The New Jersey Employment Law Firm Blog

December 2, 2019

New Jersey Appellate Division Rules on Enforceability of Non-Competition, Non-Solicitation Agreements

Employers often include restrictive covenants (RCs) in employment contracts. As the name suggests, these are contractual provisions that restrict employees from taking certain actions, both during and after employment. In order for provisions like these to be enforceable, they must balance the employer’s interests with the employee’s rights. The New Jersey Superior Court, Appellate Division ruled this summer in a consolidated group of cases in which an employer alleged RC violations by former employees. It addressed the “inconsistent” handling of the lawsuit by lower courts, and sought “to bring some clarity and uniformity” to how courts deal with RCs in New Jersey employment contracts.

Two common RCs are:
– Non-competition or non-compete agreements, which restrict employees from working for another company that competes with their employer; and
– Non-solicitation agreements, which restrict employees from soliciting clients or customers of their employer to do business with someone else.

In 1970, the New Jersey Supreme Court established three principles for non-competition agreements. In order to be enforceable, the court held that a non-competition agreement (1) must protect no more than an employer’s “legitimate interests”, (2) must “impose[] no undue hardship on the employee”, and (3) must not be “injurious to the public.” The court further ruled that New Jersey non-competition agreements must have reasonable limits on both duration and geographic scope. The court later held that the employer has the burden of demonstrating enforceability. A non-competition agreement that restricts a former employee’s ability to work indefinitely, or which prohibits working for a competitor anywhere in the United States would likely be deemed unreasonable and unenforceable in New Jersey.

November 26, 2019

Task Force Releases Report on Misclassification of Employees as Independent Contractors in New Jersey

by Resnick Law Group, P.C.

New Jersey employment statutes protect workers against a variety of acts by employers, but in order for these protections to apply, an employment relationship must exist. Independent contractors generally do not fall within the scope of these laws. Employers therefore sometimes attempt to classify workers as independent contractors when they should be employees. This is known as “misclassification.” In May 2018, the Governor of New Jersey established a task force to make recommendations on how the state can address employee misclassification. The task force released a report in July 2019 that provides 10 recommendations for identifying misclassification, enforcing state law, and deterring employers from misclassifying their employees.

Employee Misclassification

The task force defines misclassification as “the practice of illegally and improperly classifying workers as independent contractors, rather than employees.” It states in its report that the practice has increased over the past decade by about 40 percent. It attributes this, in large part, to the “fissured workplace,” in which companies use an extensive network of outsourced contractors and subcontractors.

In a 2015 ruling, the New Jersey Supreme Court adopted the “ABC test” for determining whether an individual is an employee or an independent contractor, based on a definition of “employment” codified at N.J. Rev. Stat. §§ 43:21-19(i)(6)(A) – (C). The test presumes that a person is an employee unless their working conditions meet three criteria. The individual’s work must be generally free from control by the employer, the services performed by the individual must be either not part of the employer’s usual business or performed somewhere other than the employer’s usual place of business, and the individual must have their own “independently established trade, occupation, profession or business.”

November 15, 2019

Appellate Division Affirms Verdict of Almost $1 Million in New Jersey Retaliation Case

by Resnick Law Group, P.C.

In addition to prohibiting discrimination on the basis of factors like race, sex, and religion, most anti-discrimination statutes also prohibit employers from retaliating against employees who report alleged discrimination, who participate in an investigation of alleged unlawful acts, or who engage in other legally protected activities. In 2016, a jury in Bergen County, New Jersey found in favor of a former bank vice president who alleged that she was fired for reporting her concerns about gender discrimination. It found that the bank had retaliated against the plaintiff in violation of the New Jersey Law Against Discrimination (NJLAD) and awarded her $935,000 in damages. In June 2019, the New Jersey Superior Court, Appellate Division affirmed the verdict and award.

Discrimination “on the basis of” a protected category generally refers to discrimination that is motivated by an individual’s membership, or perceived membership, in a protected group. Statutes like the NJLAD also protect employees against discriminatory or retaliatory actions based on their good-faith efforts to enforce these rights. A prohibition on discrimination is not much help if an employer can still fire someone because they made an allegation of discrimination. The NJLAD therefore prohibits employers from “tak[ing] reprisals” against employees who “oppose[] any practices or acts forbidden under this act.” N.J. Rev. Stat. § 10:5-12(d).

