I was recently asked to speak to a Human Resources Management class at a local university about how American employment law is different from employment laws in other countries. While there are many things that distinguish American employment law from that of other modern democracies — including, for example, the lack of a “code” or a cohesive set of laws, the dichotomy between “labor” and “employment” laws, and the interrelationship between health insurance and employment law — the thing that most distinguishes American employment law is the “at-will” doctrine.
The foundational “black letter” legal principle of American employment law is that employers can terminate employees for any reason, unless an employee is subject to either an employment contract or a collective bargaining agreement. Granted, there are many statutory and a few common law exceptions that qualify the at-will doctrine. But as long as an employer is not terminating an employee because of his membership in a protected class or in retaliation for exercising a protected right, American employers generally do not need a good reason to terminate someone. As irrational as it may seem, you can terminate an employee because they are a Boston Red Sox fan, they think “Forrest Gump” is a great movie, or they are a Sagittarius. In contrast, an employer in France, Germany, Mexico, Argentina, or most any other country would be required to pay that employee a statutory severance, in an amount usually based on the number of years that the employee has worked for the employer.
So what are we to make of the new law signed by the mayor of New York City that will go into effect on July 4, 2021, and requires fast food employers in the Big Apple to have “just cause” before discharging their employees? The law states that:
Except where termination is for an egregious failure by the employee to perform their duties, or for egregious misconduct, a termination shall not be considered based on just cause unless (1) the fast food employer has utilized progressive discipline; provided, however, that the fast food employer may not rely on discipline issued more than one year before the purported just cause termination, and (2) the fast food employer had a written policy on progressive discipline in effect at the fast food establishment and that was provided to the fast food employee.
If a court finds that the employer violated this statute, it shall order reinstatement of the employer (unless waived by the worker) and order payment of attorney’s fees. Courts may also assess a $500 fine for each violation, and award back pay and punitive damages.
Obviously, if you own a fast food franchise in New York, you will need to spend some time spelling out your policies, communicating those policies to employees, and implementing an effective system of progressive discipline. But if you are not in the fast food business in New York, do you need to worry? While I try to stay out of the prediction business, I think most employment lawyers would agree that the at-will doctrine is probably not going anywhere. There was similar hand wringing when the sparsely populated state of Montana eliminated the at-will doctrine in its Wrongful Discharge From Employment Act of 1987. Thirty-four years have passed, and no other state has done away with the doctrine. While we may see other municipalities enact ordinances curtailing the applicability of the at-will doctrine for certain low paid workers, the at-will doctrine is likely to survive.
