The New Jersey Employment Law Firm Blog

December 14, 2018

Major Technology Companies No Longer Require Arbitration in Sexual Harassment Cases

Litigation is perhaps the most well-known method of dealing with legal disputes, but it is not the only method. Our legal system increasingly encourages would-be litigants to use alternative dispute resolution (ADR) before, or instead of, going to court. Many contracts now include clauses requiring the parties to submit disputes to arbitration. While arbitration may offer some benefits over the court system, it is subject to numerous criticisms in disputes involving a significant imbalance of power and resources. If you have questions of this nature, contact a New Jersey employment attorney without delay.

Court decisions interpreting New Jersey’s employment antidiscrimination statute have invalidated provisions of arbitration agreements that infringe on statutory rights. Federal law, on the other hand, favors arbitration over litigation in most cases. Several major technology companies, employing thousands of people, recently dropped mandatory arbitration of sexual harassment claims, which may allow more claims to see the light of day.

Statutes like Title VII of the federal Civil Rights Act of 1964 and the New Jersey Law Against Discrimination (NJLAD) prohibit discrimination in employment on the basis of sex, and include sexual harassment as a form of unlawful sex discrimination. In order to assert a claim under these statutes, an individual must first file a complaint with a state or federal agency like the Equal Employment Opportunity Commission (EEOC). The agency will investigate the claim, and if it determines the claim to have merit, it will issue a “right to sue” letter. This allows the complainant to file suit in state or federal court. Arbitration clauses in employment contracts prevent employees from accessing this process.

December 7, 2018

Jury Awards $6 Million to Former Employee in National Origin, Age Discrimination Case

by Resnick Law Group, P.C.

A federal jury recently found in favor of a former employee claiming national origin and age discrimination under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), and state law. Middlebrooks v. Teva Pharmaceuticals USA, Inc., et al, No. 2:17-cv-00412, 2nd am. complaint (E.D. Pa., Apr. 25, 2017). The case is notable in part because the plaintiff alleged that the defendants, an Israeli pharmaceutical company and its American subsidiary, discriminated against him because of his “American origin.” Id. at 1. If you have questions of this nature, contact a New Jersey employment discrimination attorney.

In early 2018, the court allowed the plaintiff’s claims against the Israeli parent company to proceed under a theory of joint-employer liability. The case went to trial against both defendants in November 2018. The jury awarded the plaintiff over $6 million in damages.

Title VII prohibits discrimination on the basis of national origin, among other factors, and retaliation for reporting alleged unlawful acts. 42 U.S.C. §§ 2000e-2(a)(1), 2000e-3(a). The ADEA prohibits discrimination on the basis of age against individuals who are at least forty years old. 29 U.S.C. §§ 623(a)(1), 631(a). Unlawful discrimination may include harassment on the basis of a protected category, particularly when it creates a hostile work environment that prevents an individual from performing their job duties effectively.

November 30, 2018

New Jersey Court Rules on Mandatory Arbitration in Whistleblower Case

by Resnick Law Group, P.C.

Arbitration clauses are an increasingly common feature of New Jersey employment contracts, as well as around the country. If a dispute arises between the employee and employer, they agree to submit it to arbitration, a form of alternative dispute resolution (ADR) that somewhat resembles a trial, instead of the court system. Employment contracts may state that the results of the arbitration process are binding or non-binding. While arbitration may offer some advantages, it is widely perceived as favoring employers. New Jersey courts therefore tend to examine arbitration clauses very closely to ensure that employees have knowingly entered into an agreement that effectively bars them from taking their claims to court. A recent decision by the New Jersey Appellate Division, Walsh v. Prospect EOGH, Inc., et al, No. A-328-17T2, slip op. (N.J. App., Nov. 21, 2018), provides an example of this sort of scrutiny.

The arbitration process is essentially an informal trial, conducted by one or more arbitrators, who are often retired judges or attorneys. The parties submit evidence and arguments, and the arbitrators render an “arbitration award.” This could include an award of damages to one party, an order to do or refrain from doing something, or a declaration of some matter in dispute. If an arbitration clause states that the process is binding, statutes like the Federal Arbitration Act prevent courts from reviewing arbitration awards, except in cases involving alleged fraud or other misconduct.

Arbitration is arguably advantageous because it bypasses the slow-moving court system, where a lawsuit may wait years for a trial date. Parties in an arbitration may be able to select an arbitrator with knowledge of the specific issues involved in the dispute, rather than having the case decided by a randomly-assigned judge. These advantages, however, can also be distinct disadvantages employment disputes. The employer is likely to be at an advantage in selecting an arbitrator.
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November 19, 2018

New York and New Jersey Airport Workers Gain Minimum Wage Increase

by Resnick Law Group, P.C.