The Equal Employment Opportunity Commission (EEOC) reports that retaliation is the most common complaint it receives. In fiscal year 2018, the agency received 39,469 complaints alleging retaliation under at least one of the statutes it enforces. This accounted for 51.6 percent of all complaints received that year. More than 30,000 complaints, or 40 percent, were specifically for retaliation under Title VII of the Civil Rights Act of 1964.

November 1, 2019

Lawsuit by New Jersey Grocery Store Employee Alleged Disability Discrimination, Failure to Accommodate

by Resnick Law Group, P.C.

The New Jersey Law Against Discrimination (NJLAD) prohibits employers from discriminating on the basis of disability. It also requires employers to make “reasonable accommodations” for employees with disabilities, in order to enable them to perform their job duties. A New Jersey disability discrimination lawsuit originally filed in the Superior Court of Bergen County alleged failure to accommodate against a grocery store. The employee was bitten on the arm by a venomous spider while at work, resulting in hospitalization. He alleged in the lawsuit that the employer failed to accommodate the “anxiety and panic attacks” that arose because of the experience, and that he was fired in violation of the NJLAD. The parties settled the suit shortly after its removal to federal court.

The term “disability,” as defined by the NJLAD, includes “any mental [or] psychological…disability…which prevents the normal exercise of any bodily or mental functions.” N.J. Rev. Stat. § 10:5-5(q). Anxiety and panic disorders can be extremely debilitating for some individuals.

The Equal Employment Opportunity Commission (EEOC) issued a guidance document in 1997 that addressed whether anxiety may qualify as a disability under federal law. Its conclusions do not control New Jersey state courts applying the NJLAD, but they may still offer some useful guidance. The EEOC offered an example of an employee whose anxiety disorder affected their “ability to concentrate.” Legal antidiscrimination protections would be available, the EEOC concluded, if the impact of the anxiety disorder is “long-term or potentially long-term, as opposed to temporary.”

October 25, 2019

Class Action Alleges Age Discrimination in Job Advertisements on Social Media

by Resnick Law Group, P.C.

While Title VII of the Civil Rights Act of 1964 is considered to be the primary federal antidiscrimination law, the Age Discrimination in Employment Act (ADEA) of 1967 also provides important protections for workers nationwide. Both the ADEA and New Jersey’s antidiscrimination statute prohibit employers from advertising job openings in ways that restrict eligibility on the basis of age. A pending federal class action against several major companies addresses a relatively new method of advertising. The lawsuit alleges that the defendants restricted the visibility of job advertisements on social media to users in certain age ranges. Several recent decisions by the Equal Employment Opportunity Commission (EEOC) support the plaintiffs’ position that this violates the ADEA’s advertising restrictions.

The ADEA’s protections against age discrimination apply to workers who are at least forty years old. 29 U.S.C. § 631(a). The New Jersey Law Against Discrimination (NJLAD), on the other hand, does not set a minimum age but states that employers may “refus[e] to accept for employment or to promote” a person who is more than seventy years old. N.J. Rev. Stat. § 10-5:12(a). Both statutes prohibit the publication of job advertisements that demonstrate “any limitation, specification or discrimination” based on age. 29 U.S.C. § 623(e), N.J. Rev. Stat. § 10:5-12(c). Job listings that only purport to limit the eligibility of minors typically do not violate these statutes, since minors are subject to separate work restrictions. A job advertisement stating that a job is only open to applicants between the ages of eighteen and forty would violate both the ADE and the NJLAD.

In July 2019, the EEOC issued determination letters to seven companies based on charges filed under the ADEA. All of the charges alleged unlawful posting of job advertisements on the social media platform Facebook, which allows companies to target advertisements to certain audiences. The EEOC reported that it found evidence that the companies “used language to limit the age of individuals who were able to view the advertisement.” It notified the companies that it had found “reasonable cause to believe that [they] violated the ADEA.”

October 18, 2019

Supreme Court Rules on Class Arbitration in Employment Disputes

by Resnick Law Group, P.C.

New Jersey employment lawsuits can take months or years before getting to trial. Alternative dispute resolution (ADR) offers other ways for litigants to deal with their disputes. Many employment contracts now include clauses stating that employees agree to submit employment-related disputes to arbitration, a type of ADR that resembles a trial, before going to court. The Federal Arbitration Act (FAA) sets standards for arbitration agreements, and establishes limited guidelines for when courts have the authority to vacate or modify “binding” arbitration awards. The U.S. Supreme Court recently ruled on whether an arbitration agreement in an employment contract can require an employer to engage in arbitration with a class of employees, rather than separate proceedings with each employee asserting a claim. The ruling in Lamps Plus, Inc. v. Varela, 587 U.S. (2019), holds that an arbitration agreement must explicitly allow for class arbitration. Courts cannot infer consent to class arbitration from an ambiguous agreement.

