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The New York City Council passed legislation in April 2015 amending the city’s anti-discrimination law to prohibit employment discrimination based on information found in an employee’s or job applicant’s consumer credit history. This is part of a broader trend of laws at the city and state levels around the country that limit the use of background checks when making employment decisions. Similar laws have been introduced in the New Jersey Legislature, but they have not passed either chamber. New Jersey law offers some protection for consumers with regard to their credit information, including restrictions on when and how employers may access credit reports.

The federal Fair Credit Reporting Act (FCRA), the New Jersey Fair Credit Reporting Act (NJFRCA), and other statutes regulate the collection, distribution, and use of information by credit reporting agencies. These statutes define “consumer reports” in part as financial and personal information about a consumer, communicated in writing or verbally, that is intended for use “in establishing the consumer’s eligibility for…employment purposes.” 15 U.S.C. § 1681a(d)(1)(B), N.J. Rev. Stat. § 56:11-30(1)(b), N.Y. Gen. Bus. L. § 380-A(c)(1)(ii). Under New Jersey law, an employer may not obtain a person’s credit report unless they provide notice in a particular form to the person and obtain the person’s consent. N.J. Rev. Stat. § 56:11-31c.

The New Jersey statute does not prohibit an employer from taking adverse action against an employee or job applicant based, in whole or in part, on information contained in a consumer report. If the employer does take adverse action against a person, however, it must first provide the person with a copy of their consumer report and a notice of their rights under the NJFCRA and the FCRA. N.J. Rev. Stat. § 56:11-31e.
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Three airlines are facing allegations of unfair labor practices and sex discrimination in several proceedings. A coalition of U.S.-based airlines and labor unions issued a report earlier this year claiming that the three airlines, which are based in the Persian Gulf region and fly out of airports in New York and New Jersey, engage in unfair competition and unlawful employment practices. The federal government is investigating similar claims. An agency of the United Nations (UN) recently ruled that one of the airlines engaged in ongoing sex discrimination against female employees. While these proceedings generally involve international law and treaties, they could still have an impact on workers who deal with these airlines in New Jersey and New York.

The U.S. began entering into agreements with other countries known as “Open Skies Partnerships” (OSPs) in 1992. It currently has agreements with more than 100 countries. These agreements, according to the U.S. Department of State, allow airlines to expand international service by “eliminating government interference” in various air transportation matters. Since different countries provide different levels of protection for business and labor interests, however, OSPs can result in unfair advantages for some airlines.

A coalition of three U.S. airlines and labor unions, known as the Partnership for Open & Fair Skies (POFS), issued a report in early 2015 criticizing three airlines: Qatar Airways, based in Doha, Qatar; Etihad Airways, based in Abu Dhabi, United Arab Emirates; and Emirates Airlines, based in Dubai, UAE. All three airlines fly out of JFK International Airport in New York City, and Etihad Airways reportedly sometimes flies out of New Jersey’s Newark Liberty International Airport.
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Laws regarding medical–or even recreational–marijuana use are undergoing significant changes. Nearly half of the states in the U.S., including New Jersey, now allow marijuana use for at least some purposes. How this affects employees’ rights in New Jersey, however, remains unclear. The issue, which is far from resolved, pits individuals’ right to use marijuana against employers’ right to enforce anti-drug policies. A lawsuit filed last year in New Jersey, Davis v. New Jersey Transit Corp., No. L-001778-14, complaint (N.J. Super. Ct., Essex Co., Mar. 14, 2014), claims disability discrimination against a railroad employee with a valid medical marijuana prescription.

Marijuana remains a Schedule I controlled substance under federal law, 21 U.S.C. § 812(b)(1), and it is still generally illegal under New Jersey law, N.J. Rev. Stat. §§ 2C:35-10a(3)-(4). The New Jersey Compassionate Use Medical Marijuana Act, N.J. Rev. Stat. § 6I-1 et seq., which took effect in 2010, allows the medical use of marijuana under very strict limits. Rather than “legalizing” marijuana, the law creates an exception to state criminal law. N.J. Rev. Stat. § 2C:35-18. It provides that the lawful use of marijuana may not result in “civil or administrative penalt[ies],” N.J. Rev. Stat. § 24:6I-6b, but it does not specifically mention employment or disability protections.

