Morristown Becomes New Jersey’s 13th Municipality to Mandate Paid Sick Leave

On January 11, 2017, Morristown will join the growing list of municipalities in New Jersey requiring private sector employers to provide paid sick leave to employees.  The Morristown ordinance, initially passed by a 6-1 vote in September 2016 and opposed only by Councilwoman Alison Deeb, is anticipated to impact approximately 4,600 workers. Morristown Mayor Timothy P. Dougherty issued an Executive Order on September 27, 2016 delaying implantation until January 11, 2017 explaining that more time was needed to prepare the required posters and for employers to prepare for compliance. The new law does not replace more generous sick time policies offered by employers.

Amount of Required Paid Sick Time – Covered employees will be entitled to 1 hour of paid sick time for every 30 hours worked.  Employers with 10 or more employees need only give employees 40 hours (5 days) of paid sick time per year, and those with less than 10 employees need only give employees 24 hours (3 days) of paid sick time per year.   All child care workers, home health care workers and food service workers are entitled to earn up to 40 hours (5 days) per year regardless of the size of the workforce, for public health reasons.

Who is Covered – The ordinance applies to all full-time, part-time and temporary employees of private employers in Morristown.  However, it does not apply to employees currently covered by a collective bargaining agreement until that CBA expires, unless the paid sick leave terms of the expired CBA are more generous than the town ordinance, in which case the expired CBA’s paid sick leave terms will apply.

Accrual of Paid Sick Time – Under the new ordinance, paid sick time begins accruing on an employee’s first day of the job.  Unused, accrued leave time may be carried over to the next year, but an employer will not be required to provide more than 40 hours of paid leave time in one calendar year.  Moreover, an employee will not be entitled to payment for any accrued, unused sick time at the time of his/her separation from employment.

Use of Paid Sick Time – An employee will be able to use the accrued time beginning on the 90th calendar day of his/her employment.  Qualifying reasons include personal health reasons or to care for sick children, spouse (including domestic partners and civil union partners), siblings, parents, grandparents, or grandchildren.

Anti-Retaliation – An employee may not be retaliated against for requesting to use paid sick time. Retaliation may include threats, discharge, discipline, demotion, hour reduction, demotion, or related adverse action.

Notice & Recordkeeping Requirements – Employers may require that employees provide advance notice of the intention to use sick time, but may not require that a requesting employee find a replacement before taking the sick time.  Employers will be required to provide written notice to all employees of the new mandatory paid sick time. Employer must also display a poster (in English and in any language that at least 10 percent of the workforce speaks) containing sick leave entitlement in a conspicuous place. Posters will be provided by Morristown’s Department of Administration.

Employers must ensure adequate maintenance of records as failure to do so creates a presumption that they have violated the ordinance.  The Department of Administration will be free to assert its rights to access records in order to ensure compliance.  There is no distinction amongst exempt and non-exempt employees under the ordinance in terms of record-keeping requirements.

Consequences for Non-Compliance – Employers who violate the Morristown ordinance will be subject to a fine of up to $2,000.00 per violation, plus payment of the value of sick time that was unlawfully withheld.

How Morristown Compares to Other NJ Municipalities – Though Morristown is the first town in Morris County to mandate paid sick days for private-sector employees, it is New Jersey’s thirteenth municipality to enact such a law.  The idea of federally-mandated paid sick leave backed by the Obama administration did not gain much momentum, and there are only a handful of states, often limited to a few cities, that require employers to provide paid sick leave.  New Jersey does not have a statewide mandate, but it has the highest number of local paid leave laws (including now Morristown).  The following provides a glimpse of the states and cities with similar laws:

  • Arizona
  • California (statewide & the following municipalities: Berkeley, Emeryville, Long Beach, Los Angeles, Oakland, San Diego, San Francisco, Santa Monica)
  • Connecticut
  • Washington D.C.
  • Illinois (statewide & local laws in Chicago and Cook County)
  • Louisiana (statewide & local law in New Orleans)
  • Montgomery County, Maryland
  • Massachusetts
  • Minneapolis, Minnesota
  • Paul, Minnesota
  • Bloomfield, New Jersey
  • East Orange, New Jersey
  • Elizabeth, New Jersey
  • Irvington, New Jersey
  • Jersey City, New Jersey
  • Montclair, New Jersey
  • Morristown, New Jersey
  • Newark, New Jersey
  • New Brunswick, New Jersey
  • Passaic, New Jersey
  • Paterson, New Jersey
  • Plainfield, New Jersey
  • Trenton, New Jersey
  • New York City, New York
  • Oregon
  • Philadelphia, Pennsylvania
  • Pittsburgh, Pennsylvania
  • Puerto Rico
  • Vermont
  • Washington (statewide & the following municipalities: SeaTac, Seattle, Spokane, Tacoma)

There is a counter-trend across the nation aiming to eliminate the hodgepodge of local laws and foster statewide uniformity in mandatory paid sick leave.  Some states have passed laws affirmatively banning local governments from mandating paid sick leave for private employers, including Alabama, Florida, Georgia, Indiana, Kansas, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, Oregon, Tennessee, and Wisconsin.  Similar legislation prohibiting local laws has been introduced in Pennsylvania and New Jersey.

