NYC Kicks Restaurateurs While They're Down

Writing at Inc, Suzanne Lucas reports a law that basically ends at-will employment in the fast food restaurant sector in New York City:

Using robots to flip burgers has just started looking like a great idea. (Image by Richard Greenhill and Hugo Elias, via Wikimedia Commons, license.)

After a maximum of a 30-day probationary period, fast-food restaurants can terminate employees only for "just cause," defined as "the fast-food employee's failure to satisfactorily perform job duties or misconduct that is demonstrably and materially harmful to the fast food employer's legitimate business interests."

Reductions in hours are also covered, so you can't just not schedule a problem employee anymore.

Unless the employee's bad behavior is "egregious," managers have to go through a progressive discipline process before terminating an employee.

Layoffs for economic reasons are still allowed, but they have to be last-in-first-out. In other words, if you have a long-term employee who is a poor performer but hasn't reached the level of "just cause" yet and you have newer employees who are star performers, you still have to pick the newer employees for termination if layoffs are in order.

As if New York's coronavirus "lockdowns" haven't been enough of a kick in the teeth to the restaurants there...

Lucas elaborates with two opinions worth considering. The first, with which I agree, is that there is concern that other states will enact similar laws. (California's recently-gutted AB-5 contracting ban is an example of that happening.)

The second, with which I don't agree, is that this is an "obvious win" for employees. This is very bad for the employers -- as noted elsewhere in the piece -- affecting their bottom line directly (in terms of forced labor expenditures) and indirectly (in terms of businessmen being unable to count on being able to make rational manning and employment decisions). Indeed, along with whatever increases in the minimum wage may occur, laws like this clearly make replacement of workers with robots (like "flippy") more attractive than they already might have been.

Whether there are fewer jobs due to business failures or belt-tightening or mechanization, this is actually a bad omen for low-skilled workers looking to pick up skills, experience, and money.

-- CAV