Putting Employees in the “Penalty Box” Could Have Courts Blowing the Whistle on You

While the National Hockey League’s Capitals are in Washington D.C. celebrating their Stanley Cup win, a Prosecutor’s Office in New Jersey may be in hot water for putting an employee in the penalty box following complaints about department misconduct.

Last month, the Appellate Division held that the transfer of an employee to a “less desirable” position can be considered an act of retaliation that violates the Conscientious Employee Protection Act (CEPA). This is true even if the employee’s primary terms and conditions of employment – compensation, hours, and physical location – remain unchanged after the transfer.

Jeffrey Scozzafava, a detective with the Somerset County Prosecutor’s Office, had been assigned to the forensic Crime Scene Investigation Unit since his hire in 2007.  In 2015, after he complained about the mishandling of evidence and deficient casework in his unit, he was transferred to the fugitive squad. Scozzafava brought a claim for retaliation against his employer. The Prosecutor’s Office argued that he did not suffer an adverse employment action because Scozzafava’s rank, position, pay and benefits remained the same, and it arguably improved his scheduled working hours.  Therefore, the Prosecutor’s Office argued, the move was a lateral transfer and not a demotion.

The Appellate Division disagreed and held that there was more to the analysis than merely ensuring that an employee is not terminated, suspended, or demoted after making a complaint, and that all of the attendant circumstances surrounding the employment action will be closely examined.

Scozzafava had previously been a forensic detective with the New Jersey State Police, and had 12 years of extensive training and experience in the forensic field prior to his employment with the Somerset County Prosecutor’s Office. He was a member of numerous forensic professional associations, devoted time as an instructor, and was qualified as an expert in various courts.  His abrupt transfer to the fugitive squad deprived him of using and building upon his twenty years of expertise in the forensic field.

The Court acknowledged that “not every employment action that makes an employee unhappy constitutes an actionable adverse action,” but held that under the circumstances of this case, the transfer was “objectively demeaning” to Scozzafava. It certainly did not strengthen the employer’s argument that when asked for the reasoning behind the transfer, Scozzafava’s lieutenant told him “everybody does time in the penalty box.”

Scozzafava also claimed that his transfer to the fugitive squad offered fewer opportunities to earn overtime pay. While the lower court found that the potential for overtime was “too nebulous” to be considered as part of an employee’s compensation, the higher court suggested that this could be independent grounds for the finding of a retaliatory act.  It has already been established by the New Jersey Supreme Court that “any reduction in an employee’s compensation” is considered an adverse employment action, and the Appellate Division suggests that reduced opportunities for overtime, standing alone, would qualify as a reduction in pay.

Bottom Line:  Here, the employer was well aware that its transfer of Scozzafava was not neutral, and the purpose was admittedly to put Scozzafava “in the penalty box.”  The new standard emerging from this decision expands the inquiry into the type of employment action that is considered retaliatory.  In addition to a review of the standard terms and conditions of employment – compensation, benefits, hours, and job title, the employee’s skills, training, and job history will be examined to determine whether the transfer is truly lateral, or whether it instead could be considered “objectively demeaning” – a phrase the Court twice repeated in its decision.  If it can be, and it comes on the heels of an employee objection or complaint about conduct that the employee reasonably believes is unlawful, the employer could face exposure for an act of retaliation. It is important to carefully review any management decision that could appear as if the purpose of the employment action is to bench an employee for not being a team player. A job transfer intended to be punishing will likely be flagged by the courts.

“Burn Files” and Employee Self-Help: Effective Policies Protect Documents Wrongfully Taken by Former Employee

A New Jersey appellate court recently upheld the disqualification of a former employee’s attorneys in a whistleblower claim against his former employer, because the employee had improperly taken documents containing privileged attorney-client communications to use against the employer “when they try to get him.”

