Christie Vetoes Expansion of New Jersey Family Leave & Increased Minimum Wage

On July 21, 2017, New Jersey Governor Chris Christie conditionally vetoed two bills that would have expanded New Jersey’s pioneering paid Family Leave Act and raised minimum wage for certain transportation center service workers.  Under the New Jersey Family Leave Act (NJFLA), which applies to New Jersey companies with 50 or more employees, workers are eligible to receive up to 12 weeks of continuous leave during a given 24-month period to care for a newly born or adopted child, parent, a child under 18, spouse, or civil union partner who has a serious health condition requiring in-patient care, continuing medical treatment or medical supervision.  The leave is partially paid, and eligible employees can generally receive up to $633 per week.

The Bill (A4927) would have extended the NJFLA’s coverage to employers with 20 or more employees and expanded the definition of “family member” to include siblings, grandparents, grandchildren and parents-in-law.  Moreover, the Bill would have doubled the maximum number of weeks of family temporary disability leave benefits from 6 weeks to 12 weeks, increased available intermittent leave from 42 days to 84 days, and raised the weekly cap on paid benefits to $932, depending on the claimant’s income.

Governor Christie denounced the Bill’s supporters as disregarding the increased cost to taxpayers and the potentially adverse impact the bill would have on small businesses in New Jersey.

The minimum wage bill (A4870) would have significantly raised New Jersey’s minimum wage for employees at Newark Liberty International Airport, Newark Penn Station, and the Hoboken Terminal, from $10.10 to $17.98 per hour.  Incidentally, Christie vetoed a bill last year that would have raised New Jersey’s minimum wage from its current $8.44 to $15.00 per hour.  The New Jersey Business & Industry Association, considering the vetoes to be a victory to New Jersey employers, stated that the minimum wage bill would have set “a terrible precedent by circumventing the collective bargaining process and imposing backdoor wage and benefit increases by statute.”

For more information on these vetoes and current laws regarding family leave, minimum wage, or other applicable leave laws, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullnullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullnullgenovaburns.com, or 973-533-0777.

New District of New Jersey Case Shows Importance of Requiring Drivers to Form Corporate Entities in Misclassification Cases

Late last month, District of New Jersey Judge Robert B. Kugler partially granted FedEx Ground Package Systems Inc. (“FedEx”)’s Motion to Dismiss in a trucking misclassification case.  The court dismissed several claims but preserved the plaintiff’s wage claim.  One key in getting several of the claims dismissed for FedEx was that it had required the plaintiffs to form LLCs or corporations prior to contracting with them.

In Carrow v. FedEx Group Package Systems, Inc., No.: 16-3026, plaintiffs brought claims against FedEx arising under the New Jersey Consumer Fraud Act (“NJCFA”), misrepresentation, rescission, New Jersey Wage Payment Law (“NJWPL”), and breach of the covenant of good faith and fair dealing. The contract between the driver plaintiffs and FedEx classified the drivers as independent contractors and, for some agreements, first required the drivers to create a limited liability company or corporation and sign the agreement through the business entity.  Plaintiffs argued that despite language in the operating agreements, they were treated as employees as the agreements regulated the vehicle appearance, vehicle maintenance, liability insurance, driver reports, driver uniforms, and driver service areas.  FedEx was also responsible for determining the prices charged for services, route schedules, electronic equipment used, forms for paperwork, and approval of substitutes and assistants. It also actively monitored how drivers operated their vehicles, carry packages, and completed paperwork to ensure adherence to company policies.

Based on the fact that the name plaintiffs had formed corporate entities at FedEx’s request and therefore as individuals were not direct parties to the operating agreements with FedEx, the court dismissed the plaintiffs’ claims of breach of the covenant of good faith and fair dealing and rescission.  The court also dismissed the plaintiff’s NJCFA claim because the plaintiffs’ theory was that the fraud related to FedEx’s employment of the plaintiffs which is not a basis for a NJCFA claim.  Further, the court held that plaintiffs could not state a cognizable claim under the NJCFA because business opportunities are not covered by the NJCFA.  The court did, however, allow several claims to proceed, most importantly, the plaintiff’s NJWPL wage claim finding that the fact that the plaintiffs were not parties to the operating agreements was not in and of itself enough on a motion to dismiss to determine if an employment relationship existed between the plaintiffs and FedEx.

