The New Jersey Employment Law Firm Blog

May 2, 2017

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

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The main federal antitrust statute is the Sherman Act, originally enacted by Congress in 1890 in an effort to address monopolistic practices across the country.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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March 17, 2017

New York Appellate Court Asked to Reconsider Whether Title VII Prohibits Sexual Orientation Discrimination

by Resnick Law Group, P.C.

Title VII of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of race, color, religion, national origin, and sex. Congress and the Supreme Court expanded the definition of “sex discrimination” in the 1970s and 1980s to include pregnancy discrimination and sexual harassment. The efforts to broaden Title VII’s concept of sex discrimination effectively stopped there. Neither Congress nor the federal judiciary has responded to calls to apply Title VII’s prohibition on sex discrimination to discrimination based on sexual orientation. A New York federal judge ruled against a Title VII claim for sexual orientation discrimination last year. Christiansen v. Omnicom Group, 167 F.Supp.3d 598 (S.D.N.Y. 2016). The plaintiff in that case is now asking the Second Circuit Court of Appeals in New York to reconsider its own precedent.

The Equal Employment Opportunity Commission (EEOC), the agency charged with enforcing Title VII and other federal employment statutes, has ruled that sexual orientation is covered by Title VII’s sex discrimination provisions. While it acknowledged that the statute does not explicitly mention sexual orientation as a protected category, the EEOC held that the proper question was “whether the [employer] has relied on sex-based considerations or taken gender into account when taking the challenged employment action.” Baldwin v. Foxx, App. No. 0120133080, dec. at 6 (EEOC, Jul. 15, 2015). This ruling is largely symbolic, however, since it is not binding on any federal court.

Two decisions by the U.S. Supreme Court have expanded the concept of sex discrimination under Title VII in ways that could support an interpretation that the statute already prohibits sexual orientation discrimination. In Price Waterhouse v. Hopkins, the court held that “sex stereotyping” can support a claim of sex discrimination, such as if “an employer…acts on the basis of a belief that a woman cannot be aggressive, or that she must not be.” 490 U.S. 228, 250 (1989). The court ruled in Oncale v. Sundowner Offshore Services that sexual harassment between members of the same sex can violate Title VII, as long as the plaintiff can “prove that the conduct at issue was not merely tinged with offensive sexual connotations, but actually constituted discrimination because of sex.” 523 U.S. 75, 81 (1998).

March 10, 2017

Federal Trade Secrets Law Grants Immunity to Employees Who Act as Whistleblowers

by Resnick Law Group, P.C.

The balance of power between an employee and an employer is usually very uneven in favor of the employer. At times, laws intended to help businesses can inadvertently harm employees. The Defend Trade Secrets Act (DTSA) of 2016 gives businesses important tools for protecting their proprietary information, but it could also give employers an additional advantage over their workers. Congress therefore added provisions to the DTSA granting immunity to whistleblowers and others reporting suspected legal violations. A court recently ruled on an employee’s immunity claim, possibly for the first time since the law’s passage.

The DTSA amends federal criminal laws dealing with the theft of trade secrets, 18 U.S.C. § 1831 et seq., to allow the owners of trade secrets to file civil lawsuits for the misappropriation of trade secrets. The law defines “trade secret” broadly to include both tangible and intangible information that the owner “has taken reasonable measures to keep…secret” and that “derives independent economic value” from being kept secret. Id. at § 1839(3). The intentional theft of a trade secret may be prosecuted as a felony. The owner of a trade secret can sue in federal court for injunctive relief and other damages, including “the seizure of property necessary to prevent the propagation or dissemination of the trade secret.” Id. at § 1836(b)(2)(A)(i).

The unauthorized disclosure of a trade secret is not always based on criminal or otherwise wrongful intent. Sometimes, disclosure might be necessary to prevent even greater legal violations. People who have access to trade secrets and disclose them to government officials or others, with the intent of reporting suspected unlawful activity, are commonly known as “whistleblowers.”

March 7, 2017

How Federal Anti-Hacking Laws Could Affect Employment Disputes in New Jersey and Elsewhere

by Resnick Law Group, P.C.

The U.S. Congress has enacted several statutes addressing unauthorized access to computer systems, commonly known as “hacking.” These statutes include both civil and criminal components. The Stored Communications Act (SCA), 18 U.S.C. § 2701 et seq., deals with digital information stored by third parties, usually internet service providers (ISPs). It comes into play when someone accesses another person’s email or other stored communications data without authorization. The statute allows civil claims in certain cases. 18 U.S.C. § 2707. When an employer accesses an employee’s online information without permission, it could be liable to the employee for damages under the SCA.

Third-party ISPs include companies that provide internet access, email servers, and social media services. The use of a third-party ISP involves voluntarily entrusting personal information to someone else’s care. The SCA seeks to protect people’s privacy rights with regard to this information against both the government and private individuals and entities. The Fourth Amendment to the U.S. Constitution guarantees people’s right to “be secure in their…papers and effects,” but voluntarily turning materials over to a third party can negate the Fourth Amendment’s protection. The SCA extends Fourth Amendment-like protections against government access to stored communications. Since non-government actors are not constrained by the Fourth Amendment, the SCA also prohibits unauthorized access by private actors.

The same principle that excludes voluntarily disclosed information from Fourth Amendment protection also applies to the SCA. The “authorized user exception” states that SCA protection does not apply to “conduct authorized…by a user of that service with respect to a communication of or intended for that user.” 18 U.S.C. § 2701(c).

February 26, 2017

Court Rules Against “Persuader Rule” Regarding Union Organizing Rights

by Resnick Law Group, P.C.

The U.S. Department of Labor (DOL) issued a final rule, known as the “persuader rule,” in early 2016. The rule dealt with actions by employers, both direct and indirect, “to persuade employees about how to exercise their rights to union representation and collective bargaining.” 81 Fed. Reg. 15923, 15924 (Mar. 24, 2016). It marked a significant change from the agency’s previous interpretation of an employer’s obligation to disclose communications related to labor organizing activity. A court permanently enjoined implementation of the new rule in November, however, finding that the DOL exceeded its rulemaking authority. The old version of the rule, based on the old interpretation of the statute, remains in effect.

The Labor Management Reporting and Disclosure Act (LMRDA) of 1959, 29 U.S.C. § 401 et seq., requires employers to disclose various payments and communications made to labor organizations, employees, and others with regard to union organizing activities. For example, an employer must disclose payments made to an employee or a group of employees to induce them “to persuade other employees” with regard to “the right to organize and bargain collectively through representatives of their own choosing.” Id. at § 433(a)(2). The statute might also require the disclosure of communications involving attorneys or consultants specifically involved in advising an employer about ongoing labor negotiations.

Section 203(c) of the LMRDA, id. at § 433(c), exempts certain communications from the disclosure requirement. The persuader rule determines how far this exemption applies. Under the previous interpretation of the persuader rule, disclosure was only required if a consultant communicated directly with employees. The DOL concluded that this “left a broad category of persuader activities unreported” and therefore “den[ied] employees important information” they might need to make an informed decision about union representation. 81 Fed. Reg. at 15924. It modified the persuader rule to include the disclosure of both “direct” and “indirect” activities aimed at “persuading” employees. See 29 C.F.R. § 406.2(a).