Facts

The defendant, Maquet Getinge Group (“Maquet”), a German pharmaceutical company, designs, develops, manufactures, and distributes medical devices.  Because of the medical and technological focus of defendant’s business, Maquest maintains sensitive research and development data, new products, quality processes and procedures and protocols for the preparation of inspections by the Food and Drug Administration (“FDA”) on its computer systems.  Maquet had in place comprehensive policies designed to protect its confidential, proprietary information, including a “Standards of Conduct” policy, an “End User Acceptable Use Policy.”  Plaintiff, Oscar Sanchez (“Sanchez”), was employed by Maquet as the Chief Quality and Compliance Officer for approximately 18 months, until he was terminated in April 2015.  As a condition of his employment, Sanchez and other similarly situated employees had to sign a “Confidential Information, Invention Assignment, and Non-Compete Agreement.”  This agreement contained, inter alia, a “Covenant Not to Disclose” and a provision on “Return of Company Documents.”  Two months prior to his termination, Sanchez was disciplined after an investigation into numerous complaints about his conduct and deportment involving employees who reported to him.  After receiving the complaints, Sanchez informed a Senior Vice President of Marketing at Maquet that “he had personally retained copies of all kinds of Maquet-owned documentation – which he referred to as his ‘burn files’ and which included copies of . . . two executives’ hard drives and a binder full of emails and documents,” which he allegedly told his co-worker he “would use the ‘burn files’ to “f***” Maquet ‘when they tried to get him.’”

On July 2, 2015, Sanchez filed a complaint against Maquet alleging he had been wrongfully terminated for whistleblowing activities, in violation of the Conscientious Employee Protection Act (“CEPA”).  Maquet served Sanchez with its First Request for the Production of Documents in October 2015, to which plaintiff responded on February 1, 2016.  Upon receipt of the documents, Maquet claimed the documents plaintiff’s counsel had produced were owned by Maquet and had been improperly taken by Sanchez without Maquet’s knowledge or consent. Further, Maquet claimed the documents produced contained privileged attorney-client communications between Maquet’s staff and its attorneys, including correspondence regarding FDA compliance issues, results of third-party audits, budgeting issues, research and development, quality processes and procedures, and FDA findings.

Lower Court Decision

Defendant moved to preclude plaintiff from using these documents against defendant, and to remove plaintiff’s chosen counsel and his firm from continuing to represent plaintiff in the case.  In its decision, the lower court rejected plaintiff’s argument that Maquet had waived the attorney-client privilege. The Judge then found that Plaintiff’s chosen counsel “knew or should have known the material was privileged” yet failed “to promptly notify the opposing side that they had received privileged information” until nine (9) months after the case had been initiated. In disqualifying chosen counsel from serving as plaintiff’s counsel, the Judge found he would neither be harmed in the prosecution of the case nor that he would be unable to secure competent substitute counsel, as the case was still in its early stages.

Appellate Court’s Decision

Sanchez appealed arguing that the motion judge erred in reaching her decision to disqualify his chosen counsel without conducting an evidentiary hearing and that the judge misapplied the multi-factor analysis the NJ Supreme Court established in the seminal case, Quinlan v. Curtiss-Wright Corp. The Appellate Division rejected these arguments and affirmed the lower court’s decision.

The Appellate Division concluded the motion judge properly found the documents in question to be covered by the attorney-client privilege, particularly finding that the motion judge had noted the documents in dispute contained communications between Sanchez, Maquet’s Global Chief Quality Assurance & Regulatory Officer, and Maquet’s General Counsel. The record also indicated the documents included emails labeled “ATTORNEY CLIENT PRIVILEGE” by plaintiff. The Appellate Division found no legal basis to question the motion judge’s conclusion that Maquet’s counsel was included in the communications to offer legal advice and guidance if he so chose.

The Appellate Division then rejected as untimely and legally unnecessary, plaintiff’s argument that the motion judge should have conducted an evidentiary hearing to consider the Quinlan factors.  Quinlan set forth seven (7) factors to consider when an employee may take or use documents belonging to his or her employer. The first consideration a judge must make is “how the employee came to have possession of, or access to, the document.” In reviewing the record, the court found that Sanchez removed the documents at issue in direct violation of Maquet’s policies related to confidential documents containing proprietary information in an act that was outside of his ordinary duties because he wanted to [get] the company when they tried to get him.  The court also noted that Sanchez copied the documents to share with his attorneys for the purpose of evaluating whether he had “a viable cause of action” against Maquet and conversely, that Maquet had a strong interest in keeping the materials confidential.

Finally, while recognizing that the disqualification of counsel is a harsh discretionary remedy that must be used sparingly, the Appellate Division concluded that Sanchez’ extra-judicial self-help measures deprived Maquet of the opportunity to prevent the disclosure of the privileged information and that plaintiff’s counsel’s unreasonable delay in disclosing this information rendered futile any attempt to mitigate this harm.

