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.

New Jersey Issues Mandatory Notice for Compliance with New Jersey’s Paid Sick Leave Act

The New Jersey Department of Labor and Workforce Development (NJDOL) has issued its long awaited mandatory notice for compliance with the New Jersey Paid Sick Leave Act (“the Act”) which goes into effect on October 29, 2018. The “Notice of Employee Rights” can be found here.

All New Jersey employers regardless of size must:

  • Post the notice in a conspicuous place accessible to all employees in each New Jersey workplace; and
  • Distribute the notice (1) to all existing employees by November 29, 2018; (2) at the time of hiring; and (3) if the employee requests a copy of the notice.

The required notice may be distributed by email. Employers are not required to obtain signed acknowledgments confirming that employees received the notice.

The notice must be also be posted and distributed in any language that the employer believes is the first language of a majority of the employer’s workforce. In addition to English, the NJDOL will release the notice in 12 additional languages, including Spanish, Chinese, and Arabic. The NJDOL has advised that translations will be available on its website soon.

Under the new law, employees accrue 1 hour of paid sick leave for every 30 hours worked. Employees (hourly, salaried, full-time, part-time) may accrue up to 40 hours of paid sick leave per benefit year.  Employers are also permitted to designate the “benefit year” as any 12-month period but may not modify it without notifying the NJDOL.

Employees become eligible to use earned sick leave beginning on the 120th day after they are hired, and may use their earned sick leave as it is accrued. Employers are also permitted “frontload” 40 hours of paid sick time. There is no requirement to pay out accrued and unused sick leave upon termination absent a company policy to the contrary.

Coverage

Permissible use of sick leave, which will accrue at the rate of one hour for every 30 hours worked up to 40 hours per benefit year, includes the following:

(i) Diagnosis, care, treatment, recovery and/or preventive care for the employee’s own mental or physical illness or injury or the employee’s family member’s mental or physical illness or injury;

(ii) Absence due to a public health emergency declared by a public official that causes the closure of the employee’s workplace or the school or childcare facility of the employee’s child or requires the employee or an employee’s family member to seek care;

(iii) A necessary absence for medical, legal or other victim services because of domestic or sexual violence perpetrated on the employee or the employee’s family member; or

(iv) To attend a school-conferences, meetings, or any event requested or required by a child’s school administrator, teacher, or other professional staff member responsible for the child’s education, or to attend a meeting regarding a child’s health or disability.

The Act also broadly defines “family members” to include an employee’s child, spouse, domestic partner, civil union partner, parent (including adoptive, foster or step-parent, or legal guardian), sibling (including foster or adoptive siblings), grandparent or grandchild, and the parent, grandparent or sibling of the employee’s spouse, domestic partner or civil union partner. Notably, an employee has the opportunity to use their sick leave for the care of a non-related individual whose close association with the employee is the “equivalent” of a family relationship.

Exemptions & Employees Covered by a CBA

Per diem healthcare employees, construction workers subject to a collective bargaining agreement (CBA), and public employees who are provided with sick leave with full payment pursuant to any other law, rule or regulation are exempt from the new law. Non-construction employees covered by a CBA at the time the law goes into effect are also exempt, but the Act’s provisions will apply once the CBA expires. Further, employees and their representatives may waive the rights available under the law and address paid leave in collective bargaining.

Notice

Employers are entitled to 7 days advance notice of “foreseeable” absences and can restrict employee’s use of “foreseeable” paid sick leave on certain dates.  Where the need is unforeseeable, an employer may only require notice “as soon as practicable,” if the employer has notified the employee of this requirement.  In addition, employers are only permitted to ask the employee for documentation to substantiate the sick leave if the employee is absent for 3 or more consecutive days.

Compliance

Employers will be required to maintain records documenting the hours worked and earned sick leave used by employees. Records must be maintained for 5 years and made available for inspection by the NJDOL. If an employee claims an employer violated the Act, and that employer has failed to maintain adequate records, then there is a presumption that the employer failed to provide paid sick leave.

Anti-Retaliation

Employers are prohibited from retaliating or discriminating against employees under the Act. The Act broadly defines retaliation to include not only retaliatory personnel action like suspension, demotion, or refusal to promote, but also includes threatening to report the immigrant status of an employee or family member of the employee. Employers are also prohibited from retaliating or discriminating against an employee who files a complaint with the commissioner or a court alleging the employer’s violation of the Act, or informs any other person of their rights under the Act.

There is a rebuttable presumption of unlawful retaliatory action whenever an employer takes adverse action against an employee within 90 days of when that employee opposes any violation of the Act, informs any person about the employer’s alleged violation of the Act, files a complaint alleging a violation of the Act, or cooperates in an investigation into an alleged violation of the Act.

Penalties

Any failure of an employer to make available or pay earned sick leave as required by the new law, or any other violation of the law, shall be regarded as a failure to meet the wage payment requirements of the New Jersey Wage and Hour Law.  Employers will also be subject to the penalties and remedies contained in the New Jersey Wage and Hour Law, including fines and possible imprisonment, reinstatement of a discharged employee to correct any discriminatory action and payment of all lost wages in full.

