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NYC wants to curtail QSRs’ ability to fire employees, cut hours

Proposals under consideration would require proof of a just cause, as well as remedial action beforehand.
Photograph: Shutterstock

New York City lawmakers held hearings yesterday on proposals that would deny local quick-service employers the discretion to fire employees or cut staff or hours at will.

One measure, Intro 1415, would essentially require an employer to take remedial action and provide warnings before discharging an employee or cutting the worker’s hours by more than 15%. The dismissal would also have to be based on a documented just cause, as determined if necessary by an arbitrating body. The employer would also have to prove, if challenged, that the employee was informed of the business’ dissatisfaction and provided with a reason for their discharge.

The second measure would prohibit staff cuts unless the quick-service employer can provide a “bonafide economic reason,” as defined in the proposal as a cutback in hours, the adoption of technology or an organizational change. It also would require that the layoffs be made solely on the basis of seniority, with total disregard to job titles, performance or importance to the business.

The proposals apply only to quick-service restaurants within the city, but its proponents readily cited hopes the provisions would spread throughout the country and to all types of businesses. They note that the city was also the birthplace of the "Fight for $15" movement and a major proponent of paid sick leave and predictive scheduling.

“New York City’s fast-food industry has served as a laboratory for the nation’s labor movement for the last several years, and it is the natural place to start with just-cause legislation,” said council member Adrienne Adams, the sponsor of the layoffs-related proposal, Intro 1396. That name indicates the suggested legislative changes have not yet been put into the form of the bill.

The measures stand a good chance of becoming law in some form within New York City, where the pro-labor Democratic Party holds the mayor’s office and 48 of the 51 seats on the City Council. Among the parties who spoke about the bill before the City Council’s Committee on Civil Service and Labor was Lorelei Salas, commissioner of the city’s Department of Consumer and Worker Protection (DCWP). She said the administration of Mayor Bill de Blasio supports the intent of the proposals but has concerns about the reliance on arbitration to enforce them.

Intro 1396 specifies that arbitration will be the means of resolving any dispute that should arise between an employer and a discharged employer. Specifically, both parties would have to agree on the selection of an arbiter from a pool of eight individuals. Two of the eight would be fast-food employees, two would be fast-food employers, two would be union reps or other labor advocates, and two would be association executives or other employer advocates.

The city currently has no model for using such an arrangement to settle labor disputes, according to Salas.

The reliance on arbitration was one of the aspects of the proposals that drew criticism during the hearings from employer groups, which included the New York State Restaurant Association (NYSRA), the National Restaurant Association (NRA) and the Manhattan Chamber of Commerce.

The measures are “absolutely terrifying for small business” and “simply wrong,” said Jessica Walker, CEO of the Manhattan Chamber of Commerce.

Kathleen Reilly, government affairs coordinator for the NYSRA, pointed out that the proposals violate the current state laws pertaining to dismissals. New York is an at-will state, meaning employees serve at the will and discretion of employers. Workers can be fired for any reasons other than those that are set in law to protect against discrimination.

In addition, “requiring a private business to prove something about its business conditions to the city,” as required under Intro 1396, “feels like an enormous overreach by the government,” she said. And under the current just-cause provisions of Intro 1415, “the employer has the burden of proof. That is contrary to American justice.”

Reilly also pointed out several ways the proposals were unfeasible for quick-service restaurants. For instance, both measures aim to prevent employers from cutting a staff members’ hours by 15% or more. For most employees in a quick-service restaurant, that amounts to a reduction of six hours, or not even a whole shift. “It’s unrealistic for the industry,” she said.

Similarly, the proposals require proof that a business laid off people or cut the staffs’ hours because of demonstrable economic problems. Essentially, Reilly said, that would prohibit a restaurant from pulling in its labor costs in anticipation of a downturn.

She also took issue with the seniority requirement for layoffs, citing examples of how the provision would backfire and leave the business and even the affected employees at a disadvantage.

Members of the City Council disparaged much of the concerns that were aired by the business community, noting that such past proposals as a $15 minimum wage and predictive scheduling were similarly blasted as critical threats to the quick-service business. Yet the segment survived, they repeatedly stressed.

Council members noted that New York City’s quick-service industry consists of 3,000 restaurants employing 67,000 employees. They also pointed out that the just-cause proposal under consideration is already a state law in Montana, and was enacted in Philadelphia in September for the city’s 1,000 parking attendants.

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