The New Jersey Employment Law Firm Blog

August 22, 2022

New Jersey Supreme Court Rules in Employees’ Favor in Misclassification Case

New Jersey’s employment laws protect workers whose employers try to classify them as independent contractors instead of employees. Independent contractors do not enjoy the full range of safeguards offered by state law. Wage and hour laws, for example, only apply to employees. Some employers may try to misclassify employees as independent contractors as a way of avoiding various legal obligations. Employment misclassification is a violation of state law. The New Jersey Supreme Court recently ruled against a business in a misclassification claim. It ruled that workers who operated as separate business entities were still employees under state law.

A 2015 decision by the New Jersey Supreme Court applied a three-part test, known as the “ABC test,” to the question of whether a worker is an employee or an independent contractor. The test is notable for being very favorable toward workers claiming to be employees and placing the burden of proof on employers. It gets its name from the definition of “employment” found in the New Jersey Unemployment Compensation Law, codified at N.J. Rev. Stat. § 43:21-19(i)(6)(A) through (C).

The ABC test presumes that an individual is an employee unless an employer can establish all three of the following:
A. The employer does not direct or control how the worker does their job.
B. The services provided by the worker are either outside of the scope of the employer’s usual business activities, or performed somewhere other than the employer’s regular place of business.
C. The worker’s services are part of a business or trade that the worker has established apart from the employer.
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August 12, 2022

New Jersey Appellate Division Allows Discrimination and Retaliation Lawsuit to Proceed

by Resnick Law Group, P.C.

The New Jersey Law Against Discrimination (NJLAD) prohibits discrimination in numerous areas of life, including employment and education. Claims involving discrimination in educational environments are often quite similar to New Jersey workplace discrimination claims. While they might involve alleged acts by teachers, professors, coaches, or administrators rather than supervisors or managers, the standards of evidence are the same or very similar. New Jersey courts have recognized claims that allege hostile educational environments using the same test applied to hostile work environment claims. The New Jersey Appellate Division recently affirmed a lower court order denying a university’s motion for summary judgment in a lawsuit by former students alleging a hostile educational environment under the NJLAD. Notably, the claim alleges harassment of a group rather than individuals.

The NJLAD identifies race, sex, and sexual orientation as protected categories in the workplace. Employers may not discriminate on the basis of these and other factors, which may include subjecting one or more employees to harassment or a hostile work environment. The New Jersey Supreme Court described a four-part test for identifying a hostile work environment in a 1993 decision: The alleged conduct (1) only occurred because of the employee’s sex or membership in another protected category, and (2) it was so “severe or pervasive” that (3) a reasonable person belonging to the same protected category would conclude that (4) the conduct has changed the “conditions of employment” and rendered the “working environment…hostile or abusive.” The decision specifically involved sexual harassment, but New Jersey courts have since applied this test to claims involving alleged hostile work and educational environments based on other factors as well.

When assessing claims alleging hostile work environments or hostile educational environments, courts must consider how multiple acts of harassment or hostility may affect someone over time. In a 2003 decision, the New Jersey Supreme Court addressed the need to look at the “cumulative [e]ffect of individual acts,” rather than each alleged act in isolation.

August 8, 2022

New Jersey Senate Bill Would Expand Protections for Employees in Sexual Harassment Cases

by Resnick Law Group, P.C.

Employers may include provisions in employment contracts or settlement agreements that limit employees’ ability to discuss issues like sexual harassment with others. When a settlement agreement contains this kind of provision, it may mean that the public cannot learn about the employee’s experience in the workplace. Other employees could be at risk of the same kind of experience if the employer took no action against the individual — or individuals — whose conduct led to the complaint and settlement. The New Jersey Legislature passed a law in 2019 that prohibits the use of non-disclosure agreements (NDAs) in connection with claims involving employment discrimination, harassment, or retaliation. A bill now pending in the New Jersey Senate would also prohibit non-disparagement clauses or agreements in those situations. If you have concerns about non-disclosure agreements involving a workplace matter, reach out to a New Jersey employment lawyer to get legal advice.