Bottom Line

Employers need to maintain robust policies related to maintaining and access to proprietary and confidential information, and in appropriate circumstances, agreements like those used by Maquet. These policies should: (1) set forth what materials are confidential or proprietary; (2) specify who within the company is permitted access to the proprietary and confidential information, whether by job title, level, need to know basis, etc.; and (3) set forth the purpose for which the employee is granted access and any limitations on access to the proprietary and confidential information. These policies and agreements will be critical in allowing a court to determine the employee was unauthorized in taking the documents and acted outside their ordinary duties of employment.

For more information about the potential impacts of this ruling or what steps your company can take to effectively prevent and address whistleblower complaints, 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.

Welcome to The Garden State: NJ’s Law Against Discrimination Grows to Protect Non-Resident Employees

A New Jersey appellate court recently held that a non-resident employee who telecommuted to her New Jersey employer from her home in Massachusetts may be covered by the New Jersey Law Against Discrimination (NJLAD).

Facts

The employer, Legal Cost Control, Inc. (LCC), was a corporation located in Haddonfield, New Jersey.  The employee, Susan Trevejo, lived in Massachusetts, paid property taxes in Massachusetts, and held a Massachusetts driver’s license.  She never lived in New Jersey, and she never worked in LCC’s New Jersey office.  Trevejo received health insurance benefits from LCC’s insurance provider, Amerihealth New Jersey, but the plan did not condition coverage on New Jersey residency.  Trevejo’s sole connection to New Jersey was using a company-issued computer to remotely connect to LCC’s network and a company-issued phone to engage in conference calls.  After twelve years with the company, LCC terminated Trevejo’s employment.  In turn, she filed a lawsuit alleging age discrimination in violation of the NJLAD.

Lower Court’s Decision

LCC moved to dismiss the case, arguing that Trevejo was not an “inhabitant” of New Jersey, and thus, could not pursue a claim under NJLAD.  The trial court allowed for limited discovery over whether Trevejo was an “inhabitant” of New Jersey; the parties were barred from engaging in discovery over Trevejo’s other connections to the state.  The trial court ultimately dismissed the case, finding that Trevejo was not an “inhabitant” of New Jersey covered by NJLAD.

Appellate Court’s Decision

Trevejo appealed, arguing that the trial court overly restricted discovery and that she needed to engage in discovery regarding the nature and substance of her daily “virtual” connection to LCC’s New Jersey office.  The Appellate Division agreed, reversing the trial court’s decision and sending the case back to the trial court for more discovery.

In deciding that NJLAD’s coverage is not limited to inhabitants of New Jersey, the Appellate Division relied on the text of NJLAD itself.  The statute expressly prohibits discrimination against “any individual” and repeatedly uses the term “person” to identify who is protected from discrimination.  The term “person” is used throughout the statute, whereas the word “inhabitant” appears only in the legislation’s preamble.  Accordingly, the court concluded that NJLAD’s coverage is not limited to inhabitants of New Jersey.  This was, as the Appellate Division reasoned, consistent with the overarching goal and strong public policy behind NJLAD, to eradicate discrimination from the workplace entirely.  The trial court’s restricting discovery to whether Trevejo was a New Jersey inhabitant could not be reconciled with that principle.

Rather than Trevejo’s place of residency, the Appellate Division directed that discovery focus on where the discriminatory conduct took place and whether Trevejo was employed in New Jersey or Massachusetts.  The scope of discovery should extend to:

  • Where plaintiff’s co-employees worked;
  • Whether those co-employees worked from home;
  • The nature of the software used by plaintiff and other LCC employees to conduct business on behalf of LCC;
  • The location of the server used to connect plaintiff and other employees to LCC’s office in New Jersey;
  • The location of the internet service provider allowing plaintiff and other employees to connect to LCC’s office in New Jersey;
  • The individual or individuals who made the decision to terminate plaintiff and the basis for the decision; and
  • Any other issues relevant to plaintiff’s contacts with New Jersey and her work for LLC that may demonstrate her entitlement to protection under the NJLAD.

Facts Matter

The New Jersey Appellate Division has consistently applied this type of fact-sensitive approach to deciding whether non-resident telecommuters are covered by New Jersey laws, even outside the discrimination context.  But this fact-sensitive approach often produces seemingly inconsistent results.  For example, in one case, an employee who telecommuted to her New Jersey employer from her home in North Carolina was denied New Jersey unemployment benefits based on a finding that she performed all of her work in North Carolina.  This seems to contradict the holding in Trevejo’s case, where the court was unconvinced by the fact that Trevejo performed all of her work in Massachusetts.  As if you were not already confused enough by the muddle of laws and regulations governing the workplace, this case illustrates the importance of facts, rather than bright line rules, in making decisions about your employees.

