact property closed to the public from regulations addressing how a business that is generally open to the public may treat individuals. The Court further insisted that its decision would not impact government health and safety inspection regulations, explaining that the government can condition the grant of a permit, license, or registration on allowing access for reasonable inspections.  In doing so, the Court emphasized that the union access regulation was not germane to any permit or license or any risk to the public.    

Notwithstanding the Court’s assurances, the decision raises questions regarding the constitutionality of any regulations impacting a property owner’s right to exclude and the potential liability to provide compensation as a result of regulations that venture into takings territory – questions that will undoubtedly be the subject of further litigation as parties test the limits of the property rights protected by this recent decision.  

If you have any concerns about impact of regulations on property rights, please contact Karen Mack (kmack@burkelaw.com) or Victoria Collado (vcollado@burkelaw.com).