Republican Majority at NLRB Brings Important Pro-Employer Decisions

The recent, temporary Republican majority at the NLRB brought several important changes to Board decisions issued during the Obama Administration. In early December Republican appointees of President Trump briefly held a majority of the seats on the Board. This status continued until December 16 when Board Chairman Miscimarra’s resignation took effect. However, in the weeks leading up to Miscimarra’s resignation, the three Republican Board members penned pro-employer decisions that for the most part return to Board precedent in effect prior to 2009. On December 22, 2017, President Trump appointed Board Member Marvin E. Kaplan as Acting Board Chairman. The President is expected to nominate management labor attorney John Ring to fill the vacancy created by Miscimarra’s resignation. But before Miscimarra exited, the Republican-majority issued several decisions that rolled back prior Board precedent and set the stage for more pro-employer decisions. A few examples are as follows.

On December 14, the Board issued two decisions, Boeing Co. and Hy-Brand Industrial Contractors, that address facially neutral workplace rules and the joint employer standard.  In Boeing, the Board revisited the 13-year old Lutheran Heritage standard which held that an employer that maintains a facially neutral workplace rule commits an unfair labor practice if an employee would reasonably construe the rule as prohibiting Section 7 activity. In Boeing, the company issued a workplace rule that prohibited cameras at work. The Board held that the Lutheran Heritage standard, under which the anti-camera rule was unlawful, failed to consider legitimate justifications for the polices, rules, and handbook provisions challenged. The Board found it particularly problematic that prior decisions applying the Lutheran Heritage standard found unlawful employer directives that employees “work harmoniously” and conduct themselves in a “positive and professional manner.”  In Boeing the Board announced it will now apply a two-pronged test that considers (i) the nature and extent of the rule’s potential impact on employee Section 7 rights and (ii) the employer’s legitimate justifications for the rule.

Also on December 14 the Board overruled the joint employer standard announced in its 2015 Browning-Ferris decision, which decreed that “even when two entities have never exercised joint control over essential terms and conditions of employment, and even when any joint control is not ‘direct and immediate,’ the two entities will still be joint employers based on the mere existence of ‘reserved’ joint control, or based on indirect control or control that is ‘limited and routine.’” In Hy-Brand Industrial Contractors, the Board held that a finding of joint employer status now requires proof that putative joint employers have actually exercised control over essential employment terms, and that the control is direct and immediate, not limited or routine.

On December 15, Miscimarra’s last day on the job, the NLRB issued two more pro-employer decisions — Raytheon Network Centric Systems and PCC Structurals, Inc.  In Raytheon, the Board revisited the Supreme Court’s 1962 decision in NLRB v. Katz and the case law applying Katz. The Court in Katz held that Section 8(a)(5) of the Act prohibits employers from making a change in mandatory bargaining subjects unless the employer gives the union advance notice and an opportunity to bargain over the proposed change. Later NLRB case law held that an employer may lawfully take unilateral action so long as it “does not alter the status quo.”  Raytheon provided an opportunity for the Board to clarify what constitutes a “change” from the “status quo” and to revisit the Board’s 2016 holding in E.I. du Pont de Nemours which re-defined what constitutes a “change” requiring notice to the union and bargaining prior to implementation. In DuPont the Board ruled that even if an employer continued to do precisely what it did for decades pursuant to a CBA, and even if the CBA permitted the employer’s past actions, once the CBA expires, taking the same action constitutes a “change.” Furthermore, if the employer’s action involved discretion and the employer took discretionary action, under DuPont this exercise of discretion was a “change.” In Raytheon the Board overruled DuPont as fundamentally flawed. The Board concluded that “an employer’s past practice constitutes a term and condition of employment that permits the employer to take actions unilaterally that do not materially vary in kind or degree from what has been customary in the past.” In Raytheon the Board held that since the employer routinely changed its employees’ benefits, premiums, deductibles, and copayments for health insurance in the past, Raytheon did not violate the Act when it made similar changes after the CBA expired. The Board held that its decision applied retroactively, but also cautioned this its holding had no effect on a union’s right to demand bargaining over mandatory bargaining issues.