Bottom Line

Beware that all of your employees, regardless of where they perform their work, may be entitled to claim protection from discrimination under NJLAD.  The issue will come down to a factual inquiry over whether they have sufficient contacts with the state.  Be mindful that NJLAD is one of the most employee-protective state anti-discrimination statutes in the country.  In light of that fact, and the absence of any bright line rule regarding NJLAD’s applicability to out-of-state employees, you may want to consider executing, where available by law, a written agreement with your non-resident telecommuters delineating which state’s law applies in the event of a legal dispute (“choice of law” clause), and in which court those disputes are to be filed (“forum selection” clause).

For more information about the potential impacts of this ruling or what steps your company can take to effectively prevent and address complaints of discrimination, 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. Governor Orders Fresh Focus On Worker Misclassification

On May 3, 2018 New Jersey Governor Phil Murphy signed Executive Order No. 25 which authorizes a 12-person task force to review misclassification of workers as independent contractors in New Jersey, with a focus on the construction industry.  The Employee Misclassification Task Force will be responsible for examining misclassification enforcement, developing practices to improve enforcement of current law, making recommendations to encourage compliance with the law, and reviewing existing state law and applicable procedures related to worker misclassification.

The reasons advanced by the Governor for launching the Task Force are that misclassification as an independent contractor results in workers’ losing legal rights and employment related benefits, harms the State’s economy by non-payment of State and federal payroll taxes, serves as a barrier to union organizing, and provides non-compliant employers with an unfair competitive advantage over employers that properly classify their workers.

The Task Force will include three representatives of the State Department of Labor and Workforce Development, three representatives of the Department of the Treasury, one representative each of the Departments of Law and Public Safety, Agriculture, Banking and Insurance, Human Services, and Transportation, and a representative of the Economic Development Authority. Notably, the Task Force will have no representation from the plaintiffs’ or defense bars, at least at the outset.

In light of the State’s renewed crackdown, employers must be cognizant that the designation of a worker as an independent contractor in New Jersey is not a matter of semantics but must be defensible under legal precedent. Specifically, New Jersey adheres to the “ABC” test in distinguishing an independent contractor from an employee. This test presumes that a worker is an employee of the service recipient and places the burden on the service recipient to establish otherwise.

To meet this burden, an employer must show that:

  • The worker has been and will continue to be free from control or direction of the performance of the service, both in the service contract and in fact;
  • The worker’s service is either outside the usual course of business for the service recipient, or is performed outside of all the places of the business of the service recipient; and
  • The worker is engaged in an independently established trade, occupation, profession or business.

If any of these three criteria is not met, the worker is properly classified as an employee.  Accordingly, a New Jersey employer must carefully assess the status of its workforce in light of the heightened attention to misclassification at the state level.

For more information about Executive Order No. 25 and guidance as to what your organization should be doing in anticipation of this new enforcement priority, please contact one of the partners in the firm’s Labor Law Practice GroupJames J. McGovern III, Esq., at jmcgovern@nullgenovaburns.com, Patrick W. McGovern, Esq., at pmcgovern@nullgenovaburns.com, Douglas E. Solomon, Esq. at dsolomon@nullgenovaburns.com, or John R. Vreeland, Esq., at jvreeland@nullgenovaburns.com  — or call us at 973-533-0777.

New Jersey Passes Mandatory Paid Sick Leave

On May 2, New Jersey Governor Phil Murphy signed a law mandating all private and public New Jersey employers, regardless of size, offer paid sick leave. This makes New Jersey the 10th state to adopt mandatory paid sick leave legislation. The Paid Sick Leave Act (“the Act”) also permits employees to use the leave for their own care or for the care of a family member and expands how paid sick leave can be used, encompassing protections beyond the federal Family Leave and Medical Act, the New Jersey Family Leave Act as well as other leave laws. The new law also fully pre-empts the 13 municipalities in New Jersey with local paid sick leave ordinances, allowing employers to adopt a state-wide uniform paid sick leave policy.

Coverage

Permissible use of sick leave includes the following:

(i) Diagnosis, care, treatment, recovery and/or preventive care for the employee’s own mental or physical illness or injury or the employee’s family member’s mental or physical illness or injury;

(ii) Absence due to a public health emergency declared by a public official that causes the closure of the employee’s workplace or the school or childcare facility of the employee’s child or requires the employee or an employee’s family member to seek care;

(iii) A necessary absence for medical, legal or other victim services because of domestic or sexual violence perpetrated on the employee or the employee’s family member; or

(iv) To attend a school-conferences, meetings, or any event requested or required by a child’s school administrator, teacher, or other professional staff member responsible for the child’s education, or to attend a meeting regarding a child’s health or disability.