For our clients in the transportation, trucking, and logistics industries, requiring that drivers form LLCs or corporations before entering into contracts with them helps to defeat misclassification claims.  However, as this case shows, corporate status is not enough by itself to definitively defeat a misclassification claim as it is one of many factors that a court will consider.

For questions about employment issues involving the trucking and logistics industries, please contact John Vreeland, Esq., Chair of the Transportation, Trucking & Logistics Group and Partner in the Labor Law Practice Group at jvreeland@nullgenovaburns.com or (973) 535-7118, or, Harris S. Freier, Esq., Partner in the Firm’s Employment Law and Appellate Practice Groups, at hfreier@nullgenovaburns.com or (973) 533-0777.  Please also sign-up for our free Labor & Employment Law Blog at www.labor-law-blog.com to keep up-to-date on the latest news and legal developments effecting your workforce.

Second, Eleventh and Seventh Circuits Disagree Whether Title VII Extends to Claims of Sexual Orientation Discrimination

On March 27 the Second Circuit held that Title VII does not provide protection against workplace discrimination based on sexual orientation. In Christiansen v. Omnicom Group Inc., the plaintiff alleged that his employer discharged him because of his sexual orientation and his nonconformity to gender stereotypes.  On appeal to the Second Circuit, the employer sought dismissal of the claims, and argued that claims of sexual orientation discrimination cannot be brought under Title VII.  Plaintiff urged the court to expand Title VII’s scope to reach these claims and, alternatively, that his suit claimed sexual stereotyping, as opposed to sexual orientation discrimination.  The Second Circuit held that it was bound by Second Circuit precedent in this regard and the plaintiff could not state a cognizable claim for sexual orientation discrimination under Title VII.  The Christensen court relied heavily on the Second Circuit’s 2000 decision in Simonton v. Runyon where the court held that Title VII does not prohibit sexual orientation discrimination.

The Christensen court observed that the landscape of sexual orientation and the law have changed significantly since Simonton.  Most notably, in 2013, the Supreme Court struck down the Defense of Marriage Act and in 2015, held that same-sex couples have the right to marry.  However, the Christensen court found that neither of these decisions relates to Title VII protections, but instead they reflect a change in social and judicial perceptions regarding protections for same-sex couples.

The Eleventh Circuit is in agreement with the Second Circuit.  However, on April 4 the Seventh Circuit en banc held that sexual orientation discrimination is cognizable under Title VII. Hively v. Ivy Tech Comm. College. The Seventh Circuit reversed a Circuit panel that found for the employer with reasoning consistent with the Christiansen decision. The EEOC’s enforcement position during the Obama Administration was that discrimination based on sexual orientation is prohibited by Title VII, although it remains to be seen whether this will change under the current administration.

Given the split in the Circuits and the rapid development of the law in this area, employers cannot ignore discrimination or harassment claims based on sexual orientation.  Several jurisdictions already have state and local laws that prohibit these workplace behaviors, including New Jersey, New York, and New York City.  Employers must review their anti-harassment and discrimination policies to ensure compliance not only with Title VII but also with state and local laws, and promptly and effectively respond to complaints of unlawful harassment and discrimination.

For more information on this decision, on the applicability of Title VII to your organization, or to ensure compliant employment practices, 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.

Two Federal Courts Dismiss ADA Website Accessibility Claims

In the last two months, at least two federal district courts have dismissed website accessibility lawsuits filed against private companies under the Americans with Disabilities Act (“ADA”), proving that this issue continues to be the Achilles Heel of the Department of Justice’s (“DOJ”) Regulatory Arena.

