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Restaurant groups sue NYC over nonprofit deductions

NRA, Restaurant Law Center challenge new statute, saying rules help unions

The National Restaurant Association and the affiliated Restaurant Law Center are suing the City of New York and its consumer affairs commissioner to challenge requirements that quick-service operators deduct contributions to nonprofit groups.

The deduction requirement, part of a package of bills signed by Mayor Bill de Blasio in May that also addressed restaurant scheduling and work breaks, went into effect Nov. 26.

“The ‘deduction bill’ represents an unlawful attempt by New York City to help unions circumvent federal law in order to collect dues in non-union establishments,” said Angelo Amador, executive director of the Washington, D.C.-based Restaurant Law Center, in a statement. “The 'deduction bill' both violates the First Amendment and is preempted by federal law.”

New York City estimated the package of bills affected about 65,000 restaurant workers in the city.

The restaurant groups filed the lawsuit Nov. 21 in the U.S. District Court for Southern District of New York against the city and Lorelei Salas, commissioner of the Department of Consumer Affairs.

It seeks to block the statute that requires fast-food companies to forward voluntary deductions from workers’ paychecks to nonprofits like the “Fight for $15” campaign, which seeks a $15 minimum wage for hospitality workers. Various municipalities have increased the minimum wage over the federal standard of $7.25 an hour.

The lawsuit claims the deduction statute forces fast-food businesses to steer dues to political and ideological groups that the owners may oppose, citing the Service Employees International Union’s support of “Fight for $15.” 

“Specifically, the deduction bill forces fast-food employers to fund organizations affiliated with a movement that is, itself, designed and formed to disrupt the fast-food industry in an effort to force fast-food employers to voluntarily recognize the SEIU or its affiliates, messages which plaintiffs’ members may not wish to endorse,” the lawsuit said. 

The lawsuit claimed the enforcement of the deduction bill would fund the SEIU’s efforts in the fast-food industry. The lawsuit also contended the deduction rule violates employers’ free speech rights as guaranteed by the First Amendment.

“It compels employers’ speech by forcing unwilling employers to donate employees’ wages to ideological and political organizations with whom those employers may and do disagree,” the lawsuit said. “Second, it likewise compels employers’ association with and endorsement of those groups and their messages, as employers will fund—and will be perceived as funding— their apparent ideological and political agenda.”

The lawsuit also claims the federal National Labor Relations Act preempts the deduction bill.

The district court has not yet scheduled hearings in the case.

The NRA and restaurant industry leaders created the nonprofit Restaurant Law Center in January to advocate against over-regulation at the local, state and federal level. 

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

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