Strayer Factor in Determining Whether Buy Mart Is Liable Under The Doctrine Questions

Ecxtra credit question
2 days ago
LORI BAGGOT INSTRUCTOR MANAGER
FROM THE PROFESSOR…EXTRA CREDIT OPPORTUNITY
Overall Rating12
COLLAPSE
Good evening, Graduate Students: Here is the extra credit opportunity for Week
6. Please email me your answers for an extra +10 points. This is due by Monday,
noon.
•
Lynne Meyer, on her way to a business meeting and in a hurry, stopped at a
Buy-Mart store for a new car charger for her smartphone.
• There was a long line at one of the checkout counters, but a cashier, Valerie
Watts, opened another counter and began loading the cash drawer.
• Meyer told Watts that she was in a hurry and asked Watts to work faster.
• Instead, Watts slowed her pace.
• At this point, Meyer hit Watts.
• It is not clear whether Meyer hit Watts intentionally or, in an attempt to
retrieve the car charger, hit her inadvertently.
• In response, Watts grabbed Meyer by the hair and hit her repeatedly in the
back of the head, while Meyer screamed for help.
• Management personnel separated the two women and questioned them about
the incident.
• Watts was immediately fired for violating the store’s no-fighting policy.
• Meyer subsequently sued Buy-Mart, alleging that the store was liable for the
tort (assault and battery) committed by its employee.
1. What is the key factor in determining whether Buy-Mart is liable under
this doctrine?
2. How is Buy-Mart’s potential liability affected by whether Meyer’s behavior
constituted an intentional tort or negligence?
3. Suppose that when Watts applied for the job at Buy-Mart, she disclosed in
her application that she had previously been convicted of felony assault
and battery. Nevertheless, Buy-Mart hired Watts as a cashier. How might
this fact affect Buy-Mart’s liability for Watts’s actions?
Read Chapters 9 – Business Torts and Chapter 16 – Management of Employee
Conduct: Agency Law
Question 1 Answer and discuss the following:
As a small-business owner, you are faced with rising costs, particularly
employment costs, insurance, and the like. You decide to hire some friends and
pay them as they work rather than go through the expense and procedure of
bringing in “actual” employees. Your friends wear the business uniform, deal with
vendors and customers, and tell friends and family that they work for the business.
In one instance, one friend orders way too much from a vendor.
1. Explain agency law terminology and the three ways an agency relationship
is created, per the text reading. What are the implications of agency law that
apply in the above scenario? Is your business liable for the improper order?
Why or why not? Be sure to explain the legal concept of “scope of
employment” and how it is applicable to the scenario above.
2. Explain the applicability of the employment-at-will doctrine and identify and
explain all the exceptions. Research using the link provided a recent case in
your home state of wrongful termination in violation of the Employment-atWill doctrine in the last five years. Provide the state information and law,
facts, parties and what happened in the case. Use the link provided to the
NEXIS-Uni Legal
Database: https://libdatab.strayer.edu/login?url=https://www.nexisuni
.com
Teachers note:
LORI BAGGOT INSTRUCTOR MANAGER
FROM THE PROFESSOR…WELCOME TO WEEK 6 AND GOOD MORNING!
Overall Rating:
COLLAPSE
Good morning, Graduate Students: I hope you had a nice
weekend and welcome to Week 6.
This week is really important because the two areas of law we
are covering really helps an executive to make decisions to
avoid legal liability. Some of this information will not be new we have been talking about negligence and liability for the
actions of others already this quarter. Week 6 focuses on agency
law, tort law and the Employment-at-Will Doctrine.
Agency law is the first part of our discussion question this
week. Agency law covers the relationship between employers
and employees and, what actions employees do that makes the
employer liable. For example, if I am teaching in the classroom
and hit a student over the head with a book – would Strayer be
liable for my actions?…
Please read Chapter 16 – Management of Employee Conduct
– Agency Law. Reading the chapter and identifying the three types
of agency authority relationships, and explaining them, will help
you to answer the questions regarding the scenario of the
discussion. The focus of our discussion will be specifically the
authority created and given to employees by employers.
In regards to the Chapter 9, Business Torts, see some important
information and terms below:
What is a tort and, what is negligence?
•
Pursuant to the chapter reading, a tort is: a private wrong. Some type of
interference with someone or with someone’s property that results in either
injuries or damages (financial costs) to the person or
property. Example: You hit your coworker over the head because they
sneezed on you. You have committed the intentional tort of battery. (Don’t
confuse this with the criminal charge of battery). A tort is a private civil
action between two parties. A crime is the state coming after you for a
crime.
•
Negligence is a type of tort and per the reading, negligence is: when the
conduct of one party does not live up to a certain minimal “standard of
care.” We call this the reasonable person standard. Negligence imposes
liability when we are careless, see if you can identify the four elements of
negligence per the text reading and explain them in your answer this week.
The second part of our discussion is on the Employment-at-Will
doctrine. See some of the links I have provided in the discussion
thread for this answer and information and, the exceptions to the
doctrine. When we sue for a violation of this doctrine, if you are
an employee-at-will, the cause of action you sue for is “wrongful
termination.” For example, if I am fired because I attended jury
duty instead of going to work one day, my cause of action would
be a “wrongful termination” in violation of state or federal laws
regarding safeguards for employee’s attending jury duty. Be
sure in your answer to the discussion to explain the Doctrine,
identify and explain all the exceptions to the doctrine and, see if
you can research your own home state as to the specific
exceptions allowed by law in your state. Here is a hint – they are
all different and state specific.
Tomorrow, Tuesday, I will be submitting my midterm
grades. Midterm grades are a reflection of how you are doing so
far in the class. If you are struggling, let’s talk this week. My
goal is for you all to pass this class but more importantly, to
understand the material and law so you can make decisions in
the workplace in regards to legal liability and the law.
Thanks and hope you have a great Monday.
Teacher
FROM THE PROFESSOR…ASSIGNMENT DUE TOMORROW and CASE EXAMPLE – MICHIGAN
Overall Rating:
COLLAPSE
Good afternoon, Grad Students. See my case example below for wrongful
termination in violation of alleged discrimination and public policy per Michigan
law. If you find a case about public policy exception in your home state – be sure
to identify what constitutes this wrongful action.
I hope you are all doing well. Remember that our Week 5 Assignment is due
tomorrow. Please be sure to submit on time – due Wednesday by noon. Be sure to
watch the live class recording in the Announcements where we talked about the
paper and see some of my FROM THE PROFESSOR… posts in the discussion. If
you have questions – let me know.
Thanks and have a great Tuesday.
[Zyber v. Patsy Lou Buick GMC, Inc.], 2019 Mich. App. LEXIS 4718
Decided August 15, 2019
FACTS: Plaintiff was employed as a salesperson for a car dealership (Patsy Lou
Chevrolet). He sued defendants (dealership and management) after his
employment was terminated. The plaintiff alleged, among other things, a claim for
age and gender discrimination under the Elliot-Larsen Civil Rights Act (Michigan
Constitution Civil Rights Protection) and wrongful discharge based on a “public
policy” violation.
PLAINTIFF ARGUES: He is a 56-year-old man and the defendant had a
“predisposition to discriminate against employees on the basis of age” because
they took business commission and sales away from him and gave them to younger
female salespersons. Also, that the dealership and management asked him to
engage in “illegal activity” and when he refused, they retaliated against him and
fired him.
DEFENDANT ARGUES: Plaintiff was fired because he had disputes with other
salespeople over commissions and engaged in inappropriate workplace behavior
including having a shouting match with a manager and his brother on the sales
floor (1).
Employment relationships in the workplace are considered “at-will” unless there
exists an employment contract or not presumed by the state. Per the Employment-
at-Will Doctrine, the term “at-will” means that an employer can fire an employee
for any reason or any time, except for an illegal one. Also, an employee is free to
leave a job “at-will” for any or no reason with no legal consequences (2). There
are statutory and legislative exceptions to the Employment-at-Will Doctrine. One
exception is rooted in civil rights protections. Another is state specific and is
sometimes called a “public-policy exception.”
Pursuant to Michigan Law, MCL 37.2202(1)(a) – “An employer shall not do any
of the following: (a) Fail or refuse to hire or recruit, discharge, or otherwise
discriminate against an individual with respect to employment, compensation,
or a term, condition, or privilege of employment, because of religion, race, color,
national origin, age, sex, height, weight, or marital status” (3).
To prove discrimination in Michigan – the plaintiff must provide evidence that:
• He belongs to a protected class,
• He suffered an adverse employment action,
• He was qualified for the position, and
• He was discharged under circumstances that give rise to an inference of
unlawful discrimination.
Pursuant to Michigan Law – a public policy exception to the Employment-at-Will
Doctrine exists based on the “principles” that some “grounds for discharging an
employee are contrary to public policy.” Grounds may include when:
• An employee is fired for “acting in accordance with a statutory right or duty,
• When an employee is fired for refusing to violate the law in the course of
employment, or
• When an employee is fired in response to exercising their clear rights
created by law (3).
TRIAL COURT: Summary Judgment for the defendant.
APPEALS COURT: Affirmed. (Agreed with the trial court)
WHY? The plaintiff presented no evidence of discrimination. He could not
establish that the dealership or management treated “any other salesperson outside
his protected class (age and gender) any differently than they treated him.” He
never filed a charge with the EEOC or Michigan Civil Rights Department for
discrimination by the dealership or spoke with anyone in management about
discrimination. Also, the plaintiff admitted at his deposition that he was never
asked to engage in any illegal or inappropriate conduct during his employment. No
factual basis for his public policy claim (1).
SOURCES:
1. Zyber v. Patsy Lou Buick GMC, Inc., 2019 Mich. App. LEXIS 4718, 2019 WL
3849443 (Court of Appeals of Michigan August 15, 2019, Decided). Retrieved on
February 6, 2023 from https://advance-lexis-
com.libdatab.strayer.edu/api/document?collection=cases&id=urn:contentItem:
5WTW-1KM1-JYYX-61XT-00000-00&context=1516831
2. National Conference of State Legislatures. Retrieved on February 6, 2023. AtWill Employment Overview. https://www.ncsl.org/research/labor-andemployment/at-will-employment-overview.aspx.
3. Suchodolski v. Michigan Consol. Gas Co., 412 Mich. 692, 316 N.W.2d 710,
1982 Mich. LEXIS 497, 115 L.R.R.M. 4449, 99 Lab. Cas. (CCH) P55,416
(Supreme Court of Michigan March 2, 1982, Decided). Retrieved on February 6,
2023 from https://advance-lexiscom.libdatab.strayer.edu/api/document?collection=cases&id=urn:contentItem:
3RX6-JDM0-003D-628J-00000-00&context=151683
Teacher 3
FROM THE PROFESSOR…ANOTHER CASE EXAMPLE
COLLAPSE
Overall Rating:
Good morning, Graduate Students. See a recent Michigan case below with a lot of
good law on Michigan public policy exception to the EAW and an understanding
of tort liability and qualified immunity for government employees.