The plaintiff in Davis worked as a procurement clerk for NJ Transit. His doctor gave him a prescription for medical marijuana to alleviate some of the symptoms of end-stage renal failure. He states that he notified his employer of the prescription, but was told that he had to submit to a drug test in December 2013. When the test was positive for marijuana, he was sent to a drug treatment program and lost his job. He filed suit for disability discrimination under the New Jersey Law Against Discrimination. N.J. Rev. Stat. § 10:5-12a. In August 2014, the court denied a motion to dismiss filed by the defendant. The case is still pending.
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An employer demanded that its employees allow around-the-clock monitoring of their whereabouts and then terminated an employee because of her refusal to comply, according to a lawsuit filed last month. Arias v. Intermex Wire Transfer, LLC, et al, No. _____, complaint (Cal. Super. Ct., Bakersfield Co., May 5, 2015). The lawsuit’s claims include invasion of privacy, retaliation, and wrongful termination. The case involves smartphone and Global Positioning System (GPS) technology, and it may therefore present questions that are relatively novel to the legal system. The retaliation claim is based on a California statute that is similar to laws in New Jersey and New York.

The plaintiff began working for the defendant as an account manager in February 2014. According to her complaint, her supervisor told her that she was expected to keep her phone powered on at all times in order to receive calls from clients. In April 2014, the defendant allegedly instructed its employees to install a mobile application (“app”) known as Xora on their smartphones. This app uses the phone’s GPS capabilities to track users’ whereabouts and movements.

The plaintiff’s supervisor allegedly told her that the company would be monitoring employees during both work and non-work hours. While she did not object to monitoring during work hours, the plaintiff claims that she objected to off-hours monitoring as an invasion of her privacy, and that she believed the defendant’s request was illegal. She states in her complaint that she removed the Xora app from her phone in late April 2014, and that on May 5, 2014, she was terminated.
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A former program manager for the internet company Facebook has filed a lawsuit against the company in state court in California, alleging sexual harassment and discrimination based on race and gender. Hong v. Facebook, Inc., et al, No. CIV-532943, complaint (Cal. Super. Ct., San Mateo Co., Mar. 16, 2015). The case alleges numerous acts of conduct towards the plaintiff that, when taken in isolation, might seem minor, but that add up over time to constitute significant disparate treatment based on her gender and her national origin. The laws at the state and federal level are clear that employers may not discriminate in promotions, job duties, and other features of employment based on these categories. These types of claims, unfortunately, can be difficult to prove. Another recent lawsuit against a Silicon Valley venture capital firm made similar allegations but resulted in a jury verdict for the defendant. The current case makes a wide range of allegations, however, that indicate overtly discriminatory treatment towards the plaintiff.

According to her complaint, the defendant hired the plaintiff in June 2010 for the position of program manager. It transferred her to “technology partner” in October 2012. She claims that she performed her job duties well throughout her time with the company, pointing to “satisfactory performance evaluations” and regular raises as evidence. Hong, complaint at 2. Prior to the events immediately preceding her termination, she states that she “received no significant criticism of her work.” Id. She was allegedly terminated on October 17, 2013.

The plaintiff alleges that multiple employees of the defendant, including her supervisor, who is named individually as a defendant, and others identified in the complaint as “Does One through Thirty,” discriminated against her based on gender. This allegedly included comments belittling her work and admonishment for “exercis[ing] her right under company policy to take time off to visit her child at school.” Id. at 3. She also claims that she was given assignments that no male co-workers were expected to do, such as organizing office parties and serving drinks. She makes a direct allegation that the company hired a “less qualified, less experienced male” to replace her. Id.
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The question of whether an individual is an “employee” or an “independent contractor” determines whether or not they enjoy the protection of a wide range of employment laws at the city, state, and federal levels. Employees of covered employers are protected by laws related to minimum wage, overtime pay, and other matters. Independent contractors, however, are generally considered to be self-employed, and in a mere contractual relationship with the employer. Employers clearly have an interest in classifying people as independent contractors whenever possible, but some workers have begun to push back. One place where this is occurring is among the cheerleading squads of professional football teams, who claim that they are employees of the teams, not independent contractors. Multiple lawsuits, including one in New Jersey, are asserting claims for wage violations, and a bill pending in the California Legislature would formally grant “employee” status to professional sports team cheerleaders.

