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Paul Zimmerman

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National Restaurant Association Challenges Minimum Wage Law

Earlier in 2015, the New York Legislature rejected a proposal to raise the minimum wage to $11.50 in the Big Apple, and to $10.50 in the rest of the state.  Governor Andrew Cuomo utilized his ability to direct the labor commissioner to convene a panel to consider whether fast-food workers' minimum wage should be raised in an effort to raise all restaurant workers' pay.  The panel ultimately concluded that the minimum wage will gradually increase to $15/hour by 2018. The National Restaurant Association (NRA) appealed this decision to the New York Industrial Board of Appeals.

The Industrial Board of Appeals, comprised of gubernatorial appointees, determined that the panel’s actions were lawful under New York’s labor statutes. The appeal to the Board was necessary to exhaust all administrative remedies, and now the NRA has announced that it will challenge the panel’s decision in court. Although it has yet to file suit, the NRA will most likely bring an Article 78 action in New York Supreme Court, asking the Court to invalidate the actions of the panel; the suit must be brought within four months of the board’s decision.

While it is difficult to predict the exact legal theories included in the suit, the NRA has an uphill battle. Pursuant to statute, only narrow legal arguments are available to litigants in an Article 78 proceeding, including that the panel failed to follow its own rules, that its decision was arbitrary and capricious, and that the decision was not supported by substantial evidence. Lastly, the NRA may argue that the panel’s decision was unconstitutional.  Regardless, the NRA is not taking this minimum wage hike lightly, as it is bound to impact most, if not all, of its constituents in the state of New York, and will likely have national ramifications as well.

This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.