The New Jersey Employment Law Firm Blog

December 5, 2014

Worker’s Compensation Statute Found Unconstitutional by Florida Judge

Worker’s compensation (WC) is a type of insurance that compensates employees for injuries suffered in the course of their employment. Coverage is essentially assured for workers who can establish that the injury was job-related and not due to their own negligence. The tradeoff is that the amount of coverage is limited to medical benefits and lost wages, and workers have no recourse through the courts. Most states have made WC the exclusive remedy for injured workers, although New Jersey still allows employers to opt out of the system. The limited amount of benefits available to an injured worker, along with lack of access to the courts, led a Florida judge to rule that state’s WC statute unconstitutional. Florida Workers’ Advocates v. Florida (“FWA“), No. 11-13661, order (Fla. 11th Cir. Ct., Aug. 13, 2014).

The basic purpose of the WC system, if you view it in the most favorable light possible, is to remove the uncertainty and difficulty of litigation and ensure compensation for injured workers. The obligation to pay claims, in exchange for the loss of access to the courts, is sometimes known as the “compensation bargain.” In practice, of course, this “bargain” often denies workers adequate compensation for their injuries. Most states also make the WC system compulsory for injured workers, denying them the right to a civil trial. The Seventh Amendment right to a trial by jury in civil cases has never been applied to the states under the Fourteenth Amendment. The U.S. Supreme Court has affirmed this view, holding that compulsory WC systems do not violate the Constitution. Mountain Timber Co. v. Washington, 243 U.S. 219, 235 (1917). See also New York Central R. Co. v. White, 243 U.S. 188 (1917); Hawkins v. Bleakly, 243 U.S. 210 (1917).

Florida’s WC system is the exclusive remedy for workers injured on the job. Fl. Stat. §§ 440.10, 440.11. The recent decision involved a woman who tripped over boxes left on the floor at her workplace, causing injury to her shoulder. Even after shoulder replacement surgery, she was in so much pain that she was forced into early retirement. She intervened in a lawsuit seeking a declaratory judgment holding the WC statute unconstitutional.
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November 26, 2014

Drugstore Chain Settles EEOC Disability Discrimination Lawsuit for $180,000

by Resnick Law Group, P.C.

The Equal Employment Opportunity Commission (EEOC) announced this summer that it settled a disability discrimination lawsuit against the drugstore chain Walgreens, which allegedly engaged in wrongful termination based on a health condition. EEOC v. Walgreen Co., No. 3:11-cv-04470, complaint (N.D. Cal., Sep. 8, 2011). The company claimed that the termination was based on “misconduct,” but the court found that misconduct that is directly related to an employee’s disability must be considered in connection to the disability. Shortly after the court denied the defendant’s motion for summary judgment, the parties entered into a consent decree in which the company agreed to various forms of injunctive relief and $180,000 in damages.

The complainant worked for Walgreens for about 18 years. She was diagnosed with Type II diabetes in 1995, after about five years at Walgreens. The company knew about her condition and generally allowed her to have candy in case her blood sugar got too low, to keep insulin in the employee break room, and to take additional breaks to eat or test her blood sugar.

While she was restocking shelves on September 17, 2008, the complainant began experiencing symptoms of low blood sugar, including sweating and shaking. She did not have any candy on her person at the moment. Fearing a hypoglycemic emergency, she took a bag of chips from the cart of items to be restocked and ate some of them. The bag had a retail price of $1.39. She claims that she began to feel better after about 10 minutes and went to the cosmetics counter to pay for the bag of chips. Finding no one there, she put the bag under the register and returned to her restocking duties.
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November 19, 2014

NLRB Rules that Tribal Sovereignty Does Not Prevent It from Exercising Jurisdiction Over Indian Casino

by Resnick Law Group, P.C.

The National Labor Relations Board (NLRB) recently affirmed a prior ruling holding that it has jurisdiction to enforce the National Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq. in a dispute involving a Michigan casino operated by an Indian tribe. Soaring Eagle Casino and Resort, et al, No. 07-CA-053586. An administrative law judge (ALJ) ruled that the casino violated a former employee’s rights under the NLRA. The tribe, the Saginaw Chippewa Tribal Nation, has denied that the NLRB has jurisdiction over it because of tribal sovereignty. The U.S. government recognizes hundreds of Indian tribes as “domestic dependent nations,” with a degree of sovereignty over their own members. Tribal law is incredibly complicated, but the question presented in this case is relatively simple: does the NLRA, a federal statute, apply to a business owned and operated by an Indian tribe? At least one federal circuit court of appeals has held that it does, and courts have held that other statutes are binding on tribes.