[Janetsky v. City of Saginaw]
Supreme Court of Michigan, December 2022 (1)
FACTS:
• Plaintiff was a prosecutor in Saginaw County. Her boss, the defendant,
entered a plea agreement with a criminal in a case she was assigned.
• Plaintiff brought a mistake made to the defendant’s attention that he did not
follow the sentencing guidelines correctly and, after fixing the issue, she
alleges the defendant began creating a “hostile work environment.”
•
Plaintiff asserted she became afraid of the defendant, he allegedly yelled at
her, blocked her from leaving a room, and caused her “fear for her safety.”
• Plaintiff provided evidence of a doctor’s diagnosis that she was
“psychiatrically disabled from working due to a hostile work environment.”
• Plaintiff was placed on medical leave and then, she was constructively
discharged, thus “involuntarily resigned due to intolerable working
conditions.”
Plaintiff filed lawsuit alleging Defendant and state of Michigan were liable for:
• Violation of public policy exception to the employment at will doctrine in
that she was “constructively discharged” because she had no option but to
quit because of the hostile working conditions.
• Violation of the Michigan Whistleblowers Protection Act, MCL 15.361.
• Intentional infliction of emotional distress.
• Assault, battery, and false imprisonment.
The defendant sought a summary judgment motion based on governmental
immunity and absence of material facts required to prove the plaintiff’s case. (In
other words, the government had immunity from such lawsuits and, the plaintiff
would not meet the requirements to prove her case on the charges)
MICHIGAN TRIAL COURT (CIRCUIT COURT): In a motion hearing, found
for the defendant as to government immunity but denied motion as to public policy
violation, Whistleblower protection violation, assault, battery, and false
imprisonment.
MICHIGAN APPELLATE COURT: Agreed in part and reversed in
part. Agreed that defendant was entitled to immunity from tort liability and
plaintiff did not establish requirements for protection under Whistleblower Act or
the requirements for intentional infliction of emotional distress. But the court
allowed for the intentional tort allegations (assault, battery, and false
imprisonment) to continue to a jury trial.
MICHIGAN SUPREME COURT: Reversed the appellate court decision.
WHY?
• A jury could conclude that her refusal to go along with the original plea
agreement, and thus break the law, and was allegedly constructively
discharged, was a violation of the public policy exception to the
employment-at-will doctrine in Michigan.
• A jury could conclude that when plaintiff came forward with the mistake her
boss, the defendant, had made and reported it, she was then retaliated against
in violation of the Michigan Whistleblower Protection Act.
• Regarding government immunity from tort claims i.e., assault, battery, and
false imprisonment) – a jury could conclude that the defendant’s actions
were outside the scope of his supervisory employment position. And
defendant did not act in good faith in furtherance of his job when
committing the torts and, would therefore, NOT be entitled to the immunity.
Case was remanded back to the trial court for trial by jury.
THE LAW:
In Michigan, At-will employment relationships may generally be terminated at
any time, with or without cause, meaning for any reason or no reason. However, a
public policy exception exists.
Public policy grounds for wrongful termination exist when an employer fires an
employee who “refuses to violate a law in the course of employment” or, “in
response to an employee exercising their rights conferred by statute.” For
example, you cannot fire an employee for electing to take Family Medical Leave
time which is a federal law.
Plaintiff argued she was retaliated against when she was asked to violate the law
and agree to the plea deal that was in violation of the sentencing guidelines and
then, was subsequently fired (constructively) for not violating the law. This was a
public policy exception and therefore, she was wrongfully discharged from
employment.
Michigan Whistleblowers Protection Act, MCL 15.361 – protects workplace
retaliation against an employee who “reports or is about to report a violation or
suspected violation of law or regulation or rule to a public body, unless the
employee knows that the report is false.”
Plaintiff must prove:
(1) Plaintiff was engaged in protected activity as defined by the act,
(2) Plaintiff was discharged or discriminated against, and
(3) A causal connection exists between the protected activity and the discharge or
adverse employment action.” (Plaintiff must reasonably believe that a violation has
occurred
Government Immunity: Michigan law, MCL 691.1407(2) provides officers and
employees of government agencies “immunity from tort liability for injuries
caused by the officer or employee while acting “in the scope of employment” and
if acting, or reasonably believes he or she is acting, in good faith, within the scope
of authority.”
This exception DOES NOT apply for “intentional torts committed by
governmental employees exercising their governmental authority” and therefore,
the government is NOT liable for the intentional torts committed by officers or
employees.
Elements for officer/employee to prove to be protected:
• Acts were done in course of employment,
•
•
Employee reasonably believed, in good faith and without malice, he or she
was acting in the scope of authority, and
Actions were discretionary, not ministerial (duty is prescribed by law) (1).
1. [Janetsky v. Cty. of Saginaw], 2022 Mich. LEXIS 2210, 2022 WL 17823753
(Supreme Court of Michigan December 21, 2022, Decided). Retrieved on
February 8, 2023 from https://advance-lexiscom.libdatab.strayer.edu/api/document?collection=cases&id=urn:contentItem:
674P-W9V1-JFSV-G41D-00000-00&context=1516831.
Date and Time: Sunday, February 12, 2023 2:07:00PM EST
Job Number: 190138499
Document (1)
1. Rest. Law Ctr. v. City of New York, 585 F. Supp. 3d 366
Client/Matter: -NoneSearch Terms: case in New York state for employee wrongful termination
Search Type: Natural Language
Narrowed by:
Content Type
Cases
Narrowed by
-None-
| About LexisNexis | Privacy Policy | Terms & Conditions | Copyright © 2023 LexisNexis
Cited
As of: February 12, 2023 7:07 PM Z
Rest. Law Ctr. v. City of New York
United States District Court for the Southern District of New York
February 10, 2022, Decided; February 10, 2022, Filed
21cv4801 (DLC)
Reporter
585 F. Supp. 3d 366 *; 2022 U.S. Dist. LEXIS 24268 **; 2022 WL 409190
RESTAURANT LAW CENTER, et al., Plaintiffs, -v- CITY
OF NEW YORK, et al., Defendants.
Core Terms
wrongful discharge, arbitration, preemption,
employees, preempted, fast food, regulation,
restaurants, interstate commerce, establishments,
bargaining, dormant, supplemental jurisdiction, state
law claim, just cause, state law, out-of-state, local law,
discriminatory, interstate, commerce, lockout, reasons,
chains, termination of employment, summary
judgment, federal claim, challenges, burdens, fast food
restaurant
Case Summary
Outcome
Plaintiffs’ motion denied; defendants’ motion granted.
LexisNexis® Headnotes
Business & Corporate Compliance > … > Wage &
Hour Laws > Scope & Definitions > Overtime &
Work Periods
Labor & Employment Law > Wrongful
Termination > Defenses > Employee Misconduct
HN1[ ]
Periods
Scope & Coverage, Overtime & Work
Overview
HOLDINGS: [1]-In a case where plaintiffs challenged a
law prohibiting the wrongful discharge of fast food
restaurant employees under 42 U.S.C. § 1983, the
court found that the Wrongful Discharge Law was a
validly enacted minimum labor standard because the
law was one of general applicability aimed at promoting
job stability for hourly employees in a particular sector
where the just cause provision of the law made no
distinction between fast food employees who were
unionized and those who were not; [2]-The Wrongful
Discharge Law did not violate the Commerce Clause of
the U.S. Constitution because the law did not control
out-of-state commerce or require out-of-state
commerce to be conducted in a manner consistent with
it, where the law made no express distinction between
national fast food chains and chains with more than
thirty locations that were located solely within New York
State.
The Wrongful Discharge Law prohibits the employers
governed by the Fair Workweek Law from firing hourly
wage employees without notice or reason in the
absence of egregious misconduct, and provides those
employees with the option to arbitrate claims of alleged
violations of the Law.
Labor & Employment Law > Wrongful
Termination > Defenses
HN2[
] Wrongful Termination, Defenses
The Just Cause Provision in the Wrongful Discharge
Law states that a fast food employer shall not discharge
a fast food employee who has completed such
employer’s probation period except for just cause or for
a bona fide economic reason. New York City, N.Y.,
Admin. Code § 20-1272(a). The Wrongful Discharge
Page 3 of 18
Rest. Law Ctr. v. City of New York
Law defines the probation period as a defined period of
time, not to exceed 30 days from the first date of work of
a fast food employee, within which fast food employers
and fast food employees are not subject to the
prohibition on wrongful discharge set forth in New
York City, N.Y., Admin. Code § 20-1272. New York
City, N.Y., Admin. Code § 20-1271. The term bona fide
economic reason is defined as the full or partial closing
of operations or technological or organizational changes
to the business in response to the reduction in volume
of production, sales, or profit. New York City, N.Y.,
Admin. Code § 20-1271. A discharge is defined as any
cessation of employment, including layoff, termination,
constructive discharge, reduction in hours and indefinite
suspension. New York City, N.Y., Admin. Code § 201271. A reduction in hours means a reduction in a fast
food employee’s hours of work totaling at least 15
percent of the employee’s regular schedule or 15
percent of any weekly work schedule. New York City,
N.Y., Admin. Code § 20-1271.
Labor & Employment Law > … > Employment
Contracts > Conditions & Terms > Discharges
Labor & Employment Law > … > Unemployment
Compensation > Eligibility > Just Cause
Terminations
Labor & Employment Law > Wrongful
Termination > Breach of Contract > For Cause
Standard
Labor & Employment Law > Wrongful
Termination > Defenses > Employee Misconduct
HN3[
] Conditions & Terms, Discharges
Just cause, for purposes of the Wrongful Discharge
Law, is defined as the fast food employee’s failure to
satisfactorily perform job duties or misconduct that is
demonstrably and materially harmful to the fast food
employer’s legitimate business interests. New York
City, N.Y., Admin. Code § 20-1271. There are five
nonexclusive factors that a fact-finder must consider
when determining whether a just cause discharge
occurred. New York City, N.Y., Admin. Code §§ 201271, 20-1272(b). The factors include consideration of
the employer’s utilization of a progressive discipline
policy. Except for an employee’s egregious misconduct,
a termination is not for just cause unless the employer
utilized progressive discipline. New York City, N.Y.,
Admin. Code § 20-1272(c). Finally, an employer must
supply the former employee with a written explanation
containing the precise reasons for their discharge within
five days of discharge. New York City, N.Y., Admin.
