The New Jersey Employment Law Firm Blog

June 2, 2017

New Jersey Court Clarifies Liability for Violations of Statute Governing Consumer Background Reports

Background checks enable employers to obtain a vast amount of information about prospective employees. In order to safeguard people’s privacy, the Fair Credit Reporting Act (FCRA) establishes limitations on the collection and use of people’s personal information during the hiring process. The law regulates both employers and consumer reporting agencies (CRAs), which collect consumer information and compile it into reports for employers and others. Both CRAs and employers are potentially liable to job applicants for violations of the FCRA, but liability generally arises under different circumstances. Two recent decisions from New Jersey federal courts clarify who is primarily liable to a job applicant for FCRA violations. Muir v. Early Warning Svcs., et al., No. 2:16-cv-00521, op. (D.N.J., Sep. 15, 2016); Geter v. ADP Screening & Selection Svcs., et al., No. 2:14-cv-03225, op. (D.N.J., Apr. 23, 2015).

The FCRA defines a “consumer report” as any collection of information about an individual with regard to factors like “credit worthiness,…character, general reputation, personal characteristics, or mode of living.” 15 U.S.C. § 1681a(d)(1). A consumer report may include financial information like delinquent accounts and bankruptcies, as well as arrests, criminal charges, convictions, and other legal information. The statute defines a CRA as any individual or business that routinely compiles consumer information into reports in exchange for financial compensation. Id. at § 1681a(f).

A CRA may not issue a consumer report to an employer until the employer certifies that it has complied and will continue to comply with its obligations under the FCRA. Id. at § 1681b(b)(1). An employer must obtain the job applicant’s written consent to obtain a consumer report, and it must provide the applicant with a written disclosure explaining that the employer may use the report in making a hiring decision. Id. at § 1681b(b)(2).

May 26, 2017

Federal Law Protects Privacy Rights of Employees and Job Applicants During Hiring Process

by Resnick Law Group, P.C.

Employers frequently conduct background checks on job applicants by obtaining a consumer report from a credit reporting agency (CRA). In some cases, such as jobs in law enforcement or jobs requiring security clearances, employers are required to conduct background checks for specific issues. Background checks also make sense for certain types of jobs. For example, an employer hiring for a position that involves handling large amounts of money might want to check for excessive problems with debt or past convictions for offenses like fraud or embezzlement. By relying on CRAs to provide background information on job applicants, employers rely on the accuracy of the information they provide. Since these reports are not always accurate, the federal Fair Credit Reporting Act (FCRA) regulates both CRAs and employers. The Federal Trade Commission (FTC) recently offered some guidance to employers regarding FCRA compliance in a blog post. Job applicants might find the FTC’s post useful as a guide to potential warning signs in the job application process.

In the context of employment, the FCRA requires both CRAs and employers to follow specific procedures. An employer must give a job applicant a “clear and conspicuous disclosure…in a document that consists solely of the disclosure” detailing its intent to obtain a consumer report as part of the hiring process, and it must obtain the applicant’s written consent. 15 U.S.C. § 1681b(b)(2). A CRA may not issue a consumer report to an employer unless it obtains a certification from the employer stating that the employer has fulfilled all of its obligations regarding disclosure and consent and that it will comply with all additional requirements under the FCRA. Id. at § 1681b(b)(1).

If an employer decides not to hire an applicant because of information contained in a consumer report, the FCRA requires it to provide a copy of the report to the applicant, along with a written description of the applicant’s legal rights. Id. at §§ 1681b(b)(3), 1681g(c). This allows the applicant to review the information that the employer saw and to use other legal mechanisms provided by the FCRA to correct incorrect or incomplete information. The employer must allow a reasonable amount of time for the applicant to review the report and communicate with the CRA that issued it.

May 19, 2017

Definition of “Nation” Might Be at Issue in New Jersey National Origin Discrimination Lawsuit

by Resnick Law Group, P.C.