On December 15 the Board returned to the prior standard for determining when a proposed unit is appropriate for collective bargaining. PCC Structurals Inc. The Board overruled its 2011 decision in Specialty Healthcare & Rehabilitation Center of Mobile and returned to its prior “community of interests” standard. The Board criticized the Specialty Healthcare standard for transferring too much responsibility from the Board to the organizing parties and deferring to the petitioned-for unit in all but a few narrow, highly unusual circumstances. In reverting to the community of interests standard, the Board stated, “It is the Board’s responsibility to determine unit appropriateness based on a careful examination of the community of interests of employees both within and outside the proposed unit.” Accordingly, employers will have greater participation in the determination of an appropriate unit for a union election. Conversely, union organizers are expected to have less success in gerrymandering the unit to conform to the employee groups they are targeting.

More pro-management changes are expected once the fifth Board member is confirmed. For example, the Board may revisit its blocking charge policy, which delays a union decertification election when a union files an unfair labor practice charge and essentially keeps the employees in the union until the election occurs, regardless of the charge’s merits.

For more information about how the changes at the NLRB affect unionization efforts at your company or your company’s implementation of work rules, policies or procedures, please contact one of the partners in the firm’s Labor Law Practice Group — James J. McGovern III, Esq., at, Patrick W. McGovern, Esq., at, Douglas E. Solomon, Esq. at, or John R. Vreeland, Esq., at  — or call us at 973-533-0777.

The D.C. Circuit Vacates NLRB Ruling on Driver Status in FedEx Case

In early March 2017, the D.C. Circuit in FedEx Home Delivery v. NLRB, 2017 U.S. App. LEXIS 3826 (D.C. Cir. 2017) vacated a National Labor Relations Board (“NLRB” or “the Board”) ruling that Connecticut FedEx drivers constitute employees under the National Labor Relations Act (“NLRA”). The D.C. court said that the case was indistinguishable from a 2009 case before the panel involving a group of Massachusetts drivers.

In 2007, single-route FedEx drivers based in Hartford, CT elected Teamsters Local 671 (“Union”) to represent them which lead to FedEx filing subsequent objections to the NLRB. While the appeal was pending, the D.C. Circuit decided FedEx Home Delivery v. NLRB (FedEx I), 563 F.3d 492 (D.C. Cir. 2009), finding that FedEx drivers based out of the company’s Wilmington, MA terminal constituted independent contractors under the NLRA. In its holding, the court vacated the NLRB’s order to engage with the union and denied the Board’s cross-motion for enforcement. The court held that the NLRB was bound to apply the common-law ten factor agency test as set forth in the Restatement (Second of Agency), but explained that rather than a control inquiry, that the emphasis of these factors should be on  “entrepreneurial opportunity” for gain or for loss as it relates to the determination of a worker’s status.  FedEx identified three specific entrepreneurial opportunities available to the drivers: (1) drivers’ ability to hire other drivers; (2) drivers’ ability to sell routes; and (3) drivers’ ability to operate multiple routes.  Persuaded by these arguments, the court held that the FedEx drivers were independent contractors.

In 2014, the NLRB issued a revised decision in FedEx Home Delivery, 361 N.L.R.B. No. 55 (Sept. 30, 2014) which found that the facts pertaining to the Hartford drivers and those discussed in FedEx I were “virtually identical.” Still, however, the NLRB declined to adopt the D.C. Circuit’s 2009 interpretation of the NLRA because it disagreed with the court’s emphasis on “entrepreneurial opportunity” as the key factor in determining a worker’s status. Specifically, it said that the Board should give weight to actual, not merely theoretical, entrepreneurial opportunity, and it should evaluate the constraints imposed by a company on the individual’s ability to pursue that opportunity. Moreover, it noted that FedEx unilaterally drafts, promulgates, and changes the terms of its agreements with drivers, a feature that weighs “heavily in favor of employee status” along with the Board’s view that the drivers lacked independence and were disallowed the initiative and decision-making authority normally associated with an independent contractor   The Board also found that FedEx engaged in unfair labor practices affecting commerce under the NLRA by refusing to recognize and bargain with the union.

