The New Jersey Employment Law Firm Blog

February 19, 2015

Employer Settles Federal Lawsuit Alleging Unlawful Withholding of Employee Retirement Contributions

Employees often rely on their employers for more than just a regular paycheck. While employers are not necessarily required to provide benefits for their employees, such as health insurance and retirement plans, those that do must follow certain requirements intended to protect employees’ interests. The federal Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq., for example, sets minimum standards for private employee pension plans. These include the establishment of a fiduciary relationship between the employer, which administers the plan, and the employees, who are its beneficiaries. The U.S. Department of Labor (DOL) recently settled a claim against a New York-based employer, in which the department alleged unlawful withholding of employee retirement contributions in violation of ERISA. Perez v. Herring, No. 1:15-cv-10034, consent judgment and order (D. Mass., Jan. 12, 2015).

According to the DOL’s complaint, the defendant was the sole member and manager of a limited liability company (LLC) that operated a weight-loss business through a Jenny Craig franchise. The LLC, which was organized in Massachusetts, operated eight locations in New York state. It established a retirement savings plan for its employees in May 2012, with the LLC as the plan’s sponsor and the defendant acting as the plan’s named fiduciary and trustee. Funding for the plan came from employee salary deferrals, which the defendant remitted to participating employees’ plan accounts. Under ERISA, amounts withheld from employees’ paychecks automatically became assets of the retirement plan.

The defendant, according to the DOL, failed to remit employee contributions to the plan for five pay periods in 2012 and 2013, in the total amount of $8,646.00. This allegedly breached his fiduciary duty to participating employees under ERISA. In May 2014, the defendant individually filed for Chapter 7 bankruptcy. The DOL filed an adversary proceeding in bankruptcy court, seeking a judgment finding any debts resulting from the defendant’s ERISA violations to be non-dischargeable because of “defalcation while acting in a fiduciary capacity.” 11 U.S.C. § 523(a)(4). The defendant and the DOL filed a stipulation with the bankruptcy court in November 2014, in which the defendant stipulated that his actions constituted defalcation under the Bankruptcy Code. The DOL filed its ERISA civil suit in January 2015.
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February 13, 2015

Federal and State Law Prohibits Age Discrimination in Employment, Even in Traditionally “Young” Industries.

by Resnick Law Group, P.C.

In 2007, Facebook founder and CEO Mark Zuckerberg spoke to a group of aspiring entrepreneurs at a startup workshop at Stanford University about “the importance of being young and technical.” Zuckerberg, who was 22 years old at the time, went on to say that “young people are just smarter.” He cited attributes like “simpler lives,” which would allow younger employees to devote more time to their jobs. Age discrimination has long been a serious issue in the technology industry. The question of whether maintaining a young, energetic workforce–at the cost of losing older, more experienced employees–is ultimately to a company’s benefit is something that tech industry analysts can discuss. Refusing to hire someone solely on the basis of his or her age is often against both state and federal law. This problem is not limited to the tech industry but occurs in many industries all over the country. As the tech industry expands into places like New Jersey, however, the way in which some tech companies proudly tout their “youth” bears scrutiny.

Under the federal Age Discrimination in Employment Act (ADEA), employers may not discriminate against employees in hiring, firing, and other terms and conditions of employment based on the person’s age. 29 U.S.C. § 623(a)(1). This includes limiting job openings to a particular age group, either expressly or by using terms like “new or recent graduates preferred.” The ADEA, however, only applies to workers who are at least 40 years old. 29 U.S.C. § 631. It therefore might not prohibit age discrimination based on a determination that a person is too young. New Jersey’s Law Against Discrimination (LAD) also prohibits discrimination on the basis of age. N.J. Rev. Stat. § 10:5-12(a).

The tech industry, in California’s Silicon Valley and elsewhere, appears to value youth as much as, if not more than, the movie industry in Hollywood or the fashion industry in New York City. This has manifested itself in a variety of ways, from a general lack of “graybeards” to awkward work environments for the older tech workers who do manage to find jobs. It also includes multiple instances of overt age discrimination, such as the sort of job listings mentioned earlier that discourage older job seekers, either by directly stating an age limit or using phrases like “Class of 2007 or 2008 preferred.” A job advertisement using that phrase led to a settlement, which did not include any monetary penalties, between Facebook and California employment regulators in 2013.
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February 5, 2015

Researchers Find Evidence of Employment Discrimination When Job Applicants Refer to Religious Affiliations

by Resnick Law Group, P.C.

