Like any prominent public figure, the world’s reputed richest person – Amazon CEO Jeff Bezos – certainly has his critics, but none could honestly say he lacks imagination.
Unfortunately for New York and its governor, this means it is all too easy for Bezos to imagine what reconsidering his Valentine’s Day decision to dump New York City might entail, especially in New York City’s current business climate. Even as Gov. Andrew Cuomo tries to coax Amazon back (and loses no opportunity to bash those who undermined the deal), the New York City Council is considering not one, but two bills targeting at-will employment.
For now, both bills focus exclusively on the fast-food industry. But it does not take an extraordinary leap of imagination to envision a future where the city’s grant of job tenure to private-sector employees extends to other businesses. Amazon would be an almost irresistible target.
The two pieces of legislation under consideration by the New York City Council would both restrict the circumstances under which a fast-food employer could end a worker’s employment. The first would prohibit an employer from laying off an employee without a “bona fide economic reason” – defined as full or partial operational closings, or organizational changes that reduce production or profits. Even if employers can produce a bona fide economic reason, they must use a “last in, first out” policy for deciding which workers to lay off, regardless of other factors, including performance.
The second bill would prohibit fast-food employers from firing an employee, or reducing the employee’s hours by 15 percent or more, without “just cause.” The employer would be required to offer a written notice of the reason for termination and would also bear the burden of proving just cause should the employee challenge the firing. Workers undergoing a probationary period would be exempt from this requirement.
New York is an at-will employment state, meaning that employers can generally end a worker’s employment for any reason other than those protected by anti-discrimination laws. At-will employment is the norm in most of the United States; what varies is which exceptions a state or municipality recognizes, though such exceptions are generally limited. For now, the proposed New York City laws would only apply to chain restaurants – those that have 30 or more locations nationwide. This is the camel sticking his nose beneath a certain pair of golden arches. If I ran a business in the city, I would be watching this legislation with considerable apprehension, no matter what product or service my company delivered.
Brad Lander, a Brooklyn Democrat who introduced the just cause bill to the City Council, underlined this point when responding to industry complaints that fast-food franchises suffer from unfair targeting in this proposal and other policies. “If the primary complaint that fast-food employers have is that this law should cover more employers, I’d be glad to consider it,” Lander said.
If the Council passes one or both of these bills, Mayor Bill de Blasio seems likely to sign them, given his past support of increased protection for fast-food workers. Indeed, many of these bills’ supporters, especially the Service Employees International Union, have positioned them as direct successors to the “Fight for 15” minimum wage campaign. It is possible that, as Michael Lotito and Michael Saltsman suggested in an opinion column for The Wall Street Journal, supporters ultimately hope employers will agree to a comprehensive union contract rather than cope with this legal headache. Employers’ third option, of course, is simply to scale back New York City operations.
All of this brings us back to Cuomo’s doomed attempt to win back Amazon. In the aftermath of the company dumping New York, Cuomo reportedly tried softening Bezos through a series of direct phone calls, as well as through the grand gesture of a full-page ad in The New York Times co-signed by de Blasio and other New York leaders. Cuomo has promised to take personal responsibility for guiding Amazon through the state and community development processes. (Whether he renewed his offer to change his name is anyone’s guess.) Yet Amazon’s leadership has shown no sign of reconsidering the decision.
You don’t build a company like Amazon without making mistakes. The key to success is to learn from them. By now, Bezos and other Amazon leaders have doubtless concluded that choosing to vastly expand their footprint in New York City was a mistake. While Cuomo whispers to them that they were wrong, the city – just by being the place that it is at this moment in time – is doing everything in its power to show that, in fact, they were right.
Today’s target of opportunity is fast food and its franchisees, but Bezos knows he will inevitably wear the bull’s-eye as soon as he pours enough money into New York to convince its politicians that he won’t get up and leave. He would have to be crazy or stupid to do it. From all indications, the man who is believed to be the richest in the world is neither.