Code § 20-1272(d). In any subsequent action alleging a
violation of the Just Cause Provision, the employer
bears the burden of establishing that the discharge was
valid, and a fact-finder is limited to consideration of the
employer’s written reasons it provided to the employee.
New York City, N.Y., Admin. Code § 20-1272(d)-(e).
Business & Corporate Compliance > … > Alternative
Dispute Resolution > Arbitration > Arbitrability
Labor & Employment Law > Wrongful
Termination > Defenses > Employee Misconduct
HN4[
] Arbitration, Arbitrability
The Arbitration Provision in the Wrongful Discharge
Law adds that any person or organization representing
persons alleging a violation of the Wrongful Discharge
Law may bring an arbitration proceeding. New York
City, N.Y., Admin. Code § 20-1273(a). An employee
who prevails in arbitration is entitled to attorneys’ fees
and costs, reinstatement or restoration of hours, and all
other appropriate equitable relief, including such other
compensatory damages or injunctive relief as may be
appropriate. The New York City Department of
Consumer and Worker Protection may provide by rule
for persons bringing such a proceeding to serve as a
representative party on behalf of all members of a class.
New York City, N.Y., Admin. Code § 20-1273(a). Once
an employee selects arbitration to pursue a claim, it
shall be the exclusive remedy for the wrongful
discharge dispute. New York City, N.Y., Admin. Code §
20-1273(i). The parties may petition for judicial review of
the outcome of any arbitration proceeding. New York
City, N.Y., Admin. Code § 20-1273(j).
Civil
Procedure > … > Justiciability > Standing > Burdens
of Proof
Constitutional Law > … > Case or
Controversy > Standing > Elements
HN5[
] Standing, Burdens of Proof
The case-or-controversy requirement of U.S. Const. art.
III encompasses the requirement that the plaintiff
Page 4 of 18
Rest. Law Ctr. v. City of New York
establish standing to sue. A plaintiff must demonstrate
standing for each claim and form of relief sought.
Civil
Procedure > … > Justiciability > Standing > Injury in
Fact
Constitutional Law > … > Case or
Controversy > Standing > Elements
Constitutional Law > … > Case or
Controversy > Standing > Third Party Standing
HN6[
Civil Procedure > … > Federal & State
Interrelationships > Federal Common
Law > Preemption
] Standing, Injury in Fact
An organization does not have standing to assert the
rights of its members in a case brought under 42
U.S.C.S. § 1983. An organization may nonetheless
bring a § 1983 suit on its own behalf so long as it can
independently satisfy the requirements of U.S. Const.
art. III standing. To meet those requirements, a plaintiff
must have (1) suffered an injury in fact, (2) that is fairly
traceable to the challenged conduct of the defendant,
and (3) that is likely to be redressed by a favorable
judicial decision. The injury in fact must be concrete and
particularized and actual or imminent, not conjectural or
hypothetical. Where an organization diverts its
resources away from its current activities, it has suffered
an injury that is independently sufficient to confer
organizational standing. The presence of one party with
standing is sufficient to satisfy U.S. Const. art. III’s caseor-controversy requirement.
Civil Procedure > … > Federal & State
Interrelationships > Federal Common
Law > Preemption
Constitutional Law > Supremacy Clause > Federal
Preemption
HN7[
conflicts with federal law such that it is impossible for a
party to comply with both or the local law is an obstacle
to the achievement of federal objectives. Both field and
conflict preemption are usually found based on implied
manifestations of congressional intent. Preemption
analysis begins with the assumption that the historic
police powers of the States are not to be superseded by
federal law unless that is the clear and manifest purpose
of Congress.
] Federal Common Law, Preemption
A fundamental principle of the Constitution is that
Congress has the power to preempt state law. In
general, three types of preemption exist: (1) express
preemption, where Congress has expressly preempted
local law; (2) field preemption, where Congress has
legislated so comprehensively that federal law occupies
an entire field of regulation and leaves no room for state
law; and (3) conflict preemption, where local law
Constitutional Law > Supremacy Clause > Federal
Preemption
Labor & Employment Law > Collective Bargaining &
Labor Relations > Unfair Labor
Practices > Jurisdiction
Labor & Employment Law > Collective Bargaining &
Labor Relations > Right to Organize
Labor & Employment Law > Collective Bargaining &
Labor Relations > Protected Activities
HN8[
] Federal Common Law, Preemption
The National Labor Relations Act (NLRA), 29 U.S.C.S. §
151 et seq., does not contain an express preemption
provision. The doctrine of labor law preemption,
therefore, concerns the extent to which Congress has
placed implicit limits on the permissible scope of state
regulation of activity touching upon labor-management
relations. The U.S. Supreme Court has established two
implied preemption doctrines under the NLRA. Under
preemption, the NLRA preempts state regulation that
either prohibits conduct subject to the regulatory
jurisdiction of the National Labor Relations Board under
§ 8 of the NLRA or facilitates conduct prohibited by § 7
of the NLRA. Section 7 of the NLRA guarantees
employees the right to organize and engage in other
forms of protected concerted action, and § 8 identifies
forms of unfair labor practices.
Civil Procedure > … > Federal & State
Interrelationships > Federal Common
Law > Preemption
Page 5 of 18
Rest. Law Ctr. v. City of New York
Constitutional Law > Supremacy Clause > Federal
Preemption
Labor & Employment Law > Collective Bargaining &
Labor Relations > Federal Preemption > Primacy of
Labor Policy
Labor & Employment Law > Collective Bargaining &
Labor Relations > Strikes & Work Stoppages
HN9[
] Federal Common Law, Preemption
The second form of the National Labor Relations Act
(NLRA), 29 U.S.C.S. § 151 et seq., preemption, known
as Machinists preemption, preempts state law and
state causes of action concerning conduct that
Congress intended to be unregulated. Machinists
preemption forbids states and localities from intruding
upon the labor-management bargaining process. The
doctrine relies on the understanding that in providing in
the NLRA a framework for self-organization and
collective bargaining, Congress determined both how
much the conduct of unions and employers should be
regulated, and how much it should be left unregulated.
Under this theory of NLRA preemption, the crucial
inquiry is whether Congress intended that the conduct
involved be unregulated because such conduct was left
to be controlled by the free play of economic forces. In
other words, even regulation that does not actually or
arguably conflict with the provisions of sections 7 or 8 of
the NLRA may interfere with the open space created by
the NLRA. The critical inquiry under Machinists
preemption is whether state or local regulation
frustrates effective implementation of the NLRA’s
processes. States are therefore prohibited from
imposing additional restrictions on economic weapons
of self-help, such as strikes or lockouts, unless such
restrictions presumably were contemplated by
Congress.
process for determining terms and conditions of
employment, and not with particular substantive terms
of the bargain that is struck when the parties are
negotiating from relatively equal positions. States and
localities therefore remain free to set minimum labor
standards that affect union and nonunion employees
equally, and neither encourage nor discourage the
collective-bargaining processes that are the subject of
the NLRA. Minimum labor standards enacted by states
under their traditional police powers appropriately set a
baseline for employment negotiations.
Governments > Local Governments > Employees &
Officials
Labor & Employment Law > Wrongful
Termination > Defenses
Labor & Employment Law > Collective Bargaining &
Labor Relations > Federal Preemption > Primacy of
Labor Policy
HN11[ ]
Officials
Labor & Employment Law > Collective Bargaining &
Labor Relations > Federal Preemption > Primacy of
Labor Policy
HN10[ ] Collective Bargaining & Labor Relations,
Bargaining Units
The National Labor Relations Act (NLRA), 29 U.S.C.S. §
151 et seq., is concerned with establishing an equitable
Governments,
Employees
&
The Wrongful Discharge Law joins a plethora of valid
state and local laws that form a backdrop of rights
against which both employers and employees come to
the bargaining table.
Constitutional Law > Supremacy Clause > Federal
Preemption
Labor & Employment Law > Collective Bargaining &
Labor Relations > Federal Preemption
HN12[
Labor & Employment Law > Collective Bargaining &
Labor Relations > Bargaining Units
Local
] Supremacy Clause, Federal Preemption
While states may not regulate the collective bargaining
process, they retain broad authority to regulate
substantive labor standards. Preemption may not be
lightly inferred, and the regulation of the process for
termination of employment — even through a detailed
law — is not the regulation of the collective bargaining
process and is not preempted by the National Labor
Relations Act (NLRA), 29 U.S.C.S. § 151 et seq.
Business & Corporate Compliance > … > Alternative
Dispute Resolution > Arbitration > Arbitrability
Page 6 of 18
Rest. Law Ctr. v. City of New York
Labor & Employment Law > Collective Bargaining &
Labor Relations > Labor Arbitration > Enforcement
Labor & Employment Law > Collective Bargaining &
Labor Relations > Federal Preemption
HN13[
] Arbitration, Arbitrability
For purposes of a preemption analysis, the creation of
the duty to arbitrate is not fatal. Both union and
nonunion employees are affected by the Wrongful
Discharge Law in equal ways: they may request and
enforce a request to arbitrate covered disputes.
Constitutional Law > Supremacy Clause > Federal
Preemption
Governments > Legislation > Interpretation
HN14[
] Supremacy Clause, Federal Preemption
When examining the preemptive effect of a federal
statute, a court looks to the text and context of the law
in question and is guided by the traditional tools of
statutory interpretation. Where the plain meaning of the
text is clear, the inquiry generally ends there.
Labor & Employment Law > Collective Bargaining &
Labor Relations > Strikes & Work Stoppages
HN15[ ] Collective Bargaining & Labor Relations,
Strikes & Work Stoppages
his employees to work as a result of a dispute with
such employees that affects wages, hours and other
terms and conditions of employment of said
employees, provided, however, that a lockout shall not
include a termination of employment for reasons
deemed proper under New York state and federal law.
New York City, N.Y., Admin. Code § 22-501.
Labor & Employment Law > Wrongful
Termination > Defenses
HN17[
] Wrongful Termination, Defenses
The Wrongful Discharge Law protects individual
employees who are discharged, which includes a
reduction of 15% or more in hours, by defining a
process for the discharge of that individual from
employment. It does not impose liability on employers
who have locked out all employees due to a dispute
with its employees over the terms of employment.
Labor & Employment Law > Collective Bargaining &
Labor Relations > Federal Preemption
HN18[ ] Collective Bargaining & Labor Relations,
Federal Preemption
The National Labor Relations Act (NLRA), 29 U.S.C.S. §
151 et seq., does not authorize the district court to preempt minimum labor standards simply because they are
applicable only to particular workers in a particular
industry.
The Wrongful Discharge Law does not prevent covered
employers from engaging in lockouts.
