No Roman Holiday: New Jersey Appellate Division Says Employees Must Submit Sexual-Harassment and Discrimination Claims to Arbitration

August 23, 2018 was a busy day for the New Jersey Appellate Division on the arbitration front when it issued two opinions effectively upholding the enforceability of arbitration agreements.  Both cases involved sexual-harassment and discrimination claims brought by employees against their former employers under the New Jersey Law Against Discrimination (“NJLAD”).  In D.M. v. Same Day Delivery Service, Inc., et al., the Appellate Division held that a former employee was bound by the terms of an arbitration agreement, even though the language in a few sentences were “poorly written” and “didn’t make sense.”  In Roman v. Bergen Logistics, LLC, et al., the Appellate Division held that a former employee was required to arbitrate her claims, but added that, contrary to the terms of her agreement, she could also seek punitive and exemplary damages in arbitration.

Same Day provides some clarity for Arbitration Agreement language

In Same Day, an employee filed a complaint in New Jersey state court against both her former employer and her former manager, asserting claims under the NJLAD.  The employee had been hired as a delivery person by Same Day Delivery, Inc. and worked as a driver for just over two months.  During the time of her employment, the employee alleged that her manager had made “sexually provocative comments” about her body and subjected her to a hostile work environment on account of her sex and sexual orientation.  Furthermore, the employee maintained that she was fired in retaliation for rejecting her manager’s advances.

The employer moved to dismiss the complaint and compel arbitration, asserting that the employee had electronically signed an arbitration agreement along with her employment application, which she had submitted through the company’s online recruiting platform, and was therefore required to submit her claims to binding arbitration.  In response, the employee argued that the arbitration agreement was unenforceable and pointed to certain sentences with ambiguous and unclear language, which she contended made the whole agreement incomprehensible to an employee of average intelligence and thus invalid.  Particularly at issue was the wording of the last sentence of the agreement, which stated “I am agree to waive my voluntarily and knowingly, and free from any duress or coercion whatsoever to a trial by a trial judge or jury as well as my right to participate in a class or collective action.”  The trial court found that, although this sentence “doesn’t make sense,” the rest of the agreement was sufficiently clear to make the agreement enforceable and therefore entered an order directing arbitration and dismissing the complaint.  The employee appealed.

Giving further support to the federal and state policies favoring the arbitration of disputes, the New Jersey Appellate Division affirmed the trial court’s finding that the poorly drafted language did not make the whole agreement ambiguous to the extent that it was invalid because the remainder of the document was clearly written.  In reaching this conclusion, the Appellate Division addressed the issue of what language would make an arbitration agreement clear and understandable to an ordinary reader.  At the outset, the Appellate Division noted that the standard in New Jersey for an enforceable arbitration agreement is that the language clearly state that the employer and employee(s) are 1) agreeing to arbitrate and 2) agreeing to waive the right to pursue a claim in court.  Notably, this standard does not require a “particular form of words,” but, being mindful that these agreements involve a waiver of rights, the language must be such that the employee has full knowledge of his/her legal rights and, by signing, demonstrate his/her intent to surrender those rights.  The Appellate Division also noted that such an agreement will pass muster when it is phrased in plain language that is understandable to an average member of the public, who may not know that arbitration is a substitute for the right to sue.

Roman: don’t waive punitive damages goodbye

In Roman, the court confronted an arbitration agreement which stated, among other things, that the employee had waived her right to pursue punitive damages for all employment matters, including those related to wrongful termination, discrimination, harassment, retaliation, and any other violation of state and federal law.  The employee was hired by Bergen Logistics, LLC as a human resources generalist and signed an arbitration agreement as an express condition of her hiring and continued employment. The employee was terminated within four months of her hire date, after which point she filed a complaint in New Jersey state court against her employer and her former supervisor, asserting claims under the NJLAD and for intentional infliction of emotional distress.  The employee alleged that, during the time of her employment, her supervisor had sexually harassed her and had created a sexually hostile work environment and she further alleged that her termination was retaliation for her objecting to the supervisor’s sexual advances.

The employer moved to dismiss the complaint and compel arbitration, asserting that the employee was obligated to arbitrate her claims pursuant to the agreement that she had signed at the outset of her employment.  In response, the employee argued that the arbitration agreement was unenforceable because it barred the recovery of punitive damages, which the NJLAD makes explicitly available to victims of discrimination.  Unpersuaded, the trial court found that the agreement was a clear and unambiguous waiver of claims for punitive damages, that the employee knowingly signed the agreement, and that the agreement covered the claims set forth in the complaint.  The trial court accordingly entered an order upholding the enforceability of the agreement and dismissing the complaint.  The employee then appealed, again contending that a waiver of punitive damages should not be enforced.

In reviewing the trial court’s decision, the New Jersey Appellate Division noted that the federal and states policies favoring arbitration are “not without limits.”  In this vein, the Appellate Division focused its review on the relationship of the waiver-of-rights provision in arbitration agreements to the rights afforded by the NJLAD.  The Appellate Division determined that the NJLAD permits the recovery of punitive damages to victims of discrimination for an important, public-interest purpose, namely the deterrence and punishment of the most egregious discriminatory conduct by employees who, by virtue of their positions in upper management, control employer policies that should prevent discriminatory conduct in the workplace.  The Appellate Division held that this is a “substantive right” that cannot be waived by agreement between an employee and his/her employer.  Therefore, that Appellate Division modified the trial court’s decision by affirming that the employee must arbitrate her claims and adding that she was permitted to include claims for punitive and exemplary damages in the arbitration proceeding.

