The New Jersey Employment Law Firm Blog

October 17, 2024

Department of Labor Guidance Discusses Risks Posed by AI to Wage and Hour Laws

As artificial intelligence (AI) becomes more common in computer applications, lawmakers and policymakers have taken notice. This includes the use of AI by employers. For example, several bills introduced in the state legislature would add AI protections to New Jersey employment law. The White House issued an executive order in October 2023 calling for policies that “mitigate AI’s potential harms to employees’ well-being and maximize its potential benefits.” In April 2024, the Department of Labor’s Wage and Hour Division (WHD) issued Field Assistance Bulletin (FAB) 2024-1, which addresses the potential legal issues that AI may pose under several federal employment statutes.

AI and Federal Employment Laws

The WHD uses the definition of “artificial intelligence” that Congress adopted in the National Artificial Intelligence Initiative Act of 2020: a “machine-based system” that can “make predictions, recommendations or decisions influencing real or virtual environments” based on “human-defined objectives.” This consists of three steps, according to the statute:
1. The system perceives an environment.
2. It “abstract[s] such perceptions into models” using an automated system.
3. It “use[s] model inference” to produce new information, including recommendations or conclusions.
Employers may use automated AI tools for a wide range of analytical purposes related to hiring, management, HR, and employee and labor relations.

Potential AI Issues Identified by the WHD

FAB 2024-1 discusses potential problems under three employment statutes.
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October 11, 2024

Retail Workers Settle Overtime Pay Claim for $1.25 Million

by Resnick Law Group, P.C.

Employees who are not exempt from overtime rules are entitled to a greater pay rate for any hours they work over forty in a week. Federal and New Jersey employment laws protect this right and impose penalties and legal liability on employers who fail to pay overtime rates to their employees. Under the federal Fair Labor Standards Act (FLSA), an employer may be liable to employees for double the amount of unpaid overtime. The statute allows an employee to bring a lawsuit on behalf of themselves and other employees in similar circumstances. A group of retail employees recently settled a lawsuit that alleged overtime violations under the FLSA and state law. As part of the settlement, the defendant agreed to pay $1.25 million in damages.

The FLSA requires employers to pay time-and-a-half to non-exempt employees for overtime work. Generally speaking, overtime hours begin once an employee has worked forty hours. The statute uses the term “workweek,” but does not provide a definition. Employers may vary on how they define the term, although a workweek must consist of seven days. A workweek typically goes from Monday to Sunday or Sunday to Saturday. If an employee works forty-five hours during the period that the employer considers a workweek, the employer must pay them the overtime rate for five hours.

Section 16(b) of the FLSA allows employees to bring collective actions for “other employees similarly situated.” A collective action under the FLSA is similar to a class action in many ways. It allows multiple employees with similar claims to pool their claims, which can make asserting their rights more efficient. One important difference is that FLSA collective actions are strictly “opt-in.” Some class actions automatically include all parties who meet the criteria for the class unless they opt out of class membership. For an FLSA collective action, potential plaintiffs must give written consent to be part of the lawsuit.
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October 4, 2024

New Jersey Supreme Court Rules on Medical Staff’s Employment Contract Dispute

by Resnick Law Group, P.C.

Employers who enter into contracts with their workers have an obligation to abide by the terms of those contracts. These obligations exist independent of any federal or New Jersey employment laws. Contract law governs the enforcement of contractual terms. An employment action that does not violate an employment statute might still violate contract law. The New Jersey Supreme Court recently ruled in a case involving several contract law claims against a hospital. The plaintiffs alleged that the hospital breached the implied covenant of good faith and fair dealing. This is a legal principle that holds that every contract carries an implied agreement that the parties will deal fairly with one another and negotiate in good faith. The court’s ruling is complicated, going in the plaintiffs’ favor in some ways, but not in other ways. The ruling nevertheless provides a useful guide for how this implied covenant may arise in employment situations.

The implied covenant of good faith and fair dealing is almost impossible to define. It depends heavily on the circumstances of each case. Factors that may be important include the relative power and resources of each party to a contract, the history of negotiations and agreements between them, and the nature of a specific agreement. The implied covenant generally prohibits parties from acts like hiding or misrepresenting important information or taking steps to undermine the other party’s ability to perform their obligations or benefit from the contract. It may arise in claims like wrongful termination.

The plaintiffs in the case described above are a group of neurosurgeons. According to the court’s decision, they first obtained core privileges and admitting privileges at the defendant’s hospital in 2003. While this is not the same as most people’s employment arrangements, the same legal principles can apply to many employer-employee relationships. “Core privileges” means that the plaintiffs could use the hospital to perform neurosurgical procedures. “Admitting privileges” allow physicians to admit established patients to the hospital.
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September 26, 2024

Bill Pending in U.S. Senate Would Restrict Employers’ Use of AI in New Jersey and Nationwide

by Resnick Law Group, P.C.

