CHICAGO — A federal judge has rejected a challenge to Chicago’s Fair Workweek scheduling ordinance, handing defeat to an association of building owners and managers who had argued the ordinance unconstitutionally targets their businesses.
The Building Owners and Managers Association of Chicago filed a November 2019 lawsuit trying to stop the city from enforcing an ordinance that regulates employers’ scheduling processes. That action asked a judge to deem the ordinance unconstitutional for targeting only specific kinds of employers. BOMA also argued the ordinance violated state and federal equal protection clauses as well as the city’s home rule authority, in addition to being pre-empted by the National Labor Relations Act.
According to Durkin, the city passed the ordinance in July 2019 to go into effect the following July. The new rules require a large number of employers to publish workers’ shift schedules at least 10 days in advance of the first work day in each new schedule. Should that schedule change after posting, employers must provide affected workers with an additional amount equal to one hour of pay at the regular pay rate, a concept called “predictability pay.” For shifts the employer cancels within 24 hours of scheduled start time, the workers are entitled to half their regular pay for any canceled hours.
Durkin said although the U.S. Supreme Court has recognized two implicit forms of NLRA preemption, neither applies to the BOMA suit. The first, drawn from a 1976 opinion involving the International Association of Machinists & Aerospace workers, requires a law to affect both union and nonunion employees and have no effect of collective bargaining. Durkin said the city ordinance passes muster by covering “many types of workers across seven relatively broadly defined industries.”
He also noted cities and states have shown the ability to regulate mandatory bargaining subjects without promoting or dissuading the act of bargaining itself, eliminating particular negotiating tools or dictating contractual negotiations.
BOMA had argued the ordinance also encourages lawsuits against employers. But Durkin rejected that argument, as well, saying the ordinance “requires employees to pursue informal dispute resolution before filing suit.”
The second pre-emption, from the 1959 opinion in San Diego Building Trades Council v. Garmon, “prohibits the regulation of activity the NLRA arguably protects or prohibits,” Durkin wrote. He disagreed with BOMA’s argument the ordinance interferes with workers’ rights to collectively bargain, noting an opt-out provision allowing businesses and employees to mutually waive the contested provisions.
Turning to the equal protection claims, Durkin said the city correctly argued there is a rational basis for an ordinance that applies only to certain employers, with several justifications “readily apparent." He noted the ordinance's language specifically applying the rules to companies that employ at least 100 people “is appropriate because they are better able to absorb the costs of the regulations, and because their practices have an impact on a greater number of Chicagoans and their families as well as the city’s economy more generally. BOMA does not argue otherwise.”
Durkin further said it makes sense to cover seven industries where demand for workers fluctuates and to apply rules to people who earn less than $50,000 per year or $26 per hour, “given the potentially serious economic and personal impacts a late schedule change could have on them over others with more income. That is especially so because such employees may hold multiple jobs.”
In challenging compliance with Chicago’s home rule powers, BOMA argued regulating employment terms is a statewide concern. The city noted the rule “applies only to employees who spend a majority of their work time physically in Chicago,” Durkin wrote, “and specifically requires the city’s Department of Business Affairs and Consumer Protection to study its effectiveness so that it can be tailored further to local needs.”
He further agreed with the city that “BOMA has no standing to challenge the ordinance’s private right of action provision, and that its argument fails on the merits in any case.”
Durkin dismissed the case without prejudice, granting BOMA until Feb. 18 to amend its complaint.
BOMA is represented in the matter by lawyers from Cozen O’Connor, of Chicago.