The New Jersey Employment Law Firm Blog

October 13, 2016

Proposed Law Would Protect Rights of Workers in the “Gig Economy”

The traditional model of “employment” in the U.S., in which individuals work for an employer long enough to establish a career and secure retirement benefits, is a reality for fewer and fewer people. In many workplaces today, employees must fight simply to secure their status as employees—who are entitled to protection under various federal, state, and local employment laws—while their employers try to classify them as independent contractors. The “gig economy” is a relatively new concept of the last decade or so, in which people work as freelancers—i.e., independent contractors—for multiple clients. Unlike misclassified employees, freelancers accept that they are independent contractors, but they often lack the means to assert their contractual rights against much larger clients. These disputes can closely resemble wage and hour disputes between employees and employers. A bill pending in the New York City Council, informally known as the Freelance Isn’t Free Act, would protect the rights of freelancers to timely payment in full.

Currently, no law in New Jersey or New York specifically addresses the circumstances faced by freelancers. Laws regarding employee misclassification offer a good starting point for understanding these issues. Employers may see an incentive in classifying workers as independent contractors. Employees are generally protected by a wide variety of laws dealing with minimum wage, overtime compensation, workplace discrimination and harassment, family and medical leave, unemployment benefits, and other matters. Independent contractors’ rights are mostly limited to whatever is addressed in their contract—assuming they have a written contract.

New Jersey has adopted a standard for employee classification that is favorable to the employee. The New Jersey Supreme Court applied a test known as the “ABC test,” based on a provision of the New Jersey Unemployment Compensation Law. An individual is an independent contractor, rather than an employee, if they are “free from control or direction” by the employer with regard to their job duties, their work is “outside the usual course of the business” or “performed outside of all the [employer’s] places of business,” and they regularly work “in an independently established trade, occupation, profession or business.” N.J. Rev. Stat. §§ 43:21-19(i)(6)(A) – (C); Hargrove v. Sleepy’s, LLC, 106 A.3d 449, 453 (N.J. 2015).

October 6, 2016

New York City Lawsuit Alleges Discrimination Based on Mental Health Conditions

by Resnick Law Group, P.C.

The Americans with Disabilities Act (ADA), 42 U.S.C. § 12101 et seq., along with various state and city laws, protects employees with certain disabilities from discrimination and requires employers to make “reasonable accommodations” for qualifying employees who need them to perform the essential elements of their jobs. Conditions that can qualify for ADA protection range from short-term physical injuries to chronic conditions, including mental health conditions. A lawsuit recently filed in New York City alleges that the plaintiff’s employer fired her in violation of state and city anti-discrimination laws because she was diagnosed with attention deficit hyperactivity disorder (ADHD). Thiery v. Slover, et al., No. 156310/2016, complaint (N.Y. Sup. Ct., N.Y. Co., Jul. 28, 2016).

The National Institute of Mental Health (NIMH) defines ADHD as a mental health disorder “marked by an ongoing pattern of inattention and/or hyperactivity-impulsivity that interferes with functioning or development.” ADHD is commonly associated with children but is also present in adults. The three main features of ADHD, according to NIMH, are inattention, hyperactivity, and impulsivity. These traits are present to some extent in almost everyone, but in adults diagnosed with ADHD, they are present to such a degree that they can interfere with daily functioning.

A “disability” under the ADA includes a condition “that substantially limits one or more major life activities,” a “record” of this type of condition, and the perception of being impaired. 42 U.S.C. § 12102(1). Numerous courts have recognized that ADHD can constitute a “disability” within the meaning of the ADA, although the difficulty is in proving that the condition rises to that level of impairment. In one case, for example, a court found that the plaintiff had established a record “of a substantially limiting impairment,” but she had not adequately shown that her recent impairment was directly attributable to her ADHD diagnosis, nor that her employer “regarded her as having such an impairment.” Davidson v. Midelfort Clinic, Ltd., 133 F.3d 499, 502 (7th Cir. 1998).

September 29, 2016

Employer’s Social Media Policy Found to Violate Federal Labor Law by NLRB

by Resnick Law Group, P.C.