Labor & Employment Law > Collective Bargaining &
Labor Relations > Strikes & Work Stoppages
HN16[ ] Collective Bargaining & Labor Relations,
Strikes & Work Stoppages
A lockout occurs when an employer temporarily shuts
down its business and advises employees that they will
not be allowed to work until contract agreement is
reached between the employer and the union. In
connection with a law that bars the hiring of strikebreakers, the New York City’s administrative code
defines a lockout as a refusal by an employer to permit
Labor & Employment Law > Collective Bargaining &
Labor Relations > Federal Preemption > Primacy of
Labor Policy
Labor & Employment Law > Collective Bargaining &
Labor Relations > Protected Activities
HN19[ ] Federal Preemption, Primacy of Labor
Policy
The Wrongful Discharge Law does not frustrate
effective implementation of the the National Labor
Relations Act (NLRA), 29 U.S.C.S. § 151 et seq.’s
processes.
Page 7 of 18
Rest. Law Ctr. v. City of New York
Business & Corporate
Compliance > … > Transportation Law > Interstate
Commerce > State Powers
Constitutional Law > Congressional Duties &
Powers > Commerce Clause > Dormant Commerce
Clause
Constitutional Law > … > Commerce
Clause > Interstate Commerce > Prohibition of
Commerce
HN20[
] Interstate Commerce, State Powers
The Commerce Clause of the U.S. Constitution carries a
corresponding negative or dormant aspect that limits the
power of local governments to enact laws affecting
interstate commerce. The U.S. Supreme Court has
explained that the dormant Commerce Clause
jurisprudence is driven by a concern about economic
protectionism — that is, regulatory measures designed to
benefit in-state economic interests by burdening out-ofstate competitors. Analysis of state and local laws
under the dormant Commerce Clause treads a wellworn path. A court must first assess whether the
challenged law discriminates against interstate
commerce, or regulates evenhandedly with only
incidental
effects
on
interstate
commerce.
Discrimination means differential treatment of in-state
and out-of-state economic interests that benefits the
former and burdens the latter.
Business & Corporate
Compliance > … > Transportation Law > Interstate
Commerce > State Powers
Constitutional Law > Congressional Duties &
Powers > Commerce Clause > Dormant Commerce
Clause
Constitutional Law > … > Commerce
Clause > Interstate Commerce > Prohibition of
Commerce
Constitutional Law > … > Commerce
Clause > Interstate Commerce > Tests
HN21[
] Interstate Commerce, State Powers
The U.S. Supreme Court has recognized three modes
of discrimination against interstate commerce: a law
may discriminate on its face, harbor a discriminatory
purpose, or discriminate in its effect. A discriminatory
law is subject to heightened scrutiny and is permissible
only if the state shows the law is demonstrably justified
by a valid factor unrelated to economic protectionism.
This justification must show a legitimate local purpose
that cannot be adequately served by reasonable
nondiscriminatory
alternatives.
By
contrast,
a
nondiscriminatory law that only imposes incidental
burdens on interstate commerce is analyzed under the
more forgiving balancing test set out in Pike. Under the
Pike test, a nondiscriminatory law will be upheld unless
the challenger shows that the burden imposed on
interstate commerce is clearly excessive in relation to
the putative local benefits.
Constitutional Law > Congressional Duties &
Powers > Commerce Clause > Dormant Commerce
Clause
Labor & Employment Law > Wrongful
Termination > Defenses
HN22[ ] Commerce Clause, Dormant Commerce
Clause
The Wrongful Discharge Law does not violate the
dormant Commerce Clause of the U.S. Constitution.
Constitutional Law > Congressional Duties &
Powers > Commerce Clause > Dormant Commerce
Clause
Labor & Employment Law > Wrongful
Termination > Defenses
HN23[ ] Commerce Clause, Dormant Commerce
Clause
The Wrongful Discharge Law does not control out-ofstate commerce or require out-of-state commerce to be
conducted in a manner consistent with it. Moreover, it
makes no express distinction between national fast food
chains and chains with more than thirty locations that
are located solely within New York State. The
Wrongful Discharge Law does not target chains
because they are related to out-of-state brands.
Evidence > Burdens of Proof > Allocation
Page 8 of 18
Rest. Law Ctr. v. City of New York
Labor & Employment Law > Wrongful
Termination > Defenses
HN24[
] Burdens of Proof, Allocation
The Wrongful Discharge Law imposes no more than an
indirect burden on interstate restaurant operations.
Business & Corporate
Compliance > … > Transportation Law > Interstate
Commerce > State Powers
Constitutional Law > Congressional Duties &
Powers > Commerce Clause > Dormant Commerce
Clause
Constitutional Law > … > Commerce
Clause > Interstate Commerce > Tests
Constitutional Law > Congressional Duties &
Powers > Commerce Clause > Intrastate
Commerce
HN25[
] Interstate Commerce, State Powers
The Pike test is often directed at differentiating
protectionist measures’ from those that can fairly be
viewed as directed to legitimate local concerns. A state
may validly impose incidental burdens on interstate
commerce to promote safety or general welfare. To
violate the Commerce Clause of the U.S. Constitution,
at minimum, the burden imposed on interstate
commerce must be shown to be qualitatively or
quantitatively different from that imposed on intrastate
commerce. Burdens supportive of an unconstitutional
finding have been recognized in the following situations:
regulations that have a disparate impact on in-versus
out-of-state entities, laws that regulate beyond the
state’s borders, and laws that create regulatory
inconsistencies between states.
Constitutional Law > Congressional Duties &
Powers > Commerce Clause > Dormant Commerce
Clause
Constitutional Law > … > Commerce
Clause > Interstate Commerce > Tests
HN26[ ] Commerce Clause, Dormant Commerce
Clause
Since the Commerce Clause of the U.S. Constitution
protects the interstate market, not particular interstate
firms, there is no basis to find that the Wrongful
Discharge Law runs afoul of the Pike test.
Business & Corporate
Compliance > … > Arbitration > Federal Arbitration
Act > Arbitration Agreements
Business & Corporate
Compliance > … > Arbitration > Federal Arbitration
Act > Scope
HN27[ ]
Federal
Agreements
Arbitration
Act,
Arbitration
The Federal Arbitration Act (FAA), 9 U.S.C.S. § 1 et
seq., requires courts to enforce arbitration agreements
according to their terms. Specifically, the FAA provides
that a written provision in any contract evidencing a
transaction involving commerce to settle by arbitration a
controversy thereafter arising out of such contract or
transaction, or the refusal to perform the whole or any
part thereof, or an agreement in writing to submit to
arbitration an existing controversy arising out of such a
contract, transaction, or refusal, shall be valid,
irrevocable, and enforceable, save upon such grounds
as exist at law or in equity for the revocation of any
contract. 9 U.S.C.S. § 2. States may not prohibit private
agreements to arbitrate.
Business & Corporate Compliance > … > Alternative
Dispute Resolution > Arbitration > Arbitrability
Labor & Employment Law > … > Conditions &
Terms > Arbitration Provisions > Enforcement
Business & Corporate
Compliance > … > Arbitration > Federal Arbitration
Act > Arbitration Agreements
HN28[
] Arbitration, Arbitrability
The Arbitration Provision of the Wrongful Discharge
Law does not prohibit or impair the enforcement of
private arbitration agreements. Private parties, including
fast food employers and employees, remain free to
agree to submit disputes to arbitration, and the
Wrongful Discharge Law does not interfere with the
enforcement of such agreements.
Page 9 of 18
Rest. Law Ctr. v. City of New York
Business & Corporate
Compliance > … > Arbitration > Federal Arbitration
Act > Arbitration Agreements
Business & Corporate
Compliance > … > Arbitration > Federal Arbitration
Act > Scope
Business & Corporate
Compliance > … > Arbitration > Federal Arbitration
Act > Orders to Compel Arbitration
HN29[ ]
Federal
Agreements
Arbitration
Act,
Arbitration
The Federal Arbitration Act, 9 U.S.C.S. § 1 et seq., is
silent on the subject of compelled arbitration.
Civil Procedure > … > Subject Matter
Jurisdiction > Supplemental Jurisdiction > Pendent
Claims
Constitutional Law > … > Subject Matter
Jurisdiction > Supplemental Jurisdiction > Pendent
Jurisdiction
Civil Procedure > … > Subject Matter
Jurisdiction > Supplemental Jurisdiction > Same
Case & Controversy
HN30[ ]
Claims
Supplemental
Jurisdiction,
Pendent
A district court may decline to exercise supplemental
jurisdiction over a state law claim if the claim raises a
novel or complex issue of State law and/or the district
court has dismissed all claims over which it has original
jurisdiction. 28 U.S.C.S. § 1367(c)(1), (3). Once a court
has dismissed all federal claims, it must decide whether
the traditional values of economy, convenience,
fairness, and comity counsel against the exercise of
supplemental jurisdiction. In weighing these factors, the
district court is aided by the Supreme Court’s additional
guidance in Carnegie-Mellon Univ. v. Cohill, that in the
usual case in which all federal-law claims are
eliminated before trial, the balance of factors will point
toward declining to exercise jurisdiction over the
remaining state-law claims.
Counsel: [**1] For plaintiffs Restaurant Law Center
and New York State, Restaurant Association: Angelo
Amador, Restaurant Law Center, Washington, DC; Leni
D. Battaglia, James D. Nelson, Morgan, Lewis &
Bockius LLP, Washington, DC; William R. Peterson,
Morgan, Lewis & Bockius LLP, Houston, TX.
For defendants: Georgia M. Pestana, New York City
Law Department, New York, NY.
For Amicus Curiae Professors of Labor Law: Hanan B.
Kolko, Cohen Weiss and Simon LLP, New York, NY.
For Amicus Curiae National Employment Law Project,
Make the Road New York, the Center for Popular
Democracy, A Better Balance, the CUNY Urban Food
Policy Institute, the New York Taxi Workers Alliance,
Community Voices Heard, and the Workers Justice
Project: Wayne N. Outten, Outten & Golden, LLP, New
York, NY.
Judges: DENISE L. COTE, United States District
Judge.
Opinion by: DENISE L. COTE
Opinion
[*372] OPINION AND ORDER
DENISE COTE, District Judge:
In 2021, the City of New York (“City”) enacted a law
prohibiting the wrongful discharge of fast food
restaurant
employees
and
expanding
private
enforcement avenues available to them (the “Wrongful
Discharge Law” or the “Law”). The Restaurant Law
Center (“RLC”) and the New York State Restaurant
Association (“NYSRA”; together, “Plaintiffs”) [**2] seek
a declaration of the Law’s invalidity under the U.S.
