The New Jersey Employment Law Firm Blog

August 21, 2017

Whistleblower Employees Receive Share of Settlement in New Jersey False Claims Lawsuit

The typical employer/employee relationship includes an expectation that an employee will, at a bare minimum, not actively undermine their employer’s business. Employers may have legal recourse, for example, against employees who misappropriate trade secrets or other proprietary or sensitive information. In some situations, however, the law encourages going public with information about a company’s activities, such as when the company is engaging in illegal activities. Employees who report unlawful activities by their employers are commonly known as “whistleblowers.” Federal and state laws protect whistleblowers against employer retaliation when they report alleged fraud involving government programs. A pharmaceutical company recently agreed to settle a lawsuit filed in a New Jersey federal court, alleging fraud against Medicare and Medicaid. U.S., et al. ex rel Corsi, et al. v. Omnicare, Inc., No. 1:14-cv-01136, complaint (D.N.J., Feb. 21, 2014). The whistleblowers will share a portion of the settlement, in addition to receiving damages for unlawful retaliation.

The federal False Claims Act (FCA) imposes civil liability for false claims submitted to the government, with damages of $5,000 to $10,000 for each violation. 31 U.S.C. § 3729. Most states have comparable laws for fraud against state programs. See, e.g., N.J. Rev. Stat. § 2A:32C-1 et seq. The FCA allows employees to recover damages for “retaliatory actions” by employers in response to protected whistleblowing activities. 31 U.S.C. § 3730(h).

The FCA also allows whistleblowers to file suit on behalf of the government against their employer for the actual alleged fraud. This means that the whistleblowers can claim a portion of the damages for the fraud claims, as well as their own claims for damages. This type of lawsuit is known as a “qui tam suit,” and the individual or individuals filing it are known as “relators.” Once a relator has filed suit under the FCA, the government has the option of intervening in the case.

August 18, 2017

New Jersey Appellate Court Clarifies Important Definition of “Misconduct” by Employees

by Resnick Law Group, P.C.

New Jersey employment laws protect the rights of employees in a wide range of areas, including workers’ right to unemployment compensation, subject to various conditions. State agencies and the courts are charged with ensuring that employers and the state fairly apply the rules regarding eligibility for unemployment compensation. The New Jersey Superior Court, Appellate Division, recently invalidated part of a rule adopted by the state’s Department of Labor and Workforce Development (LWD). The challenged rule defined “misconduct,” in the context of unemployment, in a way that the court found “arbitrary and capricious.” In re N.J.A.C. 12:17-2.1, No. A-4636-14T3, slip op. at 3 (N.J. App., May 1, 2017). A consistent definition of “simple misconduct,” the court held, is required to protect workers’ rights.

The New Jersey Unemployment Compensation Law (UCL) states that eligible individuals shall receive benefits for a set period of time after they become “unemployed,” within the meaning established by the statute. See N.J. Rev. Stat. §§ 43:21-3, 43:21-19(m)(1). Benefits are paid from an unemployment insurance program funded by payroll tax deductions and employer contributions. In order to obtain benefits, an individual must file a claim with LWD. See N.J. Rev. Stat. §§ 43:21-4, 43:21-6.

An individual may be disqualified from eligibility for unemployment benefits if they were “suspended or discharged for misconduct” by their previous employer. Id. at § 43:21-5(b). The employer has the opportunity to respond to a former employee’s unemployment claim, including with allegations of misconduct. The statute identifies three levels of “misconduct”: simple, severe, and gross misconduct. The challenged LWD rule, codified at N.J.A.C. 12:17-2.1, defines the three levels of misconduct.

August 1, 2017

Court Awards $750,000 to Widow of Employee Who Received Insufficient Information About Employer-Sponsored Life Insurance

by Resnick Law Group, P.C.

Federal law does not require employers to provide employees with benefits like retirement plans, but it regulates employers that choose to do so. Employers may be liable to employees for failing to meet the requirements set by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq. A federal court awarded $750,000 in damages in an ERISA claim for a failure to inform an employee of certain details of a life insurance plan. Erwood v. Life Ins. Co. of N. Am., et al., No. 2:14-cv-01284, opinion (W.D. Pa., Apr. 13, 2017). The case was in a Pennsylvania court but relied in part on New Jersey employment law claims.