For context, imagine a blind person who is unable to make online mortgage payments because his bank’s website did not provide him the means.  The DOJ is tasked with enforcing the ADA, a federal statute that provides for equal access to places of public accommodation, including private businesses, for such persons with disabilities.  However, the text of the ADA is silent about public accommodations’ websites, and a recent executive order aimed at decreasing federal regulations has all but eliminated any chance that the DOJ will issue regulations on that topic.  The absence of such regulations has emboldened disability advocacy groups across the nation to flood the courts with lawsuits against companies alleging a failure to provide equal access to audio, audiovisual, or other content made available online.

Not so fast, said the U.S. District Court for the Central District of California.  On March 20, 2017, in the case of Robles v. Domino’s Pizza LLC, No. 16-06599, the federal court dismissed ADA web accessibility litigation brought against the enormous food retailer, Domino’s.  The court relied on the “primary jurisdiction doctrine,” which allows courts to dismiss complaints pending the resolution of an issue that is “within the special competence of an administrative agency.”  Noting that Congress has vested exclusive authority with the DOJ to promulgate regulations defining what web accessibility standards to impose on private companies, the court concluded that it was inappropriate to render judgment against Domino’s in the absence of such regulations.

There are various other legal issues that arise in ADA web accessibility cases, including the concept of standing, which means having a concrete injury that can be rectified by a court order, and whether a website is a place of public accommodation.  The U.S. District Court for the Southern District of Florida, in the case of Gomez v. Bang & Olfusen America, Inc., No. 16-23801, shed light on both issues.  The Gomez court dismissed an ADA web accessibility claim brought by a plaintiff who contended that the company’s website could hypothetically impede a blind person from enjoying all the benefits of the company’s retail stores on the basis that the plaintiff did not have a particularized injury (i.e., standing).  As the court concluded, “[h]is generalized grievances are wholly unconnected to any harm he actually suffered at the place of public accommodation (i.e. the concrete, physical store) and are therefore insufficient to survive a motion to dismiss.”  The court also recognized that websites are not included in the ADA’s express list of public accommodations: “If Congress – recognizing that the internet is an integral part of modern society – wishes to amend the ADA to define a website as a place of public accommodation, it may do so.  But the Court, having no legislative power, cannot create law where none exist.”

Although these cases may suggest a shield to ADA web accessibility litigation, there are just as many courts across the country taking completely opposite views.  For example, only one year ago, a Massachusetts federal court rejected the “primary jurisdiction doctrine” (relied upon in Robles) as a basis to dismiss ADA web accessibility claims made against Harvard University and the Massachusetts Institute of Technology.  See Nat’l Ass’n of the Deaf, et al., v. Harvard Univ., et al., No. 15-30023; Nat’l Ass’n of the Deaf, et al. v. Massachusetts Inst. of Tech., No. 15-30024.  Given the national split over these issues and the unlikelihood that the DOJ will issue clarifying regulations, businesses should be cautious.

The first step a business should take to minimize the risk of expensive litigation and exhausting DOJ investigations is to designate an ADA coordinator/compliance group to audit its website.  Companies should simultaneously work with counsel so that reports and findings from these audits are generated under privilege.  In addition, companies should adopt strong website accessibility polices and staff training materials.  Moreover, one of the most effective ways to stave off litigation is to provide a customer service, like a hotline, devoted to assisting customers who encounter difficulties in accessing a company’s web content.

Those with questions about these emerging issues or looking for a preliminary assessment of their legal exposure under the ADA should contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com, or Brigette N. Eagan, Esq., Counsel with the firm’s Human Resources Practice Group, at beagan@nullgenovaburns.com or 973-533-0777.

 

Appellate Court Expands Rice Notice Requirements

Following the February 8, 2017 Appellate Division decision in Kean Federation of Teachers v. Morell, public bodies must review their processes for issuing Rice notices and making available meeting minutes to the public.

In its decision, the Appellate Division expanded the application of the Rice notice requirements to include all situations in which the public body intends to take action on an agenda item which will affect an employee’s “employment appointment, termination of employment, terms and conditions of employment, evaluation of the performance of, promotion or [discipline]” of its employees. This requirement attaches to all agenda items, regardless of whether the public body intends to hold a discussion about the matter.  The Court reasoned that presenting a Rice notice for all employees on a particular agenda allows the public body to have “flexibility to discuss matters in executive session when necessary and affords the affected employees the opportunity” to request a public discussion.

