Ninth Circuit Upholds Block on California SB 399 Captive Audience Law

Ninth Circuit Upholds Block on California SB 399 Captive Audience Law

A Ninth Circuit panel ruled on October 29, 2026 that California likely cannot enforce SB 399, its captive audience meeting law. The panel affirmed a preliminary injunction, applied strict scrutiny, and rejected the state's captive audience justification. It is not a final ruling on the merits.

Information last verified on November 1, 2026. This is a developing story; we update it as the record changes.

Jurisdiction scope: This article addresses one federal appellate ruling on one California statute, Labor Code section 1137 (SB 399), and the First Amendment question the panel decided. It does not address captive audience or workplace meeting laws in other states, it does not address National Labor Relations Act preemption (the panel expressly did not reach that issue), and it does not address any individual employee's or employer's claim.

What Happened

The United States Court of Appeals for the Ninth Circuit filed a published opinion on October 29, 2026 in California Chamber of Commerce v. Bonta, No. 25-6874. The appeal came from the United States District Court for the Eastern District of California, No. 2:24-cv-03798-DJC-SCR, Judge Daniel J. Calabretta presiding. The panel heard argument in San Francisco on July 7, 2026.

Circuit Judges Richard A. Paez, Richard C. Tallman and Mark J. Bennett sat on the panel. Judge Tallman wrote the opinion. The filed document contains no concurrence and no dissent, and the Ninth Circuit's own opinions index lists the case under Tallman's name with a filing date of October 29, 2026.

Three business groups brought the challenge: the California Chamber of Commerce, the California Restaurant Association and the Western Growers Association. The opinion describes them at page 7 as nonprofit business associations representing over 13,000 employers in California. They sued the California Attorney General, the California Labor Commissioner and the Division of Labor Standards Enforcement of the California Department of Industrial Relations (the case caption names the agency in full; the opinion's prose shortens it to the Division of Labor Standards) before SB 399 took effect, arguing the law violates their members' First Amendment rights and is preempted by the National Labor Relations Act.

The district court agreed on both points and preliminarily enjoined enforcement. California appealed, arguing that the groups lacked standing for a pre-enforcement challenge and that the district court was wrong about their likelihood of success.

The panel's own statement of what it decided is short:

"We hold that the Western Growers Association, at least, has standing to challenge SB 399. We further hold that the industry groups have shown a likelihood of success on the merits of their First Amendment claim, and the other factors support the district court's discretionary decision to grant a preliminary injunction. We do not reach the industry groups' preemption claim." Source: California Chamber of Commerce v. Bonta, No. 25-6874 (9th Cir. Oct. 29, 2026), at page 26

The disposition that follows that paragraph is a single word: AFFIRMED.

California challenged only the likelihood of success factor on appeal. It did not contest the district court's determination that the remaining factors were met, as the panel noted at page 16, and the opinion records at page 8 that California conceded those factors would be met if the industry groups were likely to succeed on the merits.

What that disposition does and does not do

An affirmance of a preliminary injunction is not a final judgment that a statute is unconstitutional. The panel reviewed the district court's order for abuse of discretion under Pimentel v. Dreyfus, as it noted at page 8, and it decided only that the challengers are likely to succeed. The groups' request for a declaration of invalidity and a permanent injunction is recorded at page 8; the opinion does not say those claims have been resolved, and it contains no remand instruction.

Two issues were left open on purpose. The panel did not reach the preemption claim, at pages 6 and 26. It also did not address whether the California Chamber of Commerce or the California Restaurant Association had standing, because the Western Growers Association's standing was enough to let the suit proceed, as the panel explained at page 15.

How the panel got to the merits

California argued the groups had no standing because SB 399 punishes only adverse action against employees, not employer speech, and no plaintiff said its members planned to punish anyone. The panel accepted the challengers' reading of the statute because, for standing purposes, a plaintiff's construction controls so long as it is arguable.