Businesses often use NDAs as a way to protect trade secrets and other proprietary information. An employment contract might include an NDA that protects information that could be of great interest or value to the employer’s competitors. Employers have also used NDAs to protect other kinds of information besides trade secrets, such as information that could be embarrassing.

News reports have identified numerous cases in which sexual harassment settlements included NDAs. Under this kind of NDA, one of the conditions for receiving a settlement payment is a promise by the complainant never to disclose the circumstances of the sexual harassment claims. The effect of this kind of NDA has been to keep important safety information away from the public. New Jersey passed a law in 2019 barring NDAs in employment contracts and settlement agreements as they might pertain to any “claim of discrimination, retaliation, or harassment.”
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August 1, 2022

Supreme Court Ruling May Affect Mandatory Arbitration for Some New Jersey Workers

by Resnick Law Group, P.C.

Arbitration can allow the parties to a dispute to avoid the time and expense of litigation. More and more businesses are including clauses in consumer and employment contracts that require the parties to go to arbitration before filing a lawsuit. In some situations, arbitration may tend to favor businesses over individuals for numerous reasons. New Jersey lawmakers have attempted to limit the availability of mandatory arbitration contracts for certain claims, but several courts have ruled that the Federal Arbitration Act (FAA) precludes such laws. The FAA grants broad approval to arbitration contracts and arbitration awards. It also excludes certain groups of workers from its provisions. The U.S. Supreme Court recently ruled in favor of an airline employee who objected to arbitration of her overtime compensation claims. The ruling in Southwest Airlines Co. v. Saxon held that the employee is a “transportation worker” who is exempt from the FAA. If you have questions regarding arbitration in the workplace, contact a New Jersey employment lawyer to discuss your situation.

An arbitration proceeding resembles litigation in many ways. Both parties to a dispute must agree in advance to use arbitration. The parties present evidence and arguments to a neutral third party, known as the arbitrator. After considering both sides’ cases, the arbitrator may make an award that is similar to a verdict.

The FAA states that arbitration agreements are generally “valid, irrevocable, and enforceable,” except when they might not be under contract law principles like fraud or duress. If an arbitration agreement specifically states that the arbitrator’s award will be binding, the FAA limits courts’ authority to do anything other than confirm the award and enter it as a judgment, with few exceptions. Courts can only vacate or modify an arbitrator’s award with evidence of corruption, fraud, other forms of misconduct, or significant errors.
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July 25, 2022

New Jersey Judge Rules for Employee in Misclassification Lawsuit

by Resnick Law Group, P.C.

New Jersey’s employment laws guarantee a minimum wage and overtime compensation for millions of workers. They protect employees from various forms of discrimination and harassment in the workplace. They bar employers from retaliating against workers who object to unlawful or unethical conduct. In order to enjoy the benefits of state and federal employment laws, however, a worker must be an “employee.” The definition of “employee” can be ambiguous and subject to debate. Employers may try to describe an employee as an independent contractor in order to avoid obligations set by state wage and hour laws and other statutes. New Jersey has developed a test for determining whether an individual is an employee. A federal judge recently granted summary judgment for a plaintiff in a wage and hour dispute.

Wrongfully categorizing an employee as an independent contractor is known as “employee misclassification.” It is considered a violation of wage and hour laws when an employer does it in order to avoid obligations established by those laws. New Jersey has adopted the “ABC test” to determine whether a worker is an employee or not. The test receives its name from the definition of “employment” found in New Jersey’s Unemployment Compensation Law at N.J. Rev. Stat. § 43:21-1(i)(6)(A) through (C).

A worker is presumed to be an “employee” under the ABC test unless they meet all three of the following criteria:
A. The employer does not exercise “control or direction” over the worker’s job duties and job performance.
B. Either the services the worker performs are “outside the [employer’s] usual course of…business,” or they perform those services “outside of all the [employer’s] places of business.”
C. The worker’s services are normally part of their own “trade, occupation, profession or business,” which is separate from the employer’s business.
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July 17, 2022

NLRB Rules on Question of Back Pay in New Jersey Labor Dispute

by Resnick Law Group, P.C.