A former employee of the Soaring Eagle Casino filed a complaint with the NLRB in 2011, claiming that she was fired for soliciting support among her co-workers for a union. An ALJ ruled in the employee’s favor in March 2012, dismissing the tribe’s argument that the NLRA should not apply to activities at the casino. The casino is located on land that belongs to the tribe under treaties ratified in 1855 and 1864, but the complainant argued that because the casino is not “an essential Government operation of the Tribe,” it should be subject to the NLRA. Soaring Eagle, ALJ Decision at 7 (March 26, 2012).

The ALJ noted that statutes of “general application” may apply to individual tribal members, Fed. Power Comm’n v. Tuscarora Indian Nation, 362 U.S. 99 (1960), and that the NLRB has found the NLRA to be such a statute. He concluded that the casino is engaged in commerce as defined by the NLRA. 29 U.S.C. §§ 152(2), (6)-(7). Prior cases have reached similar decisions. The D.C. Circuit Court of Appeals held that the NLRA applies to a casino operated on tribal land in San Manuel Indian Bingo and Casino v. NLRB, 475 F.3d 1306 (D.C. Cir. 2007). Another court held that the Occupational Health and Safety Act applies to commercial activities on tribal land. Donovan v. Coeur d’Alene Tribal Farm, 751 F.2d 1113 (9th Cir. 1985).
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November 12, 2014

Sandwich Chain Reportedly Requiring Employees to Sign Non-Competition Agreements

by Resnick Law Group, P.C.

An employment agreement from a national chain of sandwich shops includes a non-competition clause that purports to impose remarkably broad restrictions on employees, according to a story in the Huffington Post. This type of clause typically states that an employee may not accept employment with the employer’s competitors while still working for the employer, or for a period of time after their employment ends. The clause was reportedly included in employment agreements for relatively low-level employees, which seems unusual because non-competition agreements are usually used for employees who gain a substantial amount of knowledge about the employer’s operations. Most states allow employers to enforce non-competition agreements in some circumstances, although the details vary from state to state. The general policy of New Jersey is that employers do not have a “legitimate interest in preventing competition” by former employees, Whitmyer Bros., Inc. v. Doyle, 58 N.J. 25, 33 (1971), unless the employer can show some risk to proprietary information.

A typical non-competition, or “non-compete,” agreement may state that an employee cannot work for a competitor while he or she works for the employer, or for a specific period of time after his or her employment ends. To be enforceable as a general rule, a non-compete agreement must specifically identify the type of employment, or employer, that is prohibited. It must have reasonable geographic restrictions, such as within a limited radius of the employer’s location. It must also have a reasonable duration, such as six months or one year. New Jersey imposes additional restrictions on non-compete agreements, as do some other states.

The Huffington Post story involves an employment agreement produced by an employee of the sandwich chain Jimmy John’s in a Fair Labor Standards Act (FLSA) lawsuit. Brunner v. Jimmy John’s Enterprises, Inc., et al, No. 1:14-cv-05509, 1st am. complaint (N.D. Ill., Sep. 19, 2014). The agreement includes a provision prohibiting the employee from working for a competitor, defined as a business that obtains at least 10 percent of its revenue from the sale of various types of sandwiches. Id. at Exhibit A at 3. The non-compete clause has a duration of two years after the end of employment with Jimmy John’s, and it applies to any competing business located within a three-mile radius of any Jimmy John’s store.
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November 3, 2014

NLRB Allows McDonald’s Employees to File Complaints Against McDonald’s and Individual Franchisees as “Joint Employers”

by Resnick Law Group, P.C.

Employees of numerous major fast-food restaurant chains have mounted campaigns to improve their working conditions, including higher wages and fewer unpaid hours. A major hurdle for these campaigns has been the franchise model used by many chain restaurants, in which one company, the “franchisor,” owns the restaurant’s brand, logo, menu, and other intellectual property, while other companies, “franchisees,” operate the actual restaurants. This has created what has been called the “fissured workplace,” since it often limits any legal claims employees can make to the franchisee that operates the restaurant where they work. The General Counsel of the National Labor Relations Board (NLRB), however, recently announced that it will treat McDonald’s USA, LLC, the franchisor of McDonald’s restaurants, and its franchisees as “joint employers.” This means that employees may file complaints against both the individual franchisee that employs them and the franchisor.

In a franchise system, a franchisor enters into agreements with franchisees to operate one or more business locations. The franchise agreement includes various requirements that the franchisees must follow related to branding, marketing, and business operations. Employment issues are often left to the individual franchisees, at least according to the written agreements. Since workers at individual business locations are employed by a franchisee, they cannot assert claims directly against the franchisor. A major criticism of this system is that the terms of franchise agreements have expanded in scope, to the point that they often have direct effects on employment matters. The franchisors, however, remain shielded from liability to the franchisees’ employees.

