NYC Passes Trial Lawyer Full Employment Act

By: Michael Seinberg

In what might be a record for legislative overreach, New York City lawmakers passed the most far-reaching measure in the US to protect unemployed job seekers. The new law, which takes effect in three months, will allow the unemployed to sue an employer if they feel they were turned down for a job specifically because they were unemployed.

City Council members passed the law and subsequently overrode a mayoral veto in the process, and making NYC the fourth place in the country to legislate against discrimination based on employment status. Next thing you know, they’ll pass an add-on law that will allow people to sue employers who reject them because they’re grossly under qualified.

Of course, it is difficult to ignore the glaring irony of this shortsighted new law. In seeking to protect the unemployed, the city council has guaranteed that that class of people will grow even larger. Faced with the new threat of litigation, many companies may rethink offering positions in the first place, preferring to distribute the work among current employees instead of making a new hire. For companies looking to leave New York for greener pastures, you can be certain this new law will be a consideration.

Will the threat of legal action force companies to hire a lesser-qualified candidate that has been out of work, rather than a qualified applicant who is currently employed? Hiring a new employee is risky business for any company – a bad hire can cost hundreds of thousands. Hiring is, by definition, a discriminatory process – otherwise, why not simply hire the first person off the street?

There is of course one group who will benefit handsomely from this new law – the trial lawyers. With tens of thousands of unemployed job seekers, this law promises to be fertile ground for the lawsuit industry. The Times Union reports that both businesses and Mayor Michael Bloomberg foresee that this measure will lead to “baseless lawsuits from disgruntled applicants.” Fighting an employment status discrimination suit will be costly for companies, and the risk of an outrageous verdict at the hands of a sympathetic NYC jury will be ever present. Most defendants will opt to cut their losses and settle.

Today’s solutions are often tomorrow’s problems.  Creating a new class of lawsuits based on employment status may allow a small few to get justice, but the cost is a great injustice against all NYC job-seekers. With unemployment levels still at record highs, New York should focus on creating jobs and strengthening the economy – unfortunately, this new law will achieve just the opposite.