The National Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq., protects workers’ right to engage in various activities related to organizing for the purpose of collective bargaining. In early 2016, an administrative law judge (ALJ) ruled in favor of a worker who alleged that his employer terminated him, in part, because of critical messages posted to the social media platform Twitter. The employer claimed that the employee had violated its social media policy. The ALJ ordered the employee’s reinstatement and further ordered the employer to rescind its social media policy and other policies, finding them to be in violation of the NLRA. The National Labor Relations Board (NLRB) affirmed the ALJ’s ruling. Chipotle Services LLC et al., No. 04-CA-147314, ALJ dec. (NLRB, Mar. 14, 2016); 364 NLRB No. 72 (Aug. 18, 2016).

Employees’ “right to self organization,” to collective bargaining, and to “concerted activities” directed towards these goals are commonly known as “Section 7 rights,” after § 7 of the NLRA, 29 U.S.C. § 157. An employer engages in “unfair labor practices” when it “interfere[s] with” or “restrain[s]” an employee’s efforts to exercise those rights. NLRA § 8(a)(1), 29 U.S.C. § 158(a)(1). The internet, social media, and other new communications technologies have vastly expanded opportunities for concerted activities protected by § 7. The NLRB has addressed numerous disputes over which, if any, restraints employers may place on employees’ use of social media.

The respondent in the Chipotle case operates a nationwide chain of restaurants. According to the ALJ’s ruling, it required employees to abide by a “social media code of conduct” that prohibited “disparaging, false, misleading, harassing or discriminatory statements about or relating to” the employer and other parties. Chipotle, ALJ dec. at 4. The employer stated that it reserved the right to “ take disciplinary action, up to and including termination,” for violations of this policy. Id.

September 22, 2016

New Jersey Governor Vetoes Minimum Wage Bill

by Resnick Law Group, P.C.

In late August 2016, the Governor of New Jersey vetoed a minimum wage bill passed by the state legislature in June. The bill, A15/S15, would have increased the minimum wage in this state to $10.10 per hour at the beginning of next year, with additional annual increases for at least three years. Failing to keep pace with the rising cost of living is a major criticism of minimum wage laws around the country. Many workers in New Jersey and throughout the country must already go to court to assert their rights against employers who do not pay them the minimum amount required by law. The governor cited the alleged impact of a minimum wage increase on New Jersey businesses, claiming that it would result in fewer jobs. The status quo, however, still leaves people unable to meet basic needs with a paycheck from a full-time job.

State minimum wage regulations set the minimum wage at the greatest of three amounts:

(1) the amount set by state law, which was most recently set at $7.15 per hour as of October 1, 2006, N.J. Rev. Stat. § 34:11-56a4;
(2) the amount set by the federal Fair Labor Standards Act (FLSA), which has been $7.25 per hour since July 24, 2010, 29 U.S.C. § 206(a)(1)(C); or
(3) $8.38 per hour, N.J.A.C. § 12:56-3.1.

September 22, 2016

New York City Mayor Issues Executive Order Regarding Union Organizing

by Resnick Law Group, P.C.

Interactions between employers and labor unions generally fall under the purview of the National Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq., which protects workers’ rights in regard to various labor organizing activities nationwide. In New York City, Mayor Bill de Blasio has imposed additional restrictions on employers and labor unions in certain situations. Executive Order No. 19 (EO19), issued in July 2016 and entitled “Labor Peace for Retail Establishments at City Development Projects,” requires covered employers and employees to enter into “labor peace agreements.” EO19 has come under criticism by various business interests, and it could be subject to court challenge.

The NLRA protects the rights of workers to organize for the purpose of collective bargaining and to engage in “concerted activities” toward that end. 29 U.S.C. § 157. Employers are generally prohibited from interfering with employees’ exercise of these rights or discriminating or retaliating against employees for union-related activity. Id. at § 158(a). The NLRA does not specifically say, however, that an employer cannot state its opposition to a union representing its employees. Employers are generally permitted to state a case for or against union organizing. It is theoretically then left to the employees to decide for themselves.

Before discussing how EO19 affects union organizing activities in New York City, it is important to note the limitations on its coverage. It only applies to “city development projects” that are larger than 100,00 square feet if commercial, or larger than 100 units if residential. “Covered employers” include retail and food-service businesses operating on the premises of a covered city development project, provided that they have at least 10 employees and occupy at least 15,000 square feet. Although EO19 only applies to business establishments physically located in New York City, it could affect New Jersey-based businesses that operate retail or food-service locations there.