A New Jersey teacher’s lawsuit for alleged national origin discrimination took an unusual turn in a recent court hearing, according to media reports. The plaintiff alleges that she was subjected to disparate treatment and retaliation because of her Palestinian heritage. Hashem v. Hunterdon Cty., et al., No. 3:15-cv-08585, 2d am. complaint (D.N.J., Oct. 19, 2016). During a hearing in early 2017, the defendants reportedly claimed that the case lacks merit because Palestine is not a “nation,” and therefore the plaintiff cannot claim “Palestinian” or “Palestinian-American” as a national origin. While this does not appear to be a prominent element of the defendants’ legal arguments, it captured media attention, and it raises important questions about how U.S. and New Jersey employment laws define “national origin.”

Title VII of the Civil Rights Act of 1964 and the New Jersey Law Against Discrimination (NJLAD) both expressly identify national origin as a protected category for discrimination claims. See 42 U.S.C. § 2000e-2(a), N.J. Rev. Stat. § 10:5-12(a). The term “nation” can have multiple meanings, depending on the context. It can refer to a sovereign country, such as the United States, Canada, or Mexico. It can also refer to a group of people with a shared heritage, language, or culture who do not have their own distinct country, like the Indian tribes of the United States, the First Nations of Canada, and trans-national regions like Kurdistan. Palestine, with its limited international recognition and “non-member observer” status at the United Nations, would seem to fit the second definition.

Since “countries” can come into being and cease to exist, multiple courts have held that “national origin” is not limited to countries in existence at the time of a discrimination claim. In Pejic v. Hughes Helicopters, a court held that Serbians were a protected class at a time when Serbia was part of Yugoslavia. 840 F. 2d 667, 673 (9th Cir. 1988). Serbia had been independent in the early 20th century and would become independent again in the 1990s. The Pejic court cited a district court decision finding that Louisiana Acadian—a/k/a Cajun—is a national origin under Title VII. Roach v. Dresser Ind. Valve & Instrument Division, 494 F. Supp. 215, 218 (W.D. La. 1980).

May 8, 2017

Federal Appellate Court Expands Definition of “Joint Employer” Under the FLSA

by Resnick Law Group, P.C.

The modern workplace often involves complex relationships among employers and between employees and employers. An individual employee might have an employer that issues their paychecks but has them work at the site of, or under the direct supervision of, a different employer. Should an employee need to assert a cause of action under an employment statute like the Fair Labor Standards Act (FLSA), a clear definition of the employee-employer relationship is critical. Federal caselaw and regulations establish guidelines for identifying “joint employers” for the purposes of the FLSA and other statutes. A recent decision from the Fourth Circuit Court of Appeals expands the definition of “joint employer” beyond the definition used in the Third Circuit, which includes New Jersey and other jurisdictions. Salinas v. Commercial Interiors, Inc., No. 15-1915, slip op. (4th Cir., Jan. 25, 2017).

The FLSA governs wage and hour issues, establishing a nationwide minimum wage and requiring employers to pay non-exempt workers time-and-a-half for work in excess of 40 hours in a week. The statute provides some of the broadest definitions of certain key terms in the entire United States Code. It defines “employee” as “any individual employed by an employer,” and its definition of “employ” merely states that it “includes to suffer or permit to work.” 29 U.S.C. §§ 203(e)(1), (g). It does not provide a distinct definition of “employer.”

Regulations promulgated by the U.S. Department of Labor (DOL) note that the FLSA does not limit individual employees to one employer. The DOL attempts to distinguish between “joint employment,” in which multiple employers employ an employee in a single position, and “separate and distinct employment,” in which an individual employee has more than one job with different employers. 29 C.F.R. § 791.2(a). Under DOL regulations, a “joint employment” situation may exist when two or more employers have “an arrangement…to share the employee’s services,” when one employer “act[s]…in the interest of the other employer (or employers),” or when one employer is partly or wholly under the control of another employer. Id. at § 791.2(b).

