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

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

Facts

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

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

District Court’s Decision

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

Third Circuit’s Decision

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

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

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

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

Bottom Line

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

For more information about ADA accommodations and requests for leave, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

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

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

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

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

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

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

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

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

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

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

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

Facts

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

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

Lower Court Decision

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

Appellate Court’s Decision

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

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

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

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

Bottom Line

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

For more information about the potential impacts of this ruling or what steps your company can take to effectively prevent and address whistleblower complaints, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

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

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

Facts

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

Lower Court’s Decision

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

Appellate Court’s Decision

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

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

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

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

Facts Matter

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

Bottom Line

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

For more information about the potential impacts of this ruling or what steps your company can take to effectively prevent and address complaints of discrimination, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

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.

Be Ready For New York State’s Paid Family Leave Law, Effective January 1, 2018

Employers with employees in New York must prepare for New York State’s Paid Family Leave Benefits Law (“PFL”), which will provide job-protected, insurance-based, paid family leave to employees.  PFL goes into effect shortly, on January 1, 2018.

Overview of PFL Benefits

Under PFL, eligible employees will be entitled to:

  • Paid time off for one of three qualifying reasons – Eligible employees will be entitled to a certain amount of time off, during which they will receive a certain percentage of their wages.  However, weekly wages payable under the PFL are capped at one-half of New York State’s Average Weekly Wage, which is currently $1,305.92 (half of which is $652.96).  The program will be fully implemented over a 4-year phase-in schedule:
    • Starting on January 1, 2018, eligible employees will be entitled to take 8 weeks of leave while receiving 50% of their average weekly wages.
    • Starting January 1, 2019, eligible employees will be entitled to take 10 weeks of leave while receiving 55% of their average weekly wages.
    • Starting on January 1, 2020, employees will still only be entitled to take 10 weeks of leave, but will be afforded 60% of their average weekly wages.
    • Finally, starting on January 1, 2021, employees will be entitled to take 12 weeks of leave while receiving 67% of their average weekly wages.
  • Reinstatement – Upon returning to work, eligible employees must be restored to the position they held before taking leave, or to a comparable position with comparable benefits and pay.

Covered Employers

  • Private employers with one or more covered employee will be required to provide PFL benefits.
  • Public employers may opt in.
  • Covered employers whose employees are represented by a union and whose collective bargaining agreement provides paid family leave need only provide PFL benefits if the collective bargaining agreement’s benefits are not as favorable as those under PFL.

Eligible Employees

  • Full-time employees (those with a regular schedule of 20 or more hours per week) become eligible for PFL benefits after working for 26 weeks.
  • Part-time employees (those with a regular schedule of less than 20 hours per week) become eligible for PFL benefits after working for 175 days.

Qualifying Reasons to take Family Leave under PFL

Eligible employees may receive PFL benefits in the following three instances:

  1. To bond with a new child (including newly adopted and foster children);
  2. To care for a close relative with a serious health condition;
    • Close relatives include spouses, domestic partners, children, parents, parents-in-law, grandparents, and grandchildren
    • A serious health condition is an illness, injury, impairment, or physical or mental condition that involves a) inpatient care in a hospital, hospice, or residential health care facility; or b) continuing treatment or continuing supervision by a health care provider.
  3. To relieve family pressures created when a spouse, child, domestic partner or parent is on or has been called to active military duty, and the employee is eligible for time off under the military provisions of the federal Family Medical Leave Act.

Notably, an employee cannot receive PFL benefits to care for his or her own serious health condition or for his or her own qualifying military event.

Interplay with other Leave Benefits

  • Covered employers may permit employees to use sick or vacation leave for full pay, but may not require that employees use such leave.
  • Employees’ PFL leave must run concurrently with qualifying FMLA leave.  This means that employees cannot stack PFL and FMLA leave to take time that exceeds the leave entitlement under the PFL.  Employees cannot receive New York State disability benefits simultaneous with their receipt of PFL benefits.

Tips and Next  Steps for New York City Employers

  • Update the leave provisions of your company’s policies and/or handbooks – it’s required by the PFL!
  • Obtain paid family leave insurance coverage
  • Train your human resources personnel

For questions on compliance with this new law or other employment and hiring requirements, please contact Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Training & Audit Programs Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

Morgan Stanley Abandons Broker Industry Recruiting Pact

In a major blow to the Protocol for Broker Recruiting, which limited restrictive covenants in the broker industry and resulting litigation, according to Reuters (October 30, 2017), Morgan Stanley has decided to withdraw from the Protocol. Created in 2004, the Protocol is made up of thousands of registered representatives, with the stated goal of “furthering clients’ interests in privacy and freedom of choice in connection with the movement of their registered representatives.” The move by Morgan Stanley to leave the Protocol was apparently motivated in part, according to Reuters, by industry changes as the top brokers are increasingly leaving the large brokerages that are members of the Protocol to work for smaller independent brokerages, which are not members.

The impact of Morgan Stanley’s departure from the agreement is unknown, but the next question remains whether the other major Wall Street brokerages follow suit. Regardless, it appears that restrictive covenants in the brokerage industry will be making a comeback as will the resulting litigation that the Protocol was created to lessen. For our clients in the brokerage industry, including Registered Investment Advisors (“RIA”), restrictive covenants are likely to become a much more important part of employment agreements again, and hiring of rival brokers will require more diligence in terms of existing non-competes.

For questions about restrictive covenants in the brokerage industry, please contact John C. Petrella, Esq., Chair of the firm’s Employment Law & Litigation Practice Group, Partner Harris S. Freier, Esq. or Associate Christopher M. Kurek, Esq. at 973-533-0777. Please also sign-up for our free Labor and Employment Law Blog to keep up-to-date on the latest news and legal developments.