ERISA covers a wide range of employment benefits, including retirement plans, deferred income plans, life insurance, and health insurance. Employers must designate an administrator, who has the duty of providing a summary of any covered plan, along with other information, to each beneficiary. 29 U.S.C. § 1021(a). Anyone who “exercises any discretionary authority or discretionary control respecting management of such plan” owes fiduciary duties to the beneficiaries. Id. at §§ 1002(21)(A), 1104(a).

If a plan does not provide any specific remedy for breaches of fiduciary duties or other violations, ERISA allows various forms of relief for aggrieved beneficiaries. Id. at § 1132(a)(3). These may include reformation of the plan and other equitable remedies, as well as “a surcharge remedy “extended to a breach of trust committed by a fiduciary.” Erwood, op. at 14, quoting CIGNA Corp. v. Amara, 563 U.S. 421, 440-42 (2011). See also Horan v. Reliance Standard Life Ins. Co., No. 3:12-cv-07802, opinion (D.N.J., Jan. 30, 2014).

July 20, 2017

FMLA Retaliation Claim Centers on Employee’s Social Media Posts

by Resnick Law Group, P.C.

The Family and Medical Leave Act (FMLA), 29 U.S.C. § 2601 et seq., guarantees that qualifying employees of covered employers have access to unpaid leave, with protection against interference or retaliation by employers. A federal appellate court recently ruled that an FMLA retaliation claim may proceed. Jones v. Gulf Coast Health Care of Del., LLC, No. 16-11142, slip op. (11th Cir., Apr. 19, 2017). The defendant employer terminated the plaintiff employee after he took FMLA leave, citing vacation photographs posted to social media by the plaintiff during their leave period. Although the case originated in Florida, it could be relevant to New Jersey employment disputes, since no court here appears to have ruled on the specific issue of social media posts during FMLA leave.

The FMLA requires employers with at least 50 employees to provide job-protected leave to eligible workers. The Third Circuit Court of Appeals, whose jurisdiction includes New Jersey, has established standards for retaliation claims. To prove retaliation, a plaintiff must meet a three-part test: (1) The plaintiff invoked a right to leave under the FMLA, and (2) the employer made an adverse decision that (3) “was causally related to her invocation of rights.” Lichtenstein v. Univ. of Pittsburgh Med. Ctr., 691 F.3d 294, 301-02 (3d Cir. 2012).

The plaintiff worked for the defendant for about 11 years, from 2004 until his termination in 2015. The defendant operates a facility providing long-term nursing care. The plaintiff’s job involved planning and coordinating events and activities for residents. He requested FMLA leave in 2014 for shoulder surgery, which the defendant granted from September 26 to December 18, 2014. On the final day of leave, the plaintiff’s doctor told him he could not resume regular physical activity at work until February 2015. The plaintiff asked the defendant to allow him to return to work on light duty, but the defendant refused to allow him to return until he “could submit an unqualified fitness-for-duty certification.” Jones, slip op. at 4. The defendant granted the plaintiff an additional 30 days’ leave instead.

July 14, 2017

New York City Bans Employers from Asking About Salary History

by Resnick Law Group, P.C.

The wage gap between men and women has received considerable media attention recently, and new legislation is attempting to improve conditions. Federal law prohibits disparate pay based on gender, but it leaves several loopholes. A new law in New York City is intended to close one of these loopholes by prohibiting employers from asking job applicants for salary history or from using salary history to determine a new employee’s compensation. This practice often perpetuates the wage gap without specifically violating equal pay laws, since female employees’ salary histories are often likely to reflect lower rates of pay than male colleagues. Several jurisdictions around the country have enacted similar laws. New York City’s law will take effect on October 31, 2017.

The federal Equal Pay Act (EPA) of 1963 prohibits employers from paying employees of different sexes at different rates “for equal work” in jobs that require “equal skill, effort, and responsibility…under similar working conditions.” 29 U.S.C. § 206(d)(1). It makes exceptions, however, for wages that are determined based on seniority, merit, “quantity or quality of production,” or “a differential based on any other factor other than sex.” Id. This last exception arguably applies to decisions based on salary history, since the applicant’s gender is not a direct factor in the employer’s calculations. A federal appellate court reached this conclusion recently in Rizo v. Yovino, No. 16-15372, slip op. (9th Cir., Apr. 27, 2017).

