Beware the Boilerplate: New Jersey Court Finds Discrimination from Language in an Unsigned Settlement Agreement

Just in time for Halloween, on October 31, 2018, a New Jersey federal court held that an unsigned, non-binding separation agreement could provide relevant background evidence of age discrimination, and that employers anywhere could be subject to the reach of the New Jersey judiciary, even if they have no contacts with the state.  

Facts

Kathleen Fowler worked for AT&T, Inc. (“ATTI”) and AT&T Services, Inc. (“ATTS”) (collectively, “AT&T”), for more than 30 years until her employment was terminated.  Kathleen Fowler v. AT&T, Inc. & AT&T Services, Inc.  At the time of her termination, she was 60 years old and undergoing chemotherapy for breast cancer.  She sued AT&T in the United States District Court for the District of New Jersey, claiming that the company engaged in age and disability discrimination when it erroneously told her that it was eliminating her position and that she was being placed on “surplus status,” meaning she had 60 days to find another job within AT&T or be terminated.  While on surplus status, she applied internally for other positions like her former job, which AT&T rejected.  Instead, AT&T placed her in a different position and then failed to reasonably accommodate her disability so that she could perform that job or be transferred to another vacant position. Meanwhile, of the 69 people in Fowler’s former unit, only two were selected for surplus, Fowler and another person who was aged 52.  Nobody under the age of 40 was selected for surplus.

AT&T terminated Ms. Fowler’s employment and offered to pay her severance in exchange for her signing a separation agreement that included a general release and waiver of liability, including age discrimination claims.  Ms. Fowler did not sign the agreement.

In her complaint, Ms. Fowler alleged that the (unsigned) release ran afoul of the Older Workers Benefit Protection Act (“OWBPA”).  The OWBPA is a federal statute aimed to protect older employees by requiring employers to provide specific information in exchange for a waiver of age discrimination claims.   Ms. Fowler alleged that the release was invalid under the OWBPA because it contained factual misstatements, failed to comply with OWBPA’s strict disclosure requirements, and was intended to harm workers aged 40 and older.

ATTS’s Motion to Strike

ATTS moved to strike the allegations in the complaint related to non-compliance with OWBPA.  ATTS argued that because Ms. Fowler did not sign the separation agreement containing the release that she claimed violated OWBPA, those allegations were immaterial to her age discrimination cause of action and would only serve to invite unnecessary discovery and cast ATTS in a prejudicial light.  In opposition, Ms. Fowler argued that the allegations related to ATTS’s release were relevant because they reflected the company’s age bias.  In reply, ATTS argued that the alleged OWBPA violation could not support a showing of age bias because the Third Circuit in Lawrence v. National Westminster Bank N.J. previously held that an employee who does not sign a waiver or release cannot establish a violation of OWBPA.

The District Court denied ATTS’s motion to strike, finding that ATTS’s non-compliant release suggested a pattern or practice of age-based bias.  The court was unpersuaded by ATTS’s reliance on Lawrence because, unlike in Lawrence, Ms. Fowler did not bring a separate cause of action under OWBPA; rather, she alleged that ATTS’s conduct was inconsistent with OWBPA, the statute designed to protect older employees, which revealed a pattern of age-based bias.

ATTI’s Motion to Dismiss

ATTI moved to dismiss Ms. Fowler’s case against it for lack of personal jurisdiction.  Personal jurisdiction refers to a court’s power to make decisions regarding an entity’s legal rights or obligations.  There are generally two types of personal jurisdiction.  First, a court can have general jurisdiction over an individual whose residence is in the forum state and an entity whose place of incorporation and/or principal place of business is within the forum state.  Second, a court can exercise specific jurisdiction over an entity in a lawsuit filed against it when i) the entity purposely directed its activities at the forum state; ii) those activities are what led to the lawsuit; and iii) the assertion of jurisdiction comports with fairness.

In Fowler, the court had personal jurisdiction over Ms. Fowler because she was a New Jersey resident.  ATTI moved to dismiss claiming the New Jersey District Court lacked personal jurisdiction over it because it is a Delaware corporation with its principal place of business in Texas.  ATTI does not employ, own real property, insure persons or property, pay taxes, contract, operate, or produce goods or services in New Jersey, nor is it even registered to do business in New Jersey.  Nevertheless, the court held that, because Ms. Fowler’s claims against ATTI arose out of a release directed at her in New Jersey, ATTI should have expected that it could be hauled into court in New Jersey to litigate disputes over that conduct.  Thus, the court held that it could exercise specific personal jurisdiction over ATTI.