The Act also broadly defines “family members” to include an employee’s child, spouse, domestic partner, civil union partner, parent (including adoptive, foster or step-parent, or legal guardian), sibling (including foster or adoptive siblings), grandparent or grandchild, and the parent, grandparent or sibling of the employee’s spouse, domestic partner or civil union partner. Notably, an employee has the opportunity to use their sick leave for the care of a non-related individual whose close association with the employee is the “equivalent” of a family relationship.

Exemptions & Employees Covered by a CBA

Per diem healthcare employees, construction workers subject to a collective bargaining agreement (CBA), and public employees who are provided with sick leave with full payment pursuant to any other law, rule or regulation are exempt from the new law. Non-construction employees covered by a CBA at the time the law goes into effect are also not effect, but will apply once the agreement expires. Further, employees and their representatives may waive the rights available under the law and address paid leave in collective bargaining.

Accrual of Paid Sick Leave

Under the new law, employees accrue 1 hour of paid sick leave for every 30 hours worked. Employees may accrue up to 40 hours of paid sick leave per benefit year.  Employers are also permitted to designate the “benefit year” as any 12-month period but may not modify it without notifying the New Jersey Department of Labor and Workforce Development (NJDOL).

Employees become eligible to use earned sick leave beginning on the 120th day after they are hired, and may use their earned sick leave as it is accrued. Employers are also permitted to offer, or “frontload” 40 hours of paid sick time or utilize a paid-time-off (“PTO”) policy as long as it provides equal or greater benefits and accrue benefits at an equal or greater rate than the benefits provided under the Act. There is no requirement to payout accrued and unused sick leave upon termination absent a company policy to the contrary.

Upon the mutual consent of the employee and employer, an employee may voluntarily choose to work additional hours or shifts during the same or following pay period, in lieu of hours or shifts missed, but shall not be required to work additional hours or shifts or use accrued earned sick leave. In addition, an employer may not require, as a condition of an employee’s using earned sick leave, that the employee search for or find a replacement worker to cover the hours during which the employee is using earned sick leave.

Notice

Employers are entitled to 7 days advance notice of “foreseeable” absences and can restrict employee’s use of “foreseeable” paid sick leave on certain dates.  Where the need is unforeseeable, an employer may only require notice “as soon as practicable,” if the employer has notified the employee of this requirement.  In addition, employers are only permitted to ask the employee for documentation to substantiate the sick leave if the employee is absent for 3 or more consecutive days.

Compliance

Employers will be required to maintain records documenting the hours worked and earned sick leave used by employees. Records must be maintained for 5 years and made available for inspection by the NJDOL. If an employee claims an employer violated the Act, and that employer that has failed to maintain adequate records, then there is a presumption that the employer failed to provide paid sick leave.

Employers must also post a notification and distribute a written notification alerting employees of their rights within 30 days of the notice being issued by the NJDOL and provide the notification to all new employees at the time of hiring.

Anti-Retaliation

Employers are prohibited from retaliating or discriminating against employees under the Act. The Act broadly defines retaliation to include not only retaliatory personnel action like suspension, demotion, or refusal to promote, but also includes threatening to report the immigrant status of an employee or family member of the employee. Employers are also prohibited from retaliating or discriminating against an employee who files a complaint with the commissioner or a court alleging the employer’s violation of the Act, or informs any other person of their rights under the Act.

There is a rebuttable presumption of unlawful retaliatory action whenever an employer takes adverse action against an employee within 90 days of when that employee opposes any violation of the Act, informs any person about the employer’s alleged violation of the Act, files a complaint alleging a violation of the Act, or cooperates in an investigation into an alleged violation of the Act.

Penalties

Any failure of an employer to make available or pay earned sick leave as required by the new law, or any other violation of the law, shall be regarded as a failure to meet the wage payment requirements of the New Jersey Wage and Hour Law.  Employers will also be subject to the penalties and remedies contained in the New Jersey Wage and Hour Law, including fines and possible imprisonment, reinstatement of a discharged employee to correct any discriminatory action and payment of all lost wages in full.

