"You're fired." Most US employers don't need a reason to utter those words, but New York City's new legislation protecting fast-food workers is going into July 4, 2021. After this, employers will either need "just-cause" or layoffs for economic reasons to terminate a fast-food employee. 

The controversial new rule singles out one sector of employees and favors them above all other employees, with job protections that most employees don't have. It may be controversial (the New York State Restaurant Association has already filed a lawsuit), but it may be the start of a change in US employment law.

A solution in search of a problem.

At-will employment means that you can quit at any time with no notice. (Two week's notice is merely customary, but absent a contract, you're not required to even give five minutes' notice.) At-will employment also means that your boss can fire you at any time with no notice for any reason or no reason as long as that reason doesn't violate the law. That last part is key here: you can't fire someone because of their race, religion, sexual orientation, or other protected characteristic. You can't fire someone for discussing salary with coworkers. You can't fire someone because she's pregnant. But, you can fire anybody just because it's Tuesday if you'd like.

While that seems to be a minimal amount of protection, it's also extremely impractical for companies to fire at a whim for no reason. Bloomberg Businessweek gave the following termination examples as reasons for why this just-cause policy is necessary.

  • "Fired for noting that a manager showed up two hours late."
  • Fired for "suffering a panic attack on the job after being subjected to racist harassment."
  • Fired for "disclosing to co-workers that they'd contracted Covid-19."

While all of these are terrible reasons for terminating, it's important to note that none of these cases are straightforward and come through the eyes of the terminated employee. 

Terminating someone for a panic attack in response to racial harassment could violate the Americans with Disabilities Act and Title VII of the Civil Rights Code. In other words, this termination was probably already illegal.

The Covid gag rule is also problematic if the employee was discussing working conditions. Employment attorney and HR consultant Kate Bischoff says, "Yes, an employer could fire an employee for talking about their experience COVID-19.  Where it gets tricky is whether the employees were talking about it because the employer did not take appropriate safety measures to keep employees safe, like following CDC/OSHA guidelines.  Then, it would likely trigger a whistleblower-style action."

Employment attorney Jon Hyman concurs: "Does [the Covid gag rule] also violate an employer's general duty to maintain a safe and healthy workplace and therefore constitute retaliation under OSHA? I also think there's a really good argument that it does."

In other words, this termination may be illegal, regardless of the employee's at-will status.

Businesses need employees, and firing people for no reason doesn't seem to be a major problem. The new rules won't stop bad managers who fired people illegally before. Good employers will now need additional paperwork and documentation to fire bad employees.

Both Bischoff and Hyman questioned the wisdom of implementing a new law, with Bishoff saying, "No fast food joint in the world is firing people willy-nilly right now.  So, fine, an employer needs a cause reason for firing someone.  Whoop-de-do."

We don't need a law to protect people from something that doesn't generally happen anyway.

The bigger problem with the new law.

There are three major portions of the law that have fast food owners nervous. The first is the paperwork requirement. JD Supra reports that to terminate someone, you need paperwork proving the following:

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

While this sounds great and businesses often operate this way, fast food restaurants rarely have a qualified HR person onsite to handle this type of investigation.

The second major problem is with layoffs. The new law allows fast-food restaurants to lay people off for economic reasons, but they have to use a last-in-first-out method. That means your struggling restaurant can't keep the best employees, only the ones with seniority.

The third major problem for fast-food owners is the requirement to not lower an employee's hours by more than 15 percent from their highest hours in the past 12 months. That means if you have a super busy week and schedule people more, you can't just give them the extra hours that week. You have to keep them forever. This is a huge burden on fast food restaurants.

Is this just the beginning?

This law is limited to one portion of one industry in one city, but if it spreads, it can cause headaches for other business owners as well. Keep your eye out for similar legislation coming your way.