New York City Implements New “Just Cause” Employment Standard for Fast Food Restaurant Workers
Effective July 5, 2021, a new “just cause” employment standard will replace the current “at-will” employment standard for New York City’s fast food restaurant workers. Under the new just cause standard, a New York City fast food restaurant seeking to terminate an employee will be required to demonstrate that the termination was motivated by either a bona fide economic reason or just cause. The two New York City Council bills responsible for this change are Int. 1396-A and Int. 1415-A, both signed into law by Mayor de Blasio on January 5, 2021 and scheduled to take effect on July 5. Int. 1396-A prohibits layoffs of fast food employees not based on bona fide economic reasons, which the statute defines as “the full or partial closing of operations or technological or organizational changes to the business, resulting in the reduction in volume of production, sales, or profit.” Layoffs based on bona fide economic reasons must be supported by business records demonstrating the economic hardship. Additionally, seniority must be accounted for in layoff decisions, such that the most senior employees must be retained the longest. Int. 1415-A prohibits layoffs that are not motivated by just cause, defined as “the fast food employee’s failure to satisfactorily perform job duties or misconduct that is demonstrably and materially harmful to the fast food employer’s legitimate business interests.” The just cause requirement takes effect following a probationary period of no more than 30 days after the employee’s hire (within the probationary period, either the employer or employee can terminate the employment relationship with or without cause). Absent egregious misconduct, employers are required to apply a “graduated range of reasonable responses” to the employee’s performance issues before terminating the employee. Upon terminating an employee for just cause, the employer must provide the employee with a written statement specifying the reason for termination. If challenged, the employer must be able to prove just cause by “a preponderance of non-hearsay evidence.” Any employee who believes that they were terminated in violation of either of these laws has the right to arbitrate their claims against their employer, including on a class or collective basis, or bring their claims in court. If the employee opts for arbitration, the arbitrator must be selected from a panel chosen by a committee comprised of two fast food employees, two fast food employee advocates, two fast food employers, and two fast food employer advocates. Potential relief for the employee can include compensatory damages, back pay, reinstatement, injunctive relief, punitive damages, and attorney’s fees and costs.
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Paduano & Weintraub's Employment Group represents employers in all aspects of employment litigation and counseling. For companies of various sizes, ranging from large public companies to small family-owned businesses, we defend employers nationally, and across various industries, in state and federal actions and arbitrations brought by employees alleging discrimination, harassment and retaliation. We defend employers in single plaintiff and collective and class actions throughout the country alleging violations of the Fair Labor Standards Act and its state and local counterparts. We regularly represent employers in matters regarding restrictive covenants. We counsel clients in risk management by creating proactive solutions to workplace issues. We create and implement compliant and practical policies and best practices to help clients build a workplace infrastructure that balances business needs and legal compliance while mitigating short- and long-term risk. In that regard, we provide effective management-level training seminars and conduct employee harassment training and intervention. Our team responds to and manages the complex issues that arise from workplace crises, including high-profile sexual harassment complaints.