Bottom Line

While these opinions reaffirm the compelling federal and state policies that favor the arbitration of disputes, they also illuminate equally compelling, and at times competing, public interests at play within the broader scope of employer-employee relations in the state of New Jersey.  Courts in New Jersey have consistently recognized the benefits of arbitration as providing an inexpensive and efficient means of dispute resolution.  Furthermore, the agreement between the employee and employer to pursue arbitration as expressed in the form of a contract has been strictly enforced, in most instances.  However, these recent opinions make it clear that the enforceability of arbitration agreements depends, in part, on the clarity of the plain language used as well as on the rights that the employee and employer have agreed to waive.  These recent opinions should serve as cautionary tales that the public interests of clarity in contract and an employee’s right to a discrimination-free workplace are some of the many considerations that employers must have when crafting arbitration agreements with the assistance of counsel.

For more information on what your company can do to ensure its arbitration agreement will be enforceable, 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 York State Releases Draft Sexual Harassment Prevention Policy & Model Training Program

New York State has released a draft Sexual Harassment Prevention Policy and model training program for employers and is seeking comments from the public by September 12, 2018. The model policy and training policy is in follow-up to the legislation passed earlier this year to reduce the prevalence of discrimination and harassment in the workplace.  After the period for public comment, revisions will be considered and final documents will be ultimately released.

The model Sexual Harassment Prevention Policy, available on the State’s website, requires that by October 9, 2018, employers doing business in New York State adopt a policy that meets or exceeds the model policy’s standards and distribute that policy in writing to all of its employees.  Employers who do not adopt the model policy may establish their own policy, but it must meet a set of “minimum standards,” which New York State also recently released.  The new law also requires that an employer’s sexual harassment policy include a complaint form for employees to report alleged incidents of sexual harassment.  The State has also released its model complaint form, linked here. Employers must also:

  • Develop an investigation procedure for complaints that guarantees due process;
  • Provide information about applicable federal, state & local laws on sexual harassment in the workplace, including remedies available to aggrieved employees;
  • Provide examples of behavior that would constitute unlawful sexual harassment.
  • State that sexual harassment is considered a form of employee misconduct and that employees or managers who take part in or knowingly allow such harassment will be disciplined; and
  • Clearly indicate that any form of retaliation is prohibited against employees who either complain about sexual harassment or assist in an investigation.

New York State also released model training program, linked here. Interactive training must be given  annually, starting on October 9, 2018.  Employers may also adopt the model training or may use it as a basis to establish its own. Employers must, however, ensure that their training complies with State-issued minimum standards, which can be accessed here.

Starting January 1, 2019, companies bidding for a state contract will be required to accompany their bids with a certification stating that they have a written policy and training program that meets or exceeds the models.

As we have previously advised, there are other sweeping changes to workplace sexual harassment laws that New York State and New York City employers must comply with, which are summarized as follows:

New York State

  • Employers Cannot Mandate Arbitration of Sexual Harassment Claims – Employers can no longer mandate that employees arbitrate sexual harassment claims unless that prohibition is inconsistent with (a) federal law or (b) a collective bargaining agreement. This provision is sure to be challenged based on preemption under the Federal Arbitration Act, however, unless or until a court rules otherwise, the law was effective as of July 11, 2018.
  • Most Nondisclosure Agreements are Banned from Sexual Harassment Settlements Unless Sufficient Consent and Notice – Employers who settle sexual harassment claims can no longer include provisions in their settlement agreements preventing the disclosure of facts underlying the claims, unless the complaining party consents to it. He/she must be given 21 days to consider the nondisclosure language and 7 days thereafter to revoke it.  He/she cannot waive this right.  This law took effect on July 11, 2018.
  • Employers Are Now Liable to Non-Employees for Sexual Harassment – Employers will be held liable for sexual harassment committed against contractors, subcontractors, vendors, and others providing services under a contract, where it can be shown that the employer (a) knew or should have known that such non-employee was being harassed but did nothing about it, and (b) has sufficient control and “legal responsibility” with respect to the conduct of the harasser. This law took effect immediately.
  • Government Employees Must Refund any Taxpayer-Funded Payouts for Sexual Harassment Awards – Effective immediately, employees of the state, political subdivisions or other public entities (including elected officials), who have been found personally liable for sexual harassment in the workplace, must refund to the state/other public entity any payments it made to the plaintiff on that employee’s behalf, within 90 days.

New York City

  • NYC’s Anti-Harassment Applies to All Employers – The NYCHRL prohibiting harassment and discrimination in the workplace now applies to all employers, regardless of size.
  • Sexual Harassment Claims are Subject to a Three-Year Statute of Limitations – The statute of limitations to bring a claim under the NYCHRL has been extended from 1 year to 3 years for claims of gender-based harassment.
  • NYC Employers Must Provide Annual Sexual Harassment Training Effective April 1, 2019, New York City employers with 15 or more employees will be required to provide all employees annual sexual harassment training that meets or exceeds the model program’s standards. New employees must receive the training within 90 days of hire.  The program must be interactive, but it need not be live.  Employers will be required to maintain records of trainings, including acknowledgement forms.  We are still awaiting the Commission’s sexual harassment training module.
  • NYC Employers Must Hang a Poster & Distribute a Hand-Out Regarding Sexual Harassment – By September 6, 2018, all employers doing business in New York City must conspicuously post and distribute a poster created by the New York City Commission on Human Rights to all employees, which informs them of their protections from sexual harassment under the New York City Human Rights Law, provides phone numbers to report harassment, and provides information on how to file a Complaint with the Commission and a Charge of Discrimination the U.S. Equal Employment Opportunity Commission. The poster is available on the Commission’s website and it must be at least 8.5 by 14 inches in size, using at least 12-point font, and posted in both English and Spanish. The Commission, however, has only released the English version to date. The Commission has also released a Fact Sheet setting forth employees’ rights regarding workplace sexual harassment, which employers must distribute to all employees at the time of hire.  The Fact Sheet is also available on the Commission’s website and linked here. The information sheet may either be distributed as a separate document or incorporated into the employer’s Employee Handbook no later than September 6, 2018.