On that reading, labeling a meeting an all-hands meeting can itself convey an implicit threat that non-attendance carries consequences, so holding such a meeting about political matters arguably triggers the law. The panel said at pages 13 and 14 that this reading is reinforced by the National Labor Relations Board's decision in Amazon.com Services, 373 NLRB No. 136, which the Board issued on November 13, 2024 in Case 29-CA-280153, and by the position California itself took at oral argument.

The panel also found a credible threat of enforcement. California had not disavowed enforcement, and the statute hands enforcement power to any employee who believes the law was violated, which the panel said at page 15 creates its own chilling effect.

The First Amendment analysis

California's first merits argument was that SB 399 regulates conduct, not speech. The panel disagreed, reasoning that the law forbids adverse action only when the meeting's purpose was expressive:

"Because employers are forbidden from taking adverse action only if they communicate certain messages at the underlying meeting, the law inevitably singles out employers based on their expressive activity." Source: California Chamber of Commerce v. Bonta, No. 25-6874 (9th Cir. Oct. 29, 2026), at page 19

The panel grounded that step in its own precedent, HomeAway.com, Inc. v. City of Santa Monica and Interpipe Contracting, Inc. v. Becerra, which apply the First Amendment to a facially conduct-based statute that has the inevitable effect of singling out those engaged in expressive activity (page 17). It then said its conclusion accords with the Eleventh Circuit's decision in Honeyfund.com, Inc. v. Governor, 94 F.4th 1272 (11th Cir. 2024), which rejected Florida's conduct-not-speech defense of its Individual Freedom Act (page 18). Both courts framed the test the same way: if enforcement requires examining the content of the message conveyed at the meeting, the law functions as a speech regulation.

Next came the standard of review. At page 21 the panel wrote that SB 399 is facially content-based because it applies only when the employer has discussed certain topics, politics and religion, and that the law is also speaker-based because it is triggered only by speech communicating the employer's opinion. The panel noted at page 19 that viewpoint neutrality does not make a law content-neutral.

Finally, the captive audience question. California argued that employees are as captive as transit riders, patients and students, because refusing to listen risks their job. The panel walked through Lehman v. City of Shaker Heights, Madsen v. Women's Health Center and DiLoreto v. Downey Unified School District and concluded those cases involve government acting as proprietor of its own property or content-neutral time, place and manner rules. Its conclusion:

"No federal appellate court, including the Supreme Court, has relied on a 'captive audience' theory to identify a compelling interest sufficient to support a content-based restriction on nongovernmental speech in a nongovernmental forum." Source: California Chamber of Commerce v. Bonta, No. 25-6874 (9th Cir. Oct. 29, 2026), at page 25

The two sentences preceding the Honeyfund citation at page 23 say the same thing and add that no sister circuit has done so either. A nearly identical sentence appears in the summary at the front of the PDF, but that summary is prepared by court staff and states on its face that it constitutes no part of the opinion, so the quotations above are taken from the opinion itself.

What the Law Actually Says

California's Legislative Information site returned HTTP 403 to every request we made on November 1, 2026, so we could not open the official statutory text. The statutory language below is therefore quoted as the Ninth Circuit's opinion sets it out, with the opinion's own pinpoints. We flag that rather than present it as a reading of the code itself.

The opinion quotes the operative subdivision at pages 6 and 7:

"[a]n employer, [with exceptions not relevant here], shall not subject, or threaten to subject, an employee to discharge, discrimination, retaliation, or any other adverse action because the employee declines to attend an employer-sponsored meeting or affirmatively declines to participate in, receive, or listen to any communications with the employer or its agents or representatives, the purpose of which is to communicate the employer's opinion about religious or political matters. An employee who is working at the time of the meeting and elects not to attend a meeting described in this subdivision shall continue to be paid while the meeting is held." Source: Cal. Lab. Code section 1137(c), as quoted in California Chamber of Commerce v. Bonta, No. 25-6874 (9th Cir. Oct. 29, 2026), at pages 6 and 7

The bracketed phrase in the panel's quotation stands in for real statutory text. The district court, quoting the same subdivision, renders the opening as "except as provided in subdivisions (g) and (h)" and notes that those subdivisions exempt, among other things, communications an employer conveys about an employee's job duties, citing sections 1137(g)(1), (g)(4), (h)(1) to (4), (h)(5) and (h)(6). We were not able to open the official text of those subdivisions, so we do not quote them. We also note one variance we cannot resolve: the district court ends the quoted sentence "while the meeting is being held." California's Legislative Information site was returning HTTP 403 to us, so we quote the appellate panel's rendering and flag the difference rather than assert the official wording.