A putative class action filed in a New Jersey court alleges that the New York Jets football team underpays its cheerleading squad. Krystal C. v. New York Jets LLC, No. L-004282-14, complaint (N.J. Super. Ct., Bergen Co., May 6, 2014). The plaintiff alleges that the team entered into an “Employment Agreement” with her, identifying them as “Employer” and “Employee,” respectively. She claims that she was paid $150 per game at which she performed, and $100 for each team-sponsored “outside event” sponsored by the team at which she was present on the team’s behalf. The amount of work required of her, however, was allegedly so extensive that it rendered the pay she actually received substantially lower than the state minimum wage, often as little as $3.77 per hour.

The plaintiff in Krystal C. does not directly raise the question of misclassification in her complaint, but her factual allegations depict a level of control over the cheerleaders’ work duties that fits the legal definition of an employer-employee relationship. The claimed class consists of current and former cheerleaders for the Jets employed within two years of the date she filed the complaint. She is claiming violations of the New Jersey Wage and Hour Law, N.J. Rev. Stat. § 34:11-56a et seq., and is asking the court to award all wrongfully withheld pay to the class members. As of early May 2015, the case is still pending in a New Jersey Superior Court.
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The Patient Protection and Affordable Care Act (ACA, or “Obamacare” to some) creates a variety of incentives to encourage employers to create and sponsor “wellness programs” for their employees. Several federal agencies, including the Department of Labor (DOL), have issued rules implementing these incentives within the requirements of federal statutes like the Health Insurance Portability and Accountability Act (HIPAA). The Equal Employment Opportunity Commission (EEOC), which enforces employment nondiscrimination statutes, was not involved in those rulemaking processes. It issued a Notice of Proposed Rulemaking in March 2015, stating that it will review how the Americans with Disabilities Act (ADA), 42 U.S.C. § 12101 et seq., affects the wellness program provisions of the ACA. It issued a proposed rule in April.

The Public Health Service Act (PHSA), as amended by HIPAA and the ACA, defines a “wellness program” as “a program offered by an employer that is designed to promote health or prevent disease.” 42 U.S.C. § 300gg-4(j)(1)(A). HIPAA prohibits discrimination in group health plans, in terms of eligibility, benefits, and other factors, based on a participant’s health. It makes one exception, however, by allowing discounts, rebates, or other benefits for participants who follow an employer-sponsored wellness program.

The DOL, the Department of Health and Human Services (HHS), and the Internal Revenue Service (IRS) jointly issued a final rule implementing the HIPAA nondiscrimination provisions for wellness programs. 71 Fed. Reg. 75014 (Dec. 13, 2006). The rule established two types of wellness programs: participatory programs, which should be made available to all similarly-situated employees regardless of their health status; and health-contingent programs, which may be tailored to employees’ particular health needs, such as a program to help employees quit smoking.

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Numerous laws at the federal, state, and city levels protect employees from a wide range of adverse acts by employers, including discrimination, harassment, withholding of pay, and unreasonable or excessive work hours. Whether the remedies offered by a particular law are available to you depends on two factors: whether your employer is an “employer” within the meaning of this specific law, and whether you are considered an “employee” or an “independent contractor.” The definitions of “employee” and “independent contractor” vary from one state to another, but they are critically important to assessing a potential employment law claim. Many laws are limited to employers with a minimum number of employees. The definition of “employee” in a given situation, by determining how many employees an employer has, could also determine whether or not it is subject to certain employment statutes. As more and more employers seem to be trying to classify workers as independent contractors, and more and more workers are fighting back in court, understanding the distinction between “employee” and “independent contractor” is extremely important.