Constitution and State law. They have moved for
summary judgment on all claims. The City has crossmoved for summary judgment, and urges the Court to
refrain from exercising supplemental jurisdiction over
the Plaintiffs’ State law claims. For the reasons set forth
below, the City’s motion for summary judgment on the
federal claims is granted. The Court declines to exercise
supplemental jurisdiction over the State law claims.
Background
This litigation addresses a 2021 amendment to the
City’s Fair Workweek Law. The City enacted the Fair
Page 10 of 18
Rest. Law Ctr. v. City of New York
Workweek Law in 2017 to expand wage and hour
protections for employees working at fast food
businesses. N.Y.C. Admin. Code §§ 20-1201 to 201263.
The Fair Workweek Law governs employers operating a
fast food establishment that is part of a chain with thirty
or more establishments, measured nationally. It defines
a fast food establishment as
[a]ny establishment (i) that has as its primary
purpose serving food or drink items; (ii) where
patrons order or select items and pay before eating
and such items may be consumed on the premises,
taken out or delivered to the customer’s location;
(iii) that offers limited service; (iv) that is part
of [**3] a chain;1 and (v) that is one of 30 or more
establishments nationally, including . . . an
establishment operated pursuant to a franchise
where the franchisor and the franchisees of such
franchisor own or operate 30 or more such
establishments in the aggregate nationally.
N.Y.C. Admin. Code § 20-1201 (emphasis added). A
“fast food employee . . . does not include any
employee who is salaried.” Id.
On December 17, 2020, the City Council amended the
Fair Workweek Law by enacting the Wrongful
Discharge Law at issue in this case. The Wrongful
Discharge Law was signed by the Mayor and the
provisions at issue here went into effect on July 4, 2021.
N.Y.C. Admin. Code §§ 20-1271 to 20-1275.
HN1[ ] The Wrongful Discharge Law prohibits the
employers governed by the Fair Workweek Law from
firing hourly wage employees without notice or reason
in the absence of egregious misconduct, and provides
those employees with the option to arbitrate claims of
alleged violations of the Law. Provisions of the
Wrongful Discharge Law that are significant to the
discussion that follows include the following.
I. The Just Cause Provision
HN2[ ] The Just Cause Provision states that a “fast
food employer shall not discharge a fast food employee
who has completed such employer’s probation period2
except [**4] [*373] for just cause or for a bona fide
economic reason.”3 Id. § 20-1272(a). Section 20-1271
provides definitions of the operative terms in the
Provision.
A discharge is defined as “any cessation of
employment, including layoff, termination, constructive
discharge, reduction in hours and indefinite
suspension.” Id. § 20-1271. A reduction in hours
“means a reduction in a fast food employee’s hours of
work totaling at least 15 percent of the employee’s
regular schedule or 15 percent of any weekly work
schedule.” Id.
HN3[ ] “Just cause” is defined as “the fast food
employee’s failure to satisfactorily perform job duties or
misconduct that is demonstrably and materially harmful
to the fast food employer’s legitimate business
interests.” Id. There are five nonexclusive factors that a
fact-finder must consider when determining whether a
just cause discharge occurred. Id. §§ 20-1271, 201272(b).
The factors include consideration of the employer’s
utilization of a “progressive discipline” policy.
“Progressive discipline” means
a disciplinary system that provides for a graduated
range of reasonable responses to a fast food
employee’s failure to satisfactorily perform such
fast food employee’s job duties, with the
disciplinary measures ranging from mild to
severe, [**5] depending on the frequency and
degree of the failure.
Id. § 20-1201. Except for an employee’s egregious
misconduct, a termination is not for just cause unless
the employer utilized progressive discipline. Id. § 201272(c).
2 The Wrongful
Discharge Law defines the probation period
as “a defined period of time, not to exceed 30 days from the
first date of work of a fast food employee, within which fast
food employers and fast food employees are not subject to
the prohibition on wrongful discharge set forth in section 201272.” N.Y.C. Admin. Code § 20-1271.
3 The term “bona fide economic reason” is defined as “the full
1 “The term ‘chain’ means a set of establishments that share a
common brand or that are characterized by standardized
options for decor, marketing, packaging, products and
services.” N.Y.C. Admin. Code § 20-1201.
or partial closing of operations or technological or
organizational changes to the business in response to the
reduction in volume of production, sales, or profit.” N.Y.C.
Admin. Code § 20-1271.
Page 11 of 18
Rest. Law Ctr. v. City of New York
Finally, an employer must supply the former employee
with a written explanation containing “the precise
reasons for their discharge” within five days of
discharge. Id. § 20-1272(d). In any subsequent action
alleging a violation of the Just Cause Provision, the
employer bears the burden of establishing that the
discharge was valid, and a fact-finder is limited to
consideration of the employer’s written reasons it
provided to the employee. Id. § 20-1272(d)-(e).
II. The Arbitration Provision
The Wrongful Discharge Law also amended the Fair
Workweek Law by giving employees a right to arbitrate
a claim of wrongful discharge (the “Arbitration
Provision”). Id. § 20-1273. Previously, the Fair
Workweek Law provided two avenues for enforcement:
administrative enforcement by the New York City
Department of Consumer and Worker Protection
(“DCWP”) upon an employee’s complaint, id. § 201207, or direct private action in court by an employee,
id. § 20-1211.
HN4[ ] The Arbitration Provision adds that “any person
or organization representing persons alleging a
violation” [**6] of the Wrongful Discharge Law may
bring an arbitration proceeding. Id. § 20-1273(a). An
employee who prevails in arbitration is entitled to
attorneys’ fees and costs, reinstatement or restoration of
hours, and “all other appropriate equitable relief,”
including “such other compensatory damages or
injunctive relief as may be appropriate.” Id. The DCWP
may “provide by rule for persons bringing such a
proceeding to serve as a representative party on behalf
of all members of a class.” Id.
[*374] Once an employee selects arbitration to pursue
a claim, it “shall be the exclusive remedy for the
wrongful discharge dispute.” Id. § 20-1273(i). The
parties may petition for judicial review of the outcome of
any arbitration proceeding. Id. § 20-1273(j).
III. Procedural History
Plaintiff RLC is a public policy organization based in
Washington, D.C. that is affiliated with the National
Restaurant Association, a food service trade
association. Plaintiff NYSRA is a not-for-profit hospitality
association with over 10,000 food service members in
the State, including approximately 1,000 members in
New York City. Some of those member food service
establishments are fast food restaurants.
The RLC and NYSRA initiated this action on May 28,
2021. They [**7] challenge the City’s authority to enact
the Wrongful Discharge Law and seek declaratory and
injunctive relief. They bring this action under 42 U.S.C. §
1983 and assert that the Wrongful Discharge Law
violates the dormant Commerce Clause and Supremacy
Clause of the U.S. Constitution, in addition to raising
claims under New York State law.4 The parties have
agreed to litigate these claims through cross-motions for
summary judgment.
An Order of February 1, 2022 granted two motions by
amicus curiae for leave to file briefs in support of the
City. The amici are Professor Kate Andrias and other
Professors of Labor Law, and a group of organizations
including the National Employment Law Project, Make
the Road New York, the Center for Popular Democracy,
A Better Balance, the CUNY Urban Food Policy
Institute, the New York Taxi Workers Alliance,
Community Voices Heard, and the Workers Justice
Project.
Discussion
The City challenges the Plaintiffs’ standing to bring
these claims. Finding that at least the NYSRA has
standing, this Opinion will address the Plaintiffs’
challenges to the Wrongful Discharge Law as
preempted by the National Labor Relations Act
(“NLRA”), 29 U.S.C. § 151 et seq., and then as a
violation of the dormant Commerce Clause. Next, the
Opinion addresses the Plaintiffs’ claim that the
Arbitration Provision is preempted by the [**8] Federal
Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq. Having
concluded that the City Law survives these challenges,
the Opinion will address whether to exercise
supplemental jurisdiction.
I. Standing
As a threshold matter, the City challenges the Plaintiffs’
standing to bring this action. HN5[ ] The case-orcontroversy requirement of Article III encompasses “the
requirement that the plaintiff establish standing to sue.”
Stagg, P.C. v. U.S. Dep’t of State, 983 F.3d 589, 601
(2d Cir. 2020). “A plaintiff must demonstrate standing for
each claim and form of relief sought.” Carver v. City of
4 The
Plaintiffs claim that the Just Cause Provision is
preempted by New York State’s at-will employment common
law and violates the New York Constitution’s home rule
clause, and that the Arbitration Provision violates the Plaintiffs’
right to a trial by jury and invades the jurisdiction of the New
York Supreme Court.
Page 12 of 18
Rest. Law Ctr. v. City of New York
New York, 621 F.3d 221, 225 (2d Cir. 2010) (citation
omitted).
HN6[ ] An organization does not have standing “to
assert the rights of its members in a case brought under
42 U.S.C. § 1983.” Nnebe v. Daus, 644 F.3d 147, 156
(2d Cir. 2011). An organization may nonetheless bring a
§ 1983 suit on its own behalf “so long as it can
independently satisfy the requirements of Article III
standing.” Connecticut Citizens Def. [*375] League,
Inc. v. Lamont, 6 F.4th 439, 447 (2d Cir. 2021) (citation
omitted). To meet those requirements, a plaintiff must
have “(1) suffered an injury in fact, (2) that is fairly
traceable to the challenged conduct of the defendant,
and (3) that is likely to be redressed by a favorable
judicial decision.” Melito v. Experian Marketing
Solutions, Inc., 923 F.3d 85, 92 (2d Cir. 2019) (citation
omitted). The “injury in fact” must be “concrete and
particularized” and “actual or imminent, not conjectural
or hypothetical.” Liberian Cmty. Ass’n of Connecticut v.
Lamont, 970 F.3d 174, 184 (2d Cir. 2020) (quoting
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112
S. Ct. 2130, 119 L. Ed. 2d 351 (1992)). Where an
organization “diverts its resources away from its current
activities, it has suffered [**9] an injury that is
independently sufficient to confer organizational
standing.” Connecticut Citizens Def. League, 6 F.4th at
447 (citation omitted). The presence of one party with
standing “is sufficient” to satisfy Article III’s case-orcontroversy requirement. Centro de la Comunidad
Hispana de Locust Valley v. Town of Oyster Bay, 868
F.3d 104, 109 (2d Cir. 2017) (citation omitted).
The NYSRA has standing to pursue its federal claims.
The NYSRA has “devoted time, money, and effort to
informing our members about the Laws’ requirements,
discussing its potential implications, and attempting to
clarify compliance requirements.” These efforts have
included hosting a February 2021 webinar on the
Wrongful Discharge Law. NYSRA’s response to the
Law has diverted time that would have otherwise been
spent on “advocacy on behalf of restaurants and
preparation of training classes,” as well as on “working
to lift COVID-19 restrictions on restaurants and obtain
funding in the State’s budget to provide restaurants
financial relief from the economic harm caused by those
restrictions.” This showing is sufficient to establish injury
in fact under a theory of diverted resources.