A group of sociologists has recently published two studies on the effect of religious identifiers on hiring decisions. One study focused on employers in New England, and the other on employers in the American South. Both studies found that résumés and job applications referencing a specific religious affiliation are less likely to receive follow-up action from employers than those that do not mention religion at all. This highlights a difficult aspect of employment anti-discrimination law, which requires proof that an adverse employment action, like refusal to hire, was based on a protected class, like religion. The discrimination uncovered by these studies may not be intentional, and in fact the individuals making these decisions may not even be aware of the disparate treatment, but it still violates state and federal anti-discrimination law.

The researchers sent about 3,000 résumés to employers from “fictitious job applicants” who had recently graduated from college. They randomly modified the résumés “to indicate affiliation in one of seven religious groups or a control group,” typically by mentioning membership in a campus religious organization. The seven religious identifiers were atheist, Catholic, evangelical Christian, Jewish, pagan, Muslim, and a fictitious religious identity called “Wallonian.” Each employer received four résumés with comparable qualifications, which only differed in religious affiliation and minor details. The researchers set up email accounts and telephone numbers for the fictitious job applicants in order to track the responses from the employers.

In the New England study, resumes that mentioned religion received about 25 percent fewer responses from employers. Those that indicated affiliation with Muslim organizations had the lowest response rate, at one-third less than the control group. Applicants identified as atheist, Catholic, or pagan also received a significantly lower response rate. The Southern study had similar results, with evangelical Christians and Wallonians also receiving significantly fewer responses. Jewish applicants were the only ones who showed no significant disadvantage compared to the control group.
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January 30, 2015

Whistleblower Who Exposed Alleged Visa Fraud Files Lawsuit Claiming Retaliation by Employer

by Resnick Law Group, P.C.

The federal government settled a massive visa and immigration fraud claim against an Indian company in 2013, after a lengthy investigation. United States v. Infosys Limited, No. 4:13-cv-00634, settlement agreement (E.D. Tex., Oct. 30, 2013). The investigation began when a U.S.-based employee reported evidence of fraud involving H-1B guest worker visas and B-1 business visas to federal authorities. The employee alleges that the company retaliated against him for reporting his suspicions, including demotion, harassment, hostile work environment, termination, and refusal to rehire. His lawsuit, initially filed in New Jersey, claims violations of the whistleblower protection provisions of the False Claims Act (FCA) and the Sarbanes-Oxley Act of 2002. Palmer v. Infosys Limited, No. 3:14-cv-06122, complaint (D.N.J., Oct. 2, 2014), transferred to No. 6:14-cv-00905 (E.D. Tex., Dec. 8, 2014).

The defendant is a technology and consulting business based in Bangalore, India, which provides services to numerous U.S. tech companies. It petitions for temporary work visas on behalf of workers in India. Workers in “specialty occupations” may come to the U.S. on an H-1B visa. To qualify, a worker must have a bachelor’s degree or higher, and he or she must have a job offer from a U.S. employer for a position that requires a degree or certain specialized skills. Federal law limits the number of new H-1B visas to 65,000 per year, so the field is competitive.

The plaintiff attended meetings in Bangalore in March 2010 in which managers allegedly “discussed the need to and ways to ‘creatively’ get around” H-1B program restrictions. Palmer, complaint at 11. He alleges that he was instructed to prepare “welcome letters” for people coming to the U.S. on B-1 visas for short-term business purposes, but that these people were actually coming to the U.S. for jobs requiring an H-1B visa. The plaintiff filed an internal whistleblower complaint with the defendant in October 2010, and he eventually reported the matter to multiple federal agencies and members of Congress.
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January 27, 2015

New Jersey Federal Court Allows Race, National Origin Discrimination Lawsuit to Proceed

by Resnick Law Group, P.C.

A federal judge in New Jersey recently denied the defendants’ motion to dismiss a lawsuit alleging race and national origin discrimination. A former employee, who worked for nearly two decades as a contract employee for a federal agency, is claiming that the agency wrongfully failed to hire him for a permanent position. Suri v. Fox, et al., No. 1:13-cv-05036, 2nd am. complaint (D.N.J., Apr. 16, 2014). After the defendants moved to dismiss the lawsuit, the court ruled that the plaintiff had made a prima facie case for race and national origin discrimination. This means that the case may proceed, and that the burden shifts to the defendants to show a non-discriminatory basis for their actions.

The plaintiff, who is originally from India, became a U.S. citizen in 1992. He has bachelor’s and master’s degrees in electrical engineering and a master’s degree in environmental engineering. He began working for the Federal Aviation Administration (FAA) as a summer intern in 1995. During the internship, he states that he asked about a permanent position but was told that a hiring freeze prevented the FAA from offering him a permanent job. He accepted a contract position with H-Tec Systems, an FAA contractor, when his internship ended in September 1995. He continued working on site at the FAA’s William J. Hughes Technical Center in Atlantic City, New Jersey for 13 years. In 2008, he took a job with another contractor, EIT, that kept him in the same place.

