Bldg. Owners & Managers Ass'n of Chi. v. City of Chi.
| Citation | 513 F.Supp.3d 1017 |
| Decision Date | 19 January 2021 |
| Docket Number | No. 19 CV 7212,19 CV 7212 |
| Parties | BUILDING OWNERS AND MANAGERS ASSOCIATION OF CHICAGO, Plaintiff, v. The CITY OF CHICAGO, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Jeffrey Brian Greenspan, Jeremy J. Glenn, Michael James Kraft, Jack J. Carriglio, Cozen O'Connor, Chicago, IL, for Plaintiff.
Andrew W. Worseck, Oscar Pina, Jordan Alexander Rosen, City of Chicago, Department of Law, Chicago, IL, for Defendant.
Plaintiff Building Owners and Managers Association of Chicago ("BOMA") filed this action seeking a declaration that the Chicago Fair Workweek Ordinance is preempted by the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151 et seq. , violates the equal protection clauses of the Illinois and United States constitutions, and violates the City of Chicago's (the "City") home rule authority. R. 1. The City moved to dismiss BOMA's complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. R. 17. For the following reasons, that motion is granted.
A Rule 12(b)(6) motion challenges the "sufficiency of the complaint." Berger v. Nat. Collegiate Athletic Assoc. , 843 F.3d 285, 289 (7th Cir. 2016). A complaint must provide "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), sufficient to provide defendant with "fair notice" of the claim and the basis for it. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). This standard "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). While "detailed factual allegations" are not required, "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. The complaint must "contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). " ‘A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ " Boucher v. Fin. Sys. of Green Bay, Inc. , 880 F.3d 362, 366 (7th Cir. 2018) (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ). In applying this standard, the Court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Tobey v. Chibucos , 890 F.3d 634, 646 (7th Cir. 2018).
In July 2019, the Chicago City Council joined a growing number of states and municipalities that have enacted so-called "predictive scheduling" laws, passing the Chicago Fair Workweek Ordinance to regulate employment scheduling practices in certain industries (the "Ordinance").1 See R. 1 ¶ 11. The Ordinance generally provides that beginning in July 2020, employers within covered industries must (among other things): provide covered employees with an estimate of projected days and hours of work for the first ninety days of employment; give employees at least ten days’ advance notice of their work schedule (increasing to fourteen days’ notice beginning in July 2022); allow employees to decline any previously unscheduled hours the employer adds to the schedule after that notice deadline; and, if the employer alters the schedule after the notice deadline, provide the affected employees with additional compensation (with certain exceptions). Id. ¶¶ 24, 25 (citing Ordinance §§ 1-25-040(b), 1-25-050(a)-(b)). The Ordinance also prohibits an employer from retaliating against an employee for exercising his or her rights under the Ordinance and provides employees with a private cause of action. Id. ¶¶ 28, 29 (citing Ordinance §§ 1-25-100(a)-(b), 1-25-140). But its requirements are waivable if the employer and any union expressly agree in a collective bargaining agreement not to apply the Ordinance's terms ("Opt-Out Provision"). See id. ¶ 30 () (quoting Ordinance § 1-25-030).
Generally speaking, the Ordinance applies to employers with 100 or more employees, or at least 250 employees in the case of a non-profit organization, that are engaged in the following seven industries: building services; healthcare; hotels; manufacturing; restaurants; retail; and warehouse services. Id. ¶ 12 (citing Ordinance § 1-25-020). Covered employees are those who: (1) earn $26.00 an hour or less (if paid hourly) or $50,000 per year or less (if paid on a salary basis); and (2) spend the majority of their work time in Chicago. Id.
BOMA is a not-for-profit association representing the interests of Chicago office building owners and managers, as well as companies that provide janitorial, security, and other building services to office buildings in Chicago. Id. ¶ 8. BOMA represents its members in multi-employer collective bargaining negotiations with labor unions that in turn represent its members’ employees. Id. ¶ 31. These negotiations generally result in collective bargaining agreements that are three years in duration. Id. One such collective bargaining agreement is set to expire this Spring, a second will expire in Spring 2022, and a third will expire in Spring 2023. Id. ¶ 33.