In an arbitration, the parties to a dispute choose a neutral third-party arbitrator who acts in a role similar to that of a judge. This process offers the advantage of moving faster than a lawsuit. Its disadvantages often weigh heavier on employees, such as the confidentiality of arbitration proceedings and, in the case of binding arbitration, a lack of further recourse if the arbitrator rules against them. The FAA presumes that any agreement to arbitrate is “valid, irrevocable, and enforceable” as long as it complies with all requirements for an enforceable contract. 9 U.S.C. § 2.

Federal and state civil procedure rules allow large groups of plaintiffs with similar claims against a defendant to join their claims into a single lawsuit, known as a class action. Class arbitration operates on a similar principle, allowing a group of claimants to present their cases together in one proceeding. The alternative is to have each claimant bring their claims individually, with each individual bearing the full cost of doing so. While a well-established set of procedural rules govern class actions, however, class arbitration derives from contractual agreements, such as those between employees and their employer. The Supreme Court ruled that courts cannot compel class arbitration when the arbitration agreement is “silent” on whether the parties have consented to it.

October 11, 2019

Third Circuit Rules Reinstates ADA Discrimination Claims in Employment Lawsuit

by Resnick Law Group, P.C.

The Americans with Disabilities Act (ADA) of 1990 is a groundbreaking law that protects the rights of people with disabilities in the workplace and in many public businesses. Employers may not discriminate against employees or job applicants on the basis of a covered disability, and they may be required to provide “reasonable accommodations” to allow employees to perform their job duties. The statute also bars employers in many circumstances from requiring medical examinations, or making other inquiries regarding medical conditions. The Third Circuit Court of Appeals, whose jurisdiction includes New Jersey, recently ruled on a disability discrimination claim that included alleged violations of the ADA provisions regarding reasonable accommodations and medical inquiries. The court reversed a lower court order dismissing those claims, allowing them to move forward. If you feel your employer is not providing reasonable accommodations in light of your medical condition, it may be to your advantage to contact a New Jersey disability discrimination attorney.

In order for a person to establish that they have a “disability” under the ADA, they must show that their impairment “substantially limits one or more major life activities,” or that they are “regarded as having such an impairment.” 42 U.S.C. §§ 12102(1)(A), (C). A “reasonable accommodation” might include physically modifying the work environment or making adjustments to work schedules. See id. at § 12111(9). An employer commits unlawful disability discrimination when, without establishing that doing so would “impose an undue hardship,” they fail to provide a reasonable accommodation to a qualified employee. Id. at § 12112(b)(5)(A).

Employers may not require employees to undergo medical examinations, nor may they inquire about employees’ medical history or medical conditions, except as specifically authorized by the statutes. The ADA specifically prohibits medical examinations or inquiries intended to determine whether an employee has a disability, or to ascertain “the nature or severity of the disability,” except when an employer can show that it is “job-related and consistent with business necessity.” Id. at § 12112(d)(4)(A).

October 4, 2019

U.S. Department of Labor Issues New Guidance on Designation of FMLA Leave by Employers

by Resnick Law Group, P.C.

The Family and Medical Leave Act (FMLA) requires covered employers to provide eligible employees with up to twelve weeks of unpaid leave. It is the only federal statute that provides medical leave nationwide, and it only provides unpaid leave. New Jersey is one of five U.S. states, plus the District of Columbia, to provide paid leave for new parents and for certain other purposes. The U.S. Department of Labor (DOL) revised its guidance on the accrual of FMLA leave by employees in an opinion letter released in March 2019. This guidance bars employers from delaying the designation of accrued leave as FMLA leave. It might also affect how and when employees can take leave under the FMLA or another program. If you need to take paid leave and wonder if doing so is permissible under state law, you should reach out to a New Jersey employment law attorney at your earliest convenience.

Employers with at least fifty employees must provide FMLA leave. 29 U.S.C. § 2611(4)(A). In order to be eligible, employees must have worked for the employer for at least one year, and they must have actually worked at least 1,250 hours during that time. Id. at § 2611(2). Unpaid leave is available for up to twelve weeks per twelve-month period, for reasons like the birth or adoption of a child, serious illness or injury, or caring for an ill or injured family member. Id. at § 2612(a)(1).

