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Just Cause Law on the Horizon for New York Fast Food Businesses

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Photograph: Courtesy Peter Mauss Esto Photography

Most jobs in the U.S. are at-will employment, which allows companies to fire their employees for just about any reason or, and this is where the controversy lies, no reason. The only groups that are more protected from this norm are executive-level managers, the public sector, unionized workplaces, and workers in Montana. Despite how counter-intuitive it may sound that employers can technically fire employees for anything – from their skin color to their sexual orientation to their religious beliefs – at-will employment offers a security blanket that makes enforcing protection too difficult and penalties too lenient. 

But since 2018, union organizers, local officials, and industry workers have successfully fought to get a two-law package passed, which will now go into effect July 5th of this year. Under these laws, at-will employment will be banned among the fast-food businesses in the city. Should an employer want to fire an employee, they will have to show that workers have engaged in misconduct or failed to satisfactorily perform their duties. In the event that proof cannot be provided, employees will be supported by a system of warnings and disciplinary actions before they are fired. This system gives employees the options of arbitration, complaining to the Department of Consumer and Worker Protection, and filing a lawsuit in state court. The law also stipulates that in the event of mass layoffs, companies will be required to privilege senior employees, shrink payrolls, and offer laid-off employees their jobs back before transitioning to new hires.  

New York City’s legislation trails many other parts of the nation, who too have either passed or are trying to pass just-cause laws; while some are vying to pass these at a city-level and others at a state level, the list includes Philadelphia, Seattle, Illinois, and New Jersey. Talk of a just-cause federal law has been proposed by Bernie Sanders and President Joe Biden as well. Should it be passed federally, whether or not every sector would enjoy just-cause employment protections, it would grant employees more negotiating power and change the employee-employer relationship to become more balanced. Such a law would help in curtailing workplace transgressions, such as wage theft and sexual harassment. Additionally, it would finally bring peace to employees who live and work in constant fear that they may be fired the next day for no reason at all. 

But many are not in agreement with the laws passing. The New York State Restaurant Association has staunchly opposed these laws, filing a federal lawsuit to overturn them on the basis of both employer discrimination and a violation of their constitutional right to a trial by jury. Despite their early filing, the first pretrial conference isn’t scheduled until September, which means the laws will go into effect long before they attempt to legally challenge it. Aside from the lobby, many other business groups and companies argue that having the ability to fire employees on their own terms is a necessity, especially during the pandemic when times are so uncertain. Aside from the pandemic, such a law could force businesses to reduce hiring more generally. 

Founded by attorneys Andreas Koutsoudakis and Michael Iakovou, KI Legal focuses on guiding companies and businesses throughout the entire legal spectrum as it relates to their business including day-to-day operations and compliance, litigation and transactional matters.

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This information is the most up to date news available as of the date posted. Please be advised that any information posted on the KI Legal Blog or Social Channels is being supplied for informational purposes only and is subject to change at any time. For more information, and clarity surrounding your individual organization or current situation, contact a member of the KI Legal team, or fill out a new client intake form.

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