Employer To-Do List

We will continue to monitor and update the new developments in both New York State and New York City.  The following is a non-exhaustive list of action items that New York State and New York City employers are strongly encouraged to implement, in consultation with legal counsel:

  • Review and revise your existing policies, practices, procedures, and training programs, as well as employment contracts, severance agreements, and other contracts to ensure compliance with these new state and city laws.
  • Even if your existing harassment policies comply with the new laws, best practice suggests that you redistribute them.
  • Now that contractors and other non-employees are protected from sexual harassment, you should consider providing training to them if you have not done so already.
  • Do not blindly adopt the state and/or city’s model policies or training programs. These are designed to provide minimum thresholds that you should adjust and build upon based upon the needs of your company.  However, make sure your policies and training programs comply with the minimum standards released by the State.
  • If you have employees in New York City, post the required sexual harassment poster and implement a system for distributing the required sexual harassment fact sheet to all employees upon hire or incorporate it into your Employee Handbook, no later than September 6, 2018.

For more information on what your company can do to ensure compliance with New York or New York City sexual harassment laws, please contact Harris S. Freier, Esq. of the firm’s Employment Litigation Practice Group, at hfreier@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 York Legislature Amends Paid Family Leave Act

On June 20, 2018, the New York legislature overwhelmingly passed a bill to give employees up to 12 weeks of partially paid bereavement leave. The bill will still require the approval of Governor Andrew Cuomo. The bill expands the Paid Family Leave Act (the “Act”), which went into effect on January 1, 2018. The Act already provided employees up to 12 weeks of leave paid at a percentage of their salaries for situations including child birth or adoption, a qualifying exigency arising out of a family member’s military service, or the need to care for a sick relative. The Act covers the care of a spouse or domestic partner, child, parent, parent-in-law, grandparent, or grandchild, by blood or marriage. The recent amendment was passed in an effort to explicitly clarify the legislative intent that bereavement leave for the death of such relative would be covered by the Act as well.

The original Act guarantees an employee the same or comparable job when they return from leave, and bars employers from cutting off health insurance. While employees with planned births or adoptions are required to provide 30 days’ notice under the Act, the bereavement amendment will permit employees to give notice “as soon as practicable.” Employees eligible for leave under this amendment will be required to provide a death certificate.

While some employers are concerned that the bill will impose hardship on small businesses, the New York State Assembly justifies the amendment because “[g]rief-related losses cost U.S. companies as much as $75 billion annually.” As such, the legislature purports that the amendment will result in “greater employee loyalty, better outcomes, better quality of life for that person, and an overall healthier workforce that has been given the necessary time to mourn their loss.” The bill is sponsored by State Senator Rich Funke, who suffered the sudden loss of his adult son. If the bill is signed by Governor Cuomo, New York will offer the most generous bereavement leave benefits in the country.

For more information on what your company can do to ensure compliance with New York or New York City employee benefits 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.

Federal Judge Clears the Haze for New Jersey Employers in the Weeds with Medical Marijuana Users

States across the country, including New Jersey, continue to legalize medical marijuana, but it remains an illegal substance under federal law, and employers’ confusion continues to bud.  The complication that employers have – especially in states such as New Jersey with expansive disability protections under the New Jersey Law Against Discrimination (“NJLAD”) – is that any employee who is using marijuana for a medicinal purpose under the New Jersey Compassionate Use Medical Marijuana Act (“NJCUMMA”), likely would be considered to have a disability and thus be protected under the NJLAD.

One way an employer can be considered under NJLAD to have discriminated against a disabled individual is by failing to offer him/her a reasonable accommodation.  While the NJCUMMA explicitly states that a reasonable accommodation would not include allowing an employee to use marijuana at work, the statute is not so blunt on the topic of workplace drug testing.  Does NJLAD require that employers accommodate a medical marijuana user by waiving the requirement that he/she pass a drug test for federally-prohibited narcotics?  Issuing a dose of relief to employers who feared that NJCUMMA would set their drug test requirements ablaze, a New Jersey federal judge recently ruled that the answer is no.

In Cotto v. Ardagh Glass Packing, Inc., et al., the plaintiff worked for about 5 years as a forklift operator for a glass packaging company.  In 2016, he injured his head on the job and was placed on light duty work.  He was subsequently asked to take a drug test before returning to work as a condition of continued employment.  He informed his employer that he would test positive for medical marijuana, which he was legally prescribed to treat a neck and back injury that occurred in 2007.  Seeking an accommodation, the plaintiff requested that his employer waive the requirement that he pass a drug test for marijuana.  Apparently, the plaintiff had told the employer upon hire that he was prescribed medical marijuana.  After his employer refused to waive the requirement that he pass a drug test before returning to work, he sued for disability discrimination based on a failure to accommodate.