In the present case, FedEx argued that the question had already been argued before the D.C. Circuit in FedEx I and involved the same parties, thus the same result should follow. The court agreed and denied the Board’s cross-application for enforcement, granted FedEx’s petitions for review, and vacated the Board’s orders. The D.C. Circuit noted that in FedEx I, the Board considered all common-law factors and was still persuaded that the drivers were independent contractors. The court also noted that the U.S. Supreme Court previously held that that the question whether a worker is an “employee” or “independent contractor” under the NLRA is a question of “pure” common-law agency principles that a court can review and does not require special administrative expertise.

The takeaway for employers is that in determining whether workers are employees or independent contractors, employers must remember that despite significant overlap, there are in fact different tests as related to the NLRA, federal taxes, the Fair Labor Standards Act, state wage and hour law, ERISA, the Affordable Care Act, and various other circumstances.  While the D.C. Circuit has for the moment clarified (or rather reinforced) its view as to the proper test under the NLRA, employers should always focus on where their greatest liability is and attempt to cater to the relevant test as much as possible.

For questions about independent contractors or trucking and logistics, please contact John Vreeland, Esq., Chair of the Transportation, Trucking & Logistics Group and a Partner in the Labor Law Practice Group at or (973) 535-7118, or, Harris S. Freier, Esq., a Partner in the Firm’s Employment Law and Appellate Practice Groups, at or (973) 533-0777. Please also sign-up our free Labor & Employment Blog at to keep up-to-date on the latest news and legal developments effecting your workforce.


On August 27, 2015, in a long-awaited and 3-2 decision, the National Labor Relations Board announced a new, lowered standard for determining whether a business is a joint employer of a work force hired by a separate employer for purposes of the NLRA. Browning-Ferris, 32-RC-109684 (Aug. 27, 2015). Prior to Browning-Ferris, the test for joint employer status was whether the entity actually exercised direct and immediate control over the union-represented employees and had sufficient control over their terms and conditions of employment. Under the prior standard the Board would find against joint employer status where the business was careful not to behave like the employees’ employer, and either avoided entirely direct instruction of employees as to their work performance, or provided only “limited and routine” instruction.

Browning-Ferris overrules decades of case law precedent, introduces a lower threshold for a finding of joint employer status, and allows the Board to find that an entity is a joint employer of a workforce if the entity satisfies a two-prong test. First, the entity must meet the common law definition of employer, in that it must have the right to control employees’ essential terms and conditions of employment, but need not actually exercise this control. The Board describes this inquiry as “not always a simple task.” Second, the entity must share or codetermine “those matters governing the essential terms and conditions of employment.” Regarding the second prong of the test, the NLRB will evaluate on a case-by-case basis the extent to which the entity shares control over and codetermines working terms and conditions. The Board declined to provide employers a “quick, definitive formula as a comprehensive answer” but stated that this area of the law will require an evolutionary process for its rational response” considering the “total factual context … in light of the pertinent common-law agency principles.” However, the Board clarified that it will not require proof of direct control over working conditions, and that indirect and even potential control will suffice to make the entity a joint employer. The entity found to be a joint employer will be required to bargain with the employees’ union, but only over those terms and conditions of employment over which it has retained control.

The NLRB reversed the Regional Director’s finding that Browning-Ferris did not control or codetermine the daily work of sorters, screen cleaners and housekeepers who were employed by a staffing agency and assigned to work at Browning-Ferris’ production facility. Despite Browning-Ferris’ lack of direct control over the employees’ day-to-day terms and conditions of employment, the Board still found that Browning-Ferris was a joint employer because it indirectly codetermined employee wages, hours and other conditions of employment, through its contract with the staffing agency, and its enforcement of production standards and setting of work hours and shifts for the temporary agency’s employees.

