Michael Gansas has said he is still too traumatized to speak with federal investigators about the Oct. 15 crash, which killed 10 people and injured dozens. He was suspended Oct. 22.
Gansas' lawyers said they would seek to take the case to independent arbitration. Attorneys Catherine Foti and Edward Gleason issued a statement calling the captain's firing "a travesty of justice" and "an effort by the city to deflect attention from themselves."
Assistant Capt. Richard Smith, who was at the ferry's controls, told investigators he passed out before the boat crashed into a concrete pier. Gansas was not in the wheelhouse, according to one of the ship's mates, an apparent violation of a city rule requiring both captains' presence during docking.
Gansas' attorneys have said that rule was not communicated to ferry staff or enforced by city transportation department managers.
On Wednesday, the city Department of Transportation's Labor Relations specialist upheld the agency's recommendation to fire Gansas, whose whereabouts during the crash remain unclear.
"Anyone who is going to obstruct this city's efforts to make ferry transportation safer has no place in our work force," said mayor's spokesman Ed Skyler.
Authorities have said Gansas and Smith could face federal charges.
Smith was interviewed by U.S. Attorney Roslynn Mauskopf's staff last week. He remains suspended without pay but the transportation department agreed with a request from federal prosecutors to delay a preliminary hearing scheduled for Friday that would have been the first step toward firing him.