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So far Frank Custode has created 85 blog entries.

New Jersey Department of Labor Issues Proposed Regulations For New Jersey Paid Sick Leave Law

On April 12, 2018, the New Jersey Legislature passed a mandatory Paid Sick Leave law.  The law, which goes into on October 29, 2018, applies to all private employers who employ individuals in the State of New Jersey, among others.  For more details on this law, please see https://custodelaw.com/leave-of-absence/new-jersey-legislature-passes-statewide-paid-sick-leave-law/.

The New Jersey Department of Labor and Workforce Development recently issued proposed regulations regarding the Paid Sick Leave Law, which provide employers with guidance on the implementation of the law.

The highlights of the proposed regulations are as follows:  Employers are not required to document hours worked for exempt employees under the Fair Labor Standards Act and the New Jersey Wage and Hour Law.   Employers are required to provide their employees with a poster issued by the Department of Labor.  The poster has already been made available by the Department of Labor and may be distributed via email to employees.  The Department of Labor has clarified that the test to determine whether a worker is an employee or independent contractor is the “ABC test” currently utilized for such a determination under unemployment compensation law.   The Department of Labor requires that a single benefit year be used for all employees.  For all employees hired on or before October 29, 2018, the accrual of sick leave begins no later than October 29, 2018.  The regulations define “foreseeable need” for paid sick leave as leave which shall not exceed seven days of advance notice, whereas leave is “not foreseeable” when “an employee requires time to care for, or obtain medical treatment for, themselves or a family member that was not reasonably anticipated.”  Lastly, employers may designate certain dates that they prohibit the use of foreseeable paid sick leave, which “shall be limited to verifiable high-volume periods or special events, during which permitting the use of foreseeable earned sick leave would unduly disrupt the operations of the employer.”

New Jersey Law Against Discrimination Does Not Require Employers to Waive Drug Tests for Medical Marijuana Users

In Cotto v. Ardagh Glass Packing, CV-18-1037 (D.N.J., August 10, 2018), the District of New Jersey held that neither the New Jersey Law Against Discrimination nor the New Jersey Compassionate Use Medical Marijuana Act required the employer to waive its mandatory drug testing for a medical marijuana user.

Daniel Cotto, Jr. was hit in the head on a forklift and was subsequently asked to take a drug test as a condition of continued employment.  In response, Cotto told his employer that he could not pass the drug test because he was taking medically-prescribed drugs, including medical marijuana.  The employer advised that the company could not allow him to continue to work there unless he tested negative for marijuana and placed him on an indefinite suspension as a consequence of not satisfying this condition of employment.

Cotto subsequently filed a lawsuit, alleging disability discrimination under the New Jersey Law Against Discrimination, and alleging that the New Jersey Law Against Discrimination and the New Jersey Compassionate Use Medical Marijuana Act require the employer to make an accommodation for him.   The employer subsequently filed a motion to dismiss the lawsuit, which the District of New Jersey granted.

In so doing, the District of New Jersey found that nothing in the express language of the New Jersey Compassionate Use Medical Marijuana Act (which protects medical marijuana users from criminal prosecution) shields employees from adverse employment actions.  In addition, the District of New Jersey predicted that the New Jersey State Judiciary would find that the New Jersey Law Against Discrimination  “does not require an employer to accommodate an employee’s use of medical marijuana with a drug test waiver.”  The Court did, however, note that its decision was narrow based “entirely on the question of whether he [Cotto] can compel Ardagh Glass [the employer] to waive its requirement that he pass a drug test.”

New Jersey Paid Sick Leave Law In Effect On October 29, 2018

On April 12, 2018, the New Jersey Legislature passed a mandatory Paid Sick Leave law.  The law, which goes into on October 29, 2018, applies to all private employers who employ individuals in the State of New Jersey, among others.

Under the law, sick leave begins to accrue on the effective date of the law or the employee’s hiring date, whichever is later.  Employees may accrue one hour of leave for every 30 hours worked.  Employers are not required to permit employees to accrue more than 40 leave hours in a benefit year, which is a 12-month consecutive period during which an employee may accrue and use earned sick leave.  Accrued, unused sick leave must carry-over to the next year (however, an employee cannot accrue and carry-over more than 40 hours in a benefit year), unless the employer offers and the employee chooses to accept compensation for accrued, unused leave at the end of the benefit year.  As an alternative, the employer may choose to “frontload” employees with one full year of 40 hours of paid sick leave on the first day of the benefit year.  If employers choose to “frontload,” they must pay employees compensation for said accrued, unused leave at the end of the benefit year or permit employees to carry over accrued, unused leave to the next benefit year.

