Restaurants Challenge de Blasio’s Union Handout

Industry groups sue to stop voluntary deductions going straight from checks to union-backed groups

New York City Mayor Bill de Blasio / Getty Images

The National Restaurant Association and Restaurant Law Center are suing the city of New York to block a law that would force fast food restaurants to deduct money from employee paychecks and send it to nonprofit advocacy groups backed by labor unions, including the Fight for $15 movement, if workers agreed to the deductions.

Mayor Bill de Blasio signed legislation in May that would allow workers in the fast food and retail industries to deduct money from their paychecks and direct them to advocacy groups, akin to the privileges labor unions have with their members. The lawsuit argues the measure forces businesses to support a front group for the politically powerful Service Employees International Union, which has long aimed to unionize fast food workers and poured tens of millions of dollars into the Fight for $15 movement.

"The SEIU is improperly attempting to use the Defendants [New York City]—through their enforcement of the Deduction Bill—to fund and advocate for the SEIU's private attack on the fast food industry, and it is that agenda with which the Plaintiffs' members disagree," the suit says. "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."

Neither the New York City Law Department, nor the Department of Consumer Affairs agency returned requests for comment. A city spokesman told Law 360 that the de Blasio administration is reviewing the lawsuit, but stands by the law as an important step toward protecting the interests of workers. He emphasized that the contributions are voluntary in nature.

"We will thoroughly review this complaint and respond accordingly," the spokesman said.  "This important law supports workers who want to effect change by allowing them to make voluntary contributions to not-for-profit organizations of their choice through payroll deductions."

Angelo Amador, executive director of the Restaurant Law Center, said that the law goes beyond worker protections. Unions have adopted nonprofit models known as worker centers to advance their interests outside the bounds of standard labor regulations. While the SEIU would be prohibited from conducting spontaneous strikes and secondary boycotts for workers or members, non-profit groups do not encounter such constraints. Amador called the city's attempt to bolster such groups "unlawful."

"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," Amador said in a statement. "The ‘Deduction Bill' both violates the First Amendment and is preempted by federal law."

Worker centers are now facing additional scrutiny before the courts and federal regulators. The IRS is now reviewing a complaint asking the agency to strip the tax-exempt status of the Coalition of Immokalee Workers, the non-profit group that has launched successful protest campaigns against the fast food chains and major grocers to divert money to a fund established to help agricultural workers. The complaint was filed by the labor watchdog Center for Union Facts (CUF).

Michael Saltsman, spokesman for the Employment Policies Institute, a sister organization to CUF, said the deduction bill creates a "pseudo-dues" system that is unprecedented in the American labor scene. Normal organizing campaigns require secret ballot votes or a majority-petition gathering process in order for companies to recognize labor organizations. Saltsman called the city's attempt to bypass that process "indefensible," adding that the bill creates "a labor loophole the size of the Empire State Building."

"New York City's indefensible favor to the SEIU is now receiving some well-deserved scrutiny. The union worked with the City Council allowing it to collect pseudo-dues from fast food employees without the pesky inconvenience of a secret ballot vote," he said. "If employees in the fast-food industry are interested in bringing a union into their workplace, they already have that right. But neither the City Council nor the union should have the right to force employers to assist with labor's organizing efforts."

The SEIU did not respond to request for comment.