NYC Gives Major Protections To Fast Food Workers

Saul Ewing Arnstein & Lehr LLP

Saul Ewing Arnstein & Lehr LLP

On January 5, 2021, New York City Mayor Bill de Blasio signed two new laws that provide significant safeguards for workers in NYC’s fast food industry.

Effective July 4, 2021, fast food employees who have completed an initial 30-day probation period may not be terminated or have their hours cut by more than 15 percent without just cause or a bona fide economic reason. Just cause includes a failure to satisfactorily perform job duties or misconduct that is “demonstrably and materially harmful” to the employer’s legitimate business interests. Similarly, a bona fide economic reason is a 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. 

Restaurants covered by the new fast food laws include any (i) with a primary purpose of serving food or drink items, (ii) where patrons order select items and pay before eating and such items may be consumed on premises, taken out, or delivered, (iii) that offers limited service, (iv) that is part of a chain, and (v) that is one of 30 or more establishments nationally. With respect to numeric requirement, it includes (A) an integrated enterprise that owns or operates 30 or more such establishments in the aggregate nationally, or (B) an establishment operated pursuant to a franchise where the franchisor and the franchisees of such franchisor own or operate 30 or more such establishments in the aggregate nationally. Under this definition, a franchisee who owns only one location would be covered, so long as there exists at least 29 other locations of the chain.

If a fast food employer discharges employees due to a bona fide economic reason, the terminations must be done in reverse order of seniority at that particular location.

In assessing “just cause” employers must consider whether the employee knew or should have known of the policy that is the basis for discharge, whether the employer provided training, whether the employer’s policy, including progressive discipline, was reasonable and applied consistently, whether the employer undertook a fair and objective investigation into the employee’s job performance or misconduct, and whether the employee violated the policy or committed the misconduct that is the basis for progressive discipline or discharge.

Additionally, unless an employee commits an “egregious” infraction, a fast food employer cannot terminate based on just cause without having disseminated a progressive discipline policy and actually utilizing progressive discipline. If a fast food employer discharges an employee based on just cause, it must provide a written reason for the discharge within five (5) days, which then becomes the employer’s sole evidence in proving “just cause” in any proceedings brought to enforce the law.

The employer bears the burden of proving that it had “just cause” to terminate the employee. If an employer cannot show that it had a lawful reason to terminate, the employee may be entitled to reinstatement, restoration of hours, back pay, and attorneys’ fees and costs. In addition, employers may be required to pay a statutory penalty of $500 for each violation.

Companies covered by the expansive definition of fast food restaurant that are located in NYC should immediately review their written employment policies to confirm that they contain appropriate progressive discipline procedures. Likewise, it is imperative that fast food companies train managers to thoroughly complete disciplinary and termination paperwork, in order to substantiate any “just cause” terminations.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Saul Ewing Arnstein & Lehr LLP

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