The New Jersey Employment Law Firm Blog

May 9, 2016

Lawsuit Against New Jersey Convenience Store Franchisee Claims Minimum Wage, Overtime Violations

A lawsuit recently filed against the owner of several convenience stores in the Princeton, New Jersey area claims violations of state and federal minimum wage and overtime laws. Lopez et al. v. 7-Eleven Inc. et al., No. L-000418-16, complaint (N.J. Super. Ct., Mercer Co., Feb. 26, 2016). The three plaintiffs, who are suing on behalf of a putative class of employees and former employees, allege that their now-former employer required them to work exceedingly long hours and unlawfully withheld their pay, which was less than both the state and federal minimum wage. The former employer is a franchisee of a national chain of convenience stores. The lawsuit names both the owners and operators of the franchisee and the national franchise owner as defendants.

This lawsuit demonstrates a common problem in employment law claims when the employer is part of a franchise. Many well-known businesses with multiple locations, such as McDonald’s restaurants, do not actually share common ownership or management. The owner of the brand—which includes the logo, menu, business model, and so forth—enters into franchise agreements as the franchisor with other companies, the franchisees, to operate one or more facilities. A typical franchise agreement contains numerous requirements regarding the operation of the worksite, in the interest of maintaining consistency among all franchised locations. This is where the tricky part for employment claims comes in.

An employee or former employee can only assert a claim for violations of minimum wage and overtime laws, anti-discrimination laws, and other employment statutes against their employer. It is often relatively easy to determine who is a person’s employer, based on an employment contract or the issuance of paychecks. In the case of a person who works at a franchised location, the franchisee is probably their employer, at least on paper. The franchisee is not, however, in full control of their own business, since they have to run their operation in accordance with the franchise agreement. How much control must a franchisor exercise over a franchisee before the franchisor begins, in a legal sense, to look like the actual employer?

April 29, 2016

New Jersey Police Officer’s Lawsuit Challenges Loss of Pay, Claims Violations of Rights

by Resnick Law Group, P.C.

A lawsuit pending in a New Jersey Superior Court seeks review of a township’s decision to dock the plaintiff’s pay by 60 hours, resulting in a loss of about $3,500. O’Hare v. Township of Morris, et al., No. L-000710-16, complaint (N.J. Super. Ct., Morris Co., Mar. 24, 2016). The plaintiff, a police officer, made negative comments about a township official in an email sent to members of the police officers’ union, and he was brought up on disciplinary charges as a result. The plaintiff’s lawsuit alleges that his comments are protected by the First Amendment and laws protecting union activities.

Federal laws and laws in many states protect the rights of workers to form and join organizations, commonly known as unions, for the purpose of collective bargaining with their employers. New Jersey law guarantees the right of most public employees “to form, join and assist any employee organization.” N.J. Rev. Stat. § 34:13A-5.3. The federal National Labor Relations Act (NLRA) extends these rights to many private-sector employees, along with the right to engage in “concerted activities” related to labor organizing. 29 U.S.C. § 157.

The rights protected by the NLRA and similar statutes generally include discussions and other communications among employees regarding negotiations with employers. The First Amendment to the U.S. Constitution extends much broader protections against restriction or retribution by the government based on the content of speech. See, e.g. Sable Commc’ns of Cal. v. Fed. Commc’n Comm’n, 492 U.S. 115, 131 (1989).

April 22, 2016

Five Players on U.S. Women’s Soccer Team File Wage Discrimination Complaint

by Resnick Law Group, P.C.

Five members of the U.S. women’s national soccer team (USWNT) have filed a complaint with the Equal Employment Opportunity Commission (EEOC), alleging unlawful wage discrimination by the U.S. Soccer Federation (USSF). They allege that they are paid substantially less than members of the U.S. men’s national soccer team (USMNT), despite generating significantly more revenue in recent years than the men’s team. They are asserting their claim on behalf of all members of the USWNT. The EEOC will investigate the claim, and it may decide to pursue the claim on the players’ behalf. Otherwise, it will issue a “right to sue” letter, allowing the players to file a private cause of action.