According to his complaint, the plaintiff worked with FAA employees on a daily basis, had an office cubicle at the FAA facility, and used office equipment, supplies, and furniture provided by the FAA. The details of his employment, including work assignments, discipline, and leave, were under the control of FAA supervisors. He claims that he continued to ask about a permanent position and was still told about a hiring freeze. The supervisor who cited the hiring freeze, however, allegedly hired several Caucasian employees with lesser qualifications than the plaintiff to permanent positions during this time period. At various other times, the plaintiff claims that employees with lesser qualifications and less seniority than him, all Caucasians, were placed in positions over him.
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January 23, 2015

Do Employment Laws Protect Workers from Getting Fired and Other Adverse Actions for Public Statements on Social Media?

by Resnick Law Group, P.C.

Social media has given a platform to nearly anyone with internet access, and many people use that opportunity to share their views with their friends and followers, as well as the general public. Many statements could be considered objectively offensive by modern standards regarding race, gender, and other issues, while others might be more subjective. Some people have faced adverse actions from their employers, including firing, because of statements on politics and other issues made on social media, and other acts outside work. Do state or federal employment laws protect workers engaging in these types of activities? The answer is complicated. Federal law only protects workers in certain specific circumstances, and few state laws address political affiliations or other activities as they pertain to employment.

Two recent incidents demonstrate the potential impact of careless or offensive statements on social media. In December 2013, a public relations director for an internet company sent a tweet just before boarding a plane bound for South Africa. The tweet, a joke referencing the issue of AIDS in Africa, caused such an immediate uproar that she was out of a job before her flight reached its destination. More recently, the communications director for a Republican member of Congress resigned her position after writing a post on Facebook criticizing President Obama’s daughters in terms generally considered offensive.

Some people have chosen to respond to online statements they find egregiously offensive by notifying employers–at least one blog, Racists Getting Fired, chronicles efforts to report racially offensive statements. Most of these types of responses have involved people making statements widely considered to be racist, sexist, or otherwise bigoted or offensive. One concern regarding this practice, according to activist and writer Tressie McMillan Cottom, is that it “sets a terrible precedent of witch-hunts for good people who make a few mistakes.” The door can swing both ways, too, as evidenced by reports that a police officer in St. Louis contacted an employer, in an official capacity, regarding an employee’s tweets that criticized the police department.
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December 30, 2014

Federal Court Allows Police Whistleblower’s Lawsuit Against City Officials to Proceed

by Resnick Law Group, P.C.

A federal judge denied a motion to dismiss a police officer’s lawsuit against a Pennsylvania borough and multiple borough officials for alleged retaliation and civil rights violations. The plaintiff alleged retaliation for reporting fraud by the former police chief to state authorities. Beatty v. Ohioville Borough, et al, No. 2:14-cv-00067, 2nd am. complaint (W.D. Pa., Jul. 25, 2014). The police chief eventually pled guilty to theft and forgery for submitting fraudulent timesheets. Several defendants moved to dismiss the suit, arguing in part that they could not be sued in their official capacities. The court disagreed, finding that Congress intended to allow lawsuits to hold public officials individually liable for civil rights violations under 42 U.S.C. § 1983.

The plaintiff is a part-time police officer in Ohioville Borough, Pennsylvania. He reportedly found evidence that the police chief was defrauding taxpayers and took this to the Pennsylvania State Police in August 2012. A criminal investigation led to allegations that the chief submitted fraudulent timesheets over a three-year period, costing taxpayers over $45,000. He was charged with 63 felony counts of forgery and one felony count of theft in February 2013. The Ohioville Borough Council voted unanimously in January 2014 to allow him to retire instead of firing him. He pled guilty to two misdemeanor counts of theft and forgery in September 2014.

While the police chief’s saga was unfolding, the plaintiff claims that he faced retaliation by borough officials, including the mayor, the assistant chief of police, the solicitor, and the members of the Borough Council. He claims that he was denied a promotion in August 2012, shortly after he went to the state police, and that he was suspended in October without good cause. The mayor allegedly “encouraged private citizens to file false and fraudulent complaints” against him during this time period. Beatty, complaint at 7. The plaintiff was suspended again in January 2013, allegedly without any explanation or opportunity to respond. He was placed back on the schedule again in March but suspended indefinitely on March 17 for reasons he claims were pretextual.
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December 23, 2014

Supreme Court Will Consider Case Alleging Religious Discrimination in Employer’s Dress Code

by Resnick Law Group, P.C.