May 2, 2017

New Jersey Antitrust Class Action Accuses Employers of “Anti-Poaching” Agreements

by Resnick Law Group, P.C.

In 2015, a group of technology companies settled a class action filed on behalf of thousands of employees for about $415 million. The lawsuit alleged that the defendants violated antitrust laws by entering into “anti-poaching” agreements, by which they agreed not to solicit or hire each other’s employees. These types of agreements make it difficult, if not impossible, for workers to advance in their fields, and they also tend to drive wages downward. More recently, a putative class action that partly originated in New Jersey made similar allegations against two major electronics companies. Frost v. LG Corp., et al., No. 5:16-cv-05206, complaint (N.D. Cal., Nov. 8, 2016). A judge granted the defendants’ motion to dismiss the case in April 2017, based on pleading defects, but will allow the plaintiffs to make corrections in an amended complaint. The case remains a good example of how state and federal antitrust laws can affect employment.

The main federal antitrust statute is the Sherman Act, originally enacted by Congress in 1890 in an effort to address monopolistic practices across the country. It prohibits any “contract…in restraint of trade or commerce among the several states,” 15 U.S.C. § 1, and allows both civil and criminal penalties. The New Jersey Antitrust Act uses almost identical language to describe prohibited contracts. N.J. Rev. Stat. § 56:9-3. The attorneys general at the state and federal levels are empowered to investigate and prosecute anticompetitive practices, and both state and federal laws allow civil causes of action by aggrieved parties.

The Frost lawsuit is actually a consolidation of two lawsuits filed in California and New Jersey. It asserts claims on behalf of three classes of employees: nationwide, in California, and in New Jersey. The two defendant employers are American subsidiaries of South Korean companies. Their parent companies are also named as defendants. The lead plaintiff for the New Jersey class worked for one of the defendants in Englewood Cliffs for about eight years, beginning in 2006.

April 25, 2017

NLRB Counsel Issues Memo on Labor Practices at Universities

by Resnick Law Group, P.C.

The National Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq., protects a wide range of activities by employees related to organizing for collective bargaining and other purposes. Whether or not a particular individual is an “employee” within the meaning of the NLRA is a critically important component of determining whether the statute applies. This has been a contentious issue on college and university campuses around the country in recent years. The National Labor Relations Board (NLRB) has issued several opinions affecting people who work, or who perform services that resemble “work,” for colleges and universities, including faculty members, student assistants, and scholarship athletes. A memorandum issued by the NLRB General Counsel in late January, identified as GC 17-01, offers new guidance in light of three of these decisions. While the memorandum does not have the force of law, it could have an impact on future decisions by both the NLRB and the courts.

Employees have the right to “self-organization” under the NLRA, which includes forming or joining labor unions and engaging in “concerted activities” aimed at collective bargaining or “other mutual aid or protection.” 29 U.S.C. § 157. The plain language of the statute indicates that employers are only obligated to respect this right for “employees.” The NLRA’s basic definition of “employee” as “any employee…not…limited to the employees of a particular employer” is not very helpful. Id. at § 152(3). The statute identifies specific exclusions from the definition of “employee,” such as agricultural laborers and independent contractors, but it offers little guidance otherwise. The task of identifying who falls under the statute’s definition has mostly fallen to the NLRB, and the university environment has shown the difficulty of defining the term.

The first case cited by the NLRB counsel involved the board’s jurisdiction over private colleges and universities that identify themselves as religious in nature. Pacific Lutheran University, 361 NLRB No. 157 (Dec. 16, 2014). The U.S. Supreme Court had determined that church-operated schools were not subject to the NLRB’s jurisdiction in NLRB v. Catholic Bishop of Chicago, 440 U.S. 490 (1979). The Pacific Lutheran decision modified the NLRB’s earlier interpretation of the Supreme Court ruling, finding that the school must establish that “First Amendment religious rights…are even implicated” before claiming a religious exemption. Pacific Lutheran at 6.