Bottom Line

Employers must ensure that separation agreements containing a release and waiver of age discrimination claims comply with the precepts of OWBPA, even if the agreement is just an offer and is never signed.  More generally, this case serves as a harsh reminder that an employer’s course of conduct, although not alone sufficient to sustain a separate cause of action, may be probative of the employer’s discriminatory animus.  Courts routinely allow employees to allege and introduce evidence of their employers’ other acts to prove a discriminatory attitude in making the employment decision at issue.  For instance, an employer’s history of treating its older employees poorly may provide an evidentiary source for employees to tap to prove the allegations of discrimination against them individually.

With respect to personal jurisdiction, Fowler reaffirms the principle that a court in New Jersey can make decisions about an employer that has no contacts in this state if the employer purposely directed the alleged conduct at residents in New Jersey.  Employers may not be able to escape the authority of the New Jersey judiciary and the potential liability imposed on it by New Jersey law by simply incorporating and operating outside of the state.

For more information, 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 Final Sexual Harassment Prevention Materials & Postpones Training Deadline to October 9, 2019

On October 1, 2018, New York State released final versions of a sexual harassment policy, a complaint form and training materials, along with guidance materials for employers, to assist employers in complying with the new set of laws combating workplace sexual harassment.  By way of background, in April of this year, Governor Cuomo signed legislation imposing requirements on New York State employers to adopt a sexual harassment prevention policy, complaint procedure and training program.  The State released, in draft form, a model policy, model complaint form and model training program in August of this year, followed by a period of public comment that ended on September 12, 2018.  Perhaps the most notable change to result from the public comment period was that the statutory deadline to train employees, which was initially October 9, 2018, was extended one year to October 9, 2019.  Note, however, that this does not change the October 9, 2018 deadline for adopting a sexual harassment policy and mounting posters.

The final materials released by New York State are as follows:

Sexual Harassment Prevention Policy Materials

  • Model Sexual Harassment Prevention Policy – By October 9, 2018, all New York State employers must adopt a policy that meets or exceeds this model policy’s standards and distribute it in writing to all employees.
  • Minimum Standards for Sexual Harassment Prevention Policies – For employers who wish to update their existing sexual harassment prevention policy instead of adopt the model policy, the State has issued minimum standards for that policy to uphold.
  • Sexual Harassment Prevention Poster – By October 9, 2018, all New York State employers must mount this poster in conspicuous places around the workplace for all employees to see.

Sexual Harassment Complaint Form

  • Model Complaint Form for Reporting Sexual Harassment – The sexual harassment policy must include a complaint form that, collects at least all of the information sought on the State’s model complaint form, for employees to report sexual harassment.

Sexual Harassment Training Program Materials – All New York State employers must implement an annual, interactive sexual harassment training program that meets or exceeds the State’s model program, and all existing employees must be trained under that program by October 9, 2019.  The materials released by the State include:

  • Model Sexual Harassment Prevention Training Script – Although the training must be interactive, it need not be live. The State established the script document for employers to use in creating the narrative of the interactive training.
  • Model Sexual Harassment Prevention Training Slides – The State has released model presentation slides to incorporate into sexual harassment training.
  • Model Sexual Harassment Prevention Training Case Studies – The new laws require that the training include examples of conduct that would constitute unlawful sexual harassment, which is provided by the content on the case studies document.
  • Minimum Standards for Sexual Harassment Prevention Training – For employers who have an existing sexual harassment training program, the State has issued minimum standards for employers to use to make sure their programs comply with the law.

The State also issued a Sexual Harassment Prevention Toolkit and set of Frequently Asked Questions as guidance materials for employers.

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

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.

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.

UPDATED: New Laws in New York State & City on Workplace Sexual Harassment

Governor Andrew Cuomo recently signed several new laws imposing requirements on employers in New York State regarding sexual harassment.  New York City employers will be subject to additional requirements, as Mayor Bill de Blasio just signed a package of bills, collectively called the “Stop Sexual Harassment in New York City Act.”.  New York State and City employers should prepare for these changes and their varying effective dates summarized below.