For more details on this law, please see https://custodelaw.com/leave-of-absence/new-jersey-legislature-passes-statewide-paid-sick-leave-law/.

New Jersey Law Against Discrimination May Prohibit Adverse Employment Action For Refusal To Sign Arbitration Agreement

In general, employers prefer arbitration as a forum to litigate employment law disputes because it forces employees to give up their right to a jury trial.  Accordingly, employers frequently require employees to sign arbitration agreements as a condition of employment.  However, a recent New Jersey trial court opinion (Cator v. WRDC Corp., BUR-L-728-17, decided on February 2, 2018) further erodes an employer’s ability to have employees sign arbitration agreements and give up their right to a jury trial under the New Jersey Law Against Discrimination.

Jorvia Cator, an African American female, made complaints to her employer about race discrimination during her one-year employment with the company.  During Ms. Cator’s employment, the company implemented a new policy requiring employees to sign an arbitration agreement as a condition of employment.  Ms. Cator refused, and handwrote on the agreement, “I do not wish to waive my right to sue for discrimination and therefor[sic] I do not agree to arbitrate my claims of discrimination.” In response, the company suspended Ms. Cator and advised her that she could not return to work unless she signed the agreement.

As a result, Ms. Cator filed a lawsuit, alleging that the company’s refusal to allow her to return to work because she refused to give up her right to a jury trial violated the New Jersey Law Against Discrimination as a retaliatory discharge. Ultimately, Ms. Cator filed a motion for summary judgment, requesting the trial court to find that the company violated the New Jersey Law Against Discrimination as a matter of law.  The trial court granted Ms. Cator’s motion.  In so doing, the trial court determined that Ms. Cator engaged in protected activity under the New Jersey Law Against Discrimination by refusing to waive her right to a jury trial, and that the company’s refusal to allow her to return to work was an adverse employment decision.

Is Treatment for Infertility Covered Under Federal Anti-Discrimination Law?

In general, Title VII of the Civil Rights Act of 1964 (“Title VII”) is a federal law that makes it unlawful to discriminate against an individual based of race, color, religion, national origin, or gender. In addition, under Title VII, it is unlawful to retaliate against an individual because the individual complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.

Here is a scenario:  An employee is undergoing treatment for infertility treatment.  The employee advises her supervisor about the treatment.  However, the supervisor is concerned that the treatment will interfere with the employee’s job responsibilities, and shortly thereafter, the employee is demoted to a position with less significant job responsibilities.

In the above scenario, does the demotion constitute gender discrimination under Title VII?  The Equal Employment Opportunity Commission (“EEOC”) answers this question in the affirmative.

Specifically, the EEOC states that “Employment decisions related to infertility treatments implicate Title VII under limited circumstances. Because surgical impregnation is intrinsically tied to a woman’s childbearing capacity, an inference of unlawful sex discrimination may be raised if, for example, an employee is penalized for taking time off from work to undergo such a procedure.”  See EEOC Enforcement Guidance on Pregnancy Discrimination and Related Issues, Notice Number 915.003, June 25, 2015.  In addition, issues under the Americans with Disabilities Act (“ADA”) may also be implicated.

Based on the above, it is important that employees undergoing infertility treatment have a clear understanding of their rights in the workplace.

New Jersey Senate Proposes Legislation That Would Prohibit Credit Report Discrimination

On March 26, 2018, the New Jersey Senate passed Bill Number S545, which would prohibit employers from obtaining, requiring or discriminating against current or prospective employees based on credit reports.

Specifically, under the proposed law, no employer shall “seek to obtain or require a current or prospective employee to provide or consent to the creation of a credit report that contains information about the current or prospective employee’s credit history, credit score, credit account balances, payment history, savings or checking account balances, or savings or checking account numbers, unless the employer is required by law to obtain a credit report, or the employer reasonably believes that the employee has engaged in a specific activity that is financial in nature and constitutes a violation of the law.”  In addition, under the proposed law, no employer shall “discharge, demote, suspend, retaliate, refuse to hire, or otherwise discriminate against a current or prospective employee with regard to promotion, compensation, or the terms, conditions or privileges of employment, based on information in a credit report on the employee.”

However, an employer may make a credit inquiry if credit history is an established bona fide occupational qualification of a particular position or employment classification.  Under the proposed law, credit history shall be considered a bona fide occupational qualification for a position that (1) is a managerial position which involves setting the financial direction or control of the business; (2) involves access to the personal belongings, financial assets or financial information (other than information that is customarily provided in a retail transaction) of customers, employees or employers; (3) involves a fiduciary responsibility to the employer, including but not limited to, the authority to issue payments, transfer money or enter into contracts or involves leases of real property; (4) provides an expense account for travel; or (5) is as a law enforcement officer for a law enforcement agency in the State of New Jersey, or is as governmental or non-governmental security personnel.