April 14, 2017

New Jersey Law Requires Employers to Give Specific Notification to Employees During Layoffs and Other Major Upheavals

by Resnick Law Group, P.C.

According to some analysts, New Jersey is experiencing a net loss of residents and businesses, which means it is also losing jobs. When a business decides to cease operations in an entire state, a significant amount of job loss is probably inevitable, but the state has enacted laws that offer some protection to workers in this type of situation. The NJ WARN Act, more officially known as the Millville Dallas Airmotive Plant Job Loss Notification Act of 2007, establishes procedures that many businesses must follow when they take certain actions that result in major job loss. This includes a detailed notification that must be provided to each affected worker. Employers that fail to provide the required notification may be liable for damages to their employees.

The NJ WARN Act generally applies to businesses that have operated in New Jersey for at least three years and that have 100 or more full-time employees. Their obligations under the statute are triggered by certain events, including a “mass layoff,” a “transfer of operations,” and a “termination of operations.” N.J. Rev. Stat. § 34:21-1. The statute defines a “mass layoff” as a “reduction in force” that is not related to a transfer or termination of operations and that results in the termination of (1) at least 500 employees within a 30-day period, or (2) at least 50 employees when that number represents at least one-third of the company’s total full-time workforce. Id. A termination of operations occurs when the company voluntarily closes an entire facility, either permanently or temporarily. A transfer of operations involves moving a facility to another location.

If an employer conducts a mass layoff or a transfer or termination of operations that causes equivalent job loss, the NJ WARN Act requires it to provide a notification to each affected employee, along with severance pay “equal to one week of pay for each full year of employment.” Id. at § 34:21-2(b). The notification must state the number of employees losing jobs, an explanation of why the employer is undertaking these actions, a breakdown of the severance pay, statements of the employee’s legal rights, and information about comparable jobs available with the employer. Id. at § 34:21-3.

April 5, 2017

Supreme Court to Consider Whether Class Action Waivers Are Enforceable in Employment Disputes

by Resnick Law Group, P.C.

The U.S. Supreme Court granted certiorari to three consolidated cases addressing the enforceability of class action and collective action waivers in employment arbitration agreements. Many employment agreements include provisions stating that both employees and employers will submit any employment-related dispute to a neutral arbitrator. A waiver bars employees from filing or joining a class action related to their employment. The Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., appears to authorize this type of provision, but a waiver might violate the National Labor Relations Act, 29 U.S.C. § 151 et seq. The Supreme Court has recently upheld class action waivers in consumer contracts, and it may have agreed to hear this case in order to resolve any uncertainty resulting from those rulings.

In a class action, a plaintiff or group of plaintiffs sues on behalf of a larger group of similarly situated persons. This allows people who lack the resources to file suit, or whose individual claims are too small to justify the expense of suing, to pool their claims into a single lawsuit. Federal law establishes four criteria for certifying a class: (1) the class must be numerous enough to make individual lawsuits, or individual joinder of plaintiffs, impractical; (2) the class members must have common legal or factual questions; (3) the claims of the lead plaintiffs must be typical of the other class members; and (4) the lead plaintiffs must be able to “fairly and adequately” represent the class members and their interests. Fed. R. Civ. P. 23(a).

Arbitration is a method of alternative dispute resolution. Instead of filing suit, the parties submit their dispute to one or more arbitrators, who are usually legal professionals with knowledge of the subject matter at issue. The arbitrator will conduct a hearing, which might resemble a trial in many ways, and recommend an outcome. Employment contracts may require binding or non-binding arbitration. The results of binding arbitration are not subject to review by a court, absent evidence of misconduct by the arbitrator. A common criticism of arbitration is that the process tends to favor whomever is paying the arbitrator’s fees.