Judge Robert B. Kugler of the U.S. District Court for the District of New Jersey held that the NJCUMMA does not require an employer to waive its requirement that employees pass a drug test for illegal drugs.  Addressing the issue as one of first impression in New Jersey, Judge Kugler relied on the current federal prohibition on marijuana.  He also relied on the express language of the NJCUMMA, which provides that legal medical marijuana users shall not be subject to criminal or civil penalties related to their use of the drug, but expressly excludes employers from its scope, as follows: “Nothing in this act shall be construed to require . . . an employer to accommodate the medical use of marijuana in any workplace.”  N.J.S.A. § 24:6I-14.  Judge Kugler also observed that most courts outside New Jersey have concluded that, unless their state statute’s language explicitly provides otherwise, the decriminalization of medical marijuana does not shield employees from adverse employment actions related to their use of the drug.

Last year, in Barbuto v. Advantage Sales and Marketing, LLC, the Supreme Court of Massachusetts was faced with a similar set of facts: an employee suffering from Crohn’s disease who was legally prescribed medical marijuana under Massachusetts’ medical marijuana statute, sought a waiver of her employer’s policy barring from employment those who test positive for marijuana.  Like the NJCUMMA, Massachusetts’ statute also explicitly states that employers are not required to accommodate any on-site medical marijuana use.  The employer in Barbuto argued that because the only accommodation the employee sought – her continued use of medical marijuana – is a federal crime, it was facially unreasonable.  The Barbuto Court disagreed, noting that such an argument respects federal law alone and ignores Massachusetts voters’ and legislators’ recognition of marijuana as an acceptable method to treat debilitating medical conditions.  The Court further held that, even if an accommodation of continued use of medical marijuana were facially unreasonable, the employer still had a duty to engage in the interactive process and explore with the employee whether there was an alternative accommodation that would allow her to work, such as allowing her to use the drug off-site during non-working hours.

Cotto concerned the reasonable accommodation request of waiving a drug test while Barbuto involved the reasonable accommodation request of using marijuana off-site during non-work hours.   The parties and judge in Cotto seem to have gone out of their way not to cite or distinguish Barbuto, so while New Jersey employers now have clarity about drug testing, they remain dazed and confused as to whether allowing an employee to use medicinal marijuana off-site during non-work hours would be a legitimate reasonable accommodation.

In addition, employers should understand that their knowledge that an employee uses the drug almost invariably imputes knowledge that an employee suffers from a protected disability.  The Cotto case concerned employer conduct resulting from an employee’s treatment, not the employee’s disability, as the plaintiff admitted that his employer knew about his disability for years and never discriminated against him until he was asked to take the drug test.  However, in the absence of such favorable facts, employers should take caution not to make employment decisions based solely on their knowledge that an employee is a medical marijuana user.

For more information about the interplay between the decriminalization of medical marijuana and disability discrimination law, please contact Harris S. Freier, Esq. of the firm’s Employment Litigation Practice Group, at hfreier@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 York City Issues Mandatory Sexual Harassment Poster & Fact Sheet

The New York City Commission on Human Rights (“the Commission”) has issued its mandatory poster and information sheet for distribution to  employees pursuant to the recently enacted Stop Sexual Harassment in New York City Act.  By September 6, 2018, all employers doing business in New York City must conspicuously post and distribute the notice to all employees. The poster, available on the Commission’s website, must be at least 8.5 by 14 inches in size, using at least 12-point font, and posted in both English and Spanish.  The Commission, however, has only released the English version to date.

The Commission has also released a Fact Sheet setting forth employees’ rights regarding workplace sexual harassment, which employers must distribute to all employees at the time of hire.  The Fact Sheet, also available on the Commission’s website, can be accessed by clicking here. The information sheet may either be distributed as a separate document or incorporated into the employer’s Employee Handbook no later than September 6, 2018.

The poster and Fact Sheet advise employees of the protections of the New York City Human Rights Law (“NYCHRL”), lists examples of sexual harassment and advises that retaliation against employees reporting sexual harassment is illegal.  The poster also provides the Commission’s phone number for employees to report sexual harassment in the workplace and provides information on how to file a Complaint with the Commission and a Charge of Discrimination the U.S. Equal Employment Opportunity Commission.

As we have previously advised, New York State and New York City employers must comply with recent sweeping changes to the laws regarding sexual harassment, summarized as follows:

