Fast Food Employer’s Guide to New York’s Newly Confirmed Wrongful Dismissal Law – Jobs & HR

The New York City Fair Work Week Act was originally enacted in 2017 to expand wage and hour protections for employees working in fast food businesses. On December 17, 2020, the City Council amended the Fair Work Week Act by enacting the Wrongful Dismissal Act. The Wrongful Dumps Act was signed by then-Mayor Bill de Blasio and its provisions went into effect July 4, 2021. NYC Admin. Coding §§ 20-1271 to 20-1275. The Wrongful Dismissal Act prohibits employers governed by the Fair Work Week Act from dismissing hourly-paid employees in the fast food industry without notice or cause in the absence of gross misconduct and provides such employees the ability to arbitrate claims for alleged violations of law.

So what’s up?

As explained below, a federal court in New York upheld the constitutionality of the law, and fast food employers should be prepared for its demands.

But first, what are the provisions of the law?

The Good Cause Provision

The justification provision states that “a fast food employer shall not dump a fast food employee who has completed that employer’s probationary period (not to exceed 30 days) except for just cause or for a authentic economic reason.” NYC Admin. Code § 20-1272(a).

Defined discharge

A layoff is defined as “any termination of employment, including layoff, termination, constructive dismissal, reduction of hours, and indefinite suspension.” Administrator of NYC. Code § 20-1271. A reduction in hours “means a reduction in a fast food employee’s hours of work totaling at least 15% of the employee’s regular schedule or 15% of any weekly work schedule.” Administrator of NYC. Code § 20-1272(a).

Just cause defined

“Just cause” is defined as “the fast food employee’s inability to perform his or her duties satisfactorily or misconduct which is manifestly and materially prejudicial to the legitimate business interests of the restaurant employer quick”.
Identifier. There are five non-exclusive factors an investigator should consider in determining whether a discharge for cause has occurred, NYC Admin. Code §§ 20-1271, 20-1272(b), discussed in more detail below.

Economic reason in good faith

For dismissal to be based on a legitimate economic reason, the reason must be supported by business records from a fast food restaurant employer showing that the closure or technological or reorganization changes are in response to a reduction in production volume, sales or profits. Terminations of fast food employees based on legitimate economic reason must be made in reverse order of seniority at the fast food establishment where the termination is to take place, and a fast food employer must make efforts reasonable to offer reinstatement or restoration of hours within 12 months before the fast food employer can offer or distribute shifts to other employees or hire new fast food employees. Administrator of NYC. Code §§ 20-1271(h).

Just cause factors

Unless the dismissal of a fast food employee is due to “gross failure of the employee to perform his duties” or “gross misconduct”, for a fast food employer to terminate legally a fast food employee, the fast food employer must 1) have a written policy on progressive discipline in effect, 2) provide this written policy on progressive discipline to employees, and 3) employees must submit to the fast food employer’s progressive discipline policy (reasons for termination cannot include discipline that is more than one year old).

Although flagrantness is not defined, the law provides several factors for an investigator to determine if there is just cause:

  • If the fast food employee knew or should have known of the employer’s policy, rule or practice that is the basis of
    progressive discipline or discharge;

  • Whether the employer has provided relevant and adequate training to the fast food employee;

  • Whether the employer’s policy, rule or practice, including the use of progressive discipline, was reasonable and consistently applied;

  • Whether the employer has undertaken a fair and objective investigation into job performance or misconduct; and

  • If the fast food employee has violated the policy, rule or practice or committed the misconduct that is the basis for progressive discipline or dismissal.

The law also stipulates that other relevant factors may be taken into consideration.

Definition of progressive discipline

“Graduated Discipline” means a disciplinary system that provides for a graduated range of reasonable responses to the failure of a fast food employee to satisfactorily perform the duties of that fast food employee, disciplinary action ranging from mild to severe, depending on the frequency and degree of failure. Administrator of NYC. Code § 20-1201. With the exception of gross misconduct by an employee, termination is not warranted unless the employer has used progressive discipline. Administrator of NYC. Code § 20-1272(c) .

