A summary judgment ruling from the Southern District of New York last Thursday set aside a challenge brought by two restaurant industry plaintiffs contesting the validity of a 2021 amendment to the city’s Fair Workweek Law. Judge Denise Cote found none of the plaintiffs’ arguments availing, permitting the wrongful discharge and optional arbitration provisions of the fast food workers’ protection law to stand.
The opinion explained that the Fair Workweek Law governs fast food eateries part of a chain with 30 or more establishments nationwide. In July 2021, the city’s wrongful discharge and optional arbitration provisions took effect. The former bars employers from firing hourly wage employees without notice or reason in the absence of egregious misconduct, and the latter provides those employees with the option to arbitrate claims of alleged violations of the law.
Two months before the amendments’ implementation, the Restaurant Law Center (RLC), a Washington, D.C.-based public policy organization and New York State Restaurant Association (NYSRA), a non-profit hospitality association with more than 10,000 New York members, including fast food restaurants, filed suit, levelling preemption and constitutional challenges at the Fair Workweek law.
This February, the court permitted amicus curiae to file briefs in support of New York City. The interested parties include the National Employment Law Project, the Center for Popular Democracy, and labor law professors.
In last week’s opinion, the court first considered whether the plaintiffs had standing. It found that at a minimum, NYSRA had associational standing as its members could have been individual plaintiffs. In addition, the organization devoted resources to inform members about the law, discuss its effects, and answer compliance questions, the decision said.
Next, Judge Cote addressed whether the wrongful discharge provision was preempted by the National Labor Relations Act (NLRA). It was not, the court said, finding the law a “validly enacted minimum labor standard” bearing no impact on collective bargaining rights. In addition, Judge Cote ruled that the arbitration provision was not preempted by the Federal Arbitration Act because it “does not prohibit or impair the enforcement of private arbitration agreements.”
The court also opined that the law does not impermissibly interfere with the dormant Commerce Clause as it neither controls out-of-state commerce nor requires out-of-state commerce to be conducted in any particular manner. After dismissing the plaintiffs’ federal claims, the court declined to exercise supplemental jurisdiction over the remaining state law claims and dismissed the suit.
The plaintiffs are represented by Restaurant Law Center, Morgan, Lewis & Bockius LLP, and the defendant by New York City Law Department.
