After a regulatory appeal, the Casino Control Commission unanimously rejected the union's contention that the law was unconstitutional and preempted by the NLRA.

The state countered that the regulation was a permissible infringement of the freedom of association because keeping criminal elements out of the gaming industry was a compelling governmental interest.

The commission demanded that both men relinquish their union offices by October 12, 1982, or the local would not be permitted to collect dues or administer its pension plan.

Justice O'Connor concluded that Section 7 of the NLRA did not contain explicit pre-emptive language nor indicate congressional intent to usurp a state role in labor-management relations.

"[A]ppropriate consideration for the vitality of our federal system and for a rational allocation of functions belies any easy inference that Congress intended to deprive the States of their ability to retain jurisdiction over such matters.

By enacting Section 504(a), O'Connor concluded, Congress "unmistakably indicated that the right of employees to select the officers of their bargaining representatives is not absolute..."[14] Citing the plurality opinion in De Veau v. Braisted,[15] O'Connor noted that the Court had previously held that the Landrum-Griffin Act had not preempted the role of state legislation in regulating union officials.

O'Connor recognized the continuing controlling nature of Hill in this regard, and acknowledged that questions of constitutionality and preemption must "be assessed independently in terms of its potential conflict with the federal enactment.

For the dissent, this proved critical: It is not clear what portion of the statute the Court upholds since it expressly refuses to decide whether the dues prohibition and fund administration provisions are valid.

Interfering with the relatively untrammeled right of the union to carry out its duties as collective bargaining agent was impermissible as a matter of federal law: Allowing the State to so restrict the union's conduct infringes on the employees' right to bargain collectively through the representative of their own choosing because it prevents that representative from functioning as a collective-bargaining agent.

[20]The record, White noted, was quite clear in showing that Local 54 would not be able to function if either of the Casino Control Commission's sanctions were imposed.

The gaming commission declined to impose either of its statutory sanctions, and instead sought a court injunction forcing Gerace to resign his consultancy.

In November 1984, a New Jersey state superior court ruled that the gaming commission had the right to force Gerace's resignation.

Gerace initially fought the court's order, but eventually resigned after concluding that the continuing legal battle would "be disruptive to the operation of the union."

The state gaming commission never again attempted to use its two statutory sanctions against any union, and relied instead on the threat of injunctions to remove officials it suspected of links to organized crime.