Two definitions do the work. Under section 1137(b)(3), political matters means matters relating to elections for political office, political parties, legislation, regulation, and the decision to join or support any political party or political or labor organization. Under section 1137(b)(4), religious matters means matters relating to religious affiliation and practice and the decision to join or support any religious organization or association. Both appear at page 7 of the opinion.

The enforcement machinery also appears at page 7. Section 1137(e) authorizes the Labor Commissioner to investigate alleged violations, order appropriate temporary relief, and issue citations or file a civil action. Section 1137(d) sets a civil penalty of $500 per employee per violation. Section 1137(f)(1) creates a private right of action, and the opinion states that in an employee suit an employer may face injunctive relief and damages, including punitive damages, in addition to the civil penalty, citing section 1137(d) and section 1137(f)(1) and (2).

Timing matters here, and the two dates are different. The opinion states at page 6 that the Legislature enacted SB 399 in 2024 and that it became effective on January 1, 2025. What the injunction changes is enforcement, not codification: the statute is still on the books, and a court order barring state officials from enforcing a law is not a repeal of that law.

This ruling is narrow in another way worth stating plainly. It concerns one Labor Code section. The Labor Commissioner's Office says its Retaliation Complaint Investigation Unit enforces more than 45 labor laws that prohibit discrimination and retaliation, and the opinion does not touch those. Readers looking for the surrounding framework can start with our guide to California at-will employment and its recognized exceptions, which walks through the state's default rule and the public policy, implied contract and good faith exceptions courts have recognized. The broader state-by-state breakdown of at-will employment rules puts California in national context, and separate reporting protections are covered in our explainer on how California whistleblower law handles retaliation complaints.

The preemption theory the panel set aside rests on the National Labor Relations Act. The opinion does not say which provision of the Act the preemption argument rests on, and it does not describe the district court's preemption reasoning. The Act's employer speech provision, section 8(c), 29 U.S.C. 158(c), provides that the expressing of any views, argument, or opinion shall not constitute or be evidence of an unfair labor practice if the expression contains no threat of reprisal or force or promise of benefit. The panel did not decide whether that provision or the Act as a whole displaces section 1137.

Analysis: Why This Matters

The following is analysis from the Recording Law Editorial Team.

The most consequential part of this opinion is not the result but the boundary it draws around the captive audience idea. California offered captivity as a compelling interest. The panel answered that captivity has functioned either as a prudential factor for a government managing its own property or as part of assessing content-neutral time, place and manner rules, and it said no federal appellate court has used it to justify a content-based restriction on nongovernmental speech in a nongovernmental forum. That reasoning is doctrinal rather than California-specific, which is why it travels.

It also aligns the Ninth Circuit with the Eleventh. Honeyfund.com rejected Florida's conduct-not-speech framing of a workplace instruction law in 2024, and the panel here adopted the same analytical move. Two circuits now treat a restriction that turns on what was said at a workplace meeting as a speech regulation rather than an employment regulation. That is the step that sets the standard of review, and under strict scrutiny the burden shifts to the state.

The standing discussion deserves attention on its own. The panel let the challengers proceed on an arguable construction of the statute, drew on the Labor Board's Amazon.com Services analysis of when a meeting is effectively compulsory, and treated the statute's private right of action as part of the enforcement threat. In combination, that makes a pre-enforcement challenge to a speech-adjacent employment statute easier to get off the ground than a narrow reading of the text alone would suggest.