Federal law protects workers’ rights to organize themselves and engage in collective bargaining with their employers. The National Labor Relations Act (NLRA) prohibits employers from interfering with these rights. It also authorizes the National Labor Relations Board (NLRB) to investigate alleged violations, rule on complaints, and award remedies like back pay and reinstatement to employees. The NLRB recently issued a ruling in an ongoing New Jersey employment dispute. The employer had raised objections to various details of an order awarding back pay to several former employees. The NLRB’s ruling generally goes in the employees’ favor.

Section 8(a) of the NLRA prohibits “unfair labor practices” by employers, such as interfering with protected activities described in § 7 or discriminating against employees on the basis of their involvement in protected activities. The NLRB has the authority under § 10 “to prevent any person from engaging in any unfair labor practice…affecting commerce.” It may serve complaints on employers based on charges received from workers, and conduct proceedings to determine whether an employer has violated the NLRA. Remedies may include reinstatement of any employee who was not dismissed for cause, along with back pay.

The case that was recently before the NLRB began with charges filed by several employees of a New Jersey nursing center in 2011 and 2012. The employees, who are licensed practical nurses (LPNs), alleged that the employer retaliated against them for their union-related activities by eliminating LPN positions and replacing them with other nurses. In 2016, the NLRB ruled that the employer’s actions violated § 8(a). It ordered the employer to offer reinstatement to the employees and awarded them back pay. The Third Circuit Court of Appeals affirmed the order in 2018.
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July 8, 2022

Supreme Court Rules on Dispute Over Mandatory Arbitration in Employment Law Claims

by Resnick Law Group, P.C.

The parties to employment law disputes in New Jersey and around the country may agree to use alternative dispute resolution (ADR) instead of the traditional litigation process. Many employers favor one particular form of ADR known as arbitration. Employment contracts often include clauses stating that any dispute must go to arbitration before — or instead of — a lawsuit. Mandatory arbitration is common in many types of employment law claims, supported by the Federal Arbitration Act (FAA). The U.S. Supreme Court recently ruled on a dispute over what an employer must do when they claim that an arbitration clause bars an employee from filing a lawsuit. The ruling in Morgan v. Sundance, Inc. allows the employee to make the case that the employer waited too long before filing a motion to dismiss the suit. If you are involved in a workplace dispute with your employer, reach out to a New Jersey employment lawyer to discuss the matter.

The arbitration process resembles litigation in some ways. An arbitrator conducts a trial and makes a recommendation, much like a judge issues a ruling or verdict. If the parties agreed in advance that arbitration would be binding, courts have very little authority to modify or vacate the arbitrator’s decision.

An employee who is subject to a binding arbitration clause has almost no recourse outside of the arbitration process itself. While arbitration agreements are voluntary, job applicants are rarely in a position to negotiate specific terms. They can either sign the agreement or look for a different job.
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June 27, 2022

Gender Discrimination Lawsuit Accuses Hospital of Wrongful Termination, Retaliation

by Resnick Law Group, P.C.

Discrimination on the basis of gender and various other factors violates federal and state employment laws in New Jersey. Employers may not take adverse actions against employees, ranging from shunning or isolating them to terminating them, based primarily on their gender or sex. They also may not retaliate against an employee for reporting concerns about gender discrimination in the workplace. A lawsuit filed in late 2021 alleges that a hospital discriminated against a doctor because of her gender and retaliated against her for opposing such practices. She alleges that the hospital eventually fired her for discriminatory and retaliatory reasons. If you feel you are the victim of retaliation or wrongful termination, contact a New Jersey employment lawyer to discuss your situation.

The New Jersey Law Against Discrimination (NJLAD) protects employees and job seekers from discrimination based on numerous factors, including sex. It prohibits retaliation for opposing or complaining about allegedly unlawful practices. It also allows workers to bring civil claims for aiding and abetting violations. At the federal level, Title VII of the Civil Rights Act of 1964 protects a smaller number of categories against discrimination, but the list includes sex. It also includes provisions barring retaliation.