March 31, 2017

When Does Commuting Time Count as “Work” in New Jersey?

by Resnick Law Group, P.C.

The “daily commute” is an iconic element of routine life in the U.S. In 2013, about three-fourths of American workers drove to work by themselves. Average commute time in New Jersey was 28.6 minutes in 2000. That number grew to 30.9 minutes in 2013. Assuming a fifty-week work year, New Jersey workers therefore spent an average of 128 hours and 45 minutes in morning traffic. The number has probably only increased since then, and this does not include time spent getting home at the end of the day. This data raises an interesting question about when a commute constitutes “work” in a legal sense, meaning time for which an employer must compensate a commuting employee. The short answer is that commuting time is usually not “work” in this sense, but the longer answer offers some exceptions to that general rule.

New Jersey law does not address the question of whether commuting time is compensable, so we must look to federal law. The Fair Labor Standards Act (FLSA) of 1938, 29 U.S.C. § 201 et seq., establishes a national minimum wage and rules for overtime compensation. It does not provide a specific definition of “work.” Congress enacted the Portal-to-Portal Pay Act (PPPA), 29 U.S.C. § 251 et seq., in 1947 to address “potential retroactive liability [that] may be imposed upon employers” under the FLSA. Id. at § 251(a). Section 4 of this law exempts employers from liability under the FLSA for failing to pay the minimum wage to an employee for “walking, riding, or traveling to and from the actual place of” employment. Id. at § 254(a)(1).

The U.S. Department of Labor (DOL) has issued regulations based on § 4 of the PPPA. Commuting from home to work is not compensable time under the FLSA in an “ordinary situation,” meaning when such travel is “a normal incident of employment.” 29 C.F.R. § 785.35. This applies, according to the DOL, regardless of whether a worker has a fixed place of employment or works for an employer at multiple locations.
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March 24, 2017

Do Employees Who Join National Strikes Have Legal Protection Against Getting Fired?

by Resnick Law Group, P.C.

The past few months have seen numerous high-profile protests around the country, both in opposition to and support of the new administration in the White House. At least two major protests have called for nationwide strikes or walkouts. In February 2017, A Day Without Immigrants called attention to the significant role of immigrants in the nation’s workforce. This month, A Day Without a Woman did the same with regard to women in the workplace. Similar protests have occurred in this country and in countries around the world for many reasons across the political spectrum. It is not clear how many people participated in the recent events, but they appeared to have a noticeable impact. They also resulted in some participants losing their jobs specifically because of their participation, which raises the question of whether, and to what extent, state and federal employment laws protect this sort of activity. A quick review of a few statutes shows that no simple answer exists. For any individual, the answer may depend on their particular employer’s policies.

Antidiscrimination laws, like Title VII of the Civil Rights Act of 1964 and the New Jersey Law Against Discrimination (NJLAD), protect employees from adverse actions by their employers based on specified categories, such as race, sex, and national origin. The NJLAD provides much broader protections than Title VII, but neither specifically addresses political views or activities. An employer who terminates or otherwise penalizes an employee for participating in a strike like the ones mentioned above might not violate state or federal antidiscrimination laws. A claim could hypothetically be possible if the employer’s actions indicate bias based on a protected category. The two recent strikes deal specifically with the protected categories of national origin and sex. This sort of claim would probably be a long-shot without solid evidence of an employer’s bias, but it is a possibility.

Laws protecting employees’ right to engage in labor activities are likely to be a better option, but the amount of protection they offer is also not clear. The National Labor Relations Act (NLRA) states that workers have the right to engage in “concerted activities” aimed at collective bargaining or “mutual aid or protection.” 29 U.S.C. § 157. Employers may not unreasonably interfere with employees who are exercising these rights, nor may they discriminate against employees who do so. It would be hard to make the case that events like A Day Without Immigrants have collective bargaining as their ultimate goal, but they do plausibly serve the purpose of “mutual aid or protection” for workers.
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