Under the Equal Pay Act (EPA), employers are generally prohibited from paying employees of one gender less than employees of another gender for the same work. The statute allows exceptions to this rule if the difference in wages is based on a system of seniority, merit, or “quantity or quality of production,” or on the vaguely worded “any other factor other than sex.” 29 U.S.C. § 206(d)(1). The USWNT players’ complaint essentially argues that they have produced a superior “quality of production” yet are paid significantly less than their male colleagues.

The USWNT, which was formed in 1985, is one of the world’s most successful soccer teams. It has won three World Cup titles, most recently in Canada in 2015, and four Olympic gold medals, most recently in London in 2012. The final game of the 2015 World Cup, in which the USWNT beat the Japanese team 5-2, drew more than 53,000 spectators and around 23 million television viewers.

April 15, 2016

Former Employee Files Suit Under New Jersey Whistleblower Law, Claiming Employer Fired Her for Reporting Financial Misconduct

by Resnick Law Group, P.C.

A former daycare center worker in New Jersey has filed suit against her former employer, alleging violations of the state’s whistleblower protection and anti-discrimination statutes. Pierce v. Woodbury Child Dev. Ctr., Inc., No. L-000216-16, complaint (N.J. Super. Ct., Gloucester Co., Feb. 19, 2016). According to media coverage of the case, the plaintiff claims that she was wrongfully terminated from her job after reporting alleged misappropriation of state funds. The Conscientious Employee Protection Act (CEPA), N.J. Rev. Stat. § 34:19-1 et seq., prohibits retaliation against employees who report suspected illegal acts by their employers. The New Jersey Law Against Discrimination (NJLAD), N.J. Rev. Stat. § 10:5-1 et seq., prohibits retaliation in situations in which an employee complains of workplace discrimination and other unlawful acts.

New Jersey enacted CEPA in 1986 in order to protect employees from various types of “retaliatory action” by employers, defined to include “discharge, suspension or demotion…or other adverse employment action.” N.J. Rev. Stat. § 34:19-2(d). Employers may not retaliate against employees who engage in certain types of activity commonly known as “whistleblowing,” such as reporting, or threatening to report, activities, practices, or policies that the employee reasonably believes violate the law.

Based on the language of the statute, CEPA’s focus seems to be on illegal and fraudulent acts that adversely affect the government, shareholders, investors, customers, employees, and others to whom an employer might owe a duty of care. See N.J. Rev. Stat. § 34:19-3. The report may be internal, such as to a supervisor, or external, such as to a law enforcement agency or other public organization. A whistleblower may also be an employee who participates in an investigation of an employer, or who refuses to participate in an action that they reasonably believe is illegal or fraudulent.

April 5, 2016

U.S. Department of Labor Issues Guidelines on “Joint Employment” Under Federal Law

by Resnick Law Group, P.C.

In order for a worker to assert their rights under many employment statutes, they must establish that an employment relationship exists. This is often not as simple as it might seem. Multiple separate business entities are often present on a worksite, with a complicated web of legal and contractual relationships. Under a “joint employment” (JE) theory, a worker might have multiple employers for the purposes of certain legal claims. The U.S. Department of Labor’s Wage and Hour Division (WHD) recently issued guidance regarding joint employment under two federal statutes: the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq.; and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA), 29 U.S.C. § 1801 et seq. Administrator’s Interpretation No. 2016-1 (“AI”) (WHD, Jan. 20, 2016).

What Is Joint Employment?

The WHD defines JE very broadly. A worker might be the employee of a business entity that has contracted to provide services to another business. The AI uses the example of a hotel that subcontracts functions like housekeeping or catering to another business. Housekeeping and catering workers, in this scenario, might wear hotel uniforms. To the public, they would appear to be hotel employees. The hotel has authority over them at its worksite, including hours worked. Applying a standard model of employment, a worker could only bring a claim under a wage and hour statute like the FLSA against the staffing agency. If the hotel is a joint employer, however, it and the staffing agency might be jointly and severally liable for the worker’s damages.

The AI begins by describing a wide range of “evolving employment scenarios” that have made JE much more common around the country. AI at 1. It states that JE plays a role in hundreds of WHD investigations every year. The purpose of the AI is to offer “additional guidance” because of the increase in JE. Id. It identifies two types of JE: horizontal joint employment (HJE) and vertical joint employment (VJE).
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April 1, 2016

New Jersey Appellate Court Invalidates Arbitration Clause in Employee Handbook

by Resnick Law Group, P.C.

