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Employment-at-Will Status Terminated for Certain Employees in Fast Food

Effective July 4, 2021 the City of New York terminates employment-at-will status for certain employees in the fast food industry. If this is an indication of things to come, it is one more unforeseen and potentially very expensive obstacle for covered employers doing business in New York City.

The law applies to limited service food and beverage chains with thirty or more establishments (including franchises) in the USA and covers non-salaried employees whose primary job involves service work for customers such as food prep, cooking, delivery, security, stocking, cleaning, and other customer services.

It prohibits the discharge or substantial reduction of hours (more than 15 percent) of employees who have at least thirty days of service, for other than “just cause” or a bona-fide economic reason.

Just cause includes failure to perform the job satisfactorily or misconduct that is “demonstrably and materially harmful to the legitimate business interests of the employer."

Proving “just cause” will require timely (within five days) written documentation and the use of a progressive discipline system (except for an “egregious infraction”) in accordance with an established policy which has been communicated, applied uniformly, and enforced following an objective investigation.

Employees will be permitted to initiate a private course of action, such as an arbitration, or to file a complaint with a city oversight agency. Remedies may include reinstatement, back pay and benefits, legal fees and penalties.

If the reduction in hours is for economic reasons, business records that support and document the economic reasons upon which the decision is based must be provided, and such reduction in hours must be enacted in accordance with seniority.

Employers covered by these regulations must revise policies and initiate training before they take effect.

Contact PMP for assistance at (516) 921-3400.


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