On July 14, 2016, New York City Mayor Bill de Blasio promulgated an Executive Order that requires all large retail or food service employers operating on the premises of a “City Development Project” to sign a so-called “Labor Peace Agreement” with any union that seeks to represent their employees.  Under the agreement, the employer agrees to “maintain a neutral posture” in the union’s efforts to organize their employees.   

Summary of the Order

• The order applies to all “Retail or Food Establishments” on the premises of any “City Development Project” that is expected to be larger than 100,000 square feet, or, in the case of a residential project, larger than 100 units, that sell goods, food, or drinks and: (a) employ, or anticipate employing, 10 or more employees and (b) occupies, or is anticipated to occupy, in excess of 15,000 gross square feet on the premises of a City Development Project.
• “City Development Project” refers to certain projects subject to an agreement between a developer, as a receiver of “Financial Assistance,” and the New York City Department of Housing Preservation and Development or a “City Economic Development Entity” in which the developer receives or is expected to receive no less than one million dollars of “Financial Assistance” from the City.
• “Financial Assistance” means discretionary assistance for the improvement or development of real property, economic development, job retention and growth, or other similar purposes, and that is provided either (a) by the city, or (b) indirectly by a city economic development entity paid in whole or in part by the city. Financial assistance includes, but is not limited to, cash payments or grants, bond financing, tax abatements or exemptions, tax increment financing, filing fee waivers, energy cost reductions, etc. “Financial assistance” does not include as-of-right assistance or benefits given any person based on state or local legislation and that is non-discretionary.¹
• A “City Economic Development Entity” is a local development corporation, not-for-profit corporation, public benefit corporation, or other entity that provides or administers economic development benefits and with which the department of small business services serves as a liaison with the City.²
• The Order applies only prospectively from July 14, 2016.  Therefore, it does not apply to City Development Projects that began prior to, or that received financial assistance authorized before that date.

Precedents

So-called “labor peace” and “project labor” agreements have found favor in various municipalities and states, including New York.  For example, the State’s Public Authorities Law requires hotels and convention center operators and their contractors and subcontractors employing more than 15 workers to negotiate a “labor peace agreement” with a labor organization that represents hotel works.

Implications

Organized labor has recently looked to Mayor de Blasio for assistance in other arenas well.  Executive Order No. 19 follows recent amendments to the NYC Displaced Building Service Workers Protection Act, which expanded the protections afforded to employees of a building services’ contractor who takes over the provision of such services from another contractor.  Among other things, new job titles are included, the salary cap for a “building service employee” has been raised from $25.00 per hour to $35.00 per hour, and the law now covers not just building owners, but also tenants that rent more than 35,000 sq. ft.

These kinds of state and local laws are proliferating, and they continue to raise challenging issues as to whether they are preempted by federal labor laws.