II. Federal Law Claims
A. NLRA Preemption
The Plaintiffs principally contend that the Wrongful
Discharge Law is preempted by the federal NLRA.
HN7[ ]
“A
fundamental
principle
of
the
Constitution [**10] is that Congress has the power to
preempt state law.” Crosby v. Nat’l Foreign Trade
Council, 530 U.S. 363, 372, 120 S. Ct. 2288, 147 L. Ed.
2d 352 (2000).
In general, three types of preemption exist: (1)
express preemption, where Congress has
expressly preempted local law; (2) field preemption,
where Congress has legislated so comprehensively
that federal law occupies an entire field of
regulation and leaves no room for state law; and
(3) conflict preemption, where local law conflicts
with federal law such that it is impossible for a party
to comply with both or the local law is an obstacle
to the achievement of federal objectives.
New York SMSA Ltd. Partnership v. Town of
Clarkstown, 612 F.3d 97, 104 (2d Cir. 2010) (citation
omitted). Both field and conflict preemption “are usually
found based on implied manifestations of congressional
intent.” Id. Preemption analysis “begins with the
assumption that the historic police powers of the States
are not to be superseded by federal law unless that is
the clear and manifest purpose of Congress.” Figueroa
v. Foster, 864 F.3d 222, 232 (2d Cir. 2017) (citation
omitted).
HN8[ ] The NLRA does not contain an express
preemption provision. The doctrine of labor law
preemption, therefore, “concerns the extent to which
Congress has placed implicit limits on the permissible
scope of state regulation of activity [*376] touching
upon labor-management relations.” Ass’n of Car Wash
Owners Inc. v. City of New York, 911 F.3d 74, 80 (2d
Cir. 2018) (“Car Wash”) (quoting N.Y. Tel. Co. v. N.Y.
State Dep’t of Labor, 440 U.S. 519, 527, 99 S. Ct. 1328,
59 L. Ed. 2d 553 (1979)).
The Supreme [**11] Court has established two implied
preemption doctrines under the NLRA. Id. The first,
Garmon preemption, is named after the Supreme
Court’s decision in San Diego Bldg. Trades Council v.
Garmon, 359 U.S. 236, 79 S. Ct. 773, 3 L. Ed. 2d 775
(1959). Under Garmon preemption, the NLRA
“preempts state regulation that either prohibits conduct
subject to the regulatory jurisdiction of the National
Labor Relations Board under section 8 of the NLRA or
facilitates conduct prohibited by section 7 of the NLRA.”
Car Wash, 911 F.3d at 80. Section 7 of the NLRA
“guarantee[s] employees the right to organize and
engage in other forms of protected concerted action,”
Page 13 of 18
Rest. Law Ctr. v. City of New York
and § 8 identifies “forms of unfair labor practices.” Id. at
81 (citation omitted). The Plaintiffs do not argue that
Garmon preemption exists here.5
HN9[ ] The second form of NLRA preemption, known
as Machinists preemption after the Supreme Court’s
decision in Lodge 76 Int’l Ass’n of Machinists &
Aerospace Workers, AFL—CIO v. Wis. Emp’t Relations
Comm’n, 427 U.S. 132, 96 S. Ct. 2548, 49 L. Ed. 2d 396
(1976), preempts “state law and state causes of action
concerning conduct that Congress intended to be
unregulated.” Metro. Life Ins. Co. v. Massachusetts, 471
U.S. 724, 749, 105 S. Ct. 2380, 85 L. Ed. 2d 728 (1985)
(“Metropolitan Life”). Machinists preemption “forbids
states and localities from intruding upon the labormanagement bargaining process.” Car Wash, 911 F.3d
at 81 (citation omitted). The doctrine relies
on the understanding that in providing in the NLRA
a framework for self-organization and collective
bargaining, Congress determined both how much
the conduct of unions and employers should be
regulated, and how [**12] much it should be left
unregulated. Under this theory of NLRA
preemption, the crucial inquiry is whether Congress
intended that the conduct involved be unregulated
because such conduct was left to be controlled by
the free play of economic forces.
Id. (citation omitted). In other words, “even regulation
that does not actually or arguably conflict with the
provisions of sections 7 or 8 of the NLRA may interfere
with the open space created by the NLRA.” Id. (citation
omitted).
The critical inquiry under Machinists preemption is
whether state or local regulation “frustrates effective
implementation of the NLRA’s processes.” Id. at 82
(citation omitted). “States are therefore prohibited from
imposing additional restrictions on economic weapons
of self-help, such as strikes or lockouts, unless such
restrictions presumably were contemplated by
Congress.” Golden State Transit Corp. v. City of Los
Angeles, 475 U.S. 608, 614-15, 106 S. Ct. 1395, 89 L.
Ed. 2d 616 (1986) (citation omitted). In Machinists, for
example, the Supreme Court held that Wisconsin could
5 In their complaint of May 28, 2021, the Plaintiffs alleged that
the Wrongful Discharge Law is invalid under Garmon, but do
not pursue this argument in their motion for summary
judgment. Accordingly, the Plaintiffs’ Garmon claim is deemed
abandoned. See Kovaco v. Rockbestos-Surprenant Cable
Corp., 834 F.3d 128, 143 (2d Cir. 2016).
not prohibit a union’s members from refusing to work
overtime as a collective bargaining tactic without
frustrating the NLRA’s comprehensive regulatory
scheme governing labor relations. 427 U.S. at 148-51.
[*377] HN10[ ] The NLRA is concerned with
establishing “an equitable process for determining terms
and conditions [**13] of employment, and not with
particular substantive terms of the bargain that is struck
when the parties are negotiating from relatively equal
positions.” Metropolitan Life, 471 U.S. at 753. States
and localities therefore remain free to set minimum labor
standards that “affect union and nonunion employees
equally, and neither encourage nor discourage the
collective-bargaining processes that are the subject of
the NLRA.” Car Wash, 911 F.3d at 81 (quoting
Metropolitan Life, 471 U.S. at 755). Minimum labor
standards enacted by states under their traditional
police powers appropriately “set a baseline for
employment negotiations.” Id. at 82 (citation omitted).
Thus in Metropolitan Life, the Supreme Court held that
the NLRA did not preempt a Massachusetts law
requiring employers to provide mental health benefits,
including for employees covered by collective
bargaining agreements, because the State law
contained “minimum standards independent of the
collective-bargaining
process
that
devolve
on
employees as individual workers, not as members of a
collective organization.” 471 U.S. at 755 (citation
omitted).
The Second Circuit in Concerned Home Care relied on
these principles to hold that the NLRA did not preempt
New York’s Wage Parity Law, which fixed minimum
rates of compensation for home care aides working in
New York [**14] City and surrounding counties.
Concerned Home Care Providers, Inc. v. Cuomo, 783
F.3d 77, 85 (2d Cir. 2015). Those fixed rates could be
superseded by rates in the largest collective bargaining
agreement covering home care aides. Id. at 85-87. The
court reasoned that the State’s “unexceptional exercise”
of its traditional power to stabilize minimum wages in a
particular industry was not “designed to encourage or
discourage employees in the promotion of their
interests collectively,” and “neither distinguishe[d]
between unionized and non-unionized aides, nor
treat[ed] employers differently based on whether they
employ unionized workers.” Id. at 85 (quoting
Metropolitan Life, 471 U.S. at 755).
For the same reasons, the City’s Wrongful Discharge
Law is a validly enacted minimum labor standard. The
Law is one of general applicability aimed at promoting
Page 14 of 18
Rest. Law Ctr. v. City of New York
job stability for hourly employees in a particular sector – the fast food restaurant industry. The Just Cause
Provision makes no distinction between fast food
employees who are unionized and those who are not. It
regulates the process through which fast food
employees may be lawfully terminated from their
positions and has no impact on the process by which
collective bargaining occurs. HN11[ ] The Law joins a
plethora of valid state and local laws “that form a
backdrop” of rights [**15]
against which both
“employers and employees come to the bargaining
table.” Fort Halifax Packing Co. v. Coyne, 482 U.S. 1,
21, 107 S. Ct. 2211, 96 L. Ed. 2d 1 (1987) (citation
omitted); see also, e.g., Rhode Island Hosp. Ass’n v.
City of Providence ex rel. Lombardi, 667 F.3d 17, 33
(1st Cir. 2011) (rejecting an NLRA preemption challenge
to a worker retention ordinance); St. Thomas–St. John
Hotel & Tourism Ass’n, Inc. v. Gov’t of U.S. Virgin
Islands, 218 F.3d 232, 243-44 (3d Cir. 2000) (rejecting
an NLRA preemption challenge to a wrongful discharge
statute).
The Plaintiffs argue that the Wrongful Discharge Law
invades the collective bargaining process. They assert
that the Law’s protections against the arbitrary
termination of employment are too detailed and
improperly tread on an area that unions typically
address during collective [*378] bargaining. HN12[ ]
While states may not regulate the collective bargaining
process, they retain broad authority to regulate
substantive labor standards. Car Wash, 911 F.3d at 82.
Preemption may not be lightly inferred, and the
regulation of the process for termination of employment
— even through a detailed law — is not the regulation of
the collective bargaining process and is not preempted
by the NLRA.
The Plaintiffs next contend that the Wrongful Discharge
Law is preempted by the NLRA because its Arbitration
Provision favors unions. They reason that employers
and unions typically negotiate a no-strike agreement in
exchange for an agreement to arbitrate. Because of the
Law, employers [**16] must submit to arbitration at an
employee’s request but can’t prevent a strike. Whether
the absence of this quid pro quo favors unions is
debatable. HN13[ ] But, for purposes of a preemption
analysis, the creation of the duty to arbitrate is not fatal.
Both union and nonunion employees are affected by
the same Law in equal ways: they may request and
enforce a request to arbitrate covered disputes.6
The Plaintiffs next argue that the Wrongful Discharge
Law invades the collective bargaining process by
denying employers the NLRA-protected right to wield
lockouts as an “economic weapon” during labor
disputes. They are wrong; HN15[ ] the Wrongful
Discharge Law does not prevent covered employers
from engaging in lockouts.
HN16[ ] “A lockout occurs when an employer
temporarily shuts down its business and advises
employees that they will not be allowed to work until
contract agreement is reached between the employer
and the union.” Labor-Management Relations: Strikes,
Lockouts and Boycotts, ch. 9, § 9:1 (2d ed., 2021-2022).