New York State

  • Employers Cannot Mandate Arbitration of Sexual Harassment Claims – Employers can no longer mandate that employees arbitrate sexual harassment claims unless that prohibition is inconsistent with (a) federal law or (b) a collective bargaining agreement. This provision is sure to be challenged based on preemption under the Federal Arbitration Act, however, unless or until a court rules otherwise, the law was effective as of July 11, 2018.
  • Most Nondisclosure Agreements are Banned from Sexual Harassment Settlements Unless Sufficient Consent and Notice – Employers who settle sexual harassment claims can no longer include provisions in their settlement agreements preventing the disclosure of facts underlying the claims, unless the complaining party consents to it. He/she must be given 21 days to consider the nondisclosure language and 7 days thereafter to revoke it.  He/she cannot waive this right.  This law took effect on July 11, 2018.
  • Employers Must Adopt a Policy and Provide Annual Training on Sexual Harassment – The state will establish a model sexual harassment policy and training program that will address specific topics, including information related to what laws workplace sexual harassment violates, remedies available to victims, complaint and investigation procedures, and the additional obligations imposed on supervisory employees to address sexual harassment. Effective October 9, 2018, employers will be required to adopt a policy that meets or exceeds the model policy’s standards, distribute that policy in writing to all of its employees, and implement an annual training program that meets or exceeds the model training program’s standards.  Effective January 1, 2019, companies bidding for a state contract will be required to accompany their bids with a certification stating that they have a written policy and training program that meets or exceeds the models.
  • Employers Are Now Liable to Non-Employees for Sexual Harassment – Employers will be held liable for sexual harassment committed against contractors, subcontractors, vendors, and others providing services under a contract, where it can be shown that the employer (a) knew or should have known that such non-employee was being harassed but did nothing about it, and (b) has sufficient control and “legal responsibility” with respect to the conduct of the harasser. This law took effect immediately.
  • Government Employees Must Refund any Taxpayer-Funded Payouts for Sexual Harassment Awards – Effective immediately, employees of the state, political subdivisions or other public entities (including elected officials), who have been found personally liable for sexual harassment in the workplace, must refund to the state/other public entity any payments it made to the plaintiff on that employee’s behalf, within 90 days.

New York City

  • NYC’s Anti-Harassment Applies to All Employers – The NYCHRL prohibiting harassment and discrimination in the workplace now applies to all employers, regardless of size.
  • Sexual Harassment Claims are Subject to a Three-Year Statute of Limitations – The statute of limitations to bring a claim under the NYCHRL has been extended from 1 year to 3 years for claims of gender-based harassment.
  • NYC Employers Must Provide Annual Sexual Harassment Training Effective April 1, 2019, New York City employers with 15 or more employees will be required to provide all employees annual sexual harassment training that meets or exceeds the model program’s standards. New employees must receive the training within 90 days of hire.  The program must be interactive, but it need not be live.  Employers will be required to maintain records of trainings, including acknowledgement forms.  We are still awaiting the Commission’s sexual harassment training module.

Employer To-Do List

We will continue to monitor and update the new developments in both New York State and New York City.  The following is a non-exhaustive list of action items that New York State and New York City employers are strongly encouraged to implement, in consultation with legal counsel:

  • Review and revise your existing policies, practices, procedures, and training programs, as well as employment contracts, severance agreements, and other contracts to ensure compliance with these new state and city laws.
  • Even if your existing harassment policies comply with the new laws, best practice suggests that you redistribute them.
  • Now that contractors and other non-employees are protected from sexual harassment, you should consider providing training to them if you have not done so already.
  • Do not blindly adopt the state and/or city’s model policies or training programs. These are designed to provide minimum thresholds that you should adjust and build upon based upon the needs of your company.
  • If you have employees in New York City, post the required sexual harassment poster and implement a system for distributing the required sexual harassment fact sheet to all employees upon hire or incorporate it into your Employee Handbook, no later than September 6, 2018.

For more information on what your company can do to ensure compliance with New York or New York City sexual harassment laws, please contact Harris S. Freier, Esq. of the firm’s Employment Litigation Practice Group, at hfreier@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

“Pass the Trash” Compliance Update

Private employers (“Employers”) holding contracts with New Jersey school districts and charter schools are reminded that it is now time to comply with the extensive background check requirements under the New Jersey “Pass the Trash” Act (the “Act”) in order to screen applicants and employees for child abuse and sexual misconduct in their former employment.  This law became effective on June 1, 2018, and requires employers/independent contractors to conduct a 20 year employment review of its applicants and employees who will have “regular contact with students.”  This employment review requires employers to:

  • Request information from the applicant/employee about child abuse and sexual misconduct with current and former employers for the last 20 years;
  • Collect the names, addresses, telephone numbers and relevant contact information of an applicant’s current and former employers for the 20 year time span, where the applicant/employee worked for a school or in a position that involved direct contact with children and inquire about child abuse and sexual misconduct.
  • Obtain authorizations from applicants to conduct the employment review;
  • Contact any out-of-state employers with whom the applicant/employee held a position involving regular contact with students; and
  • Update employment applications for positions that involve regular contact with students to include the penalties for applicants who provide false information. The penalties include termination or denial of employment and fines up to $500.

In addition to its affirmative obligation to conduct an employment review for child abuse and sexual misconduct, New Jersey employers will also be on the receiving end of these inquiries.  If an employer receives a request for information under the Act, it must respond within 20 days and disclose the requested information. Failure to do so may be grounds for the applicant’s automatic disqualification from employment. Importantly, the Act provides immunity to Employers who provide the requested information in good faith.

Employers who do business with New Jersey school districts or charter schools should review and revise existing hiring policies, practices and procedures to ensure compliance with the Act.  Human Resources personnel should also be trained on these new legal requirements to ensure that internal hiring processes and employment applications are updated to comply with the Pass the Trash Act.

For more information about the potential impacts of the “Pass the Trash” Act or forms your company can use to comply with this new law, please contact Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, 973-533-0777 or Brigette N. Eagan, Esq., Counsel in the Human Resources Practices Group at beagan@nullgenovaburns.com, 973-535-7114.

#MeToo Movement Insufficient to Revive Dismissed Case

The U.S. District Court for the District of New Jersey denied an employee’s request to reopen her case based on alleged changed attitudes “post-Weinstein.”  The Court also denied the employer’s request for sanctions but cautioned the employee’s attorney that the employee’s motion “bordered on frivolous.” 