New York state law resembled the EPA until 2015, when the legislature passed a bill limiting the “factor other than sex” exception. Under the amended statute, the “factor” cannot be “based upon or derived from a sex-based differential in compensation,” and it must “be job-related…and…consistent with business necessity.” N.Y. Lab. L. § 194(1)(d). Furthermore, a complainant can challenge any “employment practice that causes a disparate impact on the basis of sex.” Id. The New Jersey Legislature passed a bill in 2016 that would have made similar amendments to equal pay provisions, found in N.J. Rev. Stat. § 10:5-12. The governor conditionally vetoed the bill, and the legislature failed to override the veto.

July 10, 2017

NLRB Judge Rules in Favor of Workers in Wrongful Termination Claim

by Resnick Law Group, P.C.

Federal labor law, primarily through the National Labor Relations Act (NLRA), protects the right of employees to engage in various activities related to organizing for the purpose of collective bargaining. This includes actions directly related to organizing and “concerted activities” that involve matters of concern to employees. The National Labor Relations Board (NLRB) investigates alleged violations of workers’ rights under the NLRA. An administrative law judge (ALJ) with the NLRB recently ruled in favor of a group of workers who alleged that their employer unlawfully fired them because of an email exchange that criticized the employer and some of its managers. Mexican Radio Corp., Case No. 02-CA-168989 (NLRB, N.Y. Office, Apr. 26, 2017). The ALJ ruled that the workers were engaging in concerted activity protected by the NLRA.

Among other rights, the NLRA protects workers’ right “to engage in…concerted activities for the purpose of…mutual aid or protection.” 29 U.S.C. § 157. Employers may not “interfere with, restrain, or coerce employees” who are exercising their rights under the NLRA. Id. at § 158(a)(1). The NLRA defines “protected concerted activities” very broadly. It protects workers in this regard even if they are not members of a labor union. Workers are not obligated under this provision to “present a specific demand upon their employer to remedy a condition they find objectionable.” Labor Board v. Washington Aluminum Co., 370 U.S. 9, 14 (1962). In that case, the Supreme Court found that the workers’ lack of a bargaining representative, combined with immediate circumstances, required them “to speak for themselves as best they could.” Id.

The respondent in Mexican Radio Corp. operates a restaurant. According to the ALJ’s written decision, three employees made a concerted complaint to the respondent in early October 2015 regarding their work schedules and other employment-related issues. In late October, the three employees, along with a fourth employee, responded to a group email sent by a former employee who had recently resigned. The former employee addressed concerns about work schedules, tip policies, and complaints about a specific manager in the email. The four employees expressed support and agreement with many of the allegations. On the following day, the respondent reprimanded and then terminated all four employees.

June 30, 2017

Bill Pending in Congress Would Change FLSA Overtime Rules

by Resnick Law Group, P.C.

The Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., is the federal statute that governs minimum wage and overtime compensation for many employers around the country. Its overtime provisions have endured, more or less unchanged, since Congress enacted the statute in 1938. A bill currently pending in Congress, however, could change the nature of overtime compensation for workers all over the U.S. H.R. 1180, known as the Working Families Flexibility Act (WFFA) of 2017, would give employees and employers the option of compensatory time off from work, or “comp time,” instead of overtime compensation. Advocates of the bill say that this would only apply in cases of voluntary agreements between employers and employees. Critics, however, contend that the bill would result in less flexibility for workers’ schedules and less money for workers who might depend on overtime compensation. The House of Representatives passed the WFFA in May 2017. Its Senate counterpart, S. 801, is pending in committee.

Overtime compensation is currently required under the FLSA for all non-exempt employees of covered employers. For any amount of work in excess of 40 hours in a workweek, the employer must pay one-and-a-half times the employee’s regular hourly rate. 29 U.S.C. § 207(a). Employees who are exempt from overtime requirements include individuals “employed in a bona fide executive, administrative, or professional capacity;” outside salespersons; and workers in certain agricultural jobs. Id. at § 213(a). The FLSA currently only provides for comp time, instead of overtime, for employees of government agencies. Id. at § 207(o).

