Retaliation

June 8, 2017

Third Circuit Court of Appeals Rules in Employee’s Favor in FMLA Discrimination Claim

Employment statutes often use broad language that leaves much open to interpretation. The federal and state agencies charged with administering and enforcing these statutes develop their own interpretations of the statutes, which may or may not match the interpretations of the court system. The U.S. Supreme Court has held that courts must defer to agencies’ interpretations of the statutes that they administer, provided that those interpretations do not exceed the agencies’ legal authority. This is known as the “Chevron doctrine,” after the court’s decision in Chevron v. Natural Resources Defense Council, 467 U.S. 837 (1984). The Third Circuit based a recent decision, which involved a Family and Medical Leave Act (FMLA) discrimination claim, on Chevron. Egan v. Delaware River Port Authority, No. 16-1471, slip op. (3rd Cir., Mar. 21, 2017).

The FMLA requires covered employers to provide unpaid leave to qualifying employees for specific medical- and family-related reasons. The statute is heavy on qualifications regarding which employers are covered, how and when employees qualify for leave, and which situations provide a valid basis for requesting leave. The U.S. Department of Labor’s Wage and Hour Division (WHD) has promulgated additional rules and procedures for determining who is entitled to leave. See 29 U.S.C. § 2611 et seq., 29 C.F.R. Part 825. Employers cannot interfere with the rights guaranteed by the FMLA, and they may be liable to aggrieved employees for damages if they do. 29 U.S.C. §§ 2615, 2617.

In the context of employment litigation, the Chevron doctrine comes into play with regard to rules promulgated by agencies like the WHD to help identify statutory violations. See Auer v. Robbins, 519 U.S. 452 (1997). The regulation at issue in Egan involved the evidence required to prove discrimination and retaliation under the FMLA. The WHD has interpreted the statute as prohibiting employers from “us[ing] the taking of FMLA leave as a negative factor in employment actions.” 29 C.F.R. § 825.220(c). The question before the Third Circuit involved whether the plaintiff had to prove that his FMLA leave directly resulted in an adverse employment action.

March 10, 2017

Federal Trade Secrets Law Grants Immunity to Employees Who Act as Whistleblowers

by Resnick Law Group, P.C.

The balance of power between an employee and an employer is usually very uneven in favor of the employer. At times, laws intended to help businesses can inadvertently harm employees. The Defend Trade Secrets Act (DTSA) of 2016 gives businesses important tools for protecting their proprietary information, but it could also give employers an additional advantage over their workers. Congress therefore added provisions to the DTSA granting immunity to whistleblowers and others reporting suspected legal violations. A court recently ruled on an employee’s immunity claim, possibly for the first time since the law’s passage.

The DTSA amends federal criminal laws dealing with the theft of trade secrets, 18 U.S.C. § 1831 et seq., to allow the owners of trade secrets to file civil lawsuits for the misappropriation of trade secrets. The law defines “trade secret” broadly to include both tangible and intangible information that the owner “has taken reasonable measures to keep…secret” and that “derives independent economic value” from being kept secret. Id. at § 1839(3). The intentional theft of a trade secret may be prosecuted as a felony. The owner of a trade secret can sue in federal court for injunctive relief and other damages, including “the seizure of property necessary to prevent the propagation or dissemination of the trade secret.” Id. at § 1836(b)(2)(A)(i).

The unauthorized disclosure of a trade secret is not always based on criminal or otherwise wrongful intent. Sometimes, disclosure might be necessary to prevent even greater legal violations. People who have access to trade secrets and disclose them to government officials or others, with the intent of reporting suspected unlawful activity, are commonly known as “whistleblowers.”

January 27, 2017

Sex Discrimination Lawsuit Describes “Boys’ Club” Atmosphere, Alleges Attempted Securities Fraud in Major Bank

by Resnick Law Group, P.C.

Federal and state employment statutes protect employees from discrimination on the basis of sex and other protected traits, and they also prohibit retaliation for reporting alleged violations of these laws. Protections against retaliation also extend to workers who act as “whistleblowers” by reporting suspected financial crimes. A lawsuit in New York City combines allegations of sex discrimination with whistleblower retaliation claims under two major financial laws. The plaintiff’s complaint describes an alleged culture of unequal treatment based on gender, including unequal pay and job responsibilities. She further alleges that a supervisor harassed her to obtain information to use in insider trading, and the defendant terminated her in retaliation for reporting the matter. The lawsuit asserts causes of action under state and federal anti-discrimination laws and federal financial statutes.