Background Facts

Taylor Ballard worked as a retail sales consultant at a New Jersey store operated by AT&T Mobility Services LLC (AT&T).  In her lawsuit against AT&T, Ballard contended that one of her coworkers made lewd comments to her about her physical appearance and took unsolicited photographs of her on his Google Glasses.  Ballard reported the incident to her immediate supervisor.  Ballard’s supervisor spoke to the coworker (who denied the allegations) and ultimately warned him about inappropriate conduct.  Ballard claimed during litigation that coworkers would regularly discuss sexual activities, but she made no other reports to management.

After someone flagged the incident to AT&T’s Equal Employment Opportunity (EEO) hotline, AT&T’s EEO office conducted a full investigation, interviewing several witnesses.  The EEO office could not corroborate the story but ordered all of the employees and managers at the store to participate in training sessions about appropriate workplace conduct.

After the alleged incident, Ballard only attended work 3 out of her 16 scheduled shifts.  During her penultimate shift, Ballard arrived out of uniform and told her supervisor she was turning in her company phone.  After a final warning, Ballard’s employment was terminated.

Court Awards Summary Judgment to AT&T

Ballard asserted hostile work environment, constructive discharge and retaliation claims under federal and state law.  On August 25, 2017, the District Court granted AT&T’s motion for summary judgment on all claims and dismissed her complaint.

Even viewing all of the facts favorably to Ballard, the Court found that Ballard had not demonstrated the existence of a “hostile work environment” under federal and state law.  The single incident that Ballard reported, the Court held, was not “severe” or “pervasive” and so it did not rise to the level required to show a hostile work environment claim.  Ballard’s generalized allegations of other sexual comments were not specific enough and did not rescue her claim.

The Court dismissed Ballard’s constructive discharge claim both because she could not show that she voluntarily resigned – she was fired – and because a constructive discharge claim requires a showing of even more severe or pervasive conduct than a hostile work environment claim.  Since Ballard’s hostile work environment claim was legally insufficient, so was her constructive discharge claim.

On her retaliation claim, Ballard contended that AT&T fired her because she reported her coworker’s conduct.  The Court found the evidence demonstrated Ballard was fired because of her persistent failure to attend work, not because of her report of the conduct, precluding a retaliation claim.

Court Denies Request To Reopen Case Due to “Post-Weinstein” Change in Attitudes

Ballard did not appeal the summary judgment decision to the Court of Appeals.  Instead, four months later, in December 2017, Ballard filed a motion to “set aside” the Court’s summary judgment in AT&T’s favor and revive her case.

Ballard’s argued that the highly publicized allegations against Harvey Weinstein and resulting #Metoo movement have changed “common sense” and “industry standards.”  Based on these new standards, Ballard urged the Court to revisit its decision as to what constitutes a hostile work environment.

Rejecting Ballard’s argument, the Court noted that it was not based on new evidence and that all of the current events Ballard discussed bore no relation to AT&T or to her specifically.  The Court refused to draw any inferences or conclusions from other allegations of sexual harassment against different companies, all unaffiliated with AT&T, about Ballard’s case.

Ballard also cited to a decision by the U.S. Court of Appeals for the Third Circuit issued less than two weeks after the summary judgment decision.  But that decision, the Court concluded, did not change the law and, even if it had changed the law, Ballard’s time to appeal had not run when the Third Circuit issued the decision, so she should have filed a motion for reconsideration with the district court at that time.

“Close Call” For Sanctions

In response to Ballard’s motion, AT&T requested that the Court sanction Ballard because the motion lacked any basis in current law and was frivolous.  The Court denied this request but noted that it was not an “easy decision” since the motion “bordered on frivolous, considering the relevant case law and the circumstances of the litigation.”  That being said, the Court did not want to deter attorneys from making creative or novel arguments.  Thus, the Court declined to sanction Ballard or her attorney but cautioned “counsel to carefully consider future filings.”

Bottom Line

Employers should take comfort that the court will not be influenced by the ebb and flow of public opinion. The #Metoo movement has empowered individuals to come forward to report abuses and misconduct that legitimately should be remedied.  But Courts hearing sexual harassment claims will only look to evidence that directly relates to the employee/employer in that specific case, not general anecdotes about the state of corporations overall and the vicissitudes of public opinion.

For more information on hostile work environment claims and motions for relief from judgment, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com or Lawrence Bluestone, Esq., Counsel, at lbluestone@nullgenovaburns.com.

New Jersey Courts Double-Down on Arbitration Enforcement

In late June 2018, New Jersey state and federal courts issued opinions on arbitration agreements that effectively reinforced the state’s rocky pro-arbitration bearings. The first opinion came from the Third Circuit Court of Appeals on June 20, 2018, in a case called Ace American Insurance Co. v. Guerriero. In Ace, the Third Circuit held that an employee must arbitrate his employment-related claims, despite his allegations that the company never provided him a full copy of the arbitration agreement. Only one day later, in Victory Entertainment, Inc., et al. v. Schibell, et al., the New Jersey Appellate Division held that strip club owner/managers must arbitrate an ownership dispute despite the employee’s argument that the arbitration agreement lacked clear and unambiguous language to do so.