Bottom Line

The New Jersey Paid Sick Leave Act takes effect in 180 days, on October 29, 2018. Employers in New Jersey, in consultation with legal counsel, must review and revise existing policies, practices and procedures related to calculating employee’s sick leave to ensure compliance with the Act.  Human Resources and Benefits personnel should also be trained on the new paid sick leave law requirements and Managers should also receive updated training to ensure that internal recordkeeping processes are sufficient to keep track of time taken under the new law.

For more information about the potential impacts of the Paid Sick Leave Act or what steps your company can take to effectively ensure compliance with wage and hour laws, 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.

New Jersey Takes the Lead in Equal Pay Act Legislation

Following up on his January 16, 2018 Executive Order promoting equal pay for equal work, New Jersey Governor Phil Murphy signed a historic and sweeping equal pay law on April 24, 2018. The “Diane B. Allen Equal Pay Act” was named after former Republican Senator Diane B. Allen, herself a victim of bias, who was part of the original negotiations surrounding the bill when it was first proposed under former Governor Chris Christie. The new Equal Pay Act applies to all employers in New Jersey regardless of size and is scheduled to take effect on July 1, 2018. The new law combats not only gender pay discrimination but also wage discrimination against those protected by the New Jersey Law Against Discrimination (NJLAD).

Coverage

The Equal Pay Act amends the NJLAD and now makes it illegal for an employer to pay any employees who are members of a protected class recognized under the NJLAD at a lower compensation than other employees who are not members of a protected class, for “substantially similar work,” unless a pay differential is justified by legitimate business necessity. Under the NJLAD, protected classes include race, creed, sex, color, national origin, ancestry, nationality, disability, age, pregnancy or breastfeeding, marital, civil union or domestic partnership status, affectional or sexual orientation, gender identity or expression, military status, and genetic information or atypical hereditary cellular or blood traits. “Substantially similar work” is determined by a combination of the “skill, effort and responsibility” required for that position and is not limited to employees who work within a specific geographic area or region.

Moreover, although the legislation carves out an exception for differential pay based on certain factors like merit, seniority, and education, this exception is only so long as these factors do not perpetuate a sex-based differential in compensation. For example, if one employee has a different title than another employee or even works in a different department, but both employees perform the same types of tasks with similar levels of responsibility, both employees should be paid the same.

An employer may pay a different rate of compensation only if the employer demonstrates that the differential is made pursuant to a seniority system, a merit system, or the employer demonstrates:

  • The differential is based on one or more legitimate, bona fide factors other than the characteristics of members of the protected class (like training, education, experience, or the quantity or quality of production);
  • The factors are not based on, and do not perpetuate, a differential in compensation based on sex or any other characteristic protected under the NJLAD;
  • Each of the factors must be applied reasonably;
  • One or more factors account for the entire wage differential; and
  • The factors are job-related with respect to the position in question and based on a legitimate business necessity.

Prohibitions

The new law also makes it easier for employees to win pay-discrimination cases since all they would need to show is that they were paid unequally for “substantially similar” work, rather than the previous standard of “substantially equal” work. Employers are also not permitted to reduce the rate of compensation of any employee in order to achieve compliance.

The new law also prohibits employers from retaliating against employees who (1) oppose any practices or acts forbidden under the Act; (2) seek legal advice regarding rights under the Act; (3) share relevant information with legal counsel or a governmental entity; or (4) file a complaint, testifies or assists in any proceeding.  The Act also forbids coercion, intimidation, threats or interference with any person in the exercise or enjoyment of, or on account of that person having aided or encouraged any other person in the exercise or enjoyment of, any right granted or protected by the Act.

Statute of Limitations

In addition to any other relief authorized by the NJLAD, liability under the new law shall accrue, and an aggrieved person may obtain relief for back pay, for up to 6 years, so long as the violations continue within the 6-year period. The law also makes it unlawful to require employees or prospective employees to consent to a shortened statute of limitations or to waive any of the protections afforded under the NJLAD.

Available Damages

In addition to the damages permitted under the NJLAD, the new law allows victims of discrimination to recover triple damages should a jury, or the New Jersey Division of Civil Rights, determine that the employer is guilty of an unlawful employment practice as defined by the law.

Reporting Obligations

To ensure companies doing business with the state comply, companies that win contracts from public agencies are required to submit reports to the Commissioner of Labor and Workforce Development. These reports would need to include the gender and race of employees in every job title or pay band, and the total compensation for each category of employees.

