Isolated ‘Highly Offensive Gender Slur’ Insufficient to Warrant Employee’s Termination

The New Jersey Supreme Court overturned the termination of a state employee who uttered a highly offensive gender slur that was overheard by other employees.  William R. Hendrickson, Jr., a fire safety inspector with the New Jersey Department of Consumer Affairs (“DCA”) was terminated from his employment as a result of the slur, but his termination was reduced to a six-month suspension following a hearing before an Administrative Law Judge (“ALJ”) with the New Jersey Office of Administrative Law.  The Supreme Court ruled that suspension, not termination, was the proper punishment in light of the offense.

Facts

On December 1, 2013, while on an assignment at MetLife Stadium, which was hosting a New York Jets football game, inspectors from DCA’s Division of Fire Safety were tasked with ensuring the stadium complied with applicable safety codes.  Hendrickson and two other inspectors met in the parking lot before beginning their assignments.  Their supervisor was Senior Inspector Margaret Knight, who was not present with the three men in the parking lot.

While in the parking lot, Hendrickson learned that Senior Inspector Knight assigned him to inspect the pyrotechnics display (fireworks) which were on the roof of MetLife Stadium.  After being informed of his assignment, the two other inspectors overheard Hendrickson made an obscene remark about Senior Inspector Knight, calling her the “c-word.”  Both inspectors were offended by Hendrickson’s remark and reported the incident.  At the hearing, Hendrickson provided a different account of his reaction to the assignment, stating that he walked away and “muttered” to himself that he hoped Senior Inspector Knight “gets a disease.”  Hendrickson testified that he said a few things he was not proud of but claimed to have no recollection of using the offensive language.

After learning of Hendrickson’s outburst, Senior Inspector Knight announced to a number of inspectors, including Hendrickson, that if anyone had any issues with her, to respect her position and come to her directly to discuss and resolve the issue.  Hendrickson walked away without talking to Senior Inspector Knight and completed his assigned task without incident.

ALJ and Appellate Decisions

After the hearing, the ALJ issued a written decision holding that Hendrickson uttered a gender slur in the workplace and violated the State’s policy prohibiting gender discrimination and engaged in conduct unbecoming a public employee.  While the ALJ rejected Hendrickson’s account as not credible, the ALJ found that termination was too harsh a remedy given Hendrickson’s lack of disciplinary history in the 15-months prior and 9-months after the incident.  The ALJ ordered Hendrickson be suspended for 6-months.

The Department of Consumer Affairs appealed the ALJ’s decision to the Appellate Division.  The Appellate Division, substituting their judgment for that of the ALJ, reinstated the penalty of removal and Hendrickson thereafter appealed to the New Jersey Supreme Court.

Supreme Court Decision

The Supreme Court overturned the Appellate Division’s decision and reinstated Hendrickson’s 6-month suspension imposed by the ALJ.  The Supreme Court determined the proper standard of review was to assess whether the sanction imposed by the ALJ was “so disproportionate to the offense, in light of all circumstances, as to be shocking to one’s sense of fairness.”

While acknowledging that Hendrickson’s use of a highly offensive gender slur in a public place which was overheard by co-workers must be firmly condemned, the Supreme Court concluded that the ALJ’s decision to impose a 6-month suspension was not shocking to one’s sense of fairness.  In making this determination, the Supreme Court found the ALJ considered:  (1) Hendrickson’s outburst to be an isolated incident; (2) the incident was mitigated by Hendrickson’s unblemished disciplinary record prior to and after the incident; and (3) Hendrickson was ultimately redeemable.  As the Supreme Court stated: “A belittling gender insult uttered in the workplace by a state employee is a violation of New Jersey’s policy against discrimination and Hendrickson’s conduct was unbecoming a public employee.” Thus, the Supreme Court deferred to the ALJ’s conclusions and reinstated Hendrickson’s 6-month suspension.

Bottom Line

Employers have a responsibility to investigate complaints employees raise about harassment and discrimination in the workplace.  If the investigation concludes that an employee has engaged in the conduct complained of, often the employer is faced with a choice of how to properly discipline the employee.  In this case, while the Supreme Court did not does not excuse Hendrickson’s conduct, it found that the ultimate decision by the employer to terminate the employee was too harsh in light of the circumstances. While termination can always be considered, an employer must take into account, and properly document, any mitigating factors that apply in imposing discipline lesser than termination.

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.

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

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

Same Day provides some clarity for Arbitration Agreement language

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

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

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

Roman: don’t waive punitive damages goodbye

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

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

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

Bottom Line

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

For more information on what your company can do to ensure its arbitration agreement will be enforceable, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

New York State Releases Draft Sexual Harassment Prevention Policy & Model Training Program

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

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

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

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

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

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

New York State

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

New York City

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

Employer To-Do List

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

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

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

New York 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.

#MeToo Movement Insufficient to Revive Dismissed Case

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

Background Facts

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

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

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

Court Awards Summary Judgment to AT&T

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

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

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

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

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

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

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

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

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

“Close Call” For Sanctions

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

Bottom Line

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

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

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.

Christie Vetoes Expansion of New Jersey Family Leave & Increased Minimum Wage

On July 21, 2017, New Jersey Governor Chris Christie conditionally vetoed two bills that would have expanded New Jersey’s pioneering paid Family Leave Act and raised minimum wage for certain transportation center service workers.  Under the New Jersey Family Leave Act (NJFLA), which applies to New Jersey companies with 50 or more employees, workers are eligible to receive up to 12 weeks of continuous leave during a given 24-month period to care for a newly born or adopted child, parent, a child under 18, spouse, or civil union partner who has a serious health condition requiring in-patient care, continuing medical treatment or medical supervision.  The leave is partially paid, and eligible employees can generally receive up to $633 per week.

The Bill (A4927) would have extended the NJFLA’s coverage to employers with 20 or more employees and expanded the definition of “family member” to include siblings, grandparents, grandchildren and parents-in-law.  Moreover, the Bill would have doubled the maximum number of weeks of family temporary disability leave benefits from 6 weeks to 12 weeks, increased available intermittent leave from 42 days to 84 days, and raised the weekly cap on paid benefits to $932, depending on the claimant’s income.

Governor Christie denounced the Bill’s supporters as disregarding the increased cost to taxpayers and the potentially adverse impact the bill would have on small businesses in New Jersey.

The minimum wage bill (A4870) would have significantly raised New Jersey’s minimum wage for employees at Newark Liberty International Airport, Newark Penn Station, and the Hoboken Terminal, from $10.10 to $17.98 per hour.  Incidentally, Christie vetoed a bill last year that would have raised New Jersey’s minimum wage from its current $8.44 to $15.00 per hour.  The New Jersey Business & Industry Association, considering the vetoes to be a victory to New Jersey employers, stated that the minimum wage bill would have set “a terrible precedent by circumventing the collective bargaining process and imposing backdoor wage and benefit increases by statute.”

For more information on these vetoes and current laws regarding family leave, minimum wage, or other applicable leave laws, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullnullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullnullgenovaburns.com, or 973-533-0777.

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.