An “Ace” In the Pocket for Arbitration Agreements In Federal Court

In Ace, after the employee and his counsel refused to arbitrate the employee’s employment claims, Ace filed a complaint in U.S. District Court in Newark, New Jersey, to compel arbitration under the Federal Arbitration Act (“FAA”). One day later, the employee filed a whistle-blower suit in New Jersey state court claiming that his employer illegally fired him after he reported to his supervisors that the company was destroying documents it was required to preserve in violation of the New Jersey Conscientious Employee Protection Act (“CEPA”). The employee alleged that he was never provided the company’s full three-page Employee Dispute Arbitration Policy and instead was only provided the signature page. The employer produced the signed acknowledgment page, which at the top read “Arbitration Agreement.” Moreover, the employee’s offer letter, which expressly referenced the Employment Dispute Arbitration Policy, was also signed by the employee.  Employees could also access the Employee Dispute Arbitration Policy using the company’s intranet site. The U.S. District Court enjoined the employee from pursuing his state court case and ruled in ACE’s favor, which was upheld on appeal to the Third Circuit.

Reinforcing the FAA’s “strong federal policy” of resolving parties’ disputes through arbitration by enforcing the parties’ arbitration agreements, the Third Circuit affirmed the District Court’s finding that the arbitration agreement was still enforceable, whether or not the employee actually read the agreement. The court found that the Employee Dispute Arbitration Policy unambiguously stated that the employee would “submit any employment-related legal claims to final and binding neutral third-party arbitration …” and specifically mentioned CEPA.  This decision confirms New Jersey’s strong pro-arbitration stance in federal court.

A “Victory” In State Court

In Victory Entertainment, employers also enjoyed a victory in the Appellate Division. The plaintiff was a manager part-owner of The Den, holding company for Delilah’s Den strip clubs throughout the state. His two business partners certified that plaintiff suffered spells of delusion that led him to mismanage the company, including brandishing a gun in the workplace, refusing to remit payment to vendors, and sexually harassing entertainers. After plaintiff was hospitalized for mental health issues, his two business partners, along with plaintiff and plaintiff’s counsel, executed a Sales Agreement whereby plaintiff’s trusted associate, as plaintiff’s agent, would purchase the two other owner’s shares of The Den over a 10-year period. The parties also drafted a separate Shareholder/Stakeholder (Deadlock) Agreement to resolve impasses between the shareholders and stakeholders, which created a 1/3 voting right between plaintiff’s agent/associate and the two part-owners. This Deadlock Agreement contained a binding arbitration clause. Although the shares in The Den were expressly subject to the terms and conditions of the Sales Agreement and the Deadlock Agreement, plaintiff and his trusted agent/associate were the only parties to the Deadlock Agreement.

When plaintiff’s mismanagement issues re-arose, the two part-owners executed their authority to remove plaintiff from managing the business. Plaintiff filed suit, claiming he was improperly removed.  The trial court dismissed his complaint and ordered that the parties arbitrate the dispute. Plaintiff appealed. In affirming the trial court’s decision, the Appellate Division found that although only the plaintiff and his trusted associate were parties to the arbitration clause, the two owners could enforce the arbitration clause since the Sales Agreement and the Deadlock Agreement arose from the same transaction. The two agreements were executed on the same day, pertain to the control and management of the same company, and contain numerous cross-references. Further, the Appellate Division determined the two part-owners could enforce the arbitration provision as either third-party beneficiaries or the trusted associate’s agents. Finally, the Appellate Division held the plaintiff claims were within the scope of the arbitration provision because they implicated the Deadlock Agreement explicitly or the alleged conduct occurred after the parties executed the agreement or related to the execution of the Deadlock Agreement.

Bottom Line

Unlike New York, and arguably contrary to the Federal Arbitration Act, New Jersey state courts have historically imposed a higher standard to enforce an arbitration agreement. The New Jersey Supreme Court has ruled that arbitration agreements in the state must provide “clear and unambiguous” terms that the parties are waiving the right to a jury trial. Although federal courts staunchly enforce arbitration agreements in favor of employers, employees sometimes reap the benefits of this state court hurdle for employers. Together, these recent opinions stand for the proposition that arbitration agreements may be strictly enforced in New Jersey.

While these opinions are triumphs for the enforcement of arbitration agreements, it is still imperative to include explicit language that your employees waive the right to a jury trial for all employment-related claims. Likewise, the law surrounding arbitration agreements is constantly shifting and all arbitration agreements should be carefully reviewed with counsel.

If you have questions on drafting arbitration agreements or arbitration disputes, 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.

Be Reasonable: Employees May Not be Able to Request a “Few Weeks or a Few Months” of Leave as an Accommodation Under the ADA

The Third Circuit Court of Appeals recently determined that a request for indefinite leave is not a reasonable accommodation under the Americans with Disabilities Act (“ADA”).

Facts

Stanley Kieffer worked for CPR Restoration & Cleaning Service, LLC (“CPR LLC”) in a supervisory role, until he injured his shoulder in August 2013. Kieffer applied for, and received worker’s compensation and also requested, as a reasonable accommodation, a driver because he could not drive on the job with his injured shoulder. This request was denied. Kieffer then requested, and was granted leave beginning in September 2013. Kieffer told his employer that he would return to work on November 13, 2013. When Kieffer unexpectedly returned to work on November 4, 2013, he was subsequently terminated.