Bottom Line

Employers should carefully analyze their existing pay practices to ensure compliance. Prior to July 1, 2018, employers must review the current job descriptions, employee handbooks and policies to determine which employees perform “substantially similar work” in order to ensure they are being compensated at the same rate. If, after doing this review, there is a pay differential, the employer must be able to show that the difference is not based on sex or any other characteristic of members of a protected class. Existing handbooks and policies must also be revised to prohibit pay discrimination for substantially similar work, and prohibit retaliation against employees who request, discuss or disclose compensation or other job-related information covered by the law. Human resources and benefits personnel should also be trained on the new requirements and managers should also receive updated training.

Employers must also be aware that the provision for back pay damages is much more extensive than federal law, and the possibility of treble damages should a jury find that an employer is guilty of an unlawful employment practice should serve as a powerful deterrent to correct discriminatory pay differentials.  Lastly, employers who work with public entities must ensure that payroll records and other information regarding the “gender, race, job title, occupational category and rate of compensation” of every employee that is part of the project is up to date and sent to the public entity.

For more information regarding the impacts of this legislation and how to implement nondiscriminatory pay 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., Director of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777.

AG Requires New Jersey Police Departments To Randomly Drug Test Officers

The New Jersey Attorney General has issued new directive requiring all law enforcement agencies in the state to conduct random drug testing. The guidelines now make all officers subject to drug testing, whether they are employed by state, county, or municipal departments. At a minimum, random drug testing shall be conducted at least once for the remainder of 2018 and at least twice every year thereafter. At least 10% of the total number of sworn officers in an agency shall be drug tested every year.

Each agency must also notify officers of the implementation of the random drug testing policy. This includes notification that, upon an initial positive result, the officer shall be suspended from all duties. Upon final disciplinary action, the officer shall be terminated from employment as a law enforcement officer, reported to the Central Drug Registry maintained by the State Police, and permanently barred from future law enforcement employment in New Jersey.

The new guidelines also contain reporting requirements. Each department will be required to notify the County prosecutor within 10 days of (1) a positive drug test by an officer, (2) a refusal by an officer to take a drug test, or (3) administration of a reasonable suspicion drug test to an officer. Upon completion of any disciplinary action, each agency shall report the discipline to the County Prosecutor. By December 31 each year, each law enforcement agency shall provide written notice to the County prosecutor of the dates of testing conducted during the prior year, the total number of sworn officers employed by the agency, the total number of sworn officers tested, and the total number of sworn officers who tested positive.

By January 31 of each year, each County prosecutor will have to send the Attorney General a report including a statement indicating those agencies under the County Prosecutor’s supervision that are in compliance with this Directive and those that are not. Neither summary shall reveal any subject officer’s identity.

Law enforcement agencies are required to adopt or amend their random drug testing policies to meet these new requirements within 30 days of the March 20, 2018 directive. Aside from these minimum requirements, the drug testing procedures themselves are unchanged.

For more information regarding this directive and best practices for implementing appropriate drug testing policies and procedures, please contact Joseph M. Hannon, Esq. at jhannon@nullgenovaburns.com or Jennifer Roselle, Esq. at jroselle@nullgenovaburns.com, attorneys in the firm’s Labor Law Practice Group, or call 973-533-0777.

New Jersey Governor Phil Murphy Signs First Executive Order for Equal Pay and Gender Equality

In his first official act as Governor of the State of New Jersey, Governor Phil Murphy issued an Executive Order on January 16, 2018 promoting equal pay for equal work in New Jersey. The Executive Order, which is set to take effect February 1, 2018, provides that all New Jersey workers should be compensated based on their work and the services they provide, regardless of gender. The Executive Order further states that currently, women of all ethnicities in New Jersey who hold full-time, year-round jobs are paid less than men in those same positions.

Fulfilling a campaign promise and following in the footsteps of other states and major cities around the country, the Governor’s Office seeks to fix this wage gap in various ways. Since asking for prior compensation information can be part of the application process, the Executive Order directs that no State entity is permitted to ask employment applicants about their current or previous salaries until after a conditional offer of employment has been made. In the event an applicant refuses to volunteer such information, that refusal cannot be considered in employment decisions. If a State entity does have a job applicant’s compensation information, that information cannot be used in an employment decision. Further, the Executive Order provides that State entities can only request and verify current or previous compensation information prior to a conditional offer of employment if such information was voluntarily provided or if verification is required by federal, state, or local law.  A “State entity” is definied in the Executive Order as “any of the principal departments in the Executive Branch of State government and any agency, authority, board, bureau, commission, division, institution, office, or other instrumentality within or created by any such department, and any independent State authority, commission, instrumentality, or agency over which the Governor exercises executive authority, as determined by the Attorney General.”