In the same decision, the Court also evaluated the timeframe required for a public body to release its meeting minutes so that it meets the OMPA’s requirement of making them “promptly available”.  At issue was a set of minutes from the September 15, 2014 meeting, which took 94 days to release.  A second set, from the December 6, 2014 meeting took 58 days to release.  Although the Court did not expressly define a timeline to comply with making minutes “promptly available,” it suggested that a reasonable timeframe for release is within 30-45 days.  Even without a clear rule, the Court makes it clear that a 2 or 3 month delay is not justifiable, and mandates public bodies to “adopt a protocol that makes the availability of its meeting minutes a priority.”

The Court’s clear directive to the parties is applicable to all public bodies effective immediately.  Public bodies should review their protocols to ensure that Rice notices be issued in advance of taking action on agenda items involving employment matters.  Public bodies must also review its processes to ensure an efficient method of producing required meeting minutes (including those which are subject to redaction) relatively soon after receipt of a request.

For additional guidance regarding compliance with the Court’s mandate, please contact Jennifer Roselle at 973-646-3324 or jroselle@nullgevnoaburns.com. Ms. Roselle is Counsel in the Firm’s Labor Law and Education Law Practice Groups.

EEOC Releases 2016 Enforcement Data: Charges Increase, Downward Trend in Litigation & Monetary Recovery, LGBT Charges Highlighted

Each year, the U.S. Equal Employment Opportunity Commission (EEOC) releases data detailing the charges of workplace discrimination it receives, the number of enforcement suits filed and resolved, and any areas of targeted investigations and compliance initiatives from the prior year.  On January 18, 2017, the EEOC released its Fiscal Year 2016 Enforcement and Litigation Data summarizing its findings.

Rising Number of Discrimination Charges – According to the EEOC, in 2016 it received 91,503 charges of discrimination, making 2016 the second consecutive year that the agency has seen an increase in the number of charges.  2016 also marks the third consecutive year in which retaliation was the most frequently filed charge.  Below is a chart summarizing the EEOC’s breakdown of the categories of charges filed in 2016 along with a comparison to those charges filed in New Jersey and New York:

  National New Jersey New York
Retaliation:  

42,018 (45.9%)

 

731 (1.7% of total Retaliation charges in US)  

1,604 (3.8% of total Retaliation charges in US)

 

Race:  

32,309 (35.3%)

 

624 (1.9% of total Race charges in US)  

1,084 (3.4% of total Race charges in US)

 

Disability:  

28,073 (30,7%)

 

583 (2.1% of total Disability charges in US)  

1,061 (3.8% of total Disability charges in US)

 

Sex:  

26,934 (29.4%)

 

500 (1.9% of total Sex charges in US)  

1,202 (29% of total Sex charges in US)

 

Age:  

20,857 (22.8%)

 

437 (2.1% of total Age charges in US)  

865 (4.1% of total Age charges in US)

 

National

Origin:

9,840 (10.8%)

 

254 (2.6% of total National Origin charges in US)  

601 (6.1% of total National Origin charges in US)

 

Religion:  

3,825 (4.2%)

 

104 (2.7% of total Religion charges in US)  

180 (4.7% of total Religion charges in US)

 

Color:  

3,102 (3.4%)

 

42 (1.4% of total Color charges in US)  

208 (6.7% of total Color charges in US)

 

Equal Pay:  

1,075 (1.2%)

 

Info not available Info not available
Genetic

Information:

 

238 (.3%) Info not available Info not available

Steady Increase in Charges Filed by LGBT Individuals – For the first time, the EEOC included details in its year end summary about sex discrimination charges filed specifically by members of the LGBT community.  In fiscal year 2016, it settled 1,650 of such charges, recovering $4.4 million.  This accounts for roughly 40% of the 4,000 sex discrimination charges filed by LGBT individuals since fiscal year 2013, which indicates a notable, steady rise in the number of charges filed by members of the LGBT community.  Also trending are the issues involving transgendered employees’ restroom rights.  In July 2015, the EEOC ruled that denying an employee equal access to a common restroom corresponding to the employee’s gender identity constitutes sex discrimination violated Title VII of the Civil Rights Act, as does conditioning an employee’s such right on proof that the employee underwent a medical procedure, and/or restricting a transgendered employee to a single-user restroom.