The implications of the new Browning-Ferris test may reach well beyond a business’s relationship with a temporary staffing agency and affect the relationship between franchisors and their franchisees, and other business relationships where one party reserves contractual rights that potentially or in fact affect the working terms and conditions of the employees of the business partner. For additional guidance on the new joint employer test and what it means for your business plans, please contact Patrick W. McGovern, Esq.,, 973.535.7129.

NLRB Guidance Further Defines Permissive Employer Handbook Rules

The NLRB’s General Counsel recently issued a report further defining the limitations on an employer’s ability to enact workplace rules which tend to interfere with an employee’s Section 7 rights under the National Labor Relations Act. Section 7 rights generally entitle employees to self-organize, form or join a labor organization, bargain collectively, and engage in other concerted activities for the purpose of collective bargaining, as well as the right to refrain from such activities.

The report analyzes real life examples of employer rules the NLRB has assessed to determine whether the rules interfere with the employees’ rights and provides insight into the types of policies that the NLRB is likely to uphold.

Analyses of challenged work place rules are reviewed in the full context in which the issue surrounding the rule arose; the NLRB guidance states that it will not read employer rules in isolation to determine their legality. Relying on previously litigated handbook provisions for guidance, the NLRB nonetheless identifies a number of handbook rules typically deemed unlawful. Common characteristics among unlawful employer rules include use of overbroad phrases such as “inappropriate” or “negative”; blanket restrictions on certain types of conduct; and failure to provide any definition or examples of the conduct the employer seeks to prohibit.

By contrast, lawful employer rules tend to clarify broad statements, define vague terms, provide specific examples and use careful language that would not cause an employee to reasonably interpret the rule to prohibit Section 7 activity. For example, while a work rule that requires the employee to “be polite” may be overbroad, a rule prohibiting unprofessional behavior while performing company business with company clients may be more likely to be upheld.

The General Counsel’s report also focuses on areas such as confidentiality of information, professionalism, anti-harassment, trademark, photography and recording, leaving work and conflict of interest for illustrative purposes. Of particular note is the attention given to the recent Wendy’s International LLC settlement, wherein a significant number of Employer policies were set aside as unlawful based on the failure to narrowly tailor prohibited conduct. The settlement in this case clarified these employer rules by providing express examples such as limiting the use of company logos for non-commercial purposes and expressly excepting behaviors which involve Section 7 activities.

The NLRB’s report demonstrates the care with which an employer’s handbook must be crafted to avoid Section 7 challenges. Employers should reevaluate their current handbook rules in light of guidance contained in this report. For more information about crafting lawful employer rules, or if you have any questions about the NLRB’s recent guidance, please contact James J. McGovern III, Esq. Director of the Labor Law Practice Group, at 973.535.7122,, or Nicole Leitner, Esq., at 973.387.7897,

Supreme Court Rules President’s 2012 Appointments to NLRB Unconstitutional, Invalidates Key Pro-Union NLRB Decision, and Establishes Precedent for Reversals of Other NLRB Decisions and Appointments

In a unanimous decision issued June 26, 2014, the Supreme Court ruled that President Obama’s three so-called recess appointments to the National Labor Relations Board in January 2012 were unconstitutional and invalidated the order entered by the improperly appointed Board panel. National Labor Relations Board v. Noel Canning. When the appointments were made, the Senate was in pro forma sessions, meeting every three days and transacting some Senate business. The Senate met on January 3 and January 6, 2012. The President made the NLRB appointments on January 4. The Court’s 5-Justice majority agreed that any recess shorter than 10 days “is presumptively too short” for the President to exercise his appointment power.

