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Federal judge in New York rules payroll deduction law does not violate fast food restaurants’ free speech rights — February 2019

New York City, NY

In May 2017, the New York City Council enacted a law requiring fast food restaurants to send to nonprofits money employees choose to deduct from their paychecks for such contributions. Asserting that the law violated the Free Speech rights of fast food establishments, the National Restaurant Association (NRA) filed a lawsuit against the City of New York in November 2017. A federal judge upheld the law and dismissed the case in February 2019,

Key Players

The National Restaurant Association is a food-service trade association. According to its website, it engages in legal and policy advocacy on behalf of 500,000 restaurant businesses it represents throughout the United States. The organization’s legal affairs are managed by the Restaurant Law Center. The NRA’s policy agenda focuses on joint-employer laws, menu-labeling regulations, and restaurant welfare policy.

The New York City Department of Consumer Affairs (DCA) is a city agency responsible for enforcing licensing, workplace regulation, and consumer protection laws, according to its webpage. The New York City Council established the DCA in April 1969 with the passage of the Consumer Protection Law.

Further Details

The Fast Food Deductions Law was included in a package of bills signed in May 2017 by New York Mayor Bill de Blasio. The statute requires fast food businesses to “deduct voluntary contributions from fast food employee’s paycheck and remit them to the not-for-profit designated by such fast food employee.” It applies to approximately 65,000 fast food workers in New York City, according to Reuters, and prohibits labor organizations from receiving payroll deductions.

In November 2017, the National Restaurant Association filed a federal lawsuit against the City of New York and DCA Commissioner Lorelei Salas. In its official complaint, the NRA argued the law “compels employers’ speech by forcing unwilling employers to donate employees’ wages to ideological and political organizations with whom those employers may and do disagree,” and thereby “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.”

Outcome

Federal Judge upholds law, dismisses fast food restaurants’ lawsuit

U.S. District Judge Paul G. Gardephe in Manhattan (appointed by President George W. Bush in 2008) awarded summary judgment to New York City and DCA on February 6, 2019. In his ruling, Gardephe said, “Under the First Amendment, an entity’s mere transmission of others’ speech does not necessarily constitute speech of that entity.” In other words, it is not an exercise of speech when a company sends “a check to an employee’s designated non-profit,” because companies “have no discretion as to the recipient of their employees’ donations — they merely follow their employees’ instructions…”

The judge further noted that the restaurant group did not adequately show that the city’s law hindered the ability of fast food companies to communicate their own messages, or that it makes them distribute messages they disagree with side-by-side with their own.

External References:

Fast Foods Deduction Law

New York City Department of Consumer Affairs

National Restaurant Association Complaint, Case 1:17-cv-09128-PGG

Restaurant Group Can’t Upend NYC Fast-Food Deduction Law, Law 360

United States District Court for the Southern District of New York, Case 1:17-cv-09128-PGG

National Restaurant Association

New York fast-food workers’ payroll law survives free speech challenge, Reuters

 

Prepared by Jaime Moore-Carrillo ‘22

Uploaded to tracker May 27, 2019