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 will be 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 takes 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, most 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 takes 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 Statute Will Apply to All Employers – The NYC Human Rights Law (“NYCHRL”), which governs harassment in the workplace, previously applied to employers with 4 or more employees. Effective immediately, the NYCHRL applies to all employers, regardless of size, with respect to liability for sexual harassment.
  • Sexual Harassment Claims Will be Subject to a Three-Year Statute of Limitations – In its prior form, the NYCHRL imposed a one-year statute of limitations on claims of discrimination and harassment. Effective immediately, that limitations period is extended to three years for claims of gender-based harassment.
  • NYC Employers Must Provide Annual Sexual Harassment Training – The City will establish a model sexual harassment training program designed to explain what sexual harassment is and what laws it violates, and inform employees about the complaint processes and legal remedies available to them, that retaliation is prohibited, and the heightened duties imposed on supervisory employees to address sexual harassment. Effective April 1, 2019, private 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.
  • NYC Employers Must Hang a Poster & Distribute a Hand-Out Regarding Sexual Harassment – The City will create a poster and hand-out setting forth employees’ rights regarding workplace sexual harassment. Effective September 6, 2018, all employers will be required to mount the poster in a conspicuous place and distribute the handout to all employees.  The poster must be at least 8.5 by 14 inches in size, using at least 12-point font, and posted in both English and Spanish.

Employer To-Do List

The following is a non-exhaustive list of some action items that New York State and City employers are strongly encouraged to follow, 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.

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

New Laws in New York State & City on Workplace Sexual Harassment

Governor Andrew Cuomo recently signed several new laws imposing requirements on employers in New York State regarding sexual harassment.  New York City employers will be subject to additional requirements, as the city council just passed a package of bills, collectively called the “Stop Sexual Harassment in New York City Act,” which Mayor Bill de Blasio is expected to sign.  New York State and City employers should prepare for these changes and their varying effective dates summarized below.

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 will be 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 takes 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, most 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 takes 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 Statute Will Apply to All Employers – The NYC Human Rights Law (“NYCHRL”), which governs harassment in the workplace, currently applies to employers with 4 or more employees. Effective immediately following Mayor de Blasio’s signature, the NYCHRL will apply to all employers, regardless of size, with respect to liability for sexual harassment.
  • Sexual Harassment Claims Will be Subject to a Three-Year Statute of Limitations – In its current form, the NYCHRL imposes a one-year statute of limitations on claims of discrimination and harassment. Effective immediately upon signature, that limitations period will be extended to three years for claims of gender-based harassment.
  • NYC Employers Must Provide Annual Sexual Harassment Training – The City will establish a model sexual harassment training program designed to explain what sexual harassment is and what laws it violates, and inform employees about the complaint processes and legal remedies available to them, that retaliation is prohibited, and the heightened duties imposed on supervisory employees to address sexual harassment. Effective April 1, 2019, private 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.
  • NYC Employers Must Hang a Poster & Distribute a Hand-Out Regarding Sexual Harassment – The City will create a poster and hand-out setting forth employees’ rights regarding workplace sexual harassment. Effective 120 days after Mayor de Blasio’s signature, all employers will be required to mount the poster in a conspicuous place and distribute the handout to all employees.  The poster must be at least 8.5 by 14 inches in size, using at least 12-point font, and posted in both English and Spanish.

Employer To-Do List

The following is a non-exhaustive list of some action items that New York State and City employers are strongly encouraged to follow, 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.

For more information on what your company can do to ensure compliance with the many new sexual harassment laws imposed on New York State and New York City employers, 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.

Second Circuit Issues Landmark Decision that Title VII Prohibits Sexual Orientation Discrimination

Overruling its own precedent, the United States Court of Appeals for the Second Circuit became the second federal appeals court to hold that Title VII of the Civil Rights Act of 1964 prohibits workplace discrimination on the basis of sexual orientation.

Zarda v. Altitude Express, Inc., decided on February 26, 2018, arose from the claims of a Long Island sky-diving instructor, Donald Zarda.  Zarda was fired after revealing to a female client, whose boyfriend then revealed to Zarda’s boss, that Zarda was gay.  Zarda alleged that his termination was discriminatory on the basis of his sexual orientation and sex in violation of Title VII, whereas the company attributed it to his behavior.  Title VII expressly prohibits workplace discrimination “because of . . . sex.”  The Second Circuit had previously declined to recognize that sexual orientation is inherently a sex-based consideration and, thus, it held that sexual orientation discrimination claims were not cognizable under Title VII.  Applying that precedent, the federal trial court dismissed Zarda’s case on summary judgment, concluding that Zarda had failed to show he had been discriminated against on the basis of his sex and declining to recognize sexual orientation discrimination as a cognizable claim under Title VII.  Zarda appealed, and the Second Circuit affirmed.  Thereafter, the Second Circuit granted rehearing en banc, which is a mechanism allowing judges to rehear a case upon a majority vote.  This is significant because en banc review rarely happens and is often saved for cases that present a “question of exceptional importance.”