In connection with a law that bars the hiring of strikebreakers, the City’s administrative code defines a
lockout as
[a] refusal by an employer to permit his employees
to work as a result of a dispute [**17] with such
employees that affects wages, hours and other
terms and conditions of employment of said
employees, provided, however, that a lockout shall
not include a termination of employment for
reasons deemed proper under New York state and
federal law.
N.Y.C. Admin. Code § 22-501 (emphasis added).
HN17[ ] The Wrongful Discharge Law protects
individual employees who are “discharged,” which
includes a reduction of 15% or more in hours, by
defining a process for the discharge of that individual
from employment. It does not impose liability on
employers who have locked out all employees due to a
dispute with its employees over the terms of
employment.7 The Plaintiffs do not suggest that the
extensively to the legislative history of the Wrongful
Discharge Law, including public statements by sitting
Councilmembers. HN14[ ] When examining the preemptive
effect of a federal statute, a court looks to “the text and context
of the law in question and [is] guided by the traditional tools of
statutory interpretation.” Virginia Uranium, Inc. v. Warren, 139
S. Ct. 1894, 1901, 204 L. Ed. 2d 377 (2019). “Where the plain
meaning of the text is clear, [the] inquiry generally ends there.”
Jingrong v. Chinese Anti-Cult World All. Inc., 16 F.4th 47, 57
(2d Cir. 2021) (citation omitted). The plain meaning of the
Wrongful Discharge Law is not disputed, and no construction
of the text necessitating reference to the legislative history is
called for in this case.
7 It is noteworthy that the Plaintiffs bring a facial challenge to
6 To
further support their arguments, the Plaintiffs cite
the Wrongful Discharge Law, and not an as-applied
challenge.
Page 15 of 18
Rest. Law Ctr. v. City of New York
NLRA as a general matter preempts the City from
adopting regulations that impact
[*379]
the
termination of employment. After all, it is common for
state and local authorities to regulate the terms on
which private employers may terminate employees. For
instance, local laws ban termination of employment for
discriminatory or retaliatory reasons. See, e.g., N.Y.
Exec. L. § 290 et seq.; N.Y.C. Admin. Code §§ 8-101 et
seq. Other local laws prevent the termination of
employment when a business changes hands. See,
e.g., Rhode Island Hosp. Ass’n, 667 F.3d at 33.
Finally, the Plaintiffs point to two decisions from the
Ninth and Seventh Circuits, Chamber of Commerce v.
Bragdon, 64 F.3d 497 (9th Cir. 1995), and [**18] 520
South Michigan Avenue Associates v. Shannon, 549
F.3d 1119 (7th Cir. 2008), to argue that the Law is
preempted because it targets employers within a
particular industry. These decisions have not been
followed in this Circuit. See Concerned Home Care, 783
F.3d at 86 n.8; see also Rondout, 335 F.3d at 169
(distinguishing Bragdon). HN18[ ] Moreover, the Ninth
Circuit has narrowed its decision in Bragdon, finding
that “the NLRA does not authorize us to pre-empt
minimum labor standards simply because they are
applicable only to particular workers in a particular
industry.” Associated Builders & Contractors of S.
California, Inc. v. Nunn, 356 F.3d 979, 990 (9th Cir.
2004), as amended, No. 02-56735, 2004 WL 292128
(9th Cir. Feb. 17, 2004)). Shannon, which relied on
Bragdon, has similarly lost its persuasive authority. See
Shannon, 549 F.3d at 1136. More significantly, this
Circuit has upheld laws affecting the conditions of
employment of workers in a particular industry against
challenges that they were preempted by the NLRA. See,
e.g., Car Wash, 911 F.3d at 84 (reduced surety bond for
a business license to operate a car wash if the employer
was party to a collective bargaining agreement);
Concerned Home Care, 783 F.3d at 85-86 (setting
minimum wage rates for home care aides); Rondout
Elec., Inc. v. N.Y. State Dep’t of Labor, 335 F.3d 162,
168-70 (2d Cir. 2003) (setting minimum benefits for
employees on public works projects).
HN19[ ] For the reasons explained, the Wrongful
Discharge Law does not “frustrate effective
implementation of the [NLRA’s] processes.” Machinists,
427 U.S. at 148 (quoting R.R. Trainmen v. Jacksonville
Terminal Co., 394 U.S. 369, 380, 89 S. Ct. 1109, 22 L.
Ed. 2d 344 (1969)). The City’s cross-motion for
summary judgment on the claim that the Wrongful
Discharge Law is preempted by the NLRA [**19] is
therefore granted.
B. Dormant Commerce Clause
The Plaintiffs allege that the Wrongful Discharge Law is
unconstitutional under the Commerce Clause of the
U.S. Constitution, which empowers Congress “to
regulate Commerce . . . among the several States.”
U.S. Const. art. I, § 8, cl. 3. HN20[ ] The Commerce
Clause also carries a “corresponding ‘negative’ or
‘dormant’ aspect that limits the power of local
governments to enact laws affecting interstate
commerce.” New York Pet Welfare Ass’n, Inc. v. City of
New York, 850 F.3d 79, 89 (2d Cir. 2017) (“NYPWA”)
(citation omitted). The Supreme Court has explained
that “[o]ur dormant Commerce Clause jurisprudence . . .
is driven by a concern about economic protectionism -that is, regulatory measures designed to benefit in-state
economic
interests
by
burdening
out-of-state
competitors.” McBurney v. Young, 569 U.S. 221, 235,
133 S. Ct. 1709, 185 L. Ed. 2d 758 (2013) (quoting New
Energy Co. of Ind. v. Limbach, 486 U.S. 269, 108 S. Ct.
1803, 100 L. Ed. 2d 302 (1988)). “Analysis of state and
local laws under the dormant Commerce Clause treads
a well-worn path. A court must first assess whether the
challenged law discriminates against interstate
commerce, or regulates [*380] evenhandedly with only
incidental effects on interstate commerce.” VIZIO, Inc. v.
Klee, 886 F.3d 249, 254 (2d Cir. 2018) (citation
omitted). Discrimination “means differential treatment of
in-state and out-of-state economic interests that
benefits the former and burdens the latter.” NYPWA,
850 F.3d at 89.
HN21[ ] “The Supreme Court has recognized three
modes of discrimination against interstate commerce: a
law may discriminate on its [**20] face, harbor a
discriminatory purpose, or discriminate in its effect.” Id.
at 90. A discriminatory law is subject to heightened
scrutiny and is permissible “only if the state shows [the
law is] demonstrably justified by a valid factor unrelated
to economic protectionism.” Id. at 89-90 (quoting
Wyoming v. Oklahoma, 502 U.S. 437, 454, 112 S. Ct.
789, 117 L. Ed. 2d 1 (1992)). “This justification must
show a legitimate local purpose that cannot be
adequately served by reasonable nondiscriminatory
alternatives.” Id. at 90 (quoting Dep’t of Revenue of Ky.
v. Davis, 553 U.S. 328, 338, 128 S. Ct. 1801, 170 L. Ed.
2d 685 (2008)).
By contrast, a nondiscriminatory law that only imposes
“incidental burdens on interstate commerce” is analyzed
under the more forgiving balancing test set out in Pike
v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S. Ct. 844,
25 L. Ed. 2d 174 (1970). See VIZIO, 886 F.3d at 254
Page 16 of 18
Rest. Law Ctr. v. City of New York
(citation
omitted).
Under
the
Pike
test,
a
nondiscriminatory law will be upheld “unless the
challenger shows that the burden imposed on interstate
commerce is clearly excessive in relation to the putative
local benefits.” NYPWA, 850 F.3d at 90 (quoting Pike,
397 U.S. at 142).
1. Discriminatory Effect
The Plaintiffs contend that the Wrongful Discharge Law
has a discriminatory effect on interstate commerce since
it restricts its applications to those businesses with thirty
or more locations within the United States and to
franchisees that do business with national brands. They
argue that this jurisdictional limitation puts interstate
businesses at [**21] a competitive disadvantage when
compared to businesses located exclusively within New
York State. HN22[ ] The Wrongful Discharge Law
does not violate the dormant Commerce Clause.
and the court declined to do so for the first time in
VIZIO. Id. This principle applies with equal force here.
The Plaintiffs rely on the Eleventh Circuit’s decision in
Cachia v. Islamorada, 542 F.3d 839 (11th Cir. 2008), to
support their claim that the Wrongful Discharge Law is
discriminatory. Cachia held that a locality’s zoning law
that excluded “formula restaurants” had the “practical
effect of discriminating against interstate restaurants.”
Id. at 843. Cachia is not instructive in this case. The
zoning law at issue in Cachia prohibited national chain
restaurants from entering local commerce, while the
Wrongful Discharge Law regulates the “methods of
operation” for fast food restaurants and only to the
extent that they employ hourly wage employees in the
City. See id. HN24[ ] The Law, accordingly, imposes
no more “than an indirect burden on interstate
restaurant operations.” [**23] Id.
2. The Pike Test
HN23[ ] The Wrongful Discharge Law does not
control out-of-state commerce or require out-of-state
commerce to be conducted in a manner consistent with
the Law. Moreover, it makes no express distinction
between national fast food chains and chains with more
than thirty locations that are located solely within New
York State. The Law does not target chains because
they are related to out-of-state brands. The provision of
the Law on which the Plaintiffs focus this argument is
simply a neutral metric to describe the scale of the
enterprise that must comply with the Law. Indeed, the
metric is part of the City’s Fair Workweek Law, which
the Wrongful Discharge Law amended. N.Y.C. Admin.
Code § 20-1201.
The Plaintiffs insist that, its facial neutrality
notwithstanding, the City’s inability to identify any
intrastate restaurant brand or franchise that is governed
by the Law is fatal to the Law’s constitutionality. Even
without an example of a purely intrastate business of a
qualifying size, the Law does not benefit in-state
restaurant chains “at the expense of out-of-state
competitors.” [**22] Grand River Enters. Six Nations,
Ltd. v. Pryor, 425 F.3d 158, 169 (2d Cir. 2005) (citation
omitted). Only those establishments operating within the
City are impacted by the Law.
In VIZIO, the Second Circuit declined to find a
regulation discriminatory where it referred to national
market share in deciding [*381] which in-state firms
would be governed by the local regulation. VIZIO, 886
F.3d 249 at 255. Reference to national market share
had “not before been acknowledged in [the Second
Circuit’s] dormant Commerce Clause jurisprudence,”
Because the Wrongful Discharge Law imposes no
more than an incidental burden on the interstate market
for fast food restaurants, the Pike test must be applied
to determine whether the burdens imposed by the
Wrongful Discharge Laws are “clearly excessive” in
relation to its local benefits. Pike, 397 U.S. at 142.
