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January 2023: New York City Bill Would Prohibit Discharge of Employees Without Just Cause

18 Jan


Update Applicable to:
All employers in New York City.

What happened?
On December 7, 2022, the New York City Council introduced Int. No. 837, which if adopted, would amend the fast-food law, N.Y.C. Admin. Code § 20-1271 et seq., to apply to all employers, and would prohibit them from discharging New York City employees without just cause or a bona fide economic reason.

What are the details?
Under this new bill, in order for a termination to be based on just cause, the employer must:

  1. Use progressive discipline; and
  2. Have provided to the employee and posted at the workplace or job site its written policy on progressive discipline.  

Additionally, the employer must provide 14 days’ notice of any qualifying discharge and, within five days of such notice, give the employee a written explanation of the precise reasons for discharge.  If the employer fails to timely provide the written notice, according to the bill, “the discharge shall not be deemed to be based on just cause.”  

None of these requirements would be applicable when the termination is based on an employee’s egregious misconduct or egregious failure to perform their duties.  The bill does not provide any detail or further explanation of these exceptions.

A factfinder evaluating whether the employee has been discharged for just cause would be tasked with considering the following seven (7) factors:

  1. whether the employee knew or should have known of the employer’s policy, rule, practice, or performance standard that is the basis for progressive discipline or discharge;
  2. whether the employer provided relevant and adequate training to the employee;
  3. whether the employer’s policy, rule, practice, or performance standard, including the utilization of progressive discipline, was reasonable and applied consistently;
  4. whether the employer impermissibly relied on electronic monitoring;
  5. whether the employer disciplined or discharged the employee based on that employee’s individual performance, irrespective of the performance of other employees;
  6. whether the employer undertook a fair and objective investigation into the job performance or misconduct; and
  7. whether the employee violated the policy, rule, or practice, failed to meet the performance standard, or committed the misconduct that is the basis for progressive discipline or discharge.

For a discharge to be based on a bona fide economic reason, the decision must be supported by the employer’s business records showing that the termination was the result of technological or organizational changes, or a permanent shutdown of the business, in response to reduced production or sales volume.  

If enacted, the bill would also prohibit employers from relying on data collected through electronic monitoring when discharging or disciplining an employee, unless the employer can show, prior to using the data gathered through electronic monitoring, that;

  1. There is no other practical method of tracking or assessing employee performance,
  2. It is using the least invasive available form of electronic monitoring, and
  3. It previously provided the employee with the required notice of the monitoring.

 Even when these conditions are met, the employer may not rely solely on the data from electronic monitoring in making such employment decisions, except in cases of egregious misconduct or involving threats to others’ health or safety and employers would need to file in advance with the Department of Consumer and Workforce Protection “an impartial evaluation from an independent auditor that said electronic monitoring is effective in undertaking its designed task.”

Under the proposed legislation, anyone alleging a violation of the law may bring an administrative proceeding to challenge their discharge.  The employer would bear the burden of proving just cause or a bona fide economic reason by a preponderance of the evidence.  An employer found to have violated the law would have to pay the employee’s attorney’s fees and costs, pay the City for the costs of the administrative proceeding, and reinstate the employee, among other potential remedies.  The proposed bill also provides for a private right of action, such that affected employees may alternatively bring a civil action within two years of the date the employee knew or should have known of the alleged violation.

The bill is under consideration by the City Council’s Committee on Consumer and Worker Protection.  If the bill passes the Council and is signed by the Mayor, it will take effect 180 days after signature.

For more information, please see the links below:

Int. No. 837

What do employers need to do?
Employers should review the links provided above and be on the lookout for any more news on this possible new law. Vensure will continue to provide more communication once more news has been received.

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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