On July 14, 2016, New York City Mayor Bill de Blasio signed an executive order, effective immediately, that requires large retail establishments which receive at least $1 million in government assistance and operate on a city development project to enter into labor peace agreements with unions; thereby making it easier for their workers to unionize.

Specifically, the executive order applies to retail and food service businesses that have 10 or more employees and occupy 15,000 square feet or more in development projects. These businesses must agree, “at a minimum,” to maintain a “neutral posture” with respect to unions’ efforts to represent workers. The union must agree to refrain from “picketing, work stoppages, boycotts or other economic interference.”

The “labor peace clause” that allows the workers to unionize would remain in effect for the longer of (1) 10 years after the project began or (2) the term of financial assistance from the city.

Possible Legal Challenges

The executive order may conflict with National Labor Relations Act (“NLRA”) rights by requiring covered employers to enter into a labor peace agreement with a union even before the employer hires any employees. We anticipate that there may be legal challenges to the executive order on the basis that the federal NLRA preempts the executive order. Pending any anticipated challenges, the executive order stands and should be complied with by covered employers.

We will keep you apprised of any developments regarding the executive order.

Takeaway for Employers

The executive order does not apply to projects awarded financial assistance prior to July 14, 2016. Retail and food service employers should weigh the costs and benefits of entering into labor peace agreements before agreeing to contracts which would bring them within coverage under the executive order.

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If you have any questions regarding the executive order, please do not hesitate to contact us.
212-682-0020 | PutneyLaw.com.