The plaintiff in the lawsuit described above worked for a hospital affiliated with a major research university. According to her complaint, she entered into a two-year employment arrangement with the hospital as an Instructor in Surgery in December 2017. She describes her performance at the hospital as “stellar,” stating that she received “outstanding patient satisfaction scores” and various honors, including a Junior Faculty Award in 2019. She reportedly received a grant from the National Institutes of Health (NIH) in early 2019 that would have covered half her salary and funded much of her research. She allegedly could not participate in the grant program, however, because of the “relentless sexism” of her supervisor.
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June 20, 2022

New Jersey Workers Recover $2.3 Million in NLRB Action

by Resnick Law Group, P.C.

The right of workers to organize and bargain collectively with employers has led to many important reforms in workplace safety and working conditions. Congress enacted the National Labor Relations Act (NLRA) in the 1930s to protect these rights. The law created the National Labor Relations Board (NLRB) to adjudicate complaints about interference with organizing activities and other unlawful acts. In 2020, the NLRB ruled in favor of three former employees of a New Jersey bakery production plant who alleged that their employer wrongfully terminated them because of their union activities, along with other alleged NLRA violations. After an appellate court affirmed the ruling, the NLRB pursued an enforcement action against the employer. This resulted in an award of $2.3 million in damages for the three employees. If you have questions or concerns about organizing or collective bargaining in the workplace, reach out to a New Jersey employment lawyer as soon as possible.

The NLRA protects workers’ rights to organize themselves, either by joining an existing labor union or forming a new one, and to engage in collective bargaining and other “concerted activities” related to organizing or protection. Section 8 of the statute prohibits a variety of actions by both employers and unions. Employers may not interfere with employees’ protected activities, nor may they discriminate or retaliate on the basis of union activities. Once employees have chosen representatives to bargain collectively on their behalf, the employer may not refuse to engage with them.

The three complainants in the NLRB action worked at a plant in Fair Lawn, New Jersey as floor helpers and icing mixers. The plant produces cookies and crackers for a major brand. The complainants had been involved with the union for multiple years. The union, according to the decision from the administrative law judge (ALJ), has been the exclusive representative for plant workers since 1958.
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June 13, 2022

New Jersey Veterinarian Sues Employer for Pay Discrimination

by Resnick Law Group, P.C.

Federal and state employment laws in New Jersey require equal pay for workers in highly similar jobs in various circumstances. The federal Equal Pay Act (EPA) specifically addresses equal pay in terms of sex discrimination. New Jersey’s Diane B. Allen Equal Pay Act (NJEPA), on the other hand, takes on pay discrimination on the basis of any protected category under the New Jersey Law Against Discrimination (NJLAD), which is a rather long list. Equal pay claims based on sex discrimination are among the most common type of claim. A federal lawsuit filed in early 2022 in New Jersey alleges pay discrimination based on sex under both federal and state law. If you feel you may be the victim of pay discrimination, it is important that you reach out to a New Jersey employment lawyer to discuss your situation.

The EPA, codified at 29 U.S.C. § 206(d), states that employers may not discriminate based on sex when employees of one sex receive higher pay for “equal work” that “requires equal skill, effort, and responsibility…under similar working conditions.” Male and female employees working in the same position, with similar levels of education, training, or skill, should receive the same amount of pay in most circumstances. The EPA allows exceptions for systems based on merit, seniority, “quantity or quality of production,” or other factors that are not based on employees’ sex. Employers may not reduce any employee’s pay in order to comply with the law.

The NJEPA, found at N.J. Rev. Stat. § 10:5-12(t), is similar to the EPA in the protections it offers. It is not limited to pay discrimination on the basis of sex. Other categories protected under the NJLAD include race, religion, sexual orientation, gender identity or expression, pregnancy, and disability. The state law also allows exceptions for merit- or seniority-based systems, but its standard for other factors is arguably stricter than that of the EPA. An employer must show that the pay difference is solely based on factors other than sex, that it does not perpetuate pay discrimination based on any protected category, that the employer applies these factors “reasonably,” and that the factors are both “job-based” and “based on a legitimate business necessity.”
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