If an employer provides paid leave to its own employees, but the total amount of leave available under the program is less than twelve weeks, the FMLA only requires that employer to provide enough unpaid leave to bring the total amount of leave to twelve weeks. Id. at § 2612(d). For example, if an employer provides six weeks of paid family leave, the FMLA would only require it to provide an additional six weeks of unpaid leave.

September 26, 2019

New Jersey Legislature Considers Bill Addressing Hairstyle Discrimination in Employment

by Resnick Law Group, P.C.

Race discrimination in employment can take many forms. Sometimes an employer commits an adverse act against an employee that is unambiguously based on that employee’s race, but it is usually that obvious. Employment policies that do not appear to be motivated by any sort of racial animus, can still have a substantially disproportionate impact on employees of certain races. Workplace dress codes and grooming standards, for example, can reinforce racial discrimination by placing undue burdens on people who identify as African American or Black. These policies often, without a clear business justification, prohibit Black employees from wearing their hair in certain common hairstyles, including natural hairstyles. New York City issued guidelines in early 2019 about hairstyle discrimination. The state legislatures in California and New York later enacted laws adding hairstyle discrimination to state law definitions of race discrimination. A bill currently pending in the New Jersey Legislature would make similar changes to the New Jersey Law Against Discrimination (NJLAD). If you are concerned that your hairstyle may be related to a dispute you are having at work, reach out to a New Jersey employment discrimination lawyer today.

Employment discrimination on the basis of race is prohibited under the NJLAD. N.J. Rev. Stat. § 10:5-12(a). The statute does not currently provide a definition for “race.” It relies on common usage, but even in everyday conversation, the word “race” is fraught with subtext. Dictionary definitions like “a category of humankind that shares certain distinctive physical traits” do not capture the full meaning of the term. New York City sought to address this lack of detail in its antidiscrimination law by focusing on hairstyle discrimination.

In February 2019, the New York City Commission on Human Rights (CHR) published guidelines on “race discrimination on the basis of hair.” It described this as “discrimination based on characteristics and cultural practices associated with being Black.” The term “Black,” as used by the CHR, includes people who identify as African or African American, as well as people with Afro-Caribbean and Afro-Latinx heritage. Workplace dress codes and grooming standards “are often rooted in white standards of appearance,” the CHR stated, and contribute to perceptions “that Black hairstyles are unprofessional.” Many such policies do not allow Black employees to maintain natural hairstyles. This requires them to undergo treatments to straighten their hair that are both expensive and damaging.

September 20, 2019

Hospital Settles New Jersey FMLA, Pregnancy Discrimination Case

by Resnick Law Group, P.C.

New Jersey family and medical leave laws provide eligible workers with guaranteed time off from work for the birth of a child. State and federal laws also protect workers from discrimination by their employers because of pregnancy or childbirth. A company that operates a hospital in Middlesex County, New Jersey, recently settled a lawsuit brought by a former employee alleging discrimination on the basis of both pregnancy and medical leave. The settlement includes $500,000 in damages, plus attorney’s fees.

At the federal level, the Family and Medical Leave Act (FMLA) provides eligible employees of covered employers up to twelve weeks of unpaid leave per year for certain purposes, such as the birth of a child or a serious illness. 29 U.S.C. § 2612(a)(1). The eligibility criteria are based on both the total number of employees and the number of hours worked by each individual employee. See id. at §§ 2611(2)(A), (4)(A). Employers may not interfere with employees seeking to exercise their rights under these laws, nor may they discriminate against anyone for taking legally authorized leave. Id. at § 2615(a). The New Jersey Family Leave Act (NJFLA) provides similar rights and protections, with some differences. See N.J. Rev. Stat. §§ 34:11B-3(e), (f); 34:11B-4; 34:11B-9.

Both federal and New Jersey antidiscrimination statutes prohibit discrimination on the basis of pregnancy or childbirth. Title VII of the Civil Rights Act of 1964 defines pregnancy and childbirth discrimination as a form of sex discrimination. 42 U.S.C. §§ 2000e(k), 2000e-2(a). The New Jersey Law Against Discrimination (NJLAD) prohibits employers from discriminating on the basis of “familial status,” which includes “being the natural parent of a child” and “any person who is pregnant.” N.J. Rev. Stat. §§ 10:5-5(ll), 10:5-12(a).