The Court affirmed the 2013 D.C. Circuit Court of Appeals’ decision invalidating the Board’s 2012 decision but used distinctly different constitutional rationale to arrive at the same conclusion. While the Court of Appeals’ decision set aside the President’s appointments on the basis that a valid recess appointment must be an intersession appointment, the Supreme Court held that the Constitution’s Recess Appointments Clause permits both intersession and intra-session appointments. At issue for the Supreme Court was the length of the Senate’s intra-session recess in January 2012. The Court held that “three days is too short a time to bring a recess within the scope of the Clause,” so the President lacked authority to make these appointments under the Recess Appointment Clause. The Court declined to offer any bright-line test to determine when the Senate is actually in session versus recess and refused to second-guess the Senate’s motives for avoiding a lengthy recess, in the interests of avoiding “judicial interference with the Legislative Branch.” The Court commented simply, “The Senate is in session when it says it is provided that, under its own rules it retains the capacity to transact Senate business.”

The possible implications of the Court’s decision are far reaching. Numerous pending court challenges to other decisions by the same Board panelists will likely be disposed of unfavorably to the NLRB. Some estimates of Board precedents that may ultimately be affected by the decision reach 100 cases. In addition, this decision rekindles the debate as to what other Board actions must be revisited, such as personnel appointments and decisions made by regional directors who were not appointed by a properly constituted NLRB.

If you have any questions or for more information about the Supreme Court’s ruling and its impact on your company’s labor relations strategy, please contact Patrick W. McGovern, Esq., or any member of our Labor Law Practice Group.


In the wake of the Eighth Circuit’s recent decision in Owens v. Bristol Care, Inc., the Eastern District Court of New York has joined the growing list of federal courts that have found FLSA collective action waivers contained in arbitration agreements enforceable.  In Torres v. United Healthcare Serv., 12 CV 923 (DRH) (ARL), 2013 U.S. Dist. LEXIS 14200 (E.D.N.Y. Feb. 1, 2013), the plaintiffs brought a collective action against the company claiming unpaid overtime. United Healthcare maintained an “Employment Arbitration Policy,” which required any dispute covered by the Policy to “be arbitrated on an individual basis” and provided that an individual employee could not “seek to bring his/her dispute on behalf of other employees as a class or collective action.”  Because each plaintiff had received a copy of the Policy upon hire and had electronically acknowledged that he or she read and agreed to the Policy’s terms, United Healthcare sought to compel arbitration.

The district court enforced United Healthcare’s Employment Arbitration Policy, holding that nothing in the language of the FLSA or its legislative history prevented an employee from waiving the right to pursue a collective action. The court found unavailing plaintiffs’ blanket assertion that the waiver would effectively prevent potential plaintiffs with small claims from bringing an FLSA claim due to the cost of individual arbitration. However, citing decisions of the Supreme Court and Second Circuit, the court recognized that such an agreement could be invalidated if the plaintiffs were able to offer sufficient evidence to establish that the cost of arbitration “would be prohibitively expensive.” Additionally, consistent with the Eighth Circuit’s position in Owens, the court declined to adopt the NLRB’s 2012 D.R. Horton decision, 2012 NLRB LEXIS 11, in which the NLRB found that collective action waivers violate employees’ right to engage in concerted activity guaranteed by Section 7 of the NLRA.  The court quoted Owens when it determined that the waiver at issue did not violate Section 7 because it did not prevent an employee from filing a complaint with the Department of Labor or other administrative agency, nor did it prevent such an agency “from investigating [or] . . . filing suit on behalf of a class of employees.”

While the United Healthcare decision is favorable for New York employers, the issue of the enforceability of FLSA class and collective action waivers is not yet settled. While the trend in federal courts is to find such waivers enforceable, the NLRB continues to use its holding in D.R. Horton to strike them down, and the Second Circuit and the United States Supreme Court have yet to address such a specific policy.  Accordingly, we advise all employers to confer with counsel over the risks and benefits of maintaining an FLSA class and collective action waiver policy and to ensure compliance with the specific holdings of these recent decisions.