The WFFA largely takes the FLSA’s provisions regarding comp time for public employees, found in § 207(o), and applies them to all workers covered by the overtime rules. The bill would add a new subsection (s) to § 207 entitled “Compensatory Time Off For Private Employees.” The new subsection would state that an employee “may receive,…in lieu of monetary overtime compensation, compensatory time off at a rate not less than one and one-half hours” for every hour covered by overtime requirements.

June 23, 2017

New Jersey Law Against Discrimination Protects Divorcing Employees, According to State Supreme Court

by Resnick Law Group, P.C.

The New Jersey Law Against Discrimination (NJLAD) protects employees from discrimination based on a wide range of factors, including marital status. Courts have generally held that this means employers cannot discriminate against an employee solely because that employee is unmarried, married, divorced, or separated. Last year, the New Jersey Supreme Court considered whether this provision also applies to an employee who is in the process of getting a divorce. In a 6-0 decision, the court ruled that it does apply. Smith v. Millville Rescue Squad, 139 A.3d 1 (N.J. 2016). While the court recognized that a divorce case can be chaotic and disruptive, it held that an employer cannot fire a worker if their divorce case has no direct impact on their job or their job performance.

The NJLAD prohibits discrimination on the basis of “marital status, civil union status, [or] domestic partnership status,” among many other factors. N.J. Rev. Stat. § 10:5-12(a). It does not, however, define the term “marital status.” The court’s opinion in Smith reviews other state antidiscrimination statutes, finding that the states that provide a definition of “marital status” differ considerably in the scope of their definitions. Hawaii, for example, defines it simply as “the state of being married or being single,” while Colorado’s much broader definition includes being “in the process of having a marriage or civil union dissolved or declared invalid.” Smith, 139 A.3d at 10, quoting Haw. Rev. Stat. § 378-1 and Colo. Rev. Stat. § 24-34-301(4.5).

The plaintiff in Smith worked for the defendant for about 17 years as a paramedic and emergency medical technician (EMT). He was a volunteer for the first seven years and a paid employee for the following 10 years, from 1996 to his termination in 2006. His wife also worked for the defendant during this time. According to the court’s opinion, the plaintiff “commenced an extramarital affair with [a] volunteer” under his supervision in 2005. Smith at 5. The volunteer ceased working for the defendant, but the affair reportedly continued, “leading to irreconcilable discord between plaintiff and [his wife].” Id.

June 16, 2017

Placement of Comma Determines Appellate Court Decision in Overtime Wage Dispute

by Resnick Law Group, P.C.

Employment law is composed of statutes and regulations at multiple levels of government. It is perhaps inevitable that disputes will arise over the meaning of particular legal provisions. Courts have the responsibility of determining how to apply a law or regulation when its meaning is unclear, usually through a process known as statutory construction. If the “plain language” meaning of the rule or statute is ambiguous, they may look at the legislative history to see what lawmakers intended. A recent federal appellate court decision interpreted a statute based on the legislature’s use of punctuation. O’Connor v. Oakhurst Dairy, 851 F.3d 69 (1st Cir. 2017). The court found that a missing serial comma, also known as the “Oxford comma,” in a list of exemptions from a state overtime wage law created a very narrow exemption, which did not include the plaintiffs. This meant that the plaintiffs were entitled to overtime pay.

State and federal employment laws require employers to pay non-exempt workers one-and-a-half times their regular hourly rate for work performed in excess of 40 hours in a week. States may differ in how they define exemptions from overtime law. New Jersey, like most jurisdictions, exempts workers “employed in a bona fide executive, administrative, or professional capacity,” as well as numerous specific jobs. N.J. Rev. Stat. § 34:11-56a4. The O’Connor case deals with Maine’s overtime statute, which exempts workers employed in “the canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of” various food products. 26 Me. Rev. Stat. § 664(3)(F). The dispute centered on the lack of a serial comma between the words “shipment or distribution.”

The “Oxford comma” appears before the final item in a written list of three or more items. For example, in the sentence “I would like an apple, a banana, and a pear,” the Oxford comma appears after the word “banana.” The same sentence without that comma is equally grammatically correct: “I would like an apple, a banana and a pear.” Usually, use of the Oxford comma is purely a question of style—some style manuals require it, while others do not. At times, though, the lack of an Oxford comma creates an ambiguity.

June 8, 2017

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

by Resnick Law Group, P.C.

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.