New Jersey Family Leave Act Expands To Smaller Employers

The New Jersey Family Leave Act allows eligible employees to take up to 12 weeks of unpaid leave in any 24-month period for the birth or adoption of a child or the serious health condition of a covered family member.  On February 19, 2019, Governor Phil Murphy signed Assembly Bill 3975 into law which, among other, expands the scope of the New Jersey Family Leave Act. This new legislation has significant ramifications for smaller employers in the State of New Jersey and further expands employee entitlements in the workplace.

Most significantly, the new legislation, provides that, effective June 30, 2019, the New Jersey Family Leave Act applies to all employers that employ “30 or more employees for each working day during each of 20 or more calendar workweeks in the then current or immediately preceding calendar year.”   Previously, the New Jersey Family Leave Act only applied to employers with 50 or more employees.

In addition, the new legislation expands the definitions of “family member” and “child.”  Under the new legislation, “family member” now includes parent-in-law, sibling, grandparent, grandchild, domestic partner, “any other individual related by blood to the employee” and “any other individual that the employee shows to have a close association with the employee which is the equivalent of a family relationship” and “child” now includes foster child or “a child who becomes the child of a parent pursuant to a valid agreement between the parent and a gestational carrier.”

Other significant changes include: the expansion of the use of a reduced leave schedule from 24 consecutive weeks to 12 consecutive months and the permitted use of intermittent leave for the birth, adoption or foster care placement of a “child” whereas prior to this legislation, intermittent leave was only permitted by employer approval.

The new legislation also includes significant expansion of the New Jersey Temporary Disability Benefits Law as well as the New Jersey Security and Financial Empowerment Act.  In light of the above, smaller employers in the State of New Jersey should review and update their current policies and practices.

Appellate Division Invalidates “Training Module” Arbitration Policy In New Jersey Law Against Discrimination Matter

In the recent decision of Skuse v. Pfizer, Inc., et al., (Docket No. A-3027-17T4, January 16, 2019), the Appellate Division invalidated an arbitration provision it described as “an inadequate way for an employer to go about extracting its employees’ agreement to submit to binding arbitration for future claims and thereby waive their right to sue an employer and seek a jury trial.”

The employer, Pfizer, Inc., emailed the arbitration policy to its workforce in what was termed a “training module.”  The training module described the mandatory arbitration policy on a series of slides, and asked the employees to “acknowledge” the policy by clicking an electronic button.  The training module further stated that, if the employee did not click the acknowledgment and continued to work for Pfizer for at least sixty days, the employee would be “deemed” to be bound by the arbitration policy.  The training module did not request that employees provide signatures conveying they agreed to the terms of the policy.  Nor did the module request that the employees memorialize that they expressly agreed to the terms of policy.

In November 2017, Amy Skuse filed a lawsuit against Pfizer as well as several other individual defendants alleging violation of the New Jersey Law Against Discrimination based on religious discrimination and failure to provide reasonable accommodations for her religious beliefs.  Thereafter, the defendants moved to dismiss the lawsuit and compel arbitration.  The trial court granted defendants’ motion to compel.  However, the Appellate Division reversed and invalidated the arbitration provision.

In so doing, the Appellate Division found that the company’s procedure of distributing its “training module” arbitration policy fell short of the requirements set forth in Leodori v. CIGNA Corp., 175 N.J. 293 (2003) (holding that an employee’s valid waiver of statutory rights results “only from an explicit, affirmative agreement that unmistakably reflects the employee’s assent”) as well as the requirements set forth in Atalese v. U.S. Legal Services, Group, L.P., 219 N.J. 430 (2014) (holding that an arbitration agreement “must be clear and unambiguous” that the individual “is choosing to arbitrate disputes rather than have them resolved in a court of law”).

This is another significant victory for employees in the State of New Jersey because it further erodes an employer’s use of arbitration provisions in matters alleging violations of the New Jersey Law Against Discrimination.  Indeed, this opinion gives employees further ammunition to challenge arbitration provisions in employment law matters and pursue their legal remedies in court.