Some employment laws limit their application based on a minimum number of employees or other factors. The federal Family and Medical Leave Act (FMLA), for example, only applies to employers with 50 full-time employees or more. 29 U.S.C. § 2611(4)(A)(i). New Jersey’s employment statutes have broader applicability within the state. The Wage and Hour Law, which covers the minimum wage and other matters, does not limit its application based on the employer. Certain provisions, however, do not apply to minors and workers in certain specific occupations. N.J. Rev. Stat. § 34:11-56a30.

Employment statutes do not offer particularly helpful definitions of “employee,” as opposed to “independent contractor.” The New Jersey Wage Payment Law, for example, simply defines an employee as “any person suffered or permitted to work by an employer” who is not an independent contractor or subcontractor. N.J. Rev. Stat. § 34:11-4.1(b). The U.S. Supreme Court noted that a federal statute’s definition of “employee” was “completely circular and explain[ed] nothing.” Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323 (1992). It held that “traditional agency principles” should apply and used a multi-part test to determine whether the plaintiff was an “employee” that primarily looked at “the hiring party’s right to control the manner and means by which the product is accomplished.” Id., quoting Commun. for Creative Non-Violence v. Reid, 490 U.S. 730, 751 (1989).
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The New York Attorney General (AG) has obtained about $3.8 million in judgments and settlements from multiple pizza franchise operators in recent months for violations of state minimum wage and overtime laws. This includes judgments against two companies that operate Papa John’s pizza delivery businesses and settlements with five Domino’s franchisees. Many state attorneys general pursue civil claims against employers for wage violations, but state and federal laws also allow employees to file suit themselves.

Under the federal Fair Labor Standards Act (FLSA), the minimum wage is $7.25 per hour. 29 U.S.C. § 206(a)(1)(C). New York’s minimum wage is $8.75 per hour as of December 31, 2014. N.Y. Lab. L. § 652. The FLSA requires overtime pay equal to one-and-a-half times the wage of covered employees for hours worked in excess of 40 hours in a week, or 80 hours in a two-week pay period. 29 U.S.C. § 207. New York law follows the FLSA.

The AG filed suit against a Papa John’s franchisee and its two owners in December 2014 for a wide range of alleged wage violations, including under-reporting and rounding down employee hours to avoid paying overtime. New York v. Emstar Pizza, Inc., et al., No. 017345/2014 (N.Y. Sup. Ct., Kings Co.) The lawsuit claimed that various illegal wage practices had been going on for at least six years at the defendants’ six locations. The AG’s Labor Bureau reportedly found that employee paychecks were sometimes short by hundreds of dollars due to under-reporting of hours, failure to pay overtime, and lack of accurate payroll records.
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Many well-known businesses, particularly restaurant chains, use the franchise model to operate national, or even international, chains of locations. Under this model, the franchise owner enters into agreements with other businesses to operate locations using the franchise’s brand name. These businesses, known as franchisees, must abide by a wide range of requirements under the franchise agreement. Employees of individual franchise locations are considered employees of the franchisee, but multiple complaints and lawsuits in recent years have sought to hold a franchisor liable for acts of a franchisee, based on the theory that the franchise agreement gives the franchisor substantial control over the franchisee’s business. A recent lawsuit against the McDonald’s franchisor asserts that it is liable for race discrimination by a franchisee. Betts, et al v. McDonald’s Corp., et al., No. 4:15-cv-00002, complaint (W.D. Va., Jan. 22, 2015).

The plaintiffs are African-American former employees of a company that operates three McDonald’s restaurants in Clarkesville and South Boston, Virginia. They describe a lengthy sequence of events involving alleged racial and sexual harassment and discrimination by managers employed by the franchisee, culminating in an allegedly overt decision to “reduce the number of African-American employees.” Betts, complaint at 28. All but one of the plaintiffs state that they were terminated on May 12, 2014. The other plaintiff alleges that the company constructively discharged her on July 5, 2014, after “months of racial abuse.” Id. at 32.

The plaintiffs filed suit against the franchisee, several individual managers, and the franchisors. They are asserting seven causes of action, including claims for wrongful termination, constructive discharge, and racial harassment under both Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a)(1), and 42 U.S.C. § 1981; and sexual harassment under Title VII.
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