September 16, 2016

NLRB Rules Against Employer that Fired Employee for Giving Testimony to State Legislature

by Resnick Law Group, P.C.

The National Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq., protects the right of workers to organize for the purpose of collective bargaining with their employers. It prohibits discrimination or retaliation for engaging in union-related activities, as well as interference with those activities. The National Labor Relations Board (NLRB) is responsible for enforcing these protections, as well as ruling on disputes between employees and employers. A recent NLRB decision found that an employer engaged in unfair labor practices by terminating an employee for testifying before a legislative committee. Oncor Electric Delivery Co., 364 NLRB No. 58 (Jul. 29, 2016). The employer argued that the employee’s testimony was an individual act, rather than “concerted activity” protected by the NLRA. It further claimed that termination was justified because of “malicious falsehoods” in the employee’s testimony. Id. at 2. The NLRB rejected the employer’s arguments and ruled in the employee’s favor.

Section 8(a)(3) of the NLRA prohibits employers from using disparate treatment or other forms of discrimination to “encourage or discourage membership in any labor organization.” 29 U.S.C. § 158(a)(3). In order to demonstrate a violation of § 8(a)(3), an aggrieved employee must establish that they were engaging in activity protected by the NLRA, including both direct union activity and “concerted activity.” See NLRA § 7, 29 U.S.C. § 157. They must also show a causal connection between the employee’s protected activity and the employer’s adverse action. The NLRB calls this a Wright Line analysis, after Wright Line, 251 NLRB 1083 (1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert. denied 495 U.S. 989 (1982).

The Wright Line analysis requires an employee to establish four elements: (1) their conduct was protected under the NLRA; (2) their employer knew about or suspected the employee’s conduct; (3) the employer “harbored animus” toward the employee because of the conduct; and (4) the employer took an adverse action against the employee because of this animus. Oncor at 22.

September 1, 2016

EEOC Touts Success of Program to Combat Systemic Discrimination in Employment

by Resnick Law Group, P.C.

Employment discrimination is not limited to individual acts of overtly disparate treatment based on factors like race, sex, national origin, or disability. It can also take much more subtle forms, which might only be visible if one takes a much broader look at an employer’s practices. The Equal Employment Opportunity Commission (EEOC) calls this “systemic discrimination.” While it can affect large numbers of workers in one or more protected classes, it can also be difficult to prove in a legal proceeding. The EEOC recently published a review touting “significant success” in a nationwide program that it launched in 2006 to fight systemic discrimination. New Jersey courts have addressed systemic discrimination under federal and state employment laws, providing workers with a variety of means for asserting their rights.

The EEOC defines systemic discrimination as any “pattern or practice, policy, or class case” having “a broad impact on an industry, profession, company, or geographic area.” Examples of unlawful systemic discrimination might include questions on job applications that unlawfully exclude people with disabilities, as well as restrictions on access to “management trainee programs” or “high level jobs” that disparately affect prospective trainees or employees based on factors like race or gender.

According to the EEOC’s 10-year review, published in July 2016, the agency has prevailed in 94 percent of the lawsuits brought through its nationwide systemic discrimination program. The amount of monetary damages recovered during the period covering fiscal years 2011 through 2015 was reportedly three times as much as the amount recovered during the previous five fiscal years. Between fiscal year 2007 and fiscal year 2015, the EEOC also increased the rate of “successful voluntary conciliations of systemic investigations” from 21 percent to 64 percent.

August 25, 2016

Employment Contract May Not Restrict Employee’s Rights Under New Jersey Law Against Discrimination, According to State Supreme Court

by Resnick Law Group, P.C.

The New Jersey Law Against Discrimination (LAD) protects workers in this state from a wide range of unlawful employment practices. In order to assert their rights and claim damages, individuals must follow procedures outlined in the LAD, as well as case law interpreting the statute. This includes a two-year statute of limitations for filing suit. The New Jersey Supreme Court recently ruled that an employment contract may not limit the protection offered by the LAD by reducing this time period from two years to six months. Rodriguez v. Raymours Furniture Co., No. A-27 Sept. Term 2014, 074603, slip op. (N.J., Jun. 15, 2016). The court held that any such restriction “defeats the public policy goal” of the LAD. Id. at 4.