BOMA's complaint seeks a declaratory judgment that the Ordinance: (1) is preempted by the NLRA (Count I); (2) violates the federal and Illinois equal protection clauses (Counts II and III); and (3) violates the City's home rule authority (Count IV). See generally id. The City moves to dismiss the complaint in its entirety for failure to state a claim. The Court considers the parties’ arguments on each count in turn below.
Count I alleges that the Ordinance is preempted by the NLRA. Id. ¶ 46. The NLRA does not contain an express preemption provision, but the Supreme Court has recognized two forms of implicit preemption: (1) Machinists preemption; and (2) Garmon preemption. See 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) ; San Diego Bldg. Trades Council v. Garmon , 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959). BOMA's complaint alleges that both apply, while the City maintains that neither applies. See R. 18-1 at 8. The Court takes each in turn.
Machinist Preemption. The Machinists preemption doctrine forbids the regulation of "conduct that Congress intended ‘be unregulated [and] left to be controlled by the free play of economic forces.’ " Chamber of Commerce of U.S. v. Brown , 554 U.S. 60, 65, 128 S.Ct. 2408, 171 L.Ed.2d 264 (2008) (quoting Machinists , 427 U.S. at 140, 96 S.Ct. 2548 ). It prevents interference with the "economic weapons of self-help" that parties to a labor dispute may use in the bargaining process, such as strikes or lock-outs. Golden State Transit Corp. v. City of Los Angeles , 475 U.S. 608, 615, 106 S.Ct. 1395, 89 L.Ed.2d 616 (1986) ; Fort Halifax Packing Co. v. Coyne , 482 U.S. 1, 20, 107 S.Ct. 2211, 96 L.Ed.2d 1 (1987). However, states nevertheless "possess broad authority under their police powers to regulate employment relationships to protect workers," including by way of example through "[c]hild labor laws, minimum and other wage laws, [and] laws affecting occupational health and safety." Metropolitan Life Ins. Co. v. Massachusetts , 471 U.S. 724, 756, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985). Indeed, "the establishment of labor standards falls within the traditional police power of the State." Fort Halifax , 482 U.S. at 21, 107 S.Ct. 2211. Accordingly, a law that merely "establishes a minimum labor standard that does not interfere with collective bargaining" is not preempted. 520 S. Mich. Ave. Assocs., Ltd. v. Shannon , 549 F.3d 1119, 1129 (7th Cir. 2008). In short, preemption in this area "should not be lightly inferred." Fort Halifax , 482 U.S. at 21, 107 S.Ct. 2211. The United States Supreme Court has held that a minimum labor standard is a law that: (1) affects union and nonunion employees equally; and (2) neither encourages nor discourages collective bargaining. See Id. at 20, 107 S.Ct. 2211 ; Metro. Life , 471 U.S. at 753-55, 105 S.Ct. 2380.
According to BOMA, the Ordinance fails under this test. First, BOMA contends that the Ordinance is not a minimum labor standard because it applies to only a small segment of the working population, and thus is not a "law of general application" of the type the Seventh Circuit would allow. R. 28 at 8-11. BOMA relies exclusively on the Seventh Circuit's decision in Shannon . But that case is easily distinguished. There, an Illinois law known as the One Day Rest in Seven Act broadly applied to covered employees and employers throughout the state, regulating meal and rest breaks. 549 F.3d at 1121-22. At issue was an amendment to the Act that provided greater protections to certain covered employees. Ultimately, the court concluded that the amendment was preempted under Machinists in large part because it applied "to only one occupation (room attendants), in one industry (the hotel industry), in one county (Cook county)." Id. at 1130. As such, it was too narrow to be considered a law of general application. Id. at 1132.
In contrast, the Ordinance applies to the entire area over which the City has power to legislate, and concerns many types of workers across seven relatively broadly defined industries. It is broader in application than other laws that passed muster under Machinists , many of which applied to just one industry. See, e.g. , Am. Hotel and Lodging Ass'n v. City of Los Angeles , 834 F.3d 958, 960 (9th Cir. 2016) (); Concerned Home Care Providers, Inc. v....
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