“HN25[ ] The Pike test is often directed at
differentiating ‘protectionist measures’ from those that
‘can fairly be viewed as . . . directed to legitimate local
concerns.'” VIZIO, 886 F.3d at 259 (quoting Philadelphia
v. New Jersey, 437 U.S. 617, 624, 98 S. Ct. 2531, 57 L.
Ed. 2d 475 (1978)). A state may validly impose
incidental burdens on interstate commerce “to promote
safety or general welfare.” Id. To violate the Commerce
Clause, at minimum, the burden imposed on interstate
commerce must be shown to be “qualitatively or
quantitatively different from that imposed on intrastate
commerce.” Town of Southold v. Town of E. Hampton,
477 F.3d 38, 50 (2d Cir. 2007) (citation omitted).
“Burdens supportive of an unconstitutional finding have
been recognized in the following situations: regulations
that have a disparate impact on in-versus out-of-state
entities, laws that regulate beyond the state’s borders,
and laws that create regulatory inconsistencies between
states.” VIZIO, 886 F.3d at 259 (citation omitted); see
also Brown & Williamson Tobacco Corp. v. Pataki, 320
F.3d 200, 208-09 (2d Cir. 2003).
Applying the Pike test, the Law does not violate the
dormant Commerce Clause. The Law is a general
welfare [**24] statute. The costs of employing hourly
wage workers in the City while complying with the Law
are not “qualitatively or quantitatively different” for
Page 17 of 18
Rest. Law Ctr. v. City of New York
intrastate or interstate businesses. See Town of
Southold, 477 F.3d at 50. The regulatory costs of the
Law are not distributed based on distinction between instate and out-of-state enterprises. HN26[ ] Since the
Commerce Clause “protects the interstate market, not
particular interstate firms,” NYWPA, 850 F.3d at 90
(quoting Exxon Corp. v. Maryland, 437 U.S. 117, 127,
98 S. Ct. 2207, 57 L. Ed. 2d 91 (1978)), there is no
basis to find that the Wrongful Discharge Law runs
afoul of the Pike test.
C. FAA Preemption
The Plaintiffs allege that the Arbitration Provision in the
Wrongful Discharge Law is preempted by the FAA. The
law regarding preemption is set forth above. The
Plaintiffs do not suggest that the FAA contains an
express provision that preempts the Arbitration
Provision or rely on a theory of field preemption. They
appear to assert that the Arbitration Provision [*382]
conflicts with the FAA such that it is impossible for a
party to comply with both.
HN27[ ] “The FAA requires courts to enforce
arbitration agreements according to their terms.” Lamps
Plus, Inc. v. Varela, 139 S. Ct. 1407, 1415, 203 L. Ed.
2d 636 (2019) (quoting Epic Sys. Corp. v. Lewis, 138 S.
Ct. 1612, 1621, 200 L. Ed. 2d 889 (2018)). Specifically,
the FAA provides that
A written provision in any . . . contract evidencing a
transaction involving commerce to settle by
arbitration a controversy [**25] thereafter arising
out of such contract or transaction, or the refusal to
perform the whole or any part thereof, or an
agreement in writing to submit to arbitration an
existing controversy arising out of such a contract,
transaction, or refusal, shall be valid, irrevocable,
and enforceable, save upon such grounds as exist
at law or in equity for the revocation of any
contract.
9 U.S.C. § 2 (emphasis added). States may not prohibit
private agreements to arbitrate. See AT&T Mobility LLC
v. Concepcion, 563 U.S. 333, 341, 131 S. Ct. 1740, 179
L. Ed. 2d 742 (2011).
HN28[ ] The Arbitration Provision of the Wrongful
Discharge Law does not prohibit or impair the
enforcement of private arbitration agreements. Private
parties, including fast food employers and employees,
remain free to agree to submit disputes to arbitration,
and the Wrongful Discharge Law does not interfere
with the enforcement of such agreements.
In arguing that the FAA prohibits the arbitration scheme
enacted in the Wrongful Discharge Law, the Plaintiffs
chiefly rely on the Supreme Court’s description of the
“foundational FAA principle” that “[a]rbitration is strictly a
matter of consent,” and that arbitrators “derive their
powers from the parties’ agreement to forgo the legal
process and submit their disputes to private dispute
resolution.” [**26] Lamps Plus, 139 S. Ct. at 1415-16
(quoting Granite Rock Co. v. Teamsters, 561 U.S. 287,
299, 130 S. Ct. 2847, 177 L. Ed. 2d 567 (2010) and
Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S.
662, 682, 130 S. Ct. 1758, 176 L. Ed. 2d 605 (2010)).
HN29[ ] The FAA, however, is silent on the subject of
compelled arbitration. The Plaintiffs have failed to
demonstrate that the FAA preempts the Arbitration
Provision of the Wrongful Discharge Law.
III. Supplemental Jurisdiction
The Plaintiffs also bring four state law claims. HN30[ ]
A district court may decline to exercise supplemental
jurisdiction over a state law claim if “the claim raises a
novel or complex issue of State law” and/or the district
court “has dismissed all claims over which it has original
jurisdiction.” 28 U.S.C. § 1367(c)(1), (3). Once a court
has dismissed all federal claims, it must decide whether
the traditional values of “economy, convenience,
fairness, and comity” counsel against the exercise of
supplemental jurisdiction. Catzin v. Thank You & Good
Luck Corp., 899 F.3d 77, 85 (2d Cir. 2018) (citation
omitted).
In weighing these factors, the district court is aided
by the Supreme Court’s additional guidance in
[Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 108
S. Ct. 614, 98 L. Ed. 2d 720 (1988),] that in the
usual case in which all federal-law claims are
eliminated before trial, the balance of factors will
point toward declining to exercise jurisdiction over
the remaining state-law claims.
Kolari v. New York-Presbyterian Hosp., 455 F.3d 118,
122 (2d Cir. 2006).
There is no reason in this case to depart from the
ordinary practice of dismissing the remaining state law
claims. Each of [*383] the federal claims has [**27]
been resolved. Judicial economy and comity weigh in
favor of dismissal.
The Plaintiffs argue that judicial economy would be
served by deciding the state law claims raised in this
action. The legal framework for addressing the federal
and state law claims differs substantially. In addition,
Page 18 of 18
Rest. Law Ctr. v. City of New York
this litigation presents novel and complex issues of
state law. Accordingly, the Court will not exercise
supplemental jurisdiction over the state law claims.
Conclusion
The Plaintiffs’ July 20, 2021 motion for summary
judgment on their federal claims is denied. The City’s
cross-motion is granted with respect to the Plaintiffs’
federal claims. The Court declines to exercise
supplemental jurisdiction over the state law claims and
they are dismissed without prejudice to refiling in state
court. The Clerk of Court shall close the case.
Dated: New York, New York
February 10, 2022
/s/ Denise L. Cote
DENISE L. COTE
United States District Judge
End of Document
LORI BAGGOT INSTRUCTOR MANAGER
FROM THE PROFESSOR…GOOD FAITH AND FAIR DEALINGS and CASE EXAMPLE
Overall Rating:
COLLAPSE
Good afternoon, Graduate Students. I hope you have a nice weekend. I wanted to
clarify some information as to the employment-at-will doctrine and a specific
exception. The “implied covenant of good faith and fair dealing” is a contract term
and is only applicable when the employer is trying to get out of a contract-type
obligation owed to an employee. For example, paying retirement benefits or a
commission for a sale. When there is a contract provision of some kind that an
employee is owed, the employer cannot “in bad faith” fire the employee to get out
of its obligation.
Also, when parties contract, this provision assumes that the parties will act in good
faith and deal fairly with one another at the bargaining table. If one party does not,
like commits fraud, this is a breach of the implied covenant of good faith and fair
dealing. Remember – an employee-at-will is one that does not have an
employment contract that dictates the terms of their employment. Therefore, this
“good faith doctrine” does not apply if there is no contract-type provision an
employee is owed or, an employee does not have an actual employment
contract. Please let me know if you have questions.
Check out a wrongful termination case below and again – have a great Friday and
weekend.
[Berg v. Tittabaswasee Twp.]
Court of Appeals of Michigan
December 2021
FACTS:
• Plaintiff was police officer and detective from 2008 to 2018.
• In 2018, Plaintiff was investigating a Catholic priest.
• In October 2018, plaintiff’s employment was terminated and filed suit
alleging wrongful termination in 1. violation of Michigan’s public policy, 2.
violation of Michigan’s Whistleblower Protection Act (WPA) and 3.
violation of the Elliot Larsen Civil Rights Act (ELCRA).
•
Plaintiff argues he was fired for refusing to cease his investigation of the
priest, despite pressure and orders of his police chief.
• Defendant denied plaintiff’s assertions.
TRIAL COURT: Dismissed the plaintiff’s case.
COURT OF APPEALS: Affirmed
WHY?
1. Public policy exception: This cause of action is overridden by the Michigan
Whistleblower’s Protection Act. When there is specific legislation that protects an
employee, and the employee asserts that right – it is the exclusive remedy. Thus,
the plaintiff cannot argue a public policy exception AND retaliation protection
because of the same action.
“The remedies provided by the WPA are exclusive and not cumulative. Thus,
when a plaintiff alleges discharge in retaliation for engaging in activity
protected by the WPA, [t]he WPA provides the exclusive remedy for such
retaliatory discharge and consequently preempts common-law public-policy
claims arising from the same activity.”
2. Michigan’s Whistleblower Protection Act (WPA): Provides protection for
two types of whistleblowers:
(1) those who report, or about to report, violations of law, regulation,
or rule to a public body, and
(2) those who are requested by a public body to participate in an
investigation held by that public body or in a court action.”
Plaintiff alleged he was fired for refusing to cease his investigation into the priest
and therefore, he was refusing to violate the law or circumvent his job
duties. Thus, he could not be Type 1 of the Act.
As to Type 2 – there is nothing that forbids or criminalizes ceasing a criminal
investigation and it does not make you a whistleblower to be asked to stop
investigating.
3. Violation of Elliot Larsen Civil Rights Act: The ELCRA was modeled after
Title VII of the Civil Rights Act and protects employees from wrongful
termination for discriminatory reasons including retaliation for reporting certain
criminal conduct. Here, the plaintiff was not reporting conduct against himself in
violation of ELCRA but rather investigating an alleged crime and civil rights
violation (1).
SOURCE:
1. Berg v. Tittabawasee Twp., 2021 Mich. App. LEXIS 7215, 2021 WL 6064357
(Court of Appeals of Michigan December 21, 2021, Decided) Retrieved on
February 10, 2023 from https://advance-lexis-
com.libdatab.strayer.edu/api/document?collection=cases&id=urn:contentItem:
64C8-9XS1-F900-G0V3-00000-00&context=1516831