For more information, please contact John R. Vreeland, Esq., Director of the firm’s Wage & Hour Compliance Practice, or Joseph V. Manney, Esq.,

Appeals Court Nixes President’s Recess Appointments to NLRB Raising Question Whether Any NLRB Decisions Since 2011 Are Enforceable

In a 3-0 decision on January 25, the D.C. Circuit Court of Appeals held that a Board decision issued on February 8, 2012 was invalid because the Board failed to consist of a quorum of three validly appointed members. In February 2012 the Board had five members – Pearce and Hayes, who the Court found were validly appointed and confirmed by the Senate, and Block, Flynn and Griffin, who were appointed by President Obama in January 2012 as “recess” appointments. The Court held that the three recess appointments were constitutionally invalid, the Board lacked a quorum, and therefore the Board’s decision under review was invalid and unenforceable. Canning v. NLRB, No. 12-1115 (U.S. Ct. App. D.C.Cir. 2013).

The key underpinning to this holding was the status of the U.S. Senate’s operations during the 2011 holiday season when the President made the contested appointments. The Court found that the Senate’s actions of passing an extension of the payroll tax on December 23, 2011 and then convening the second session of the 112th Congress on January 3, 2012, taken together dictated the conclusion that the Senate was not in recess on January 4, 2012 when the President made the recess appointments. The Court held that a valid recess appointment is limited to an intersession appointment – that is, an appointment between sessions of Congress. The NLRB conceded that the appointments were not made during an intersession recess and accordingly, the Court vacated the Board’s underlying decision.

The Administration is sure to appeal the Court’s decision. Board Chairman Pearce has stated that he disagrees with the Court’s decision, the Board will continue to issue decisions, and anyway the decision is limited to one Board decision and order. In fact, the number of Board decisions whose validity is now in question is 219, since the Board failed to have a quorum of three Senate-confirmed members throughout 2012. The Board presently consists of three members, since Member Flynn resigned in 2012 and Member Hayes’ term expired last month. Two of the three current Board Members are recess appointees.

For more information on the practical implications of the Court’s decision and strategy recommendations in view of the Board’s precarious situation, please contact Patrick McGovern, Esq., in the Labor Law Practice Group.

NLRB Issues Revised Policy Concerning Inclusion of Front Pay in Settlements

Generally, the NLRB favors reinstatement as the preferred means of restoring the “status quo” after a finding of unlawful discrimination is made in a discharge case. However, parties are permitted to and often negotiate settlements which substitute monetary compensation (known as “front pay”) for reinstatement. Front pay is often given in addition to back pay owed. Under current NLRB practice, front pay settlements in return for a waiver of reinstatement cannot be included in a Board settlement, and therefore such settlements are non-Board settlements.

Seeking to maintain an active role in the settlement process where front pay is desired by the parties, the NLRB has announced that while reinstatement remains the preferable remedy where unlawful discrimination is found, if front pay in lieu of reinstatement is proposed and agreeable to all parties, such settlements may be reached through the Board’s processes. The Board will even raise the prospect of front pay if it is confident that reinstatement will not be achieved absent litigation.

The revised policy shows the Board’s desire to take a more active role in effectuating favorable settlements for individual workers. While NLRB involvement may accelerate settlement negotiations, employers should be wary of pitfalls where Board Agents are acting in tandem with union representatives during settlement negotiations.

For more information on the practical implications of the Board’s policy change and strategy recommendations on negotiating favorable settlements in discharge cases, please contact James J. McGovern, III Esq., or Douglas J. Klein, Esq.,, in the Labor Law Practice Group.

Lawfulness of Employer Arbitration Policies Barring Class Actions Far From Settled

The NLRB continues to disapprove of employer policies limiting employees’ rights to pursue employment-related concerted action.  The question over the permissibility of arbitration class action waivers stems from recent U.S. Supreme Court decisions favoring deferral to arbitration.  In 2009, the U.S. Supreme Court handed down its seminal decision in 14 Penn Plaza LLC v. Pyett, where it enforced a collective bargaining agreement provision containing a clear and unmistakable waiver of employees’ right to pursue employment-related statutory claims in court in favor of arbitration.  Then, in 2011, in AT&T Mobility v. Concepcion, the U.S. Supreme Court held in the consumer context that a consumer arbitration agreement could bar class action lawsuits.

