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NYC Fast-Food Worker Law Shines Light on ‘Just Cause’ Policies

Feb. 1, 2021, 10:46 AM

The odds are against a flood of new “just cause” employee termination laws that mirror New York City’s new fast-food worker protections, but even a trickle could be a major change for employers and workers.

The New York law, once it takes effect in July, will bar fast-food employers from firing workers without a good reason and require the employer to prove the reason if a worker contests their termination, plus require a progressive discipline process before most firings. Worker advocates and management-side employment lawyers alike say it’s a huge shift and a rare law that contradicts the U.S. standard of “at will” employment.

Mayor Bill de Blasio’s signing of the measure earlier this month inspired hope for its supporters and fear for its opponents that other city councils and state legislatures around the U.S. might follow suit—most likely in places with aggressive worker protections such as Philadelphia, San Francisco, Seattle, or statewide in California.

“In the worst throes of an unprecedented economic crisis, officials eliminated small business owners’ ability to make personnel decisions and manage their employees,” said Randy Peers, president and CEO of the Brooklyn Chamber of Commerce. “Make no mistake, this won’t be the last attack on at-will employment in New York State. They will come after mainstream restaurants and other food establishments next.”

‘Hard Sell’

Tia Koonse, legal and research policy manager at the UCLA Labor Center, said the center is researching the topic now at the request of workers’ rights groups in California, and she got about 50 emails from people expressing excitement when the New York law passed.

“I know there’s a lot of interest in California as well as in New York in ‘just cause,’” she said, noting she favors “just cause” policies as a way to protect workers from arbitrary, unfair, or retaliatory terminations.

Still, widespread adoption of the policies won’t come easily, if at all, she said.

“It is a hard sell,” Koonse said. “It would be a massive, massive shift from the current paradigm. This is one of those pieces the chamber will fight tooth and nail.”

At-will employment is standard in the U.S. for workers who aren’t covered by a union or other employment contract—although not common in European and other countries. It means workers can quit a job and their employers can terminate them at any time for any reason, with a few exceptions such as anti-discrimination and anti-retaliation laws. Montana is the only state that broadly limits employers’ ability to terminate workers.

The New York law will be difficult for employers to satisfy, said Felice Ekelman, an attorney with Jackson Lewis in New York City and co-leader of the firm’s restaurant industry group. New York employers could face a difficult legal challenge—whether through arbitration or a lawsuit—in which they struggle to prove their justification each time they fire an employee, she said.

“The arbitrator or fact-finder sits in the shoes of the employer and Monday-morning-quarterbacks the decision,” Ekelman said.

Pandemic Policy Bump

The Covid-19 pandemic could give a boost to advocates of “just cause” policies. While it’s a precarious time for businesses to adapt to new regulations, Koonse said the pandemic also is raising awareness of workers’ concerns about unfair firings, especially those done in retaliation for complaining about working conditions.

“This idea came about before the pandemic but it’s even more critical now because workers are taking even more risks,” said Rachel Deutsch, supervising attorney for worker justice at the Center for Popular Democracy, which helped research and advocate for the New York fast-food worker law.

Federal law bans employers from firing workers in retaliation after they complain about harassment, discrimination, or unsafe working conditions. But Deutsch and Koonse said the at-will employment arrangement makes it hard to enforce anti-retaliation laws, because workers have to prove their termination was retaliatory. Workers also hesitate to report unsafe conditions or harassment for fear of being fired, Deutsch said.

“At-will employment is a major tool of employer control of the workforce,” Deutsch said. “Everybody knows they can be fired at any time for any reason. People are often fired arbitrarily.”

While not aware of proposals actively under consideration, Koonse said it wouldn’t surprise her to see “just cause” legislation introduced in Seattle, and in California cities or even statewide.

Seattle City Councilmember Teresa Mosqueda (D) plans to eventually introduce “just cause” legislation, but not this year as the council focuses on other pressing concerns such as vaccine distribution, racial equity, and economic recovery, she said in an emailed statement.

“Most Seattle businesses don’t arbitrarily fire people, but the fact they can leaves some of our workforce hanging on by a thread,” said Mosqueda, who recently sponsored legislation to mandate hazard pay for grocery store workers. “Just cause legislation has long been on our list of policies.”

California Assemblywoman Lorena Gonzalez (D) has introduced fast-food worker protection legislation, Assembly Bill 257, but hasn’t yet filled in the details of what protections she will propose, Koonse noted.

Gonzalez’s office didn’t immediately respond for comment on this report. The assemblywoman was the author of 2019’s A.B. 5, which aimed to broadly reclassify truck drivers and gig workers such as Uber and Lyft drivers as employees.

Shades of ‘Just Cause’

Although not as direct as the New York ordinance, a Covid-19 response measure passed in Los Angeles imposes a de facto “just cause” requirement in specific instances, according to employer-side lawyer David Prager, who’s based in Epstein Becker Green’s L.A. office.

L.A.’s “right of recall” ordinance requires employers that lay off workers during the pandemic to call them back first before hiring any new employees. It applies to certain airport, building services, hotel, and event center workers.

The ordinance creates a presumption that workers terminated after March 2020 were laid off for non-disciplinary reasons. If a worker files a complaint about not being rehired, the burden falls on the employer to prove they were terminated for a disciplinary reason, Prager said. A handful of other U.S. cities have passed similar “right of recall” ordinances during the pandemic, but the burden of proof language varies, he added.

“That’s a departure from the at-will standard in California,” he said.

On the other hand, he said the frequency of employment lawsuits is so high—with state laws that make it easy for plaintiffs but hard for defendants to win attorney’s fees—that many businesses already think twice before firing workers, fearing they might be accused of retaliation or discrimination if they don’t carefully document their reasons for each termination.

“A lot of smart employers are already firing people for cause because of the litigation risk in California,” Prager said. “They feel like they can’t rely on the at-will employment doctrine as codified in state law.”

To contact the reporter on this story: Chris Marr in Atlanta at cmarr@bloomberglaw.com

To contact the editors responsible for this story: Andrew Harris at aharris@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com

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