Significantly, the proposed law prohibits retaliation or discrimination against an individual because the individual has done or is about to do any of the following: (1) files a complaint under the law; (2) testifies, assists, or participates in an investigation, proceeding, or action concerning a violation of the law; or (3) otherwise opposes a violation under the law.  Lastly, under the proposed law, “an employer shall not require an individual to waive or limit any protection under [the act] as a condition of applying for or receiving an offer of employment.” The proposed bill is currently under consideration by the New Jersey General Assembly.

Senate Bill Seeks To Bar Waiver of Jury Trials and Non-Disclosure Provisions In New Jersey Law Against Discrimination Matters

On June 7, 2018, the New Jersey Senate passed S-121, which among others, would prohibit the waiver of “any substantive or procedural right or remedy” relating to claims under the New Jersey Law Against Discrimination, and would prohibit employers from having non-disclosure provisions in settlement agreements involving disputes under the LAD.

Specifically, the bill provides that “a provision in any employment contract that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment shall be deemed against public policy and unenforceable.”  In addition, the bill states that “no right or remedy under the ‘Law Against Discrimination’ or any other statute or case law shall be prospectively waived.”  Therefore, in essence, this bill would prohibit the prospective waiver of jury trials in disputes under the LAD.  Moreover, the bill would further limit the enforceability of arbitration agreements (which waive an employee’s right to a jury trial) regarding employment disputes under the LAD.  This aspect of the bill would be a significant win for employees given that the enforceability of agreements that waive the right to a jury trial are often contentious disputes in employment law matters.

In addition, the bill contains a provision that would eliminate non-disclosure provisions in agreements, including settlement agreements.  Specifically, the bill provides that “a provision in any employment contract or settlement agreement which has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation or harassment shall be deemed against public policy and unenforceable.”  If enacted, this aspect of the bill would fundamentally change the negotiation of discrimination and harassment claims since confidentiality is usually a standard term required by employers.

The bill also prohibits an employer from taking any retaliatory action (such as a discharge, suspension, or demotion, etc.) against an employee who refuses to enter in an agreement that contains a provision deemed to be contrary to public policy and unenforceable; and affords aggrieved individuals the right to commence legal action in the Superior Court of New Jersey.

New Jersey Equal Pay Act In Effect On July 1, 2018

To follow-up one of my earlier blogs, the Diane B. Allen Equal Pay Act (“the New Jersey Equal Pay Act”) is in effect on July 1, 2018.  The law protects all classes recognized under the New Jersey Law Against Discrimination.  Specifically, the law makes it an unemployment practice “[f]or an employer to pay any of its employees who is a member of a protected class at a rate of compensation, including benefits, which is less than the rate paid by the employer to employees who are not members of the protected class for substantially similar work, when viewed as a composite of skill, effort and responsibility.”

The New Jersey Equal Pay Act, however, expressly provides for narrow, itemized legally permissible reasons for offering employees a different rate of compensation.  In addition, the law enhances the damages available to prevailing employees under the New Jersey Law Against Discrimination.  Indeed, a prevailing party may be awarded three times the amount of monetary damages (known as treble damages) for unlawful discrimination or retaliation under the New Jersey Equal Pay Act.

The Act is a game-changer for employees in the State of New Jersey as they will now be afforded additional protection for unlawful differential in compensation.  For more details on the New Jersey Equal Pay Act, please see https://custodelaw.com/discrimination/new-jersey-legislature-passes-comprehensive-equal-pay-act.

New Jersey Assembly Seeks To Limit Restrictive Covenant Agreements

On May 10, 2018, the New Jersey Assembly Labor Committee advanced a bill (Assembly Bill A1769) that would provide for certain limitations on restrictive covenant agreements (in particular, non-compete agreements) between employers and employees.   If enacted, employers in the State of New Jersey would certainly have a more difficult time attempting to enforce restrictive covenant agreements given the onerous nature of the proposed legislation’s requirements; and employees who sign restrictive covenant agreements in compliance with the proposed legislation would have less post-employment restrictions imposed on them.

