On August 18, 2021, Local Law 2021/087 was enacted to require City human services contractors and subcontractors to enter into labor peace agreements prior to the award or renewal of a City service contract. The Local Law, which serves as an amendment to the Administrative Code of the City of New York, is likely to have a significant impact on covered employers.

The Local Law applies to any contractor or subcontractor that bids on a City human services contract or seeks a renewal of such a contract. Human services contracts include those concerning day care, foster care, home care, health or medical services, housing and shelter assistance, preventative services, youth services, the operation of senior centers, employment training and assistance, vocational and educational programs, legal services and recreational programs. However, the Local Law carves out an exception for building service employees and subcontractors whose primary task is the care or upkeep of a building or property. Such employees may instead be covered the City’s prevailing wage law.

The centerpiece and most critical component of this Local Law is the labor peace agreement requirement. Covered employers engaging in City human services contracts must enter into labor peace agreements with labor organizations in which both the union and the employer agree to ensure the continuous delivery of services under the contract. According to the Local Law, covered employers must submit an attestation no later than 90 days after the award or renewal of a City service contract to confirm its compliance with the labor peace agreement requirement. The attestation shall state that either: (i) the covered employer has joined one or more labor peace agreements with a labor organization; or (ii) the covered employer’s employees are not represented by a labor organization and no labor organization has sought to represent them. If the covered employer has entered into one or more labor peace agreements, the employer is required to identify the classes of employees covered by the labor peace agreements, the classes of employees not represented by a labor organization, and the classes of employees currently undergoing labor peace agreement negotiations. This attestation must be updated on a yearly basis. City agencies will be required in the future to include a provision in future City services contracts to the effect that failure to comply with the Local Law may constitute material breach. The City Comptroller may also provide for additional remedies after investigation.

Labor peace agreements make it significantly easier for unions to organize employers, because in exchange for the union party’s commitment to ensure labor peace (i.e. no strikes or picketing), the union party typically insists on the employer party’s neutrality in any organizing campaign and requires employers to forego rights afforded to them by the National Labor Relations Act of 1935 (the “Act”), replacing the secret ballot election with a card check and providing union access to the employer’s facilities and employee information, with all disputes subject to arbitration. It should be noted that labor peace agreements typically do not dictate provisions in collective bargaining agreements that have to be negotiated after the union has organized a covered employer’s employees.

Unless the covered employer is already unionized, the labor peace agreement requirement of Local Law 2021/087 presents many new challenges for covered employers. However, further changes may be in store as a result of Prevailing Wage Bill 2137. If enacted, covered employers will be required to pay its City-contracted human services employees no less than the prevailing wage as established by the Comptroller. Given the current political make-up of the City Council, this bill is likely to pass and be signed into law by the Mayor who recently issued an Executive Order requiring all large retail or food service employers operating on the premises of a City development project to sign labor peace agreements.