The NLRB’s Office of the General Counsel (OGC) decided in July 2014 to allow workers to file complaints against both their employer and the national franchisor. At the time of this announcement, the NLRB had received 181 complaints against McDonald’s franchisees since November 2012. While 64 complaints were still under investigation, it had already found 43 of them to have merit. If the NLRB is unable to settle the meritorious complaints, it may file lawsuits naming the individual franchisees and the franchisor as defendants.
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October 24, 2014

What Duty Does an Employer Have to Protect Employees from Infectious Diseases?

by Resnick Law Group, P.C.

Concern over infectious diseases has captured the imagination of much of the country in recent months, particularly with regard to Ebola virus disease (EVD). Only a handful of EVD cases have been reported in the U.S., and health officials and experts have repeatedly stated that the disease is unlikely to pose a serious threat to the country. Other diseases, such as influenza, pose a far greater threat in the U.S. but generally receive less media attention. Regardless, since a disease outbreak is on the nation’s mind, it raises the question of what legal duties employers owe to protect their employees from infectious diseases. The answer depends largely on the type of employer.

The first case of EVD in the U.S. was diagnosed at a hospital in Dallas, Texas in September 2014. That patient has since died, and two nurses who treated him were subsequently diagnosed with EVD. The Centers for Disease Control and Prevention (CDC) is investigating reports that health care workers treated the initial EVD patient for about three days, from September 28 to September 30, without wearing protective equipment. As many as 70 workers were exposed to the patient during that time, but only the two nurses have tested positive for the disease. EVD is not airborne and can only be transmitted through direct contact with an infected person’s blood or other bodily fluids.

The actions and preparedness of the Dallas hospital, including an alleged lack of safety protocols, drew a harsh rebuke from the hospital’s nurses. The incident has raised concerns about whether the hospital took adequate precautions to protect its workers from infection. Laws like the Occupational Safety and Health Act (OSHA), 29 U.S.C. § 651 et seq., require employers to provide reasonable protection against occupational diseases. This could apply to workers in health care and other fields where ordinary job duties make exposure to infectious diseases likely. See American Dental Ass’n v. Martin, 984 F.2d 823 (7th Cir. 1993).
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October 23, 2014

Court Rejects Proposed Settlement in Class Action Lawsuit Alleging Wage Fixing by Silicon Valley Employers

by Resnick Law Group, P.C.

A U.S. district judge in California rejected a proposed settlement in a class action lawsuit that accuses multiple technology companies of colluding to suppress wages, saying that “the total settlement amount falls below the range of reasonableness.” In re High-Tech Employee Antitrust Litigation, No. 5:11-cv-02509, order at 6 (N.D. Cal., Aug. 8, 2014). The proposed settlement agreement with the defendants Adobe, Apple, Google, and Intel included over $300 million in damages, far short of the $9 billion in damages estimated by the defendants earlier this year. The plaintiffs originally filed suit in California state court for alleged violations of state antitrust law. After the defendants removed the case to federal court, they amended the complaint to add a cause of action under the federal Sherman Act, 15 U.S.C. § 1 et seq.

The plaintiffs are employees of major technology companies, including the four parties to the proposed settlement as well as Intuit, Lucasfilm, and Pixar. The U.S. Department of Justice (DOJ) began investigating many of these companies in 2009, based on allegations that they had entered into agreements with each other not to recruit or hire each other’s employees. The purpose of these schemes was to avoid competition for employees and thereby keep salaries low. As the Wall Street Journal noted at the time, hiring a competitor’s employees, sometimes known as “poaching,” is common in the technology industry. In 2010, the DOJ settled its claims against many of the companies named in the current lawsuit, but the settlement did not include compensation or damages for employees affected by the schemes.

Five software engineers filed suit against the defendants in Alameda County Superior Court in May 2011. The defendants removed the case to federal court several weeks later, and in September 2011 the plaintiffs amended the complaint to include federal antitrust claims. The lawsuit alleged a class of salaried employees who worked for the defendants during the time period from 2005 through 2009, but not retail employees or corporate officers or directors.
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October 16, 2014

EEOC Targets Auto Supply Chain in Race and Disability Discrimination Claims

by Resnick Law Group, P.C.