Overall Decrease in Monetary Awards – The EEOC recovered a total of over $482 million in fiscal year 2016, down from the $525 million in 2015, broken down as follows:

  • $347.9 million for private-sector, state, and local government employees through mediation, conciliation, and settlements;
  • $52.2 million through litigations; and
  • $82 million for federal employees.

Downward Trend in Litigation – Over 76% of cases that were referred to mediation in 2016 were resolved successfully, though conciliation had a lower success rate of only 44%.  Litigation by the EEOC is experiencing a downward trend, with only 165 active cases on the EEOC’s docket at the end of 2016, as opposed to the 218 that existed at the end of 2015.  In addition, the EEOC filed only 86 lawsuits alleging discrimination in 2016, down from its 142 filed in 2015 and 133 in 2014.

New Online Charge Status System – The EEOC launched digital services allowing employers and charging parties to receive and file documents electronically, check the status of charges online, and communicate electronically with the EEOC.  These services are intended to streamline the charge process and reduce the number of paper submissions and phone inquiries, easing administrative burdens on the EEOC.  These changes may make it easier not only for the agency to handle more charges and resolve them more quickly, but for complainants to file them.

New ADA Regulations on Employer-Sponsored Wellness Plans – The EEOC issued regulations and interpretive guidance advising that employers may provide limited financial and other incentives in exchange for an employee answering disability-related questions or undergoing medical exams as part of a wellness program.

Employers should review the EEOC’s 2016 charge and enforcement data in order to remain vigilant when responding to complaints of harassment and/or discrimination in the workplace.  The EEOC’s statistics also reinforces the need for employers to train managers, supervisors, and employees on those policies.

For more information on the EEOC’s year-end summary, the EEOC’s strategy for future enforcement of federal employment discrimination statutes, or ways to ensure that your company is in compliance with the EEOC’s mandates, 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.

Philadelphia Becomes First U.S. City to Prohibit Inquiries into Applicants’ Wage Histories

On January 23, 2017, Philadelphia Mayor Jim Kenney signed into law the “Wage History Ordinance,” which bans all employers doing business in Philadelphia from asking job applicants about their wage histories, subject to a few exceptions. The Ordinance, unanimously passed by the Philadelphia City Council on December 8, 2016, amends Chapter 9-1100 of the Philadelphia Code, the “Fair Practices Ordinance.” The new law, the first for a U.S. city, will take effect on Tuesday, May 23, 2017.

The Wage History Ordinance specifically prohibits employers from the following:

  • To inquire about, require disclosure of, or condition employment or consideration for an interview on the disclosure of a potential employee’s wage history, unless done pursuant to a “federal, state or local law that specifically authorizes the disclosure or verification of wage history for employment purposes;”
  • Determine a potential employee’s wages based upon his/her wage history provided by his/her current or former employer, unless the potential employee “knowingly and willingly” disclosed such information to the prospective employer; and/or
  • Take any adverse action against a potential employee who does not comply with a wage history inquiry (anti-retaliation provision).

For purposes of this Section 9-1131, “to inquire” shall mean to “ask a job applicant in writing or otherwise,” and “wages” shall mean “all earnings of an employee, regardless of whether determined on time, task, piece, commission or other method of calculation and including fringe benefits, wage supplements, or other compensation whether payable by the employer from employer funds or from amounts withheld from the employee’s pay by the employer.”

Notably, the exception allowing wage history inquiries where a law “specifically authorizes” such applies not only when the inquiry is required by law, but when it is merely permitted by law.