Appellate Division Further Erodes Arbitration Clauses In New Jersey Law Against Discrimination Cases

In Flanzman v. Jenny Craig (A-2580-17T1, October 17, 2018),the New Jersey Appellate Division rendered a decision that further erodes the enforceability of arbitration clauses involving employment law claims filed in the State of New Jersey.  This is an important decision for employees in the State of New Jersey given that it provides them with further protections against companies attempting to impose arbitration provisions upon them (that preclude them to the right to a jury trial trail in court). 

Specifically, the appeal at issue required the court to decide whether to invalidate an arbitration agreement because the parties failed to identify any arbitration forum and/or any process for conducting the arbitration. The company sought to compel arbitration of the former employee’s age discrimination and harassment claims under the New Jersey Law Against Discrimination(“LAD”).  The trial court enforced the arbitration agreement; however, on appeal, the Appellate Division reversed and thus, invalidated the arbitration provision. 

The arbitration provision at issue provided as follows: “Any and all claims or controversies arising out of relating to [plaintiff’s employment], the termination thereof, or otherwise arising between [plaintiff] and [defendant] shall, in lieu of a jury or other civil trial, be settled by final and binding arbitration.  This agreement to arbitrate includes all claims whether arising in tort or contract and whether arising under statute or common law, including, but not limited to,any claim or breach of contract, discrimination or harassment of any kind.”    

In analyzing the arbitration provision, the Appellate Division held “that the parties lacked a ‘meeting of the minds’ because they did not understand the rights under the arbitration agreement that ostensibly foreclosed plaintiff’s right to a jury trial” and therefore, there was no mutual assent to arbitrate the dispute. The main deficiency with the arbitration provision was that it did not identify the process and/or forum for the arbitration, such as designating an arbitral institution (e.g. the American Arbitration Association or the Judicial Arbitration and Mediation Services) and/or providing a general method for selecting a different arbitration setting.

New Jersey Lawmakers Seek To Limit Restrictive Covenant Agreements

On May 10, 2018, the New Jersey Assembly Committee reported favorably on Assembly Bill No. 1769, which, as amended, places certain limitations on restrictive covenant agreements between employers and employees.  Under the bill, employers may require that an employee enter into a restrictive covenant agreement as a condition of employment or with regard to severance pay.

Under the bill, the restrictive covenant agreement would be enforceable if it meets the following requirements: (1) if the agreement is entered into in connection with the commencement of employment, the employer must disclose the terms of the agreement in writing to the prospective employee, the agreement must be signed by the employer and the employee, and the agreement must expressly state that the employee has the right to consult with counsel prior to signing; (2) the agreement may not be broader than necessary to protect the legitimate business interests of the employer; (3) the agreement may restrict the employee from engaging in activities competitive with the employer for no more than 12 months following the date of termination of employment; (4) the agreement must be reasonable in geographical reach and limited to the geographic areas in which the employee provided services or had a material presence or influence during the two years preceding the date of termination of employment and may not prohibit the employee from seeking employment in other states;  (5) the agreement must be reasonable in the scope of proscribed activities in relation to the interests protected and limited to only the specific types of services provided by the employee at any time during the last two years of employment; (6) agreement must not penalize the employee for defending against or challenging the validity or enforceability of the covenant; (7) the agreement must not contain a choice of law provision that would have the effect of avoiding the requirements of the bill if the employee is a resident of or employed in the State of New Jersey at the time of termination or has been for at least 30 days immediately preceding the employee’s termination of employment; (8) the agreement must not waive an employee’s substantive, procedural and remedial rights provided under the bill, any other act or administrative regulation, or under the common law; (9) the agreement must not restrict an employee from providing service to a customer or client of the employer, if the employee does not initiate or solicit the customer or client; and (10) the agreement may not be unduly burdensome on the employee, injurious to the public, or inconsistent with public policy.

If enacted, this bill will have an impact on the enforceability of restrictive covenants in the State of New Jersey.  Indeed, given the bill’s stringent requirements, restrictive covenants agreements would be more difficult to enforce for employers; and employees would likely have increased mobility following the termination of their employment.

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

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

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.