360 F. Supp. 3d 192
S.D. Ill.2019Background
- New York City enacted the "Deductions Law" requiring covered fast-food employers to implement payroll deductions so employees can voluntarily donate portions of wages to City-registered nonprofits; the law excludes labor organizations from eligibility and permits employers to seek reimbursement for actual deduction costs (capped at $0.30 per transaction unless exemption granted).
- Plaintiffs: National Restaurant Association and Restaurant Law Center (the Court found only the Association had standing); Intervenors: fast-food workers supporting the nonprofits.
- Association sued under 42 U.S.C. § 1983 asserting First Amendment violations (compelled speech, association, subsidy) and federal preemption (NLRA/LMRA and Machinists preemption); parties cross-moved for summary judgment.
- Consumer Affairs administers registration of recipient nonprofits and consults federal sources (NLRB lists, IRS forms) to exclude labor organizations; Fast Food Justice registered and receives remittances; plaintiffs allege ties between Fast Food Justice and SEIU.
- The district court considered both facial and as-applied challenges, evaluated standing, First Amendment doctrines (compelled speech/association/subsidy), rational-basis review, and federal labor-law preemption doctrines (Garmon, Marine Engineers, Machinists).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing | Association has concrete diversion-of-resources injury from responding to law | Defendants contend such diversion is core mission and not injury; Law Center lacks evidence | Association has standing (resource diversion is injury); Restaurant Law Center does not |
| Compelled speech/hosting third‑party speech | Law forces employers to "speak" or facilitate employees' expressive donations and thus compels speech | Deductions are ministerial transmission of employees' funds; employers have no editorial control | No First Amendment compelled-speech violation; ministerial payroll remittances are not employer speech |
| Compelled association | Deduction scheme forces employers to associate with nonprofits (records, contacts, perceived endorsement) | Any impression of association is minimal; no distortion of employers' own messages | No expressive-association violation; interactions are administrative and do not distort employers' messages |
| Compelled subsidy | Employers bear unreimbursed administrative/legal costs and provide interest-free loans to nonprofits | Employers can seek reimbursement for actual costs; incidental administrative costs are permissible | No compelled-subsidy; plaintiffs offered no evidence of substantial uncompensated costs or delayed reimbursements |
| First Amendment scrutiny | Plaintiffs treat challenge as facial and require strict scrutiny | Defendants treat as regulating conduct; rational-basis review applies if no First Amendment right implicated | Facial challenge fails; rational-basis review applies and statute is rationally related to legitimate City interest (facilitating donations) |
| NLRA/LMRA preemption (Garmon/Machineins) — facial | Law delegates labor-organization determination to Consumer Affairs and will inevitably decide arguable NLRA issues | Law incorporates federal definition and directs Consumer Affairs to use NLRB/IRS sources; not inevitable that arguable NLRA questions will arise | Facial preemption fail — City incorporated federal standards and need not inevitably decide arguable NLRA matters |
| NLRA/LMRA preemption — as-applied to Fast Food Justice | Fast Food Justice is arguably a labor organization, agent/alter ego of SEIU, so registration conflicts with NLRA/LMRA | Record lacks evidence Fast Food Justice has engaged in "dealing with" employers or is an agent/alter ego; independent 501(c)(3) governance | As-applied preemption fail — Fast Food Justice not arguably a labor organization nor an SEIU agent/alter ego; no actual conflict with NLRA/LMRA |
| Machinists preemption | Law intrudes on collective-bargaining mechanics (creates payroll-deduction mechanism akin to dues checkoff) | Law does not regulate bargaining process, economic weapons, or impose penalties tied to bargaining | No Machinists preemption — statute does not regulate bargaining mechanics or impede economic weapons of parties |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requires concrete, particularized injury fairly traceable and redressable)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (concrete and particularized injury requirement in standing analysis)
- FAIR v. Rumsfeld, 547 U.S. 47 (2006) (hosting/accommodation of third‑party speakers is not compelled speech where host’s own message is not affected)
- Pacific Gas & Elec. Co. v. Public Utilities Comm'n, 475 U.S. 1 (1986) (plurality: compelled distribution of third‑party speech in a speaker’s forum can burden the speaker’s own expression)
- Ysursa v. Pocatello Educ. Ass'n, 555 U.S. 353 (2009) (First Amendment does not create affirmative right to use government payroll mechanisms to fund expression)
- Johanns v. Livestock Marketing Ass'n, 544 U.S. 550 (2005) (compelled assessments can be government speech and thus not subject to strict scrutiny)
- Garmon (San Diego Bldg. Trades Council v. Garmon), 359 U.S. 236 (1959) (when conduct is arguably protected/prohibited by NLRA, NLRB has primary jurisdiction)
- Marine Engineers Beneficial Ass'n v. Interlake Steamship Co., 370 U.S. 173 (1962) (determination whether entity is a "labor organization" is for the NLRB when the question is arguable)
- Machinists (Lodge 76, Int'l Ass'n of Machinists v. Wis. Emp't Relations Comm'n), 427 U.S. 132 (1976) (preemption bars state regulation that interferes with the federal labor bargaining process)
- U.S. Telecom Ass'n v. FCC, 825 F.3d 674 (D.C. Cir. 2016) (neutral transmission by intermediaries is not transformed into intermediary speech where no editorial control exists)
- Centro de la Comunidad Hispana de Locust Valley v. Town of Oyster Bay, 868 F.3d 104 (2d Cir. 2017) (an organization has standing if it reasonably diverts resources to respond to challenged law)
- Nnebe v. Daus, 644 F.3d 147 (2d Cir. 2011) (organization standing via diversion of resources assisting members)