Workers at major airports in New Jersey and New York City will see their minimum wage increased over the next few years to $19, the highest in the country, after a unanimous vote by the Board of Commissioners of the Port Authority of New York and New Jersey (PANYNJ). The federal minimum wage has remained at $7.25 per hour for almost a decade, while New Jersey and New York have enacted higher state-level minimum wages. Despite these laws, New Jersey wage and hour law claims routinely allege failure by employers to pay their workers at or above the minimum rate. The PANYNJ’s wage increase, while only binding on employers at certain airport facilities, will hopefully lead to increases elsewhere.

Congress last amended the minimum wage provisions of the Fair Labor Standard Act (FLSA) in 2007. The minimum wage increased to $5.85 per hour on July 24, 2007; to $6.55 an hour on July 24, 2008; and to $7.25 an hour on July 24, 2010. 29 U.S.C. § 206(a)(1). New Jersey’s minimum wage has been set at $8.60 per hour since the beginning of 2018. N.J. Rev. Stat. § 34:11-56a4, N.J.A.C. § 12:56-3.1. The minimum wage in New York varies by location. As of December 31, 2017, employers in New York City with eleven or more employees must pay at least $13.00 per hour, while employers with ten or fewer employees must pay $12.00 per hour. N.Y. Lab. L. § 652(1)(a).

The PANYNJ is a government organization created by a compact between the states of New Jersey and New York, with the approval of Congress. It was formally established in 1921, although the two states first agreed to work together in 1834 to manage the port area, which now covers an area of about 1,500 square miles. The governors of the two states appoint the members of the Board of Commissioners. The PANYNJ manages multiple seaports, the PATH train system and numerous bus lines, multiple bridges and tunnels, and six airports. Its authority includes the ability to set a minimum wage for workers employed at its sites.
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November 9, 2018

Lawsuit Alleges Video Game Company Violated Federal and State Labor Laws by Laying Off Most of Its Employees

by Resnick Law Group, P.C.

New Jersey employment laws, as well as laws around the country, must balance the rights and interests of employees with those of employers. Employees’ protected rights include fair wages, reasonable hours, and a workplace that is reasonably safe and free of harassment and discrimination. Employers need to be able to pursue their business activities, to the extent that they do not violate the rights of their employees and others. Sometimes, businesses may determine that they need to lay off a significant portion of their workforce. This is within an employer’s rights, but laws at the federal level and in many states, including New Jersey, set strict limits. A recently-filed lawsuit alleges that a video game company violated the federal Worker Adjustment and Retraining Notification (WARN) Act of 1988 when it laid off all but twenty-five employees several months ago. Roberts, et al v. Telltale Games, Inc., No. 3:18-cv-05850, complaint (N.D. Cal., Sep. 24, 2018).

The federal WARN Act generally applies to employers with at least one hundred full-time employees. The statute’s requirements are triggered by two events: a “plant closing” or a “mass layoff.” The former refers to any closure of a facility that results in fifty or more employees at a single site losing their jobs within a period of thirty days; while the latter refers to any other incident that, in a thirty-day period, results in layoffs of (1) at least five hundred employees, or (2) at least fifty employees when that number accounts for one-third of all employees. 29 U.S.C. §§ 2101(a)(2), (3). New Jersey’s equivalent law is formally known as the Millville Dallas Airmotive Plant Job Loss Notification Act of 2007, and informally known as the NJ WARN Act. It uses the same definition of “mass layoff,” and uses the term “termination of operations” to refer to the same type of incident as a “plant closing.” N.J. Rev. Stat. § 34:21-1.

Both the federal and NJ WARN Acts require covered employers to provide written notice to employees or their representatives at least sixty days prior to a plant closing or mass layoff. 29 U.S.C. § 2102(a)(1), N.J. Rev. Stat. § 34:21-2(a). If an employer fails to provide the required notice under either statute, aggrieved employees may bring a civil action for damages. Federal law allows back pay, along with benefits subject to the Employee Retirement Income Security Act of 1974 (ERISA), for up to sixty days. 29 U.S.C. § 2104(a). The NJ WARN Act allows courts to award “lost wages, benefits and other remuneration” in an amount up to “one week of pay for each full year of employment.” N.J. Rev. Stat. §§ 34:21-2(b), 34:21-6.
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November 2, 2018

New Jersey’s New Public-Sector Union Law Faces Challenge in Light of Recent Supreme Court Ruling

by Resnick Law Group, P.C.

