Burger-Flipper Arbitrators

Original Article: https://www.wsj.com/articles/burger-flipper-arbitrators-11551398235

  • Author: Michael Saltsman and Michael Lotito

  • Publication Date: March 2019

  • Newspaper: Wall Street Journal

  • Topics: Work Schedule

Now that the Fight for $15 movement has achieved a higher minimum wage in New York City, its backers at the Service Employees International Union want to make fast-food workers hard to fire. City Councilman Brad Lander introduced legislation in February that would effectively abolish at-will employment in chain restaurants—those with 30 or more locations nationwide, whether corporate-owned or franchised.

The bill is unprecedented in its scope; apart from a legal quirk in Montana’s law, no other U.S. city or state has eliminated the bedrock principle of at-will employment. If a fast-food employee skips a shift or uses foul language in front of customers, he can be fired immediately. Employers don’t have to justify staffing adjustments such as layoffs or reduction in hours.

Mr. Lander’s bill would require “just cause” to fire an employee or reduce his weekly hours by 15% or more. Employees could demand arbitration from a panel chosen in part by fellow fast-food workers or “fast-food employee advocates.” If the employer loses in arbitration, penalties include reinstatement, back pay and punitive damages. It’s a lot like a union shop.

Employers would have to demonstrate a record of “progressive discipline” in responding to bad workplace behavior. They’d have to show that training is “relevant and adequate,” that workplace rules are “reasonable and applied consistently,” and that every firing decision was preceded by “a fair and objective investigation.”

In a news article on the legislation, the union offered several employees who claimed to be unfairly terminated. One had failed to show up for a shift and had a history of arriving late. Another employee had used profanity in the workplace. These firings, and countless others, could be subject to arbitration, with the entire burden of proof resting on the employer.

Fast-food employers could avoid this scenario only through a union contract, which is surely the SEIU’s objective. The other alternative is to stop expanding in New York. State Labor Department data show a sharp slowdown in restaurant employment growth in New York City in recent years. In the fast-food industry, annual growth averaged 7% a few years ago but has vanished since the $15 wage began phasing in. Employment growth has fallen each of the past three years and was less than 1% in 2018. New York has proved that employers can say “no thanks” if the burdens of doing business in the city exceed the benefits. The City Council and labor unions have yet to learn the lesson.