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Judge Upholds NYC Fast Food Deductions Law

Judge Upholds NYC Fast Food Deductions Law

In May 2017, the New York City Council enacted a new law that requires large fast food restaurant chains to maintain a “payroll deductions system” for their employees. This system allows individual employees to donate a portion of their wages to non-profit organizations that are registered with the City's Department of Consumer Affairs. Labor organizations–i.e., unions or groups that directly negotiate with employers on behalf of employees–are not eligible to receive donations under this system, but other non-profit groups that advocate pro-labor positions do qualify.

NYC Law Does “Regulates Conduct, Not Speech”

This, in turn, prompted a legal challenge to the deductions law from the National Restaurant Association. The Association alleged the law violates the First Amendment rights of its member restaurant owners by requiring them to effectively fund the speech of non-profit organizations with whose views they disagree. For example, one of the groups funded by the deductions law is Fast Food Justice, an organization backed by a labor union that advocates for a $15 minimum wage.

In federal court, the Association argued Fast Food Justice was effectively a “labor organization.” U.S. District Judge Paul D. Gardephe disagreed. In a February 6 order granting summary judgment to the City, the judge said non-profits such as Fast Food Justice were “not arguably an agent or alter ego” of labor unions.

The judge further rejected the Association's larger challenge to the deductions law itself. Far from compelling the speech of restaurant owners, the judge said the law “regulates conduct, not speech.” That is to say, the deductions law does not require restaurant owners to make donations to non-profit organizations; rather, the law requires they forward donations made by employees. Under the First Amendment, the judge noted, “an entity's mere transmission of others' speech does not necessarily constitute speech of that entity.”

That said, the judge acknowledged that it is possible to violate the First Amendment by requiring “one speaker to host or accommodate another speaker's message.” This only applies to situations in which “the complaining speaker's own message was affected by the speech it was forced to accommodate.” In this case, the Association failed to produce any evidence that “the speech of fast food employers is affected by the Deductions Law.” After all, the Association and its members are still free to “donate to causes they support.”

Need Advice from a New York Employment Attorney?

The ultimate goal of New York City's deductions law is to make it easier for fast food workers to donate part of their own earnings to causes they support. As Judge Gardephe noted in his opinion, the City adopted the law in part because many workers “do not have access to banking services,” which makes it effectively impossible for them to make such donations on their own. In that respect, the law is designed to help workers participate in the political process, not restrict or impede the First Amendment rights of employers.

If you need advice or assistance on any matter related to New York employment law, contact the Law Offices of Mahir S. Nisar today.

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