What the opinion conspicuously does not do is resolve the labor law question. The district court had held that SB 399 is likely preempted by the National Labor Relations Act, but only in part: it found preemption to the extent the law prohibits employers from requiring employees' presence to hear the employer's message on unionization, resting on the Garmon and Machinists preemption doctrines rather than on a provision of the Act's text. The panel declined to review that holding. The preemption issue therefore survives in the district court, and nothing in this opinion tells us how it comes out.

A final note on posture. The panel reviewed the district court's order for abuse of discretion and asked only whether the challengers are likely to succeed, as it set out at page 8. That is what makes this relief interim rather than final, and it is why the district court's remaining work on the permanent injunction and the declaratory claim still matters.

How This Affects You

For California employers, the operative fact is procedural: the named state enforcement bodies are under a preliminary injunction, affirmed on appeal, while the case continues. The district court's order is explicit on reach. It enjoins defendants Bonta, Garcia-Brower and the Division of Labor Standards Enforcement, together with their officers, agents, servants, employees and attorneys and anyone in active concert with them, from enforcing Labor Code section 1137 pending further order of that court. The bar is not limited to the plaintiff associations' members; it is a bar on enforcing the section. By the same terms it reaches state enforcement and those acting with the state, not a private suit brought by an employee under section 1137(f)(1). The statute itself has not been removed from the Labor Code, and the panel decided a likelihood of success question rather than entering final judgment.

The opinion does not resolve how the injunction interacts with the private right of action. The panel described the district court order at page 8 as preventing California from enforcing the Act, and page 5 defines California to mean the Attorney General, the Labor Commissioner and the Division of Labor Standards Enforcement of the Department of Industrial Relations, which the opinion's prose shortens to the Division of Labor Standards. Separately, at page 15, it noted that section 1137(f)(1) delegates enforcement to any employee who believes a violation occurred. The opinion does not say whether private suits are covered, and we do not read it as deciding that question.

Nothing here speaks to other states. If your state has its own workplace meeting statute, this opinion does not rule on it; the only other state law the panel discussed is Florida's, and only by way of the Eleventh Circuit's reasoning. Related labor law variation across states is mapped in our rundown of which states have right-to-work laws.

Timing questions in employment disputes turn on state filing deadlines rather than on this ruling, and those vary by claim type. Our reference on California filing deadlines by case type sets out the windows. Because an injunction can change, anyone whose situation depends on whether section 1137 is enforceable on a given date should confirm the current posture of the district court case rather than rely on a news summary.

What Happens Next

The merits case has been pending before Judge Calabretta throughout; this was an interlocutory appeal from his preliminary injunction order of September 30, 2025, which is why the panel issued no remand instruction. The challengers' request for a declaration that SB 399 is invalid and for a permanent injunction is still before him. Page 8 of the opinion records that the groups sought that relief; the opinion itself contains no remand instruction and says nothing about further district court proceedings. The National Labor Relations Act preemption claim the panel declined to review also remains in play there.

The opinion itself says nothing about rehearing or further appellate review. We were not able to open the appellate docket, so we cannot say whether California has sought rehearing. Readers should note only the timetable the rules set: a petition for panel rehearing or rehearing en banc in a civil case of this kind is generally due within 14 days of the decision, which means the window was still open as this was published, and the court's mandate ordinarily issues after that period runs. Either way the district court's injunction remains in force in the meantime.

The event that would turn this into a completed legal development is a final judgment in the district court on the permanent injunction and the declaratory claim, or a further appellate ruling that supersedes this one. Until then, the controlling fact is interim relief that has survived appellate review.

This is general legal information, not legal advice. It covers California and the United States Court of Appeals for the Ninth Circuit, and reflects sources verified on November 1, 2026. Laws change and this story is developing; consult a lawyer licensed in your jurisdiction about your specific situation.