Posted by Larry M. Elkin, CPA, CFP®
New York City Hall. Photo by Wikimedia Commons user MusikAnimal.
Like any prominent public figure, the world’s reputed richest person – Amazon CEO Jeff Bezos – certainly has his critics, but none could honestly say he lacks imagination.
Unfortunately for New York and its governor, this means it is all too easy for Bezos to imagine what reconsidering his Valentine’s Day decision to dump New York City might entail, especially in New York City’s current business climate. Even as Gov. Andrew Cuomo tries to coax Amazon back (and loses no opportunity to bash those who undermined the deal), the New York City Council is considering not one, but two bills targeting at-will employment.
For now, both bills focus exclusively on the fast-food industry. But it does not take an extraordinary leap of imagination to envision a future where the city’s grant of job tenure to private-sector employees extends to other businesses. Amazon would be an almost irresistible target.
The two pieces of legislation under consideration by the New York City Council would both restrict the circumstances under which a fast-food employer could end a worker’s employment. The first would prohibit an employer from laying off an employee without a “bona fide economic reason” – defined as full or partial operational closings, or organizational changes that reduce production or profits. Even if employers can produce a bona fide economic reason, they must use a “last in, first out” policy for deciding which workers to lay off, regardless of other factors, including performance.
The second bill would prohibit fast-food employers from firing an employee, or reducing the employee’s hours by 15 percent or more, without “just cause.” The employer would be required to offer a written notice of the reason for termination and would also bear the burden of proving just cause should the employee challenge the firing. Workers undergoing a probationary period would be exempt from this requirement.
New York is an at-will employment state, meaning that employers can generally end a worker’s employment for any reason other than those protected by anti-discrimination laws. At-will employment is the norm in most of the United States; what varies is which exceptions a state or municipality recognizes, though such exceptions are generally limited. For now, the proposed New York City laws would only apply to chain restaurants – those that have 30 or more locations nationwide. This is the camel sticking his nose beneath a certain pair of golden arches. If I ran a business in the city, I would be watching this legislation with considerable apprehension, no matter what product or service my company delivered.
Brad Lander, a Brooklyn Democrat who introduced the just cause bill to the City Council, underlined this point when responding to industry complaints that fast-food franchises suffer from unfair targeting in this proposal and other policies. “If the primary complaint that fast-food employers have is that this law should cover more employers, I’d be glad to consider it,” Lander said.
If the Council passes one or both of these bills, Mayor Bill de Blasio seems likely to sign them, given his past support of increased protection for fast-food workers. Indeed, many of these bills’ supporters, especially the Service Employees International Union, have positioned them as direct successors to the “Fight for 15” minimum wage campaign. It is possible that, as Michael Lotito and Michael Saltsman suggested in an opinion column for The Wall Street Journal, supporters ultimately hope employers will agree to a comprehensive union contract rather than cope with this legal headache. Employers’ third option, of course, is simply to scale back New York City operations.
All of this brings us back to Cuomo’s doomed attempt to win back Amazon. In the aftermath of the company dumping New York, Cuomo reportedly tried softening Bezos through a series of direct phone calls, as well as through the grand gesture of a full-page ad in The New York Times co-signed by de Blasio and other New York leaders. Cuomo has promised to take personal responsibility for guiding Amazon through the state and community development processes. (Whether he renewed his offer to change his name is anyone’s guess.) Yet Amazon’s leadership has shown no sign of reconsidering the decision.
You don’t build a company like Amazon without making mistakes. The key to success is to learn from them. By now, Bezos and other Amazon leaders have doubtless concluded that choosing to vastly expand their footprint in New York City was a mistake. While Cuomo whispers to them that they were wrong, the city – just by being the place that it is at this moment in time – is doing everything in its power to show that, in fact, they were right.
Today’s target of opportunity is fast food and its franchisees, but Bezos knows he will inevitably wear the bull’s-eye as soon as he pours enough money into New York to convince its politicians that he won’t get up and leave. He would have to be crazy or stupid to do it. From all indications, the man who is believed to be the richest in the world is neither.
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