The National Labor Relations Board, the federal agency that oversees the nation's labor relations law, has expressed "serious concerns" about the legality of state's new "labor neutrality law" - the same concerns The Business Council voiced last summer in vigorously opposing the union-backed bill.

"It appears that this law may be preempted by the National Labor Relations Act," Margery E. Lieber, an NLRB attorney, said in an Oct. 30 letter to Linda Angello, commissioner of the state Department of Labor. The letter was reported in the Nov. 26 Albany Times-Union.

The letter argues that the National Labor Relations Act probably preempts the new state law. The letter also raises concerns about the effect of the law on employers free-speech rights in union organizing drives.

"It appears that the labor neutrality law will effectively regulate conduct that is intended by Congress to be free from governmental interference," the letter said.

"That's what we've been saying since July," said Business Council President Daniel B. Walsh.

The law, which was conceived and promoted by labor leader Dennis Rivera and other union officials, is intended to prevent employers that receive any state funds from discussing unions or their organizing efforts in any way.

The Legislature passed the bill in July with broad support in both parties, despite strong objections from The Council and groups representing hospitals, nursing homes and other health-care providers, and other interests.

The Council opposed the bill "because it would radically tilt the playing field to unions' advantage," Walsh said.

The new restricts the ability of employers to use public funds to hire or pay attorneys, consultants, or other contractors that encourage or discourage union organization, or participation in union drives, or to hire or pay the salary of employees whose principal job duties are to encourage or discourage union organization or participation in drives.

Employers that receive state funds can be required to prove that they did not spend any of the funds inappropriately, and must submit those records to any state entity and the state attorney general if asked to do so.