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

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

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

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

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

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

Uber Scores Victory Compelling Arbitration in Wage & Hour Misclassification Suit

Just a few days after being in the news and facing consumer boycotts for allegedly seeking to profit as a result of a taxi boycott of JFK International Airport related to President Trump’s immigration Executive Order, Uber received good news when it received a pro-employer legal ruling in a suit brought against the company by its New Jersey drivers.

In a published opinion filed on January 30, 2017, Hon. Freda L. Wolfson, U.S.D.J. of the U.S. District Court for the District of New Jersey held that a proposed class of Uber drivers must arbitrate their claims that Uber misclassified them as independent contractors, failed to pay overtime compensation, and required drivers to pay business expenses purportedly incurred for Uber’s benefit.  In Singh v. Uber Technologies Inc., No. 16-03044 (D.N.J. January 30, 2017), the District Court made two significant findings that are favorable to employers: (1) employment agreements incorporating so-called “clickwrap” or hyperlinked agreements by reference are enforceable—whether or not the employee actually reviews the agreement—so long as the employer provides reasonable notice that the terms and conditions of that agreement apply; and (2) Uber’s agreement with its drivers is not considered a contract involving “transportation employees,” and therefore is not subject to the exemption provisions of the Federal Arbitration Act (FAA), which the court construed narrowly.

In Singh, plaintiff registered with the Uber App (the “App”) in order to become a driver with Uber’s “uberX” platform. Registration required him to electronically accept an Agreement provided by Uber’s technology service provider Raiser, LLC (the “Raiser Agreement”).  When plaintiff logged onto the App, he was able to review the Raiser Agreement by clicking a hyperlink to the Raiser Agreement within the App.  To advance within the App past the hyperlink and actively use the App, plaintiff had to twice confirm that he reviewed and accepted the Raiser Agreement by clicking “YES I AGREE.”

The first page of the Raiser Agreement also contained a paragraph, written in large bold and capital text, indicating that a voluntary arbitration agreement was contained therein.  The arbitration provision required Uber drivers—if they do not opt out within a 30-day period—to individually arbitrate all disputes arising out of, or relating to, the Raiser Agreement, or their relationship with Uber, including disputes alleging breach of contract, wage and hour, and compensation claims on an individual and class or collective basis.  Importantly, the Raiser Agreement’s 30-day opt out provision noted that the arbitration provision was not mandatory, and should the driver choose to opt out of arbitration, Uber would not retaliate against him or her.  Plaintiff was also permitted to spend as much time as he found necessary in reviewing the Raiser Agreement on his smartphone or other electronic devices before accepting it.

Following the filing of litigation by plaintiff, Uber moved to dismiss the complaint and compel arbitration.  In his opposition, the plaintiff first asserted that because Uber only provided a hyperlink, or “access” to the Raiser Agreement, as opposed to providing the document itself, he should not be bound to the Raiser Agreement’s arbitration provision.  In rejecting this argument, the District Court noted that for hyperlinked agreements to bind parties, they must provide “reasonably conspicuous notice of the existence of” the terms of the agreement, citing favorably to ADP, LLC v. Lynch, No. 16-01111 (D.N.J. June 30, 2016), a decision that our firm helped to achieve on behalf of a long-time client.  The District Court determined that since the plaintiff was required to review and agree to the hyperlinked Raiser Agreement before utilizing the App, and the link was prominently displayed, he was provided with sufficient notice of the terms and conditions and therefore manifested intent to be bound by the agreement.

The District Court also held that the parties’ agreement is subject to the FAA, granting the court authority to compel arbitration. Plaintiff argued that his employment with Uber fell within the exemption contained in Section 1 of the FAA, which excludes from the FAA’s ambit contracts involving “transportation employees.”  However, the court noted even if plaintiff was an Uber employee (as opposed to an independent contractor, as Uber argued), Section 1 of the FAA only excludes “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”  The court found that although the Third Circuit has yet rule on the issue, virtually every other Circuit Court having considered the issue found that the exclusion is to be narrowly construed as only applying “to those employees who are actually engaged in the movement of goods, as opposed to the transportation of people, in interstate commerce.”  Coupled with Congress’s intent to only exclude contracts involving certain categories of workers in this way from the application of the FAA, the District Court held that plaintiff’s job was “too far attenuated from the types of employees to whom the FAA’s exclusion is intended to apply.”

Finally, the District Court also rejected plaintiff’s argument that the Raiser Agreement violated Section 8 of the National Labor Relations Act (NLRA).  While noting that it is an open question whether “an employee may enter into an arbitration agreement requiring the resolution of labor disputes on an individual basis” (indeed, the Supreme Court recently granted certiorari to review this exact issue), the court found it did not need to reach this issue because Uber did not “restrain, or coerce” the plaintiff into being bound by the arbitration agreement contained within the Raiser Agreement because it was optional.

The court’s decision in Singh shows that if crafted correctly, employers are permitted to execute agreements with their employees in more contemporary fashion, and with dispute resolution provisions that are fair and efficient for all parties.

For questions about Singh v. Uber Techs. Inc. and its implications on your company’s arbitration agreements, please contact Harris S. Freier, Esq., a Partner in the firm’s Employment Law and Appellate Practice Groups, at hfreier@nullgenovaburns.com or (973) 533-0777.  Please also sign-up our free Labor & Employment Blog at www.labor-law-blog.com to keep you up-to-date on the latest news and legal developments effecting your workforce.