Rest. Law Ctr. v. City of N.Y.

360 F. Supp. 3d 192
CourtDistrict Court, S.D. Illinois
DecidedFebruary 6, 2019
Docket17 Civ. 9128 (PGG)
StatusPublished
Cited by10 cases

This text of 360 F. Supp. 3d 192 (Rest. Law Ctr. v. City of N.Y.) is published on Counsel Stack Legal Research, covering District Court, S.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rest. Law Ctr. v. City of N.Y., 360 F. Supp. 3d 192 (S.D. Ill. 2019).

Opinion

Paul G. Gardephe, United States District Judge

This case is brought by the National Restaurant Association - a foodservice trade association - and its legal arm, the Restaurant Law Center. Plaintiffs claim that a recently enacted New York City law and regulation requiring fast food employers in the City to create and administer a payroll deduction scheme - under which employees can donate a portion of their wages to certain non-profit organizations registered with the City - are unconstitutional and preempted by Federal law. The parties have cross-moved for summary judgment.

For the reasons set forth below, Plaintiffs' motion for summary judgment will be denied, and Defendants' motion for summary judgment will be granted.

BACKGROUND

I. FACTUAL BACKGROUND 1

A. Parties

Plaintiff National Restaurant Association (the "Association") is the "largest foodservice trade association in the world[ ] - supporting over 500,000 restaurant businesses." (Sturniolo Decl., Ex. 14 (Dkt No. 50-14) at 2)2 Plaintiff Restaurant Law Center (the "Law Center") was launched in January 2017 to "enhance the restaurant industry's legal advocacy capabilities to provide protection and advancement for the industry, including fighting overregulation at the federal, state and local level." (Id. Ex. 15 (Dkt. No. 50-15) at 2) The Center is a 501(c)(6) entity "affiliated with, but separate from, the [Association]." (Id. )

Defendants are the City of New York (the "City") and Lorelei Salas, in her official capacity as the Commissioner of the New York City Department of Consumer Affairs ("Consumer Affairs"). (Cmplt. (Dkt. No. 1) ¶¶ 9, 10)

*201Intervenors Kshawn Clark, Christian Malloy, Mica McLawhorn, and Jordan Rodriguez are members of Fast Food Justice who work at fast food restaurants. (Clark Decl. (Dkt. No. 29-1) ¶¶ 2, 3; Malloy Decl. (Dkt. No. 29-2) ¶¶ 2, 3; McLawhorn Decl. (Dkt. No. 29-3) ¶¶ 2, 3; Rodriguez Decl. (Dkt. No. 29-4) ¶¶ 2, 3)

B. The Deductions Law

On May 24, 2017, the New York City Council enacted the "Deductions Law," New York City Administrative Code § 20-1301, etseq. (Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 1) The new law - which became effective on November 26, 2017 - requires certain fast food establishments in New York City to create and maintain a payroll deduction system by which employees can donate a portion of their wages to certain non-profit organizations registered with the New York City Department of Consumer Affairs. (Id. ¶¶ 2-3; N.Y.C. Admin Code § 20-1302 )

The Deductions Law defines a "fast food establishment" as, inter alia, a business that "has as its primary purpose serving food or drink items," and is part of a chain that has thirty or more locations nationwide. (Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 23; N.Y.C. Admin. Code § 20-1301 ) A "fast food employee" is someone who works at a fast food establishment in the City, and whose "job duties include at least one of the following: customer service, cooking, food or drink preparation, delivery, security, stocking supplies or equipment, cleaning or routine maintenance." (Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 25; N.Y.C. Admin. Code § 20-1301 )

Under the Deductions Law, "a fast food employer shall, upon authorization from a fast food employee ... deduct voluntary contributions from such fast food employee's paycheck and remit them to the not-for-profit designated by such fast food employee." N.Y.C. Admin. Code § 20-1302(a). "[N]o later than the first pay period after 15 days of receipt of the authorization," fast food employers must begin deductions from an employee's wages and "remit the deductions to the not-for-profit [designated by the employee], by the method of transmission that such organization requests." Id. § 20-1302(e). The Deductions Law also prohibits retaliation against fast food employees who exercise their rights under the Deductions Law. Id. § 20-1306.

To be eligible to receive employee remittances under the Deductions Law, a nonprofit organization must register with Consumer Affairs. (Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 29; N.Y.C. Admin. Code § 20-1303(a) ) The non-profit organization must provide, inter alia, its name, a physical address, an email address, a web address (if any), a telephone number, and a "contact." (Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 30; N.Y.C. Admin. Code § 20-1303(a)(1) ) The non-profit entity must also collect at least 500 authorizations from fast food employees to who wish to donate a part of their wages to the organization. (Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 32; N.Y.C. Admin. Code § 20-1303(a)(3) )

Labor organizations are not eligible to receive donations pursuant to the Deductions Law. (Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 36; N.Y.C. Admin. Code § 20-1310(b) ) Under the Deductions Law, a "labor organization" is, inter alia,

[a] "labor organization" within the meaning of [ 29 U.S.C. § 152(5) ], which defines a labor organization as "any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work," as such *202definition is interpreted by the [N]ational [L]abor [R]elations [B]oard.

N.Y.C. Admin. Code § 20-1310(b)(3) (quoting 29 U.S.C. § 152(5) ). The Deductions Law directs Consumer Affairs to "promulgate rules necessary to ensure that this law will be applied in a manner consistent with federal or state labor law." Id. § 20-1310(c).

The Deductions Law authorizes fast food employers to obtain reimbursement for certain costs associated with administering the payroll deduction scheme. Reimbursement is to be provided by the non-profit organization receiving the wage donations: "Upon request by a fast food employer, [a] not-for-profit shall reimburse the fast food employer for the costs associated with deduction and remittance, as calculated pursuant to the rules of [Consumer Affairs]." Id. § 20-1302(g). Pursuant to rules published on November 28, 2017 (see Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 6; see also Implementation of Pay Deductions Law, NYC CITYWIDE ADMIN. SERVS. , https://a856-cityrecord.nyc.gov/RequestDetail/20171127102 (last visited Jan.

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360 F. Supp. 3d 192, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rest-law-ctr-v-city-of-ny-ilsd-2019.