New Jersey courts encourage parties to a dispute to make every reasonable effort to resolve their disagreements without resorting to litigation. Various forms of alternative dispute resolution (ADR) are available to assist litigants and would-be litigants. One type of ADR, known as arbitration, is somewhat similar to a trial, in that the parties present their cases to one or more arbitrators. Many employment contracts include clauses stating that any disputes must be submitted to arbitration, and that the arbitrator’s decision is binding on the parties. The New Jersey Appellate Division recently ruled that an arbitration clause in an employee handbook was not a mandatory arbitration clause, because the handbook also stated that it was not to be construed as a contract. Morgan v. Raymours Furniture Co., Inc., No. A-2830-14T2, slip op. (N.J. App., Jan. 7, 2016).

The New Jersey Arbitration Act, N.J. Rev. Stat. § 2A:23B-1 et seq., applies to arbitration agreements between employers and individual employees. An agreement to arbitrate must be part of an enforceable employment contract, or else it must be a separate contract between an employer and an employee.

A party to a dispute can ask a court to compel arbitration if another party is refusing to cooperate with a valid arbitration agreement. N.J. Rev. § 2A:23B-7. A court is required to enter an order confirming a binding arbitration award, N.J. Rev. § 2A:23B-22; unless it vacates the order due to fraud, partiality by an arbitrator, or certain other grounds, N.J. Rev. § 2A:23B-23; or it modifies the award due to an error by the arbitrator, N.J. Rev. § 2A:23B-20, 24.
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March 24, 2016

New Employment Laws in New York City Restrict Use of Employee Credit, Criminal Histories in Hiring Decisions

by Resnick Law Group, P.C.

Two new employment laws took effect in New York City in late 2015 that limit the uses employers may make of job applicants’ credit and criminal histories. Individuals who, for whatever reason, have credit problems, or who have a record of one or more arrests, criminal charges, or convictions, may have difficulty finding a job because of this information, whether it is directly relevant to the job or not. The “Stop Credit Discrimination in Employment Act” (SCDEA) prohibits employers from requesting or using the consumer credit history of a job applicant or employee, except in specific, narrow circumstances. The “Fair Chance Act” (FCA) restricts when employers may ask about criminal history, and how they may use that information. New Jersey state law addresses criminal history in employment on a more limited basis, but it does not protect credit information.

The SCDEA, which took effect in September 2015, amends the New York City Human Rights Law (NYCHRL) to add a provision regarding employers’ use of consumer credit history. It defines “consumer credit history” as a person’s “credit worthiness, credit standing, credit capacity, or payment history,” based on certain types of information. N.Y.C. Admin. Code § 8-102(29). Credit information typically comes from credit reports and credit scores issued by the major consumer credit bureaus, but the NYCHRL states that it can also come directly from the job applicant or employee if it relates to “details about credit accounts,…bankruptcies, judgments or liens.” Id.

An employer, under the SCDEA, may not request or use consumer credit information in hiring decisions, nor may it discriminate based on an employee’s credit history. N.Y.C. Admin. Code § 8-107(24). The law allows exceptions if state or federal law requires a review of credit history. Other exceptions include jobs as a police officer or certain other law enforcement positions, any job that requires the employer to obtain a bond, jobs requiring security clearance under state or federal law, and jobs that involve high levels of financial responsibility or digital security. A bill with similar provisions, S. 1130, passed the New Jersey Senate in June 2015, but its companion bill in the Assembly died in committee.

March 14, 2016

New Jersey Department of Labor Issues Regulations Implementing “Ban the Box” Law

by Resnick Law Group, P.C.