Related articles

• California at-will employment: the exceptions courts recognize
• At-will employment rules in every state
• Reporting misconduct under California whistleblower law
• Right-to-work states and what the designation means
• California statute of limitations by case type

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Last updated: 2026-11-01. This is a developing story; details verified as of 2026-11-01.

Frequently Asked Questions

Is California SB 399 in effect right now?

SB 399 remains codified at Labor Code section 1137 and took effect January 1, 2025, according to the Ninth Circuit's opinion at page 6. But a federal preliminary injunction, affirmed on October 29, 2026, bars the named California officials from enforcing it while the case proceeds. An injunction against enforcement is not a repeal of the statute. One caveat the opinion itself flags: the injunction removes only the state law. Separately, federal labor law restricts compelled attendance at meetings about unionization. At page 13 the panel cites the National Labor Relations Board's decision in Amazon.com Services LLC, 373 NLRB No. 136 (2024), which treats a meeting as compulsory where employees could reasonably conclude that failure to attend could subject them to discharge or discipline. That Board decision's own standing is unsettled, and we have not independently confirmed its present status from a primary filing, but it is not displaced by this ruling.

Did the Ninth Circuit strike down SB 399?

No. The panel affirmed a preliminary injunction and held that the challengers are likely to succeed on the merits of their First Amendment claim. The disposition at page 26 is a single word, AFFIRMED. The request for a declaration of invalidity and a permanent injunction remains with the district court.

What does California Labor Code section 1137 prohibit?

As the opinion quotes the statute at pages 6 and 7, section 1137(c) bars an employer from subjecting, or threatening to subject, an employee to discharge, discrimination, retaliation or any other adverse action because the employee declines to attend an employer-sponsored meeting, or declines to receive communications, the purpose of which is to communicate the employer's opinion about religious or political matters. An employee who is working when the meeting is held and elects not to attend must continue to be paid.

Why did the court apply strict scrutiny instead of a lower standard?

At page 21 the panel wrote that SB 399 is facially content-based because it applies only when the employer has discussed certain topics, politics and religion. The panel added that the law is also speaker-based because it is triggered only by speech communicating the employer's opinion. Under Reed v. Town of Gilbert, as the panel quoted it, content-based laws are presumptively unconstitutional and subject to strict scrutiny.

What is a captive audience argument, and why did it fail here?

California argued that employees are a captive audience at employer meetings because they depend economically on the employer. The panel responded at pages 23 and 25 that courts have invoked captivity when the government acts as a proprietor over its own property or when assessing content-neutral time, place and manner rules, and that no federal appellate court has used the theory to supply a compelling interest for a content-based limit on nongovernmental speech in a nongovernmental forum.

Did the court decide whether federal labor law preempts SB 399?

No. The panel stated at pages 6 and 26 that it did not reach the National Labor Relations Act preemption claim. That question is unresolved on appeal even though the district court had accepted it. The opinion does not state which provision of the Act the argument rests on.

Who does the injunction run against?

The opinion describes the district court order as preventing California from enforcing the Act, and it defines California collectively at page 5 as the state Attorney General, the Labor Commissioner and the Division of Labor Standards Enforcement of the Department of Industrial Relations, a name the opinion's prose shortens to the Division of Labor Standards. The panel separately noted at page 15 that section 1137(f)(1) lets an employee sue, and the opinion does not decide whether the injunction reaches private suits.

Does this ruling affect captive audience laws in other states?

The opinion addresses only California's SB 399 and does not rule on any other state's statute. The one other state law it discusses is Florida's Individual Freedom Act, which the panel reached through the Eleventh Circuit's 2024 decision in Honeyfund.com Inc. v. Governor, cited at page 18 as support for treating such a law as a regulation of speech and again at page 23, at footnote 5 of that decision, as the one sister circuit to have directly rejected a captive audience theory.

Does this ruling change California retaliation protections in general?

The panel addressed only section 1137. The Labor Commissioner's Office states that it enforces more than 45 labor laws prohibiting discrimination and retaliation through its Retaliation Complaint Investigation Unit, and the opinion does not address those laws.