Kieffer filed a Charge of Discrimination with the U.S. Equal Employment Opportunity Commission (“EEOC”), and then began to work for CPR Restoration, Inc. (“CPR, Inc.”), which is owned by the same individual as CPR LLC. This new position required Kieffer to commute from Pennsylvania to Northern New Jersey every day. Due to a disagreement over whether his relocation to New Jersey would be paid for, Kieffer claimed that the decision to not pay for his move amounted to a constructive discharge and retaliation, and he quit the company in June 2014.

District Court’s Decision

Kieffer filed suit in the District Court against both CPR LLC and CPR, Inc., alleging violations of the ADA, the Family Medical Leave Act (“FMLA”), and applicable state law. Finding for CPR LLC and CPR, Inc., the District Court found that the companies were not joint/integrated employers under the FMLA, and that Kieffer was not a “qualified individual” under the ADA because he could not show that he could perform the “essential functions” of his positions with or without reasonable accommodations. The District Court also determined that neither company retaliated against Kieffer under the ADA, FMLA, or applicable state law.

Third Circuit’s Decision

The Third Circuit found that CPR LLC’s denial of a driver was proper because even with such an accommodation, Kieffer could not perform any physical labor, which was an essential function of his job. The Third Circuit reiterated that whether a task is an essential function is generally a fact-intensive inquiry. Factors used to determine whether a function is essential include the 1) employer’s judgment, 2) written job descriptions, 3) time spent on the job performing the function, 4) consequences of not requiring a worker to perform the function, 5) terms of a collective-bargaining agreement, 6) work experience of past employees in the job, and 7) work experience of current employees in similar jobs.

On appeal, Kieffer also argued that the leave of absence he requested would have allowed him to perform his essential functions after he returned from leave. However, there was no evidence that the leave was requested for a definite, rather than an open-ended, period of time. Following other circuits, the Third Circuit found that Kieffer’s request for leave was considered to be indefinite, because testimony showed that his request for leave was “worded loosely as being for a few weeks or a few months.” Upholding the District Court’s decision, the Third Circuit stated, “The basis for such a holding reflects the fact that an accommodation of a short period of definite leave would enable an employee to perform his essential job functions in the near future … The request for leave here specified neither a leave for a definite period, nor a return in the future.”

The Third Circuit also found that Kieffer was not retaliated against for requesting a leave of absence two months before his termination. The Third Circuit noted that it had previously ruled that over two months between protected activity and adverse employment activity—without more—is insufficient to prove that his request for a break “was the likely reason for h[is] termination.”

Finally, the Third Circuit found that even assuming that CPR Inc. reneged on its promise to relocate Kieffer, there was no evidence to suggest any hostility or antagonism between the filing of his EEOC claim and the denial of moving costs. Thus, Kieffer’s constructive discharge claim was also dismissed.

Bottom Line

Proceed with caution when employees request leave under the ADA. Vague requests for unspecified amounts of leave are not “reasonable accommodations” under the ADA and employers must work with employees to guarantee that the employee’s request for leave is for a definite amount of time so that the employee can recover and perform the essential functions of their job. Be mindful, however, that the EEOC may consider the request a request of up to “a few months” of leave, as a leave for a definite amount rather than an open-ended (i.e. “indefinite”) leave.

For more information about ADA accommodations and requests for leave, 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.

Supreme Court Bids Farewell to Mandatory Public-Sector Union Agency Fees in Janus Ruling

On June 27, the Supreme Court issued a 5-4 opinion in Janus v. American Federation of State, County, and Municipal Employees, Council 31, Dkt. No 16-1466, holding that compulsory payment of public-sector union fees by non-union members violates First Amendment free speech rights.

The petitioner in Janus, challenged the constitutionality of an Illinois law requiring public employees to pay union agency fees, despite an employee’s choice not to join the union and his strong objection to the union’s positions in collective negotiations. The petitioner argued that the payment of mandatory agency fees by nonmembers in connection with collective negotiations for government employees is inherently political and violates the First Amendment. Siding with the petitioner and striking down the Illinois law, the Supreme Court overturned its prior 1977 decision in Abood v. Detroit Board of Education, 431 U.S. 209 (1977).

In Abood, the Supreme Court held that a union could constitutionally collect from dissenting employees financial support for collective negotiations so long as the fees were not used for ideological or political causes not germane to the union’s duties as the collective negotiations agent. In the Janus opinion, Justice Samuel Alito wrote that “Abood was wrongly decided and is now overruled,” concluding that the mandatory payment of public-sector agency fees violates the free speech rights of nonmembers by compelling them to subsidize private speech. Under Janus, “States and public-sector unions may no longer extract agency fees from nonconsenting employees.” However, the Court stated that unions could require payment from nonmembers for union representation in disciplinary matters and grievances.

The Janus decision leaves open the specific timeframe by which an employee may revoke compulsory payment of public-sector union fees.

For New Jersey public employers, the Janus decision must be applied in light of the requirements of the recently enacted Workplace Democracy Enhancement Act (“WDEA”). The WDEA includes requirements regarding an employee’s withdrawal of consent for the union to collect fees. Additionally, the WDEA prohibits public employers from encouraging employees to revoke their union fee deductions and from discouraging employees to join, form or assist a union. Public employers should be prepared to receive employees’ withdrawals of consent and should continue to follow the current statutory WDEA requirements.

If you have any questions or would like to discuss how the Janus decision or the WDEA affects you, please contact Joseph M. Hannon, Esq. at 973-535-7105 or jhannon@nullgenovaburns.com, or Jennifer Roselle, Esq. at 973-646-3324 or jroselle@nullgenovaburns.com.