Bottom Line

The New Jersey Paid Sick Leave Act takes effect on October 29, 2018. Employers in New Jersey, in consultation with legal counsel, must post the notice and review and revise existing policies, practices and procedures related to calculating employee’s sick leave to ensure compliance with the Act.  Human Resources and Benefits personnel should also be trained on the new paid sick leave law requirements and Managers should also receive updated training to ensure that internal recordkeeping processes are sufficient to keep track of time taken under the new law.

For more information on New Jersey’s new paid sick leave law, see the June issue of New Jersey Employment Law Letter.

For more information about the potential impacts of the Paid Sick Leave Act or what steps your company can take to effectively ensure compliance with wage and hour laws, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at  jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

Religion at Work: NJ Appellate Court Reinstates Religious Harassment Lawsuit Over Shaving Mandate

The New Jersey Appellate Division has ruled that a lawsuit against the New Jersey Department of Corrections (NJDOC) can proceed for failure to accommodate a trainee’s religious practice.

Background Facts

In July 2016, Marven Roseus, a member of the Israel United in Christ faith, applied to become a NJDOC corrections officer. While attending an orientation meeting, Roseus informed lieutenants that his religion prohibits him from shaving his head or face. Roseus submitted a religious accommodation request which included a statement from an elder in his church explaining that his religion requires that he not shave either his head or face.

After submitting his request, Roseus arrived for his first day of training, and was told that he was not “properly shaven.”  Even though Roseus explained that his request for a religious accommodation, Roseus was written up and dismissed from training.

On January 9, 2017, Roseus filed a complaint against the State of New Jersey and the NJDOC alleging discriminatory practices and a failure to accommodate a sincerely held religious belief, in violation of the New Jersey Law Against Discrimination (NJLAD) which prohibits employers from imposing a condition on employees that “would require a person to violate or forego a sincerely held religious practice or observance” unless, “after engaging in bona fide effort, the employer demonstrates that it is unable to reasonably accommodate the employee’s religious observance or practice without undue hardship on the conduct of the employer’s business.” N.J.S.A. 10:5-12(q)(1).

The State and NJDOC moved to dismiss Roseus’ complaint, and the trial court dismissed the case on June 30, 2017.

Appellate Court’s Decision

The Appellate Division ruled that Roseus’ complaint should be reinstated finding that there was no evidence the NJDOC acted in “a bona fide effort” or that it is “unable to reasonably accommodate” his religious practice without a “undue hardship.” An “undue hardship”, as defined by the NJLAD, must be one requiring “unreasonable expense or difficulty, unreasonable interference with the safe or efficient operation of the workplace or a violation of a bona fide seniority system or a violation of any provision of a bona fide collective bargaining agreement.” N.J.S.A. 10:5-12(q)(3)(a).

In its decision, the Appellate Division distinguished a 2008 ruling from the U.S. Court of Appeals for the Third Circuit in Valdes v. New Jersey. In Valdes, an applicant sought to become a corrections officer, and sought an accommodation to not shave his beard based upon his religious beliefs. This request was initially denied, but the NJDOC eventually granted an accommodation and allowed the applicant to retain his facial hair so long as it was not longer than one-eighth of an inch. When the applicant did not shave his beard to the agreed upon length, he was terminated. The Appellate Division points out that although seemingly similar to the facts at hand, Valdes was distinguishable in a number of ways, including, most notably, that an accommodation was offered in Valdes, whereas Roseus was offered no such accommodation.

The Appellate Division also noted that because Roseus sufficiently alleged that the NJDOC has previously granted accommodations to its grooming policy, Roseus was entitled to discovery to explore whether there was a bona fide effort made to accommodate his religious beliefs. Moreover, the State and NJDOC did not explain the reasons for the grooming policy, nor did they demonstrate they attempted to accommodate Roseus.

Bottom Line

This case serves as a reminder that employers must engage in the interactive process in order to determine whether or not an employee’s sincerely held religious belief requires an accommodation in the workplace.  Accommodation requests often relate to change in work schedules, exceptions to dress and grooming policies, or time for religious expression or practice while at work.  In many cases, employers who face costly litigation are those where supervisors refuse an accommodation request without exploring other ways to accommodate the employee. Employers should also take pro-active steps to ensure they have the following:

  • A compliant Anti-Harassment Policy that covers religion and creed.
  • An accommodation policy that covers religious beliefs, practices or observances.
  • Train Managers and Supervisors on how to document and respond to requests for a religious accommodation and address complaints about religious harassment.

For more information on what your company can do to ensure compliance with religious accommodations in the workplace, 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 Legislature Amends Paid Family Leave Act

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

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

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

For more information on what your company can do to ensure compliance with New York or New York City employee benefits laws, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

#MeToo Movement Insufficient to Revive Dismissed Case

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

Background Facts

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

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

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

Court Awards Summary Judgment to AT&T

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

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

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

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

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

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

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

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

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

“Close Call” For Sanctions

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

Bottom Line

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

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

New Jersey Courts Double-Down on Arbitration Enforcement

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

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

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

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

A “Victory” In State Court

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

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

Bottom Line

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

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

If you have questions on drafting arbitration agreements or arbitration disputes, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

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

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

Facts

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

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

District Court’s Decision

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

Third Circuit’s Decision

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

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

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

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

Bottom Line

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

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

“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.