A pair of lawsuits brought by the Equal Employment Opportunity Commission (EEOC) against a company that operates a nationwide chain of auto supply stores alleges race and disability discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and the Americans with Disabilities Act (ADA) of 1990, 42 U.S.C. § 12101 et seq. One case involves the transfer of an employee from one store to another as part of an alleged effort to reduce the number of black employees at the first store. The other case alleges failure to provide reasonable accommodations for two employees with disabilities, and the termination of one of them after making a complaint.

The complainant in the race discrimination case worked at a retail location in southwest Chicago. The employer “involuntarily transferred” him to a store location on the far south side of the city, allegedly “as part of an effort to eliminate or limit the number of black employees” at the southwest Chicago store. EEOC v. AutoZone, Inc. (“AutoZone I“), No. 1:14-cv-05579, complaint at 3 (N.D. Ill., Jul. 22, 2014). The company allegedly believed that the southwest Chicago store’s customers “preferred to be served by non-black, Hispanic employees.” Id. The complainant objected to the transfer to the south Chicago store and ultimately refused to agree to it. At that point, the defendant terminated his employment.

The EEOC alleges that the defendant’s actions “deprive or tend to deprive [the complainant] and other black individuals of employment opportunities because of their race.” Id. at 3-4. The lawsuit asserts a cause of action for race discrimination, 42 U.S.C. § 2000e-2(a)(2). It seeks a permanent injunction against further employment practices that discriminate based on race, new policies and training programs geared towards alleviating past and preventing future race discrimination, and monetary damages paid to the complainant.
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October 9, 2014

Adjunct Professors Face Challenges in Trying to Unionize

by Resnick Law Group, P.C.

Adjunct professors, generally defined as non-tenure-track and part-time, are becoming increasingly common at two- and four-year colleges and universities around the country. As their numbers grow, however, they are struggling with a lack of job security, low pay, and few benefits. Some of them are successfully demanding better treatment, and several unions are offering their support and assistance. They face some difficult legal obstacles, however, including Supreme Court precedent that limits the applicability of the National Labor Relations Act (NLRA) and claims by some schools that more recent Supreme Court decisions allow them to prevent their adjunct professors from holding union elections.

An article published by Al-Jazeera America in July 2014 describes the experiences of several adjunct professors and describes how faculty employment has changed in recent years. Approximately 30 percent of the 1.8 million faculty members employed by U.S. colleges and universities hold tenure-track positions, meaning that their position offers them the possibility of promotion to “full” professor with a very high degree of job security. Only 24 percent of faculty members actually have tenure, a decrease from about 45 percent in the 1970s.
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October 3, 2014

Question of Whether EEOC Must Make a Good Faith Effort to Conciliate Will Go to Supreme Court

by Resnick Law Group, P.C.

Title VII of the Civil Rights Act of 1964 requires employees to file a complaint with the Equal Employment Opportunity Commission (EEOC). The EEOC must make an effort to resolve the dispute with the employer before it may file suit on behalf of the complainant, or authorize the complainant to do so directly. 42 U.S.C. § 2000e-5(b), (f). Federal circuit courts of appeals have reached different decisions regarding whether a defendant may raise “failure to conciliate” as an affirmative defense. The Supreme Court granted certiorari to a case that rejected an employer’s attempt to assert this defense, and it will hear the matter during the October 2014 session. EEOC v. Mach Mining, LLC (Mach I), No. 11-cv-879, mem. order (S.D. Ill., Jan. 28, 2013); rev’d EEOC v. Mach Mining, LLC (Mach II), 738 F.3d 171 (7th Cir. 2013); cert. granted Mach Mining v. LLC (Mach III), No. 13-1019 (Sup. Ct., Jun. 30, 2014).

The EEOC filed suit for alleged sex discrimination against Mach Mining, on behalf of the complainant and a class of female job applicants. The lawsuit alleged that the company “had never hired a single female for a mining-related position” and “did not even have a women’s bathroom on its mining premises.” Mach I, mem. order at 1. It further claimed that the company’s policy of hiring new employees based on referrals from current employees caused a disparate impact on women in violation of Title VII. The EEOC filed a motion for summary judgment on the defendant’s affirmative defense, which claimed that the EEOC had failed to make a good-faith effort at conciliation before filing suit.

The district court noted that several federal circuit courts of appeal had ruled that Title VII allows appellate courts to review the EEOC’s efforts at conciliation. The usual remedy for failure to conciliate would be to stay the proceedings for further conciliation. The Seventh Circuit had not considered the issue at that time. New York courts are bound by cases like EEOC v. Sears, Roebuck & Co., 650 F.2d 14, 18-19 (2nd Cir. 1981). The Third Circuit Court of Appeals, which includes New Jersey, has not ruled on the issue.
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