The new law also requires a prospective employee who alleges a violation of the Ordinance to file a complaint with the Philadelphia Commission on Human Relations within 300 days of the alleged discriminatory act before he/she may file a civil action in court. Violations of the Ordinance can result in an award of injunctive or other equitable relief, compensatory damages, punitive damages (not to exceed $2,000 per violation), reasonable attorneys’ fees and hearing costs.

Advocates of the legislation, like Philadelphia Councilman Bill Greenlee, have suggested that the Ordinance is aimed at reducing the gender wage gap.  According to the “Findings” section of the Ordinance, women in Pennsylvania are paid 79 cents for every dollar that a man earns.  Amongst minorities, it claims that African-American women are paid 68 cents, Latinas are paid 56 cents, and Asian women are paid 81 cents for every dollar paid to men.  The belief is that, since women have historically been paid less than men, an employer’s knowledge of applicants’ wage histories can perpetuate a cycle of lower salaries.  Advocates profess that the Ordinance forces prospective employers to, instead, set salaries based on an applicant’s experience and the value of the position to the company.

Opponents of the Ordinance, like Rob Wonderling, CEO of the Chamber of Commerce for Greater Philadelphia, denounce it as an unnecessary “hassle” driving businesses away from Philadelphia.  Corporations like Comcast have also threatened costly lawsuits contesting the legality of the Ordinance.

It is recommended that employers review their hiring practices and applications for employment in advance of the Wage History Ordinance’s effective date of May 23, 2017.  Moreover, anyone involved in the hiring and interview process must be trained to ensure compliance with the new law prohibiting inquiries into an applicant’s salary history.

For more information on the Wage History Ordinance, how it may affect your business, or ways to ensure that your company’s hiring documents and policies comply with the Ordinance, 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.

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.

Please, Take Your Time: NJ Supreme Court Voids Contracts That Limit Workers’ Time to Sue

On June 15, 2016, the New Jersey Supreme Court issued its long-awaited decision in Sergio Rodriguez v. Raymours Furniture Company, Inc., in which it addressed whether the two-year statute of limitations under the New Jersey Law Against Discrimination (“LAD”), N.J.S.A. 10:5-1 to -49, may be altered pursuant to a private agreement.  The issue was a matter of first impression for New Jersey courts.  In a unanimous opinion authored by Justice Jaynee LaVecchia, the Court held that “a private agreement that frustrates the LAD’s public-purpose imperative by shortening the two-year limitations period for private LAD claims cannot be enforced.”

Plaintiff, Sergio Rodriguez, was hired by defendant, Raymours Furniture Company, Inc., the parent company of furniture retailer Raymour & Flanigan, in September 2007, and sustained an injury to his knee in April 2010.  After having undergone surgery for the injury, along with a brief recovery period, Rodriguez was cleared to resume his work duties in September 2010.  Just two short days after his return to Raymour & Flanigan, Rodriguez was terminated as part of a company-wide reduction in force. Rodriguez instead contended that he was targeted because of his injury and asserted that others with less seniority or distinguishing features were retained.

Rodriguez brought a lawsuit in the Superior Court against Raymours in July 2011, seven months after his termination, alleging wrongful termination based on an actual or perceived disability under the LAD, which carries a two-year statute of limitations. However, Raymour & Flanigan’s employment application, which Rodriguez signed, included a provision shortening the period for an employee to file a claim against the company to six months. The provision stated that “I agree that any claim or lawsuit relating to my service with Raymour & Flanigan must be filed no more than six (6) months after the date of the employment action that is the subject of the claim or lawsuit,” adding, “I waive any statute of limitations to the contrary.”

The trial court granted summary judgment in favor of Raymours, upholding the validity of the contractual limitation as clear and unambiguous and neither unreasonable nor against public policy.  On appeal, the Appellate Division also sided with Raymours, holding that employers are generally able to shorten a statutory limitation through an employment contract so long as the provided language is clear and unambiguous.  While pointing out that the language of the provision was acceptable and not misleading, the Appellate Division noted that “[t]he disputed contract provision was not buried in a large volume of documents.  It was contained in a two-page application and set forth very conspicuously in bold oversized print and capital lettering, just above the applicant’s signature line. The terminology was clear and uncomplicated.”  Ultimately, the trial court and Appellate Division held that the provision met the aforementioned threshold and by signing the document, Rodriguez waived his rights to access the LAD after the six-month period expired.

