Employment Law Blog

Tis the Season to be Careful, Fa-la-la-la-la, la-la-la-la

December 7, 2018

Company holiday parties are often great for camaraderie and employee morale but are fraught with danger, whether it be harassment, religious discrimination or drinking and driving.

We don’t want to be accused of being the Grinch that stole Christmas. We are all in favor of holiday parties, so long as they are done right. Here are our top ten (10) tips:

  1. Remind employees in advance of the Company's anti-harassment policy;

  2. No mistletoe;

  3. Limit alcohol;

    1. Consider no alcohol or using drink tickets

    2. Designate a member of management to monitor employees

    3. Have rides home available or remind employees to consider Uber/Lyft, etc.

    4. Consider day-time parties

  4. No slow dancing;

  5. No unsupervised speeches or skits;

  6. Avoid religious symbols and religious music;

  7. If during off hours, do not require attendance or there may be exposure to wage and hour claims;

  8. If exchanging gifts, instruct employees as to what is appropriate and no gag-gifts;

  9. When selecting a menu, make sure it is inclusive to accommodate religious needs, i.e. Kosher meals; and

  10. If all else fails, promptly investigate any claims!

Attorney: Steven Adler
Related Practice: Labor and Employment

NJ Department of Labor Publishes FAQs to Clarify Paid Sick Leave Law

November 29, 2018

The New Jersey Department of Labor and Workforce Development ("DOL") has published a list of Frequently Asked Questions ("FAQs") intended to address various unanswered (and unclear) questions regarding the new Sick Leave Law.

The FAQs are available at:
https://nj.gov/labor/forms_pdfs/lwdhome/Legal/earnedsickleave.pdf

The DOL's mandatory workