New York fast-food workers' payroll law survives free speech challenge

NEW YORK (Reuters) - A federal judge on Wednesday dismissed a restaurant industry lawsuit challenging a New York City law requiring fast-food employers to send money that workers want deducted from their paychecks to nonprofits, including groups they might oppose.

U.S. District Judge Paul Gardephe in Manhattan said the National Restaurant Association failed to show that the November 2017 law compelled fast-food employers to subsidize employees’ speech, violating the First Amendment of the Constitution.

In a 70-page decision, the judge also said New York City easily demonstrated a rational basis for the law, including that it makes it easier for workers, especially those who lack access to banking services, to contribute to nonprofits.

The restaurant group and its legal arm, the Restaurant Law Center, did not immediately respond to requests for comment.

Nick Paolucci, a spokesman for the city’s law department, said the city was gratified by the decision.

The New York City Council passed the deductions law in May 2017, as part of a package of bills covering an estimated 65,000 fast-food workers in the city.

It allowed nonprofits to receive donations once they had obtained pledge commitments from at least 500 workers. Labor organizations were not eligible to receive the donations.

The restaurant group complained that the law could force employers to steer money to and endorse ideological and political groups they might disapprove of.

It cited as an example the “Fight for $15” campaign for a $15 an hour minimum wage for fast-food workers, which drew support from the Service Employees International Union.

But the judge said there was no reason to believe people would view the forwarding of employee donations as an expression of employer support for the nonprofits, even if donations were disclosed. He also found only a “minimal” risk of confusion.

“The deductions law does not compel speech, association, or subsidies from fast food employers, and is not preempted by federal labor law,” Gardephe concluded.

A $15 an hour minimum wage took effect on Dec. 31 in New York City at employers with more than 10 workers, and at all fast-food employers. The federal minimum is $7.25 an hour.

The case is Restaurant Law Center et al v City of New York et al, U.S. District Court, Southern District of New York, No. 17-09128.

Reporting by Jonathan Stempel in New York; Editing by Tom Brown