A new law protecting New Jersey public sector unions, which was signed into law by Governor Phil Murphy in May 2018, faces a legal challenge based on a U.S. Supreme Court decision one month later. The law, entitled the Workplace Democracy Enhancement Act (WDEA), establishes standards for interactions between public-sector unions and government employers, and addresses several controversial issues. The Supreme Court’s ruling in Janus v. AFSCME, 585 U.S. ___ (2018), however, could represent a significant reduction in the power of public-sector unions. A lawsuit filed by several union members against their union and various state government officials argues that Janus invalidates certain provisions of the WDEA. Thulen, et al v. AFSCME, et al, No. 1:18-cv-14584, complaint (D.N.J., Oct. 3, 2018). The lawsuit is among the first to test how Janus will impact New Jersey employees’ rights.

Federal and state laws protect workers’ rights to organize for the purpose of collective bargaining, and either to form a union or to join an existing union that can negotiate with management on their behalf. The WDEA declares that any public sector union chosen as “the exclusive representatives of employees in a collective negotiations unit” must “hav[e] access to and be[] able to communicate with the employees it represents.” P.L. 2018, c. 15 § 2 (N.J. Rev. Stat. § 34:13A-5.12). The law requires public employers to allow union representatives to have reasonable access to employees, and to provide certain employee information to the union within a specified time frame.

Public-sector union members may authorize their employer to deduct union membership dues from their paychecks. The WDEA provision at issue in Thulen involves a restriction on employees’ ability to withdraw authorization for this payroll deduction. An employee may only withdraw authorization by giving written notice to the employer “during the 10 days following each anniversary date of their employment.” Id. at § 6, amending N.J. Rev. Stat. § 52:14-15.9e.

October 26, 2018

Supreme Court Ruling Strikes Down Fees Charged to Non-Members by Public Sector Unions

by Resnick Law Group, P.C.

The role of labor unions in the modern economy is often a controversial issue. It is exceedingly difficult to deny, however, that they have improved working conditions for employees in New Jersey and around the country. Today’s unions are arguably victims of their own success, as many people no longer see them as necessary. Workers nevertheless still benefit from the ability to bargain collectively with their employers. Federal and state laws protect workers’ ability to organize for purposes of collective bargaining, but many states have enacted laws that limit unions in important ways. A recent decision by the U.S. Supreme Court, Janus v. AFSCME, 585 U.S. ___ (2018), specifically impacts public sector unions and their ability to collect fees to support their collective bargaining activities. If you have a question about your union, contact a New Jersey labor law attorney.

The National Labor Relations Act (NLRA) of 1935 allows workers to organize in order to engage in collective bargaining with their employer regarding pay, working conditions, and other features of employment. See 29 U.S.C. § 157. Union members support these activities by paying membership fees. Workers who do not become dues-paying members often still benefit from the union’s efforts. This is commonly known as the “free rider problem.” Some unions dealt with this by negotiating “closed shop” agreements, by which the employer could only hire union members; or “union shop” agreements, which required all employees to join the union or pay an “agency fee” once they had been hired.

The Taft-Hartley Act of 1947 banned closed shop agreements, and only allowed union shop agreements or agency fees to the extent that they do not conflict with state law. Id. at § 164(b). Many states have enacted “right to work” laws, which prohibit unions from charging agency fees to non-members.
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October 19, 2018

Federal Lawsuit Alleges Gender Discrimination Under the Equal Pay Act

by Resnick Law Group, P.C.

Federal and state law prohibit employment discrimination on the basis of sex, particularly with regard to salary and wages. New Jersey’s newly-enacted Diane B. Allen Equal Pay Act (DAEPA) is one of the most comprehensive laws in the country addressing wage disparities based on sex. The federal Equal Pay Act (EPA), while offering fewer protections, applies more broadly throughout the country. Both statutes allow employees to file suit and recover damages for wage discrimination. A lawsuit that is currently pending in a federal court alleges a widespread pattern of sex discrimination in wages and other features of employment. Cahill et al v. Nike, Inc., No. 3:18-cv-01477, complaint (D. Ore., Aug. 9, 2018). Although the case is filed in Oregon, where the defendant maintains in main headquarters, it could also affect workers in New Jersey and New York. The defendant has a significant presence in this part of the country, and recently opened a regional headquarters in New York City. If you have questions regarding possible instances of discrimination at your workplace, contact a New Jersey employment discrimination attorney to discuss.

The federal EPA was enacted as an amendment to the Fair Labor Standards Act (FLSA). It prohibits employers who are covered by the FLSA from paying workers of different genders at different rates “for equal work on jobs” that “require[] equal skill, effort, and responsibility, and which are performed under similar working conditions.” 29 U.S.C. § 206(d)(1). Employers are not liable for wage disparities resulting from systems that are based on “seniority,” “merit,” “quantity or quality of production,” or “any other factor other than sex.” Id. Employees alleging wage discrimination based on sex are subject to a two-year statute of limitations.