To enforce this Executive Order, the Governor’s Office of Employee Relations is tasked with overseeing the implementation and training of staff at State entities so that they can comply. For those who are improperly asked about their salary history, such violations can be reported to the Governor’s Office of Employee Relations. Reporting such violations to the Governor’s Office of Employee Relations is the sole remedy, as the Executive Order does not create a private right of action for employees or prospective employees in the event they are improperly asked about their salary history.

Although the Executive Order only impacts State entities, Governor Murphy indicated that he would make it state law if the Legislature presents him with a bill extending these protections to private businesses.  California, Massachusetts, Delaware, Oregon, and several other U.S. cities, including New York City, Philadelphia, and San Francisco, have all enacted policies that prohibit employers from asking about prospective employees’ salary histories.

For more information regarding the potential impacts of this Executive Order and how to implement nondiscriminatory pay practices, please contact Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777.

NJLAD Amendment to Protect Nursing Mothers in the Workplace

Since 2010, the Fair Labor Standards Act (“FLSA”) requires employers to provide reasonable break times for nursing mothers to express breast milk.  These break times must be provided for up to 1 year after the birth of the child.  On January 8, 2018, New Jersey’s Law Against Discrimination (“NJLAD”) was amended to include a similar requirement.  The NJLAD now requires all New Jersey employers to provide lactation breaks, regardless of the employer’s size and number of employees.

This new amendment to the NJLAD makes it a civil rights violation for an employer to terminate or discriminate against a female employee who breastfeeds or pumps milk on the job. The amendment also imposes a reasonable accommodation requirement, where employers must reasonably accommodate employees with daily break times and a suitable room or other location with privacy so that she can express breast milk for her child. This room must be in close proximity to the employee’s working area. However, it is not required that these breaks be paid, unless the employee is already compensated for breaks. While the FLSA requires that employers allow this accommodation for up to a year after the child’s birth, the new NJLAD amendment does not include any time restriction.

These requirements are effective immediately, unless the employer can demonstrate that providing the accommodation would pose an undue hardship on its operations. Factors to consider when deciding whether providing the accommodation would cause an undue hardship include: the number of employees, the number and type of facilities, the size of the budget, the nature and cost of the accommodation needed, and the extent to which the accommodation would involve waiver of an essential requirement of a job.

For more information about how these new requirements affect your company, please contact Dina M. Mastellone, Esq., Chair of the firm’s Human Resource Training & Audit Programs Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

Mr. Martinez (Maybe) Goes to Washington: NJ Chief Administrator to be Appointed by President Trump

Raymond Martinez, the current Chair and Chief Administrator of the New Jersey Motor Vehicle Commission (“MVC”), is to be appointed by President Trump as the next Administrator of the Federal Motor Carrier Safety Administration (“FMCSA”). The FMCSA is a separate administration within the U.S. Department of Transportation and is tasked primarily with ensuring safety in motor carrier operations through strong safety regulation enforcement.

Mr. Martinez has served under Governor Christie since 2010. In his role as Chief Administrator, Mr. Martinez directs 2,400 employees at 71 MVC locations across New Jersey. He also serves as Chairman of the Motor Vehicle Commission Board, a policy-making body comprised of government and public members. Governor Christie appointed Mr. Martinez as an Executive Branch Member of the State Planning Commission, where he is called upon to represent state government in the oversight of environmental protection issues, land use, development and redevelopment.  In 2015, Mr. Martinez was selected by the American Association of Motor Vehicle Administrators (“AAMVA”) to serve as a member of its International Board of Directors.

Mr. Martinez has been active in the public arena for more than twenty years. From 2005 to 2009, he served as the Deputy U.S. Chief of Protocol and Diplomatic Affairs for the U.S. Department of State, and the White House under President George W. Bush. As such, Mr. Martinez was responsible for managing five operational divisions: Diplomatic Affairs, Foreign Visits, Ceremonial Events, Blair House, and Administration. Between 2000 and 2005, Mr. Martinez served as the Commissioner for the New York State Department of Motor Vehicles as well as Assistant General Counsel for the Long Island Power Authority. During President Reagan’s administration, he served as Deputy Director for Scheduling and Advance for First Lady Nancy Reagan. He also held roles in the U.S. Department of Housing and Urban Development, within the New York State Senate, and as a private attorney.

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. 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.