The plaintiff asserts sex discrimination, harassment, and retaliation claims under a New York state law, which is similar to the New Jersey Law Against Discrimination. N.J. Rev. Stat. § 10:5-12(a). She is also alleging gender-based pay discrimination under the Equal Pay Act of 1963, 29 U.S.C. § 206(d). She has reportedly filed a claim with the Equal Employment Opportunity Commission, and she will add claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a), once the administrative process is complete.

The plaintiff is also claiming violations of the whistleblower protection provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, 15 U.S.C. § 78u- 6(h)(1); and the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A. Employers that are subject to these laws cannot terminate or otherwise retaliate against an employee for reporting alleged financial fraud or impropriety, for participating in an investigation of alleged financial impropriety, or for disclosing information to a government agency in the manner required by law. Both statutes allow private causes of action by aggrieved employees.

December 2, 2016

New Jersey Jury Awards $8.45 Million in Wrongful Termination Case

by Resnick Law Group, P.C.

A wrongful termination lawsuit in a New Jersey state court resulted in a jury verdict awarding the plaintiff $8.45 million in September 2016. This amount consisted of compensatory damages for emotional distress of $2.45 million, as well as $6 million in punitive damages. The plaintiff alleged that her employer, a government agency in Hudson County, New Jersey, terminated her after she sought treatment for depression, despite the fact that two mental health professionals had stated that she was fit to return to work. The New Jersey Civil Service Commission (CSC) ruled that the county had wrongfully terminated her and awarded her back pay. Matter of Malta-Roman, Hudson Cty. Dept. of Family Svcs., Docket No. 2013-2883, decision (N.J. Civil Svc. Comm., May 7, 2015). The plaintiff also filed a civil lawsuit, which resulted in the jury verdict. Malta-Roman v. Hudson Cty., No. L-001361-14, complaint (N.J. Super. Ct., Hudson Co., Mar. 24, 2014).

This case highlights two tracks that employment law claims can take. The plaintiff brought a claim before the New Jersey Office of Administrative Law (OAL) and the CSC. Filing an administrative claim is a prerequisite for many employment law claims. A person claiming employment discrimination, for example, must first file a complaint with the federal Equal Employment Opportunity Commission (EEOC) or a comparable state or local agency. The agency may decide to pursue the matter on the claimant’s behalf. If it does not, it may issue a “right to sue” letter, which allows the claimant to file a civil lawsuit. Since the plaintiff in Malta-Roman was a county employee, she had to use certain administrative procedures before going to court.

August 25, 2016

Employment Contract May Not Restrict Employee’s Rights Under New Jersey Law Against Discrimination, According to State Supreme Court

by Resnick Law Group, P.C.

The New Jersey Law Against Discrimination (LAD) protects workers in this state from a wide range of unlawful employment practices. In order to assert their rights and claim damages, individuals must follow procedures outlined in the LAD, as well as case law interpreting the statute. This includes a two-year statute of limitations for filing suit. The New Jersey Supreme Court recently ruled that an employment contract may not limit the protection offered by the LAD by reducing this time period from two years to six months. Rodriguez v. Raymours Furniture Co., No. A-27 Sept. Term 2014, 074603, slip op. (N.J., Jun. 15, 2016). The court held that any such restriction “defeats the public policy goal” of the LAD. Id. at 4.

The LAD prohibits employers from discriminating against employees on the basis of various protected categories, including race, sex, religion, national origin, sexual orientation, gender identity or expression, and disability. N.J. Rev. Stat. § 10:5-12. It also prohibits retaliation against an employee for asserting their rights, such as by making an internal complaint to a human resources official or an external complaint to state or federal officials.

An individual may file a complaint with the New Jersey Division on Civil Rights, or they may file suit in Superior Court against an employer for alleged violations of the LAD. The statute does not specify a time frame during which a complainant must file suit, but the state Supreme Court has determined that the applicable statute of limitations is two years. Montells v. Haynes, 627 A.2d 654, 133 N.J. 282 (1993).