On appeal to the Supreme Court, the plaintiff made two arguments, generally focusing on principles of contract unenforceability based on unconscionability.  Because this contract was one of adhesion, the plaintiff contended that it was both procedurally and substantively unconscionable and unenforceable due to the inherent imbalance of power in an employment application.  Furthermore, the plaintiff argued that permitting such a contractual shortening of the limitations period would frustrate the remedial scheme of the LAD.  The defendant-employer argued that it is well established under New Jersey law that parties may privately contract to shorten statutes of limitation and that the waiver at issue here was clear and unambiguous.

This case drew significant interest from the legal community.  The New Jersey State Bar Association, the New Jersey Association for Justice, the American Civil Liberties Union of New Jersey, and the National Employment Lawyers Association all submitted amicus curiae briefs generally supportive of the plaintiff’s position, focusing on the “singular public-interest importance of the LAD.”  The Academy of New Jersey Management Attorneys filed a brief in support of the defendant, arguing that shortening the limitations period under the LAD did not frustrate public policy and was within private parties’ ability to contract.

While recognizing the “strong belief” in the freedom to contract in New Jersey, the Court emphasized the public interest that the LAD serves to protect in trying to eliminate discrimination.  In making its determination, the Court relied heavily on its decision in Montells v. Haynes, 133 N.J. 282 (1993), where the two-year statute of limitations for claims under the LAD was first established.  In addition, the Court looked to the State Legislature’s more than two-decades-long acceptance of that limitations period, noting that the LAD has been amended in other respects during that time period.  The Court offered several reasons in support of its decision:

  • Shortening the time period for bringing an LAD action in the Superior Court would undermine the integrated nature of the statutory avenues of relief and election of remedies made available to claimants;
  • A limitations period of shorter than two-years would effectively eliminate claims because it takes time for an individual to bring the claim forward and the two-year period established in Montells was purposefully designed to impose uniformity and certainty;
  • A shortened limitations period might compel a person to file a premature LAD action where investigation might reveal a lack of a meritorious claim; and
  • Case law has incentivized employers to first receive workplace complaints, investigate them, and respond and any shortening of the period would “seriously affect an employer’s ability to protect itself.”

The Court emphasized that its decision was “rooted in the unique importance of our LAD and the necessity for its enforcement.”  The Court further noted that “[r]estricting the ability of citizens to bring LAD claims is antithetical to that societal aspiration and defeats the public policy goal” of the law.  While the Court’s decision was rooted in the public policy importance of the LAD, the Court also noted that it would have reached the same outcome based on the argument of unconscionability, though it did not go into a detailed analysis.  The Court said that if such an analysis were to be performed, it would have struck down the agreement because the provision was located in an employment application, the plaintiff could not bargain, and it was an adhesion contract containing “indicia of procedural unconscionability.”

What does this decision mean for employers in New Jersey?  The Court’s decision affirms its longstanding commitment to the public policy goals and remedial nature of the LAD.  Unless and until the State Legislature decides to alter the limitations periods for claims under the LAD, it remains a two-year period and that time frame may not be amended through a private agreement.

While it appears that employers can no longer alter the two-year statute of limitations for LAD claims by private agreement, employers need to take action to ensure that they are in the best positon possible when litigation does arise, which can be achieved by:

  • Thorough documentation of performance issues;
  • Regular Anti-Discrimination and Harassment Training;
  • Proper paperwork for all reductions-in-force; and
  • Ensuring that prompt and thorough investigations of employee complaints are conducted.

Finally, when terminating an employee, employers may want to consider severance payments in exchange for a release of all claims. Most importantly, employers should consult with counsel to evaluate their arbitration agreements, employment policies and procedures, and ensure conformity with the Court’s ruling.  For more information, please contact John C. Petrella, Esq., Director of the firm’s Employment Litigation Practice Group at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq, Director of the firm’s Human Resources Practices Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.