The U.S. Supreme Court will hear the appeal of a religious discrimination lawsuit brought by the Equal Employment Opportunity Commission (EEOC). EEOC v. Abercrombie & Fitch Stores, Inc., No. 14-86. The complainant alleged that the company, a retail clothing chain, refused to hire her because she wears a hijab, the headscarf commonly worn by many Muslim women. The company claimed that the hijab violated its dress code. It argued in court that the complainant never requested a religious accommodation during the job application process, although she wore a hijab to her in-person interview. An unpublished 2013 New Jersey decision addresses a similar religious discrimination claim by a Sikh man.

Abercrombie operates a nationwide chain of retail clothing stores that market a particular style, supported by a comprehensive, and often controversial, “Look Policy” for its employees. The complainant applied for a job at an Abercrombie Kids store in Tulsa, Oklahoma in 2008, when she was 17 years old. She wore a hijab to her interview, where an assistant manager reportedly gave her a good enough score on her style to recommend her for employment. A supervisor allegedly rejected her because the “Look Policy” does not allow employees to wear hats or other head coverings. The supervisor has since claimed to have had no knowledge that the headscarf–which the complainant wore to a job interview with an employer known for its expansive dress code–was worn for religious reasons.

The EEOC investigated her claims of religious discrimination and filed suit in 2009. Abercrombie settled two similar EEOC lawsuits in 2013. One alleged refusal to hire, and the other involved a woman who claimed that the company fired her after a district manager visited the store and disapproved of her hijab. The company paid a total of $71,000 to the two women and agreed to allow female employees to wear hijabs. The Oklahoma case was already pending when the settlement occurred.
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December 18, 2014

New York State Attorney General Sues Pizza Franchisee for Alleged Wage Violations

by Resnick Law Group, P.C.

The New York State Attorney General (AG) filed a lawsuit against a Manhattan pizza franchisee, alleging that it underpaid hundreds of delivery workers by about $1 million. New York v. New Majority Holdings, LLC, et al., No. 452487/2014, verif. pet. (N.Y. Sup. Ct., N.Y. Co., Oct. 16, 2014). The lawsuit claims that the company did not pay its delivery employees for the actual amount of hours they worked, did not compensate them for job-related expenses, and “shaved” hours off their timesheets and paychecks. It seeks about $2 million in liquidated damages, statutory damages, and restitution for underpayment of wages.

Federal law currently sets the minimum wage at $7.25 per hour, 29 U.S.C. § 206(a)(1)(C), and states may establish higher minimum wages. In the state of New York, the minimum wage increased from the federal level to $8.00 per hour at the end of 2013, N.Y. Labor Law § 652. It will increase to $8.75 per hour at the end of 2014, and to $9.00 one year later. New Jersey’s minimum wage is currently $8.25 per hour, and it will increase to $8.38 on January 1, 2015. N.J. Rev. Stat. § 34:11-56a4.

State and federal law requires employers to pay hourly workers at one-and-one-half times their hourly rate if they work more than 40 hours in a week. See, e.g. 29 U.S.C. § 207. A common wage violation involves an employer who requires workers to perform duties outside of the time when they are “on the clock.” If this additional time is taken into account, the amount of wages paid to the worker might be less than the minimum hourly wage, or the worker might be entitled to overtime pay.
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December 10, 2014

Employer Lays Off Worker After Learning About Cancer Diagnosis

by Resnick Law Group, P.C.

In September 2014, the story of an employer who laid off a woman shortly after learning of her cancer diagnosis went “viral,” moving quickly from local to global news coverage. The story highlights an important question for employees and their advocates about how state and federal employment laws protect people when they are diagnosed with cancer or another serious illness. Federal laws like the Americans with Disabilities Act (ADA) and the Family and Medical Leave Act (FMLA) offer some protection, but they do not apply to many small employers. State laws, such as New Jersey’s Law Against Discrimination (LAD), sometimes offer broader protections.

A local news site in Pennsylvania reported on a woman who notified her employer of about 12 years that she had been diagnosed with cancer. The employer reportedly sent her a handwritten letter informing her that that he was laying her off without pay, noting that she would not be able to fulfill her employment duties while also undergoing cancer treatment. The story took off when a family member posted a copy of the letter to the internet.

The woman has avoided media attention and is reportedly focusing on her treatment. The employer has stated that everyone has misinterpreted the letter, and that he intended to help her by giving her time away from work. Local news reported that he did not contest her unemployment claim, which gives her 26 weeks of benefits. Nothing else has appeared in the news about the story since mid-September.
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