At-Will Employment Challenged by New York City Ordinance

Currently, employees in the fast-food industry, like employees in every other industry in New York City, are considered “at-will” employees.  That is, they can be fired for any lawful reason, or no reason at all.

However, at-will employment in New York City’s fast-food industry is slated to come to an end this summer.  An ordinance signed into law January 5, 2021, and which goes into effect on July 4, 2021, requires that an employer seeking to fire a worker may only do so for “just cause” following progressive discipline.  The law further prohibits significantly cutting an employee’s hours.

The new law is expected to increase litigation over the termination of fast-food employees.

Just-Cause Dismissal

The new law defines “just-cause dismissal” as a dismissal due to the fast-food employee’s failure to satisfactorily perform job duties or his/her engagement in misconduct that is demonstrably and materially harmful to the fast-food employer’s legitimate business interests.

The employer must prove that there is just cause for the discharge by demonstrating that either the employee engaged in egregious misconduct or the following occurred:

  • The employee knew or should have known of the employer’s policy, rule or practice that is the basis for progressive discipline or discharge.
  • The employer provided relevant and adequate training to the employee.
  • The employer’s policy, rule or practice, including the use of progressive discipline, was reasonable and applied consistently.
  • The employer undertook a fair and objective investigation into the job performance or misconduct.
  • The employee violated the policy, rule or practice or committed the misconduct that is the basis for progressive discipline or discharge.

Probationary Employees

The just-cause dismissal requirement does not apply to fast-food employees who are in a probationary period, which ends thirty (30) days after the start of their employment.  Thus, since the law does not cover probationary employees, it is expected that employers will not only be more careful in their hiring, but will also increase their review of new employees, because employers will want to identify poor performing employees as early in his/her employment as possible.

Progressive Discipline

             Before a permitted just-cause discharge, the law mandates that New York City fast-food employers must use a progressive discipline that is in writing and provided to employees.  However, this requirement does not apply to “egregious misconduct,” which the law does not define.

In addition, fast-food employers may not rely on discipline issued more than one year before separation.

Reduction in Hours Restricted

The law defines the term “discharge” to mean not just termination, but also “a reduction in a fast-food employee’s hours of work totaling at least 15 percent of the employee’s regular schedule or 15 percent of any weekly work schedule.”

Economic Reasons for Discharge

The law permits discharge of New York City fast-food employees for a “bona fide economic reason,” which is defined as “the full or partial closing of operations or technological or organizational changes to the business in response to the reduction in volume of production, sales or profit.”

Employee discharges based on a bona fide economic reason must be done in reverse order of seniority so that employees with the greatest seniority are retained the longest and reinstated or restored hours first. Fast-food employers are also required to make reasonable efforts to offer reinstatement before hiring new fast-food employees.