NCPA - National Center for Policy Analysis


May 20, 2010

The New York state Senate last Wednesday passed a bill whose enactment would put a permanent chill on job creation there.  The bill, now pending in a state Assembly committee, would allow employees to sue their employers if they feel they have been "subjected to an abusive work environment" -- a potentially elastic concept.  If enacted, it would undermine the Empire State's long standing doctrine of "employment at will" -- one of the very few areas in which New York law actually encourages hiring, according to E.J. McMahon, director of the Manhattan Institute's Empire Center for New York State Policy, and James Copland, director of the Institute's Center for Legal Policy. 

  • The at-will doctrine means that an employer is free to discharge individuals for good cause, bad cause or no cause at all, and the employee is equally free to quit, strike or otherwise cease work.
  • At-will employment offers a vital outlet for firms to hire and fire without the prospect of a lawsuit, other than for the causes of action for race, gender, age or disability discrimination covered by other laws.  

If the anti-bullying bill were to become law, any fired worker in New York could launch a lawsuit, assuming he or she could allege plausible "abusive" practices.  Since the bill's language expressly cites "verbal abuse" such as "derogatory remarks" and "the gratuitous sabotage or undermining of an employee's work performance," it's hard to see how a plaintiff's lawyer could fail to come up with a plausible hook for a legal complaint on behalf of a disgruntled ex-employee, explain McMahon and Copeland: 

  • Although potential remedies could include reinstatement of a fired employee and reimbursement of lost wages, the bill does cap damage awards at $25,000.
  • However, the discovery process alone could be prohibitively expensive for small firms and a nuisance for deeper-pocketed large employers. 

The New York State United Teachers, for one, which filed a memo in support, is said to be a strong supporter of the bill.  The primary beneficiaries of this bill would be attorneys seeking to shake down employers.  Passing this legislation will make New York state more like Europe, which has hardly been a job creation dynamo, say McMahon and Copeland. 

Source: E.J. McMahon and James Copland, "New York's latest job killer: A new bill would give workers broad rights to file suit when fired" New York Daily News, May 19, 2010. 

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