NYC Adds 'Just Cause' Protections For Fast Food Workers

By Max Kutner
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Law360 (January 6, 2021, 7:10 PM EST) -- New York City fast food workers have gained protections from being fired without just cause or a legitimate economic reason, after Mayor Bill de Blasio signed into law two bills that had the support of a major service employees union.

The legislation de Blasio signed on Tuesday, which adds restrictions for terminations by large fast food chains, is part of an ongoing effort by New York City lawmakers to address the rights of fast food workers despite pushback from the restaurant industry, and it comes amid widespread layoffs and challenges to the industry due to COVID-19.

"A strong, fair recovery starts with protecting working people," de Blasio said in a statement Tuesday. "These bills will provide crucial job stability and protections for fast food workers on the front lines."

Under the new legislation, a fast food employer needs just cause to fire a worker or reduce his or her hours by more than 15%, and the firing can only come after the employer used a progressive discipline policy. The legislation defines "just cause" as the "failure to satisfactorily perform job duties or engaging in misconduct that is harmful to the fast food employer's legitimate business interests."

The other bill says a fast food employer can lay off workers due to "a bona fide economic reason," and that such layoffs must be done in reverse order of seniority. An employer must rehire those employees before hiring any new employees for a year after the layoffs, the legislation also says.

The restrictions apply to fast food chains with 30 or more locations.

The legislation gives fast food workers the sort of protections they might have as union members without them necessarily having to join a union. Fast food workers typically do not belong to unions, in part because they often view the work as temporary, and organizing takes time, their advocates have said.

The new protections are meant to update and expand the "Fair Workweek" bills that de Blasio signed in 2017. That earlier legislation curbed fast food employers' ability to make last-minute changes to workers' schedules and required them to pay employees for changes without notice.

Legislation from around the same time also required that fast food businesses forward voluntary deductions from workers' paychecks to worker advocacy groups. The National Restaurant Association sued the city over the requirement, but in 2019 a New York federal judge ruled it was lawful.

New York City Council had approved the new legislation in December. The legislation is the first of its kind in the U.S., according to the city.

Kyle Bragg, president of 32BJ SEIU, which advocated for the legislation, said the protections are especially necessary during the pandemic.

"There are nearly 70,000 fast food workers in New York City who are on the front lines of the pandemic but who, until now, didn't have economic security because they could be fired or have their hours cut for no reason and without recourse," Bragg said in a statement Tuesday. "These laws will end the instability and indignity that front-line fast food workers have faced for too long."

Even before COVID-19, New York City fast food workers faced arbitrary firings, according to a 2019 report by the Center for Popular Democracy, a pro-worker and pro-immigrant advocacy group.

Of the 539 New York City fast food workers surveyed for the report, half said they had previously been fired, laid off or forced to quit because of working conditions. The report said 65% of those workers who lost jobs said their employer had not given them a reason, and 62% said they faced economic hardship because they lost their job.

But fast food restaurants and industry groups had opposed the legislation, saying it added difficulties for them during an already difficult time.

"It is outrageous and unacceptable for the city council to choose this devastating moment to further hamstring the business operations of New York City's restaurants by passing 'just cause' legislation," Melissa Fleischut, president and CEO of the New York State Restaurant Association, said in a statement. "We are not talking about wrongful termination, which is already illegal. We're talking about singling out a sector and trampling on their at-will employment rights under state law."

Eli Freedberg of Littler Mendelson PC, whose clients have included New York City fast food businesses, said the legislation will cause hardship for franchisees.

"It's a complete disruption to the way everyone's done business," Freedberg told Law360 on Wednesday. "And in a time where many of these mom and pop businesses for the most part have really struggled in the last year, it's now essentially a guarantee that they're going to have to pay hundreds of thousands of dollars in compliance and additional legal fees and costs and arbitrations and court cases."

--Additional reporting by Vin Gurrieri. Editing by Haylee Pearl.

For a reprint of this article, please contact reprints@law360.com.

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