A criminal record of any kind can be a serious impediment to finding a job. Many employers have policies excluding anyone with a felony conviction record, or even a misdemeanor record, from employment, regardless of whether it has any bearing on the job in question. “Ban the Box” (BTB) laws are intended to help people who might be qualified for a job but are unable to find work because of a criminal record. New Jersey passed the Opportunity to Compete Act (OCA), P.L. 2014 ch. 32, in June 2014. It took effect on March 1, 2015. The New Jersey Department of Labor and Workforce Development (LWD) issued new regulations implementing the law in December. 47 N.J.R. 3034(a) (Dec. 7, 2015).Numerous cities and states around the country have enacted BTB laws. The “box” in question refers to the checkbox on many job applications asking whether the applicant has a criminal record indicating one or more arrests, charges, or convictions. At a minimum, BTB laws prohibit employers from asking about criminal history during the initial stage of the job application process. Some laws go much further, such as New York City’s broad prohibition on employment discrimination based on criminal history. See N.Y.C. Admin. Code §§ 8-107(9) – (11-b).

In New Jersey, the OCA does not extend as far as New York City’s law, but it still provides several important protections. During the “initial employment application process,” employers may not inquire about an applicant’s’ criminal history, either verbally or in writing, nor may they require an applicant to provide such information in any other form. N.J. Rev. Stat. § 34:6B-14. Advertisements for job openings cannot state that an employer will not consider applicants with criminal histories. Id. at § 34:6B-15.

March 14, 2016

Employment Discrimination Based on Citizenship Status, National Origin Prohibited by Federal Immigration Law

by Resnick Law Group, P.C.

Title VII of the Civil Rights Act of 1964 is not the only federal statute that protects employees from discrimination in the workplace. The Immigration and Nationality Act (INA), which was first enacted in 1952, prohibits employers from discriminating on the basis of “national origin” and “citizenship status.” 8 U.S.C. § 1324b. Those two terms have specific meanings in this context. The U.S. Department of Justice (DOJ) enforces these provisions through its Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), and the Office of the Chief Administrative Hearing Officer (OCAHO) adjudicates claims. In late 2015, the OSC issued an opinion letter addressing questions about the extent of the INA’s anti-discrimination protections.

The INA prohibits discrimination in hiring, recruitment, and firing of individuals based on their national origin. It also prohibits discrimination in these areas on the basis of citizenship status, but only for “protected individuals,” whom it defines to include U.S. citizens, individuals who have recently attained lawful permanent resident status (i.e., a “green card”), and people who have been granted official status as refugees or asylees. 8 U.S.C. § 1324b(a)(3). These provisions are much narrower in scope than those of Title VII.

The INA states that its prohibition against national origin discrimination does not apply if the alleged discriminatory act violates Title VII’s provisions on national origin, meaning there is not intended to be any overlap between the INA and Title VII. Id. at § 1324b(a)(2)(B). The prohibition on discrimination based on citizenship only applies to “protected individuals,” as defined above, and it does not apply if an employer prefers to employ a U.S. citizen or national over an equally qualified non-citizen. Id. at 1324b(a)(4).

March 1, 2016

Supreme Court to Decide Case that Could Substantially Affect Employee Class Actions

by Resnick Law Group, P.C.

The federal Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., requires employers to pay a minimum wage and overtime compensation. Employees may file suit to recover wages owed under the FLSA, and they may file a class action if enough individuals have similar claims. Fed. R. Civ. P. 23. The U.S. Supreme Court heard arguments in late 2015 in a case, Tyson Foods, Inc. v. Bouaphakeo, in which the employer objects to the use of summary data, based on statistical analysis, to prove wage violations. The employees respond by arguing that the employer cannot use its own recordkeeping failure as a defense against FLSA liability. The decision could have a significant impact on how classes of employees can prove their claims in FLSA suits.

A common FLSA claim involves employers who require workers to spend unpaid time performing work-related tasks. If the time spent on these tasks pushes an employee’s total amount of work time over 40 hours in a week, or pushes the average hourly wage below the federal minimum of $7.25 per hour, the employer may be liable for unpaid wages and other damages. Time spent changing into and out of work clothes or uniforms, also known as “donning and doffing,” is one example of this sort of claim.

Plaintiffs who have substantially similar claims against an employer can pool their claims in a class action, provided they meet the four requirements of numerosity of plaintiffs, commonality of claims, typicality of the class representatives’ claims, and fair and adequate representation by the class representatives. Fed. R. Civ. P. 23(a). The FLSA allows employees to file a collective action against an employer. 29 U.S.C. § 216(b). The key difference between the two is that the FLSA requires plaintiffs to give consent, or “opt in,” to being part of the case.