The use of artificial intelligence (AI) technology has caused concern in numerous industries, raising concerns ranging from copyright protection to employment discrimination. State legislatures, state and federal regulatory agencies, and the White House have weighed in on the potential misuse, whether intentional or not, of AI in the workplace. New Jersey employment law does not address this issue directly, but several pending bills would take it on. The U.S. Senate also has a bill that deals with the use of AI in hiring decisions. The No Robot Bosses Act (NRBA) would limit the ways employers may use AI during the hiring process and give individuals the right to sue for damages. The bill is unlikely to pass during this session, but it will hopefully inspire future bills.

Several bills introduced in the 2024-25 session of the New Jersey Legislature address AI in employment decisions. One would regulate “automated employment decision tools,” systems that use machine learning or other types of AI to screen job applicants or identify preferred candidates for a position. These types of tools rely on human-supplied data to “learn,” so they are prone to making biased decisions if they receive biased data. This can occur with no conscious intent to be biased. The bill would require “bias audits” for all AI screening tools. The NRBA also addresses these concerns.

The NRBA would regulate “automated decision systems” (ADSs), which it defines as “a system, software, or process that uses computation” to make decisions or assist in decision-making. This includes systems that use “machine learning, statistics, or other data processing or artificial intelligence techniques.”
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September 18, 2024

New Jersey Courts Reject Effort to Stop Temporary Workers’ Bill of Rights from Taking Effect

by Resnick Law Group, P.C.

The Temporary Workers’ Bill of Rights (TWBOR) became law in New Jersey in February 2023. The Legislature determined that more than 100,000 temporary workers employed by staffing agencies earned substantially less than direct employees performing the same work. It also found that temporary workers are often at risk of abuse or exploitation and that temporary workers do not have the full range of protections offered by New Jersey employment laws. The TWBOR addresses these concerns. The bill took effect on August 5, 2023, after a federal court rejected a challenge by several staffing agency trade organizations. The Third Circuit Court of Appeals affirmed the court’s ruling in July 2024. A month later, the district court denied another motion from the plaintiffs seeking an injunction against the TWBOR. Whether additional appeals will follow remains to be seen.

The TWBOR provides several important legal protections for temporary workers. The law mainly applies to staffing agencies that employ temporary workers and make them available to client companies. Staffing agencies must pay temporary workers at least the same amount that their clients pay their employees for similar work. They must also provide equal benefits. They may not retaliate against workers who exercise the rights the TWBOR guarantees. They must provide workers with written notice for every new assignment that provides information like the work they will be performing, the length of the assignment, and the wage rate they will receive.

A group of trade associations that represent New Jersey staffing agencies filed suit in May 2023 seeking to prevent the TWBOR from taking effect. They sought a preliminary injunction that summer. A federal judge denied their request, finding that they had failed to establish one of the elements required for a preliminary injunction: that they would be likely to succeed on the merits of their claims. The court rejected other arguments from the plaintiffs as well, including a claim that the TWBOR discriminated against out-of-state businesses in violation of the Dormant Commerce Clause and that the law was void because of vagueness. It held that protecting temporary workers is a valid state interest and that the TWBOR was reasonably related to this interest.
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August 30, 2024

Third Circuit Affirms Dismissal of Plaintiff’s Racial Discrimination Case

by Resnick Law Group, P.C.

In a recent ruling, the Third Circuit upheld a summary judgment in favor of Bryn Mawr Trust Company (BMT) in a lawsuit filed by former employee, Russo. Russo, who is Black, alleged that her supervisor, Therese Trainer, subjected her to racial discrimination, retaliation, and a hostile work environment. Ultimately, the court rejected Russo’s claims against her former employer; however, the case provides important insight to similarly situated employees who are looking to learn more about their options.

The Court Rejects Each of the Plaintiff’s Claims

The court reviewed Russo’s claims under the McDonnell Douglas burden-shifting framework. While Russo established a prima facie case of discrimination by highlighting several instances of inappropriate comments and perceived hostile actions by Trainer, the court found that BMT provided legitimate, non-discriminatory reasons for its actions. Specifically, the court noted that the security investigation into Russo’s handling of a vault key, which led to her suspension with pay, was justified given the seriousness of the breach. Additionally, the court determined that Russo’s claim of constructive discharge—stemming from BMT’s decision to give a hostile customer 30 days to close her account—did not hold up under legal scrutiny. The court concluded that BMT’s response was consistent with its standard procedures and did not create an environment so intolerable that a reasonable person would feel compelled to resign.