Under the proposed legislation, a restrictive covenant is enforceable if it meets the following requirements:  if the agreement is entered into at the commencement of employment, the employer must disclose the terms in writing to the prospective employee by the earlier of a formal offer of employment or 30 business days prior to the commencement of employment; if the agreement is entered into after the commencement of employment, the employer must provide the agreement to the employee at least 30 business days before the agreement is effective; the agreement must be signed by both the employer and the employee and state that the employee has the right to consult with counsel; the agreement shall not be broader than necessary to protect the legitimate business interests of the employer, including the employer’s trade secrets or other confidential information, such as sales information, business strategies and plans, and customer or price information; the agreement may not restrict the employee from engaging in competitive activity for more than 12 months; the agreement must be reasonable in geographic scope, must be limited to the area where the employee provided services or had a material presence in the two years prior to the employee’s termination, and may not restrict the employee from seeking employment in other states; the agreement shall be reasonable in the scope of the proscribed activities in relation to the interests protected and limited to the specific types of services provided by the employee during the employee’s last two years of employment; the agreement shall not penalize an employee for defending or challenging the enforceability of the agreement; the agreement shall not contain a choice of law provision that would have the effect of avoiding the requirements of the legislation; the agreement shall not waive the employee’s substantive, procedural or remedial rights provided under the legislation or any other law, act, or regulation; the agreement shall not restrict the employee from providing a service to a customer or client of the employer if the employee does not initiate or solicit the customer or client; and the agreement shall not be unduly burdensome on the employee, injurious to the public or inconsistent with public policy.

In addition, other highlights of the proposed legislation are as follows:  the bill would not be enforceable against certain classes of employees, such as non-exempt employees under the Fair Labor Standards Act, independent contractors, and employees whose service was less than one year;  an employer who seeks to enforce the restrictive covenant agreement would be required to notify the employee in writing within ten days after the employee’s termination of the employer’s intent to enforce the agreement; employers would be required to post a copy of the law in a prominent place in the work area; unless the employee is terminated for misconduct, an employer who seeks enforcement of the agreement would be required to pay the employee 100 percent of the pay to which the employee would have been entitled as well as whatever benefit contributions would be required in order to maintain fringe benefits for the employee; and the proposed legislation allows employees to bring civil action against the employer for violation of the law, including seeking injunctive relief, liquidated damages, compensatory damages and reasonable attorneys’ fees and costs.

If enacted, the legislation would go into effect immediately.  However, the legislation would not apply to agreements in effect prior to the enactment of the legislation.  Nonetheless, it would be prudent for employers to review their restrictive covenant agreements currently in effect and to monitor this legislation; and likewise, it would be prudent for employees to seek legal counseling prior to signing a restrictive covenant agreement.

Lateral Transfer May Constitute Adverse Employment Action For Whistleblower Retaliation Under New Jersey Conscientious Employee Protection Act

In general, to establish a whistleblower retaliation claim under the New Jersey Conscientious Employee Protection Act (“CEPA”), an employee must suffer an “adverse employment action.”  The most typical examples of adverse employment actions are employment terminations or demotions.

In Jeffrey Scozzafava v. Somerset County Prosecutor’s Office (Docket No. A-2228-16T1 May 14, 2018), the Appellate Division took an expansive view of the term “adverse employment action” to include a lateral transfer.  Plaintiff, a detective with the Somerset County Prosecutor’s Office who had extensive experience in the forensic field, alleged that his transfer from the Office’s forensic unit to the Office’s fugitive squad was “in retaliation for whistle-blowing conduct in lodging complaints regarding deficient and improper evidence collection and casework by the forensic unit.”  Significantly, the transfer was a lateral transfer.  Indeed, Plaintiff maintained his position and rank, with full pay and benefits.  Therefore, the trial court dismissed the lawsuit, finding that Plaintiff did not suffer an adverse employment action under CEPA.

The Appellate Division, however, reversed the trial court’s decision and remanded the matter for further proceedings.  Specifically, the Appellate Division found that retaliation under CEPA not only includes “discharge, suspension or demotion but also other adverse employment action taken against an employee in the terms and conditions of employment.”  The Appellate Division further determined that New Jersey courts have interpreted the “terms and conditions of employment” as “those matters which are the essence of the employment relationship,” including “length of the workday; increase or decrease of salaries, hours, and fringe benefits; physical arrangements and facilities; and promotional procedures.”  Accordingly, here, the Appellate Division found that, given Plaintiff’s extensive experience as a forensic detective, the transfer was “objectively demeaning” and would not allow him to continue to develop his expertise in the forensic field.   Therefore, the Appellate Division held that Plaintiff alleged “sufficient facts, when viewed in the proper light, to prove an adverse employment action.”

This decision represents a significant victory for employees given that it further expands whistleblower protection under CEPA.  As such, it important that New Jersey employees understand the expansion of their rights in the workplace under CEPA.