However, the NLRB has pushed back, strongly disfavoring arbitration policies requiring deferral of all employment-related claims to individual arbitration.  In 2011, in the DR Horton case, the NLRB held than an arbitration agreement requiring employees to waive their right to bring a joint, class or collective action as a condition of employment violated the NLRA.  The employer appealed that determination to the Fifth Circuit Court of Appeals where the case is still pending.

Then, just last month, an NLRB Administrative Law Judge struck down 24 Hour Fitness USA, Inc.’s policy requiring employees to waive their right to bring employment-related joint, class or collective actions in any arbitral or judicial forum.  The employer sought to distinguish its policy from the policy the NLRB deemed unlawful in DR Horton by pointing to the fact that employees could opt-out of the policy by taking a series of steps during the first 30 days of their employment.  However, the ALJ found that the opt-out provision was “an illusion” because the process was convoluted and employees were limited in their ability to identify coworkers who had also opted out.  The ALJ also rejected the argument that the U.S. Supreme Court’s pro-arbitration decisions like Concepcion meant 24 Hour Fitness’ policy should be upheld, holding that arbitration decisions in the consumer context are unrelated to arbitration decisions in the employment context.

Clearly, the issue over the permissibility of class action waivers in employment agreements is far from settled.  Employers should be cautious in requiring employees to waive their right to bring employment-related joint, class or collective actions in any arbitral or judicial forum until federal courts—and perhaps the U.S. Supreme Court—weigh in.  Employers are well advised to confer with counsel over the risks and benefits of maintaining such policies in light of the unsettled state of the law.  If you have any questions or for more information about implementing lawful arbitration clauses in employee handbooks, please contact Douglas E. Solomon, Esq.,, or Douglas J. Klein, Esq.,, in the Labor Law Practice Group.

Significant Limitations Placed on Newark Employers Considering Criminal Records when Hiring

Following updated federal guidance from the EEOC last April concerning limits on employers’ use of arrest and conviction records when making employment decisions, Newark has taken matters into its own hands passing a new ordinance which restricts Newark employers’ ability to consider criminal records when making hiring decisions.

Beginning November 18, 2012, Newark employers with five or more employees will be limited in their ability to conduct criminal background checks on applicants.  Going forward, covered employers may not make any criminal background inquiries, whether orally or in writing, prior to extending a conditional offer of employment.  If a conditional offer is extended, employers may make narrow criminal background inquiries, and only if there has been a “good faith determination” that criminal history is relevant based on the sensitivity of the position, the employer has provided the candidate with advance written notice of the background check, and the candidate has agreed to the check in writing.  Even if these preconditions are met, Newark employers may only inquire into certain criminal history, including:

  • indictable offense convictions for eight years following sentencing;
  • disorderly persons convictions or municipal ordinance violations for five years following sentencing;
  • pending criminal charges, including cases that have been continued without a finding until the case is dismissed;
  • convictions for murder, voluntary manslaughter, and sex offenses requiring registry punishable by a term of incarceration in state prison, regardless of the length of time that has passed since disposition.

The ordinance also requires employers to consider certain factors when evaluating the results of a permissible criminal background check, including the nature of the crime and its relationship to the duties of the position sought, any information pertaining to rehabilitation, the amount of time that has elapsed since the offense, and whether the prospective position provides an opportunity for the commission of a similar offense.  In the event the candidate is not ultimately hired, the ordinance also requires covered employers to provide the applicant with a form stating the reason for rejection and to give the applicant an opportunity to respond.

The Municipal Council has made it clear to Newark employers that any decision not to hire an applicant with a criminal background must be narrowly tailored to the job in question.  Newark employers should review current hiring practices, particularly with respect to criminal background checks, and work with counsel to confirm these processes comply with the new ordinance.

If you have any questions or for further information about implementing lawful pre-hire processes, please contact James J. McGovern, III Esq., or Douglas J. Klein, Esq.,, in the Labor Law Practice Group.