Obligations of the employer upon dismissal

An employer must provide any terminated employee with a written explanation containing “specific reasons for termination” within five days of termination. Administrator of NYC. Code § 20-1272(d). In any subsequent action alleging a breach of the cause provision, the employer bears the burden of establishing that the dismissal was valid, and an investigator is limited to reviewing the employer’s written reasons provided by the employer. to the employee. Administrator of NYC. Code § 20-1272(d)-(e). If an employee was to work and then fired, the employee is entitled to a change in schedule bonus. The schedule change bonus must be paid even if the dismissal is for just cause or for a legitimate economic reason. Administrator of NYC. Code § 20-1274.

Arbitration Option

Fast food employees can now sue alleged wrongful termination violations in arbitration, even in the absence of a specific arbitration agreement with the fast food employer. Employees must bring such claims within the two-year statute of limitations, and employees can begin filing claims for arbitration beginning January 1, 2022. It is important to note that if an employee seeks arbitration, they will be deemed to have waived his right to bring a private action. cause of action. Administrator of NYC. Code § 20-1273. Panel arbitrators are to be chosen by an eight-person committee consisting of four representatives from the employee side (including employees or fast food advocates) and four representatives from the employer side (including employers or advocates fast food). If the parties are unable to agree on an arbitrator, the New York City Department of Consumer Affairs will select an arbitrator from the panel. Arbitrations will be governed by the rules of the American Arbitration Association, as well as rules to be promulgated by the New York City Department of Consumer Affairs.

Burden of proof

The fast food employer shall bear the burden of proving good cause or genuine economic reason by a preponderance of the evidence in any proceeding brought under the good cause provision, subject to the rules of evidence set out in the civil practice law and rules or, where applicable, common law. Administrator of NYC. Code § 20-1272(e).

What is a fast food employee?

An employee who performs customer service, cooking, food or beverage preparation, delivery, security, storage of supplies or equipment, cleaning, or maintenance running in a fast food restaurant in exchange for an hourly rate of pay falls within the scope of this Ordinance. The term “fast food employee” does not include any salaried employee.

What is a fast food employer?

To qualify as a fast food employer, an establishment must:

  1. primarily serve food or drink;

  2. use a model where customers order or select items and pay before eating, and these items can be consumed on the spot, picked up or delivered to the customer;

  3. offer a limited service;

  4. exist as part of a chain, which requires the establishment to be a member of a set of establishments that share a common brand or are characterized by standardized options in decoration, marketing, packaging, products and Services ; and

  5. be considered to be: (a) an integrated enterprise that owns or operates at least 30 such establishments nationwide; or (b) a franchise operated establishment where the franchisor and franchisees together own or operate 30 or more such establishments in aggregate nationwide.

The decision of the Southern District of New York

Procedural background

On May 28, 2021, Restaurant Law Center and the New York State Restaurant Association filed a lawsuit against the City of New York for declaratory relief and injunctive relief in the United States District Court, Southern District of New York. On July 20, 2021, the Restaurant Law Center and the New York State Restaurant Association filed a motion for summary judgment. After some additional information, the Southern District of New York issued a decision on February 11, 2022.


The restaurant groups sought to strike down the law on several grounds, arguing that it violated the Commerce Clause of the US Constitution, the National Labor Relations Act and the Federal Arbitration Act.


The Southern District of New York denied each of these claims and ruled that the wrongful discharge law was constitutional because it minimally burdened interstate commerce; that it complies with federal labor law because it does not treat unionized and non-unionized employees differently, or otherwise invade the collective bargaining process; and finally, that it complies with the Federal Arbitration Act because it does not prohibit or impede the enforcement of private arbitration agreements. In that decision, the court declined to exercise jurisdiction over the restaurant groups’ various state law claims.

Practical reality

The practical reality is that the wrongful discharge law may be here to stay and is likely to set the tone for other jurisdictions by adopting similar measures. So, if you’re a fast food employer, it’s best to immediately implement a progressive discipline policy, distribute it to your fast food workers, and comply with the wrongful dismissal provisions of the law. We also recommend that you consult a lawyer.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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