The court also dismissed Russo’s retaliation claims, emphasizing that the security investigation was initiated before Russo filed her EEOC and PHRC complaints, making it unlikely to be retaliatory. The court further found that BMT’s handling of the hostile customer incident was prompt and appropriate, undermining Russo’s claims of retaliation.

August 25, 2024

Court Blocks FTC’s Non-Compete Ban: What It Means for New Jersey Employees

by Resnick Law Group, P.C.

In a recent case, the U.S. District Court issued a preliminary injunction against the Federal Trade Commission’s (FTC) “Non-Compete Rule,” which was set to take effect on September 4, 2024. The Non-Compete Rule aimed to make most non-compete agreements unenforceable, significantly altering the employment landscape across the U.S., including in New Jersey. Thus, if left to stand, the recent opinion out of Texas could have far-reaching implications for New Jersey employees.

The FTC’s Non-Compete Rule and Its Implications

The FTC introduced the Non-Compete Rule intending to protect employees from restrictive agreements that limit their ability to work for competitors or start their businesses after leaving a job. Historically, non-compete agreements have been widely criticized for stifling competition and limiting workers’ job mobility. If enforced, the FTC rule would have provided greater freedom for employees in New Jersey to seek better job opportunities without fear of legal repercussions from former employers.

However, the court’s recent decision temporarily blocks the FTC’s Non-Compete Rule, questioning the FTC’s authority under the Federal Trade Commission Act to implement such a sweeping regulation. In this case, the court found that the FTC might lack the substantive rulemaking power to enforce the Non-Compete Rule, raising concerns about the agency’s ability to regulate unfair methods of competition in this manner.

August 23, 2024

New Jersey Court Rejects Employee’s FMLA Claim

by Resnick Law Group, P.C.

If you believe you’ve been unfairly treated at work, particularly if you’ve been denied leave under the Family and Medical Leave Act (FMLA) or retaliated against for requesting it, the Resnick Law Group is here to help. Understanding your rights under the FMLA is crucial, and if those rights are violated, you may have grounds for legal action.

In a recent case, an employee claimed her employer violated the FMLA in two ways: first, by denying her request for FMLA leave, and second, by retaliating against her for attempting to take that leave. She alleged that her employer intensified a hostile work environment, increased harassment, and reassigned her to roles for which she was unqualified. Unfortunately, the court found her claims too vague and inconsistent to proceed.

The FMLA is designed to help employees balance work with personal or family needs, allowing them to take reasonable leave for serious medical conditions without fear of losing their jobs. The law sets clear expectations for employers, ensuring that eligible employees can take up to 12 weeks of leave within a year. After this leave, the employee must be reinstated to their original job or a comparable one with the same pay, benefits, and working conditions.

However, the FMLA doesn’t just grant leave—it also protects employees from retaliation for using it. This means your employer can’t treat you negatively, such as by demoting you or increasing your workload unfairly, just because you took or requested FMLA leave.

August 16, 2024

Federal Court Weighs in on Employee’s Discrimination Case Based on COVID-19 Vaccination Requirements

by Resnick Law Group, P.C.

Employers have an affirmative duty to respect workers’ rights. However, due to various pressures and biases, employers often fail to live up to their duty. If you feel that your rights as an employee have been violated, particularly if you’ve faced discrimination or unfair treatment related to COVID-19 policies, the recent case of Srilatha Kuntumalla vs. Bristol Myers Squibb Company (“BMS”) may provide you with the guidance you’re looking for.

The Facts of the Case

In this case, Srilatha Kuntumalla, along with several other employees, filed a lawsuit against BMS after being terminated for refusing to comply with the company’s COVID-19 vaccination mandate. Kuntumalla and her co-plaintiffs argued that BMS did not follow its own exemption policies and that their terminations were a result of the company’s failure to accommodate their religious beliefs and medical concerns regarding the vaccine.

August 8, 2024

Third Circuit Holds Job Applicant’s Discrimination Case Was Improperly Dismissed

by Resnick Law Group, P.C.

Most New Jersey workers know that state and federal employment laws protect them from illegal discrimination. However, what fewer people know is that these very same laws also provide protection to job applications; that is, individuals who applied for an open position but were not selected for employment.

Recently, the United States Court of Appeals, Third Circuit, issued an opinion in an age and disability discrimination case that highlights this longstanding principle. In the case, Porter v. Merakey, the court reversed the lower court’s dismissal of Porter’s claims, finding that the lower court applied incorrect legal principles.

The Facts of the Case

Porter had previously suffered an injury to his leg, which caused him to walk with a limp and required that he stretch his leg out straight while sitting. Eight years after his injury, at the age of 66, Porter applied for an open position at Merakey, a provider of behavioral health services. He met the minimum requirements for the job and was invited to interview for the position.