Advocates of mandatory paid sick leave laws told the Morristown Town Council that providing paid sick time is good for businesses, as it will create a happier, healthier and more productive workforce, resulting in less worker turnover and leading to reduced costs incurred for potential new hiring.  However, opponents of the new law argue that small business owners will face cost-issues in order to remain in compliance.  Morristown Councilwoman Deeb, who provided the lone dissenting vote, believes the law will drive small businesses out of Morristown.

For more information on the ordinance and how the new sick leave requirements will affect your business, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

N.J. Supreme Court Rejects Defense of Federal Labor Law Preemption of CEPA Claim in Underlying Unpaid Wage Action

On August 16, 2016 the N.J. Supreme Court held, in a 6-0 opinion, that neither the federal Labor Management Relations Act nor the National Labor Relations Act preempts a claim under the Conscientious Employee Protection Act (CEPA) by a private sector employee who is covered by a collective bargaining agreement.  Puglia v. Elk Pipeline, Inc. (Case No. A-38-14).

Elk Pipeline employed Mr. Puglia, a union member, on a construction project in Camden. The project was subject to N.J. prevailing wage law and apparently as a cost savings measure, Elk reduced severely the wages of several laborers on the project, claiming that the employees were re-classified as apprentices.  Puglia complained to his supervisor and to Elk’s project manager that with the wage reduction, he was not being paid correct prevailing wages. An unhelpful fact for Elk was that its project manager commented to the project engineer that “the owner wanted to [f**k] with [Puglia] and wants to get rid of him.” In fact, no more than 11 months after Puglia first complained to Elk about his wages, Elk laid Puglia off, ahead of two less senior employees who were not laid off. Elk explained that the two less senior employees had relevant certifications that Puglia lacked. Puglia’s CEPA claim alleged that, by complaining internally about Elk’s failure to pay him proper prevailing wages, he engaged in protected whistleblowing activity, for which he lost his job. Elk moved for summary judgment, arguing that Puglia’s CEPA claim was preempted by federal labor law.

The trial court concluded that Puglia’s CEPA claim was preempted, by both the Labor Management Relations Act (LMRA), and based on Garmon preemption, a U.S. Supreme Court-based doctrine that holds that state-law claims that involve conduct arguably subject to Section 7 or Section 8 of the NLRA are preempted. The Appellate Division affirmed, holding that Puglia’s claim was preempted by the LMRA, and by the NLRA under Garmon. The Appellate Division reasoned that the issues of Puglia’s contract seniority and Elk’s assertion that the Camden project was winding down required evaluation of the terms of Elk’s labor agreement.

The Supreme Court reversed and held that Puglia’s CEPA claim was not preempted by federal labor law. The issue the Court teed up for analysis and foreshadowed the Court’s conclusion was “whether complaints about violations of that minimum labor standard [of prevailing wages], and the concomitant State interest in curbing retaliation for such complaints, invoke preemption concerns.”  The Court analyzed Puglia’s CEPA complaint to determine whether it required an interpretation of the CBA and found that it did not. “Whether Puglia performed a whistleblowing activity in reporting the alleged failure by Elk to abide by Prevailing Wage Act requirements, and whether Elk retaliated against Puglia for doing so are factual questions, untied to any interpretation of the CBA.” The Court dismissed Elk’s best argument — that Puglia’s complaint depended on interpreting the labor agreement — and strained to find no contract issue. “It is far from clear that Puglia claimed a violation of the CBA in [his complaint]. He was making a factual allegation: He was more senior than other employees who were not let go. … That Puglia mentioned seniority in his deposition does not alter the substance of his claim. Nor does it inject a question of CBA interpretation into the factual questions at the heart of a CEPA claim. … Having a claim under the CBA does not void state-law remedies that are independent of the CBA. The employer’s attorney cannot change that by the course of his questioning at a deposition.” Despite Puglia’s claim that he was laid off out of seniority order, the Court still determined that it was “unclear” that he was claiming a contract violation. The Court gave no weight to Elk’s argument that the labor contract permitted Elk to lay Puglia off ahead of more junior employees and therefore Puglia’s layoff was dictated by the labor contract, and not retaliatory. Turning to Garmon preemption, the Court agreed with Elk “that Puglia’s conduct was at least arguably protected under Section 7” of the NLRA.  However, the Court determined it could not find that “Puglia’s CEPA claim is identical to the claim that he could have, but did not, present to the Board.” The Court explained, “[W]e believe that when the State’s interests in enforcing CEPA in a factual setting like this one — whistleblowing activity arising out of a prevailing wage dispute — are balanced against any potential interference with the federal labor scheme, the State’s interests win out. New Jersey’s interest in enforcing CEPA runs deep.” The Court concluded with this syllogism: “If an employee can allege a violation of those state minimum labor standards without being preempted by federal law, then it follows that allegations of retaliatory discharge based on whistleblower conduct in response to a violation of those standards should not be preempted.”

This decision indicates that rarely if ever will this Court find that a CEPA claim based on an alleged violation of N.J. wage laws is preempted by federal labor law, no matter how many labor contract issues are pled or implicated. A major concern for N.J. businesses flowing from this decision is the proliferation of claims and litigation, since this holding confirms that union-represented employees like Mr. Puglia can prosecute claims of retaliatory discharge and get three bites at the apple — in the contractual grievance-arbitration procedure, before the NLRB, and in state court under CEPA.

Questions relating to this important decision may be directed to any partner in our firm’s Labor Law Practice Group. Our Group’s attorney roster can be accessed at http://www.genovaburns.com/attorney-search-results.