Years after the Second Circuit originally ruled that sexual orientation is not covered by Title VII, the U.S. Equal Employment Opportunity Commission and the Seventh Circuit oppositely held that discrimination on the basis of sexual orientation is a form of sex discrimination barred by Title VII.  Emphasizing the evolving nature of Title VII, the Second Circuit in Zarda overruled its prior caselaw to hold that Title VII prohibits discrimination on the basis of sexual orientation as discrimination “because of . . . sex.”

In dispensing with its prior rulings, the Second Circuit reasoned that sexual orientation is defined by one’s sex in relation to the sex of those to whom he/she is attracted.  Discriminating against an employee because he/she is homosexual means discriminating against him/her because of a) his/her sex, and b) his/her sexual attraction to those of the same sex.  Thus, “because sexual orientation is a function of sex and sex is a protected characteristic under Title VII, it follows that sexual orientation is also protected.”

The Second Circuit disagreed with the United States Justice Department, which argued in a friend-of-the court brief, that Title VII does not cover sexual orientation discrimination.

For now, the ruling that Title VII bars employers from discriminating based on sexual orientation applies to those in the Second Circuit, which includes New York, Connecticut, and Vermont.  However, this decision sharpens the divide among courts, setting the stage for a potential fight in the United States Supreme Court.  The Supreme Court could reverse the Second Circuit, or it could affirm, thereby extending Title VII’s prohibition on sexual orientation discrimination to the rest of the country.

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

New York City Employers Will Soon Be Required To Approve Work Schedule Changes At Their Employees’ Request

On December 19, 2017, the New York City Council passed a bill requiring employers to grant employee requests for “temporary changes” to work schedules for “personal events.”  This bill takes effect on July 18, 2018.

What qualifies as a “personal event” triggering a mandatory schedule change? – “Personal events” requiring a schedule change include:

  • When the employee is a caregiver who provides direct and ongoing care to a “care recipient,” and needs a temporary schedule change to provide this care. A “care recipient” under the bill is defined as a minor child or a disabled family or household member who relies on the employee for medical care or to meet the needs of daily living;
  • When the employee needs the temporary schedule change to attend a legal proceeding or a hearing for government assistance benefits, to which the employee, the employee’s family member or a “care recipient” is a party; or
  • Circumstances that qualify for sick time use under the New York City’s Earned Sick Time Act.

How many “temporary changes” are employees entitled to? – Eligible employees are entitled to two “temporary changes” to their work schedules in a calendar year, for up to one business day per request.  The employer may allow the employee to use two business days for one request, in which case it need not grant a second request.

What constitutes a “temporary change”? – A “temporary change” is defined as “a limited alteration in the hours or times that or locations where an employee is expected to work.”  A temporary change can include paid or unpaid time off, working from home, or changing work hours.

Who is eligible? – All non-government employees who work full time or part time within New York City for 80 or more hours per calendar year, and who have worked for the employer for more than 120 days.

Who is not eligible?

  • Employees covered by a collective bargaining agreement that expressly waives the provisions of the bill and addresses temporary work schedule changes; and/or
  • Certain employees whose jobs and whose employer’s primary business involves the development, creation or distribution of movies, TV programs or live entertainment presentations. Exceptions to this category apply.

What are the employee’s notice requirements? – To properly request a “temporary change” to his or her work schedule, an eligible employee must:

  • Notify his employer or direct supervisor immediately upon learning of the employee’s need for the change;
  • Propose a temporary change, unless the employee seeks unpaid leave; and
  • Reduce his notification and proposal (if required) to writing no later than the second business day after he returns to work. The employer may permit the employee to satisfy this writing requirement by any electronic means (g., email or text message) commonly used by employees to request and manage time off or schedule changes.

What are the employer’s obligations? The employer must respond immediately to a request for a temporary schedule change by indicating:

  • Whether the employer will grant the proposed temporary change, or, alternatively, will grant the change as unpaid leave;
  • The reason for denying the request; and
  • How many temporary change requests and business days to fulfill such requests the employee has left in the calendar year.

The employer’s response must be reduced to writing no later than 14 days following the request.

How does NYC’s temporary work schedule change bill interact with the New York City Earned Sick Time Act? – The New York City Earned Sick Time Act generally provides employees up to 40 hours of paid sick leave per calendar year.  Employees who are eligible for a temporary work schedule change under this bill need not exhaust their earned paid sick time before requesting such changes. In addition, any unpaid leave granted for personal events under this bill does not count toward the obligation to provide earned paid sick leave pursuant to the Earned Sick Time Act.

For more information about how this new bill affects your company or how your company can effectively implement it into its existing practices and procedures, 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.