New Jersey’s DAEPA, which took effect in July 2018, includes the same exceptions as the EPA for systems based on seniority, merit, etc., but it goes into more detail about these exceptions. Any differential in pay must be based on “legitimate, bona fide factors other than the characteristics of members of the protected class.” N.J. Rev. Stat. § 10:5-12(t)(1), as amended. Employees have six years to file suit for alleged violations.
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October 15, 2018

How the “Gig Economy” Could Impact Wage and Hour Law Claims in New Jersey

by Resnick Law Group, P.C.

The term “gig economy” has entered common usage in recent years. It broadly refers to alternatives, of sorts, to having a single 9-to-5 employer. This includes rideshare or delivery services, and services ranging from childcare to odd jobs through online platforms. It also includes selling goods through online marketplaces, and most kinds of freelance work. One supposed advantage of the gig economy is that it provides greater flexibility for workers than the traditional workplace. It also comes with certain disadvantages, including a lack of legal protections when compared to the traditional definition of “employment.” This summer, the New York Times reported on several studies examining the gig economy. While most of the workforce still holds traditional jobs, the gig economy is growing. The studies provide nationwide information, not figures on employment in New Jersey or any other specific state. As this type of work arrangement becomes more common, our system of employment laws may have to catch up. Speak to a New Jersey employment lawyer to discuss any questions you might have.

Minimum wage and overtime laws are among workers’ most important legal protections, but state and federal laws only apply to people who meet a specific definition of an “employee.” The federal Fair Labor Standards Act (FLSA) establishes a national minimum wage, overtime requirements, and limits on child labor. Its definition of an “employee” is simply “any individual employed by an employer.” 29 U.S.C. § 203(e)(1). Gig economy workers are often considered to be independent contractors instead of employees, for FLSA purposes. The extent to which the FLSA’s minimum wage and overtime requirements apply to gig economy workers is a matter of ongoing dispute, with courts deciding cases in both directions and the U.S. Department of Labor (DOL) recently changing its position on the issue.

New Jersey’s Wage Payment Law expressly states that it only applies to “employees,” which it defines as “any person suffered or permitted to work by an employer.” N.J. Rev. Stat. § 34:11-4.1. The statute specifically excludes independent contractors from that definition. The state’s Wage and Hour Law has a similar definition of “employee,” but without the specific exclusion of independent contractors. Id. at § 34:11-56a1(h). State regulations establish a test for determining whether an employee has been misclassified as an independent contractor. N.J.A.C. § 12:56-16.1. See also Hargrove v. Sleepy’s, LLC, 106 A.3d 449 (N.J. 2015).
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October 4, 2018

FTC Settles Case Alleging Collusion Among Employers to Keep Pay Rates Low

by Resnick Law Group, P.C.

Federal law prohibits employers from engaging in practices that have an adverse effect on competition. This includes practices that harm consumers and those that harm employees. For example, employers engaged in the same business, who would ordinarily compete among each other for employees, may not enter into agreements with one another that diminish employment opportunities or set artificial limits on wages. Agreements not to solicit or hire one another’s employees, for example, can prevent those employees from advancing in their chosen careers. Agreements on wage limits impact employees’ ability to negotiate higher wages. The Federal Trade Commission (FTC), which enforces various federal consumer laws, may also investigate anticompetitive practices. It recently announced a settlement with a group of staffing companies, which it alleged violated federal law by colluding to limit pay rates. In the Matter of Your Therapy Source, LLC, et al, No. C-1710134, complaint (FTC, Jul. 31, 2018). Although the case did not involve events in New Jersey, federal antitrust and anticompetition laws have nationwide application. A New Jersey employment law attorney can help guide you in the right direction based on the unique facts of your situation.

The FTC was created by the Federal Trade Commission Act (FTCA) of 1914, 15 U.S.C. § 41 et seq. The statute prohibits “unfair methods of competition in or affecting commerce,” and authorizes the FTC “to prevent persons, partnerships, or corporations…from using unfair methods of competition in or affecting commerce.” Id. at §§ 45(a)(1), (2). It also specifically states that a finding of liability under the FTC Act does not preclude additional findings of liability under other antitrust statutes, such as the Sherman Antitrust Act of 1890. Id. at §§ 44, 45(e).

The respondents in the Your Therapy Source case operated staffing services that, according to the FTC’s complaint, provided therapists to “treat[] home health agency patients in the Dallas/Fort Worth, Texas area.” Your Therapy Source, complaint at 1. Although the companies competed with one another in the same market, the FTC alleged that they “agree[d], and invit[ed] other therapist staffing companies to agree, on rates paid to therapists.” Id. Ordinarily, therapists could “contract with multiple therapist staffing companies and choose among them based on pay rate” and other factors. Id. at 3. The agreement alleged by the FTC, however, prevented therapists from obtaining competitive pay rates.
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