The LAD prohibits employers from discriminating against employees on the basis of various protected categories, including race, sex, religion, national origin, sexual orientation, gender identity or expression, and disability. N.J. Rev. Stat. § 10:5-12. It also prohibits retaliation against an employee for asserting their rights, such as by making an internal complaint to a human resources official or an external complaint to state or federal officials.

An individual may file a complaint with the New Jersey Division on Civil Rights, or they may file suit in Superior Court against an employer for alleged violations of the LAD. The statute does not specify a time frame during which a complainant must file suit, but the state Supreme Court has determined that the applicable statute of limitations is two years. Montells v. Haynes, 627 A.2d 654, 133 N.J. 282 (1993).

August 18, 2016

New Jersey Lawsuit Accuses Employer of Failing to Make Disclosures Related to Credit Checks, as Required by Federal Law

by Resnick Law Group, P.C.

Digital technology has brought all sorts of conveniences into our lives, but these conveniences might come at a significant cost for some people. Our daily activities leave a trail of information behind, which is accessible to credit reporting agencies (CRAs). Employers often ask to conduct credit checks as part of the hiring process. The Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., offers some protection to job applicants by making this process reasonably transparent. An employer must provide job applicants with various disclosures, particularly if it decides not to hire an applicant because of information in their credit report. A proposed class action currently pending in New Jersey claims that a transportation network company (TNC), also known as a rideshare company, failed to provide disclosures required by the FCRA to prospective drivers. Cuccinello v. Uber, Inc., No. 2:15-cv-06604, am. complaint (D.N.J., Dec. 7, 2015). The complaint also alleges FCRA violations against a CRA.

A person’s credit report potentially includes their complete financial history for the previous seven years, if not longer, along with other information about their current life and history. This might include criminal convictions and arrests, marriages, divorces, and children. In order to protect people’s privacy, the FCRA places restrictions on the CRAs that collect consumer credit information and issue credit reports, as well as on individuals and businesses that request those reports.

An employer that wants to obtain a job applicant’s credit report must give the applicant “a clear and conspicuous disclosure,” stating that it intends to use the report “for employment purposes.” 15 U.S.C. § 1681b(b)(2)(A). The disclosure must be provided “in a document that consists solely of the disclosure.” Id. The job applicant must consent in writing to the issuance of a credit report for this purpose. CRAs are not permitted to issue a credit report unless the employer certifies that it has complied with these provisions. Id. at § 1681b(b)(1).

August 12, 2016

Department of Labor Expands Eligibility for Overtime Pay Under the FLSA

by Resnick Law Group, P.C.

The Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., guarantees overtime pay for employees of covered employers for work performed in excess of 40 hours in a week, provided that they do not fall under one of the law’s exemptions. Regulations promulgated by the U.S. Department of Labor (DOL) set a minimum salary level, above which some employees are exempt from the overtime rule. The DOL issued a new regulation in May 2016 raising this level, giving more than four million workers nationwide access to overtime pay. 81 Fed. Reg. 32391 (May 23, 2016). The new rule will go into effect on December 1, 2016.

Workers are entitled to one and a half times their regular pay under the FLSA if they work over 40 hours in a week. 29 U.S.C. § 207(a). Employees who work “in a bona fide executive, administrative, or professional capacity,” however, are exempt from the FLSA’s overtime rules. Id. at § 213(a)(1). This applies to a wide range of workers, and the DOL’s regulations go into great detail about how the overtime exemption applies to executive, administrative, professional, computer, and outside sales employees. See 29 C.F.R. § 541.0 et seq.

Current DOL regulations only exempt executive, administrative, and professional employees from the overtime rules if their salary is at least $455 per week, also calculated as $910 biweekly, $985.83 semimonthly, or $1,971.66 per month. 29 C.F.R. § 541.600. Annually, this equals a salary of just under $23,660. The DOL set these levels in 2004, and that was reportedly its first revision of the salary levels since 1975. 69 Fed. Reg. 22122 (Apr. 23, 2004). The new rule is partly a response to concerns that the cost of living has exceeded the 2004 level.