July 11, 2016

U.S. Supreme Court Rules for Demoted Employee in First Amendment Claim

by Resnick Law Group, P.C.

The U.S. Supreme Court recently ruled in favor of a New Jersey police officer who claimed that his employer violated his First Amendment rights. Heffernan v. City of Paterson, 578 U.S. ___ (2016). This case is particularly notable because the underlying action by the plaintiff’s employer was based on a mistake. The employer thought the plaintiff was engaging in a “constitutionally protected political activity,” Heffernan, slip op. at 1, by supporting a political candidate opposed by the police chief. The district court and the Third Circuit Court of Appeals ruled against the plaintiff on the grounds that, since he was not actually engaging in constitutionally protected speech, his employer could not have deprived him of any constitutional right. The Supreme Court reversed this ruling based on a 1994 case, which held that an employer’s subjective belief is the controlling factor.

The First Amendment’s guarantee of “freedom of speech” means, in part, that the government cannot punish a person for the content of their speech. In an employment law context, this protects public employees like the plaintiff, a police officer. Government employers are generally prohibited from taking adverse action against an employee for acts that are protected by the Bill of Rights. This restriction does not necessarily apply to private employers, since the First Amendment only restrains government actions. Congress enacted a statute in the 19th century giving individuals the right to file suit against a government official for the “deprivation of any rights, privileges, or immunities secured by the Constitution and laws” while acting in an official capacity. 42 U.S.C. § 1983.

The plaintiff in Heffernan was a 20-year veteran of the police department in Paterson, New Jersey. He was assigned to work in the police chief’s office in 2005, according to the court’s opinion. The mayor, who had appointed both the chief and the plaintiff’s direct supervisor, was running for reelection at the time. The plaintiff was reportedly “a good friend” of the mayor’s challenger. Heffernan, slip op. at 2.

May 27, 2016

How New Federal Trade Secrets Legislation Could Affect New Jersey Employment Law

by Resnick Law Group, P.C.

In order to remain competitive in the marketplace, most businesses rely on keeping certain types of information confidential. These might include client lists, sales leads, or computer algorithms, to name but a few. Employees often have access to information that an employer considers proprietary or otherwise secret. State laws protecting trade secrets may affect employees during and after their employment relationship. New federal legislation, the Defend Trade Secrets Act (DTSA) of 2016, Pub. L. 114-153 (May 11, 2016), expands federal courts’ jurisdiction over trade secret matters, and it could have an impact on employees in New Jersey and around the country.

Until the DTSA came along, no uniform standard for trade secret protection applied across the country. New Jersey law defines a “trade secret” as information that has value specifically because it is secret and that has been “the subject of efforts…to maintain its secrecy.” N.J. Rev. Stat. § 56:15-2. This definition is consistent with most state statutes and existing federal law. See 18 U.S.C. § 1839(3).

New Jersey’s trade secrets law prohibits the “misappropriation” of a trade secret, defined to include the acquisition of secret information by a party who knows of its confidential nature, and the disclosure of such information without permission and with knowledge of its secrecy. N.J. Rev. Stat. § 56:15-2. It allows state courts to grant injunctions to prevent “actual or threatened misappropriation.” Id. at § 56:15-3. It also allows the recovery of damages for actual losses and unjust enrichment resulting from misappropriation. Id. at § 56:15-4.

April 15, 2016

Former Employee Files Suit Under New Jersey Whistleblower Law, Claiming Employer Fired Her for Reporting Financial Misconduct

by Resnick Law Group, P.C.

A former daycare center worker in New Jersey has filed suit against her former employer, alleging violations of the state’s whistleblower protection and anti-discrimination statutes. Pierce v. Woodbury Child Dev. Ctr., Inc., No. L-000216-16, complaint (N.J. Super. Ct., Gloucester Co., Feb. 19, 2016). According to media coverage of the case, the plaintiff claims that she was wrongfully terminated from her job after reporting alleged misappropriation of state funds. The Conscientious Employee Protection Act (CEPA), N.J. Rev. Stat. § 34:19-1 et seq., prohibits retaliation against employees who report suspected illegal acts by their employers. The New Jersey Law Against Discrimination (NJLAD), N.J. Rev. Stat. § 10:5-1 et seq., prohibits retaliation in situations in which an employee complains of workplace discrimination and other unlawful acts.

New Jersey enacted CEPA in 1986 in order to protect employees from various types of “retaliatory action” by employers, defined to include “discharge, suspension or demotion…or other adverse employment action.” N.J. Rev. Stat. § 34:19-2(d). Employers may not retaliate against employees who engage in certain types of activity commonly known as “whistleblowing,” such as reporting, or threatening to report, activities, practices, or policies that the employee reasonably believes violate the law.

Based on the language of the statute, CEPA’s focus seems to be on illegal and fraudulent acts that adversely affect the government, shareholders, investors, customers, employees, and others to whom an employer might owe a duty of care. See N.J. Rev. Stat. § 34:19-3. The report may be internal, such as to a supervisor, or external, such as to a law enforcement agency or other public organization. A whistleblower may also be an employee who participates in an investigation of an employer, or who refuses to participate in an action that they reasonably believe is illegal or fraudulent.

February 23, 2016

Laws in New Jersey and at Federal Level Prohibit “Pay Secrecy” Policies by Employers

by Resnick Law Group, P.C.

Federal law and New Jersey state law generally prohibit wage discrimination, in which an employer pays different wages to employees of different genders who hold substantially similar positions or have substantially similar job duties. As the issue of wage disparity between male and female employees gains attention nationwide, understanding these laws is critically important. It can be difficult to establish that one employee has the same job as a higher-paid employee. Some employers, however, prevent workers from ever reaching that point by prohibiting their employees from disclosing or inquiring about wage information with co-workers. This practice, commonly known as “pay secrecy,” remains common despite laws prohibiting it at the federal and state levels.

The federal Equal Pay Act amended the Fair Labor Standards Act (FLSA) to ban payment of different wages to male and female employees for jobs requiring “equal skill, effort, and responsibility…performed under similar working conditions.” 29 U.S.C. § 206(d). The law allows exceptions for seniority, merit, and quantitative or qualitative factors, and the broadly-construed “differential based on any other factor other than sex.” Id. A bill that would have limited this last category, the Paycheck Fairness Act, died in the Senate in 2014. New Jersey law merely states that employers may not discriminate in the payment of wages based on sex, and it allows exceptions for any “reasonable factor or factors other than sex.” N.J. Rev. Stat. 34:11-56.2.

In order to assert their rights under federal or state wage discrimination laws, employees must know that a difference in wages exists. Many employers keep that from happening by enacting pay secrecy policies. Among private-sector employees, estimates of how many are subject to such policies range from one-third to more than 60 percent. Penalties for discussing pay rates or inquiring about pay rates can include anything from reprimands to termination.

January 4, 2016

Former New Jersey Prison Official Awarded $7.7 Million in Whistleblower Lawsuit

by Resnick Law Group, P.C.

A jury in a New Jersey superior court awarded $7.7 million in damages to a former prison official in her lawsuit alleging retaliation for cooperating with a federal extortion investigation. Easley v. N.J. Dept. of Corrections, et al., No. L-000094-13, complaint (N.J. Super. Ct., Burlington Co., Jan. 10, 2013). A Department of Corrections deputy commissioner went to prison as a result of the investigation, and the plaintiff alleged that she was terminated by the department in retaliation. The lawsuit asserted claims under state whistleblower protection law, including the Conscientious Employee Protection Act (CEPA), N.J. Rev. Stat. § 34:19-1 et seq. The judgment includes both compensatory and punitive damages.

Common-law whistleblower protections in New Jersey are based on an employer’s duty “not to discharge an employee who refused to perform an act that is a violation of a clear mandate of public policy.” Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 72 (1980). After the New Jersey Legislature enacted the CEPA, the New Jersey Supreme Court held that its protections apply to a wide range of individuals defined as “employees.” D’Annunzio v. Prudential Ins. Co., 192 N.J. 110 (2007). The court has continued to affirm that the statute has broad applicability. See Lippman v. Ethicon, ___ N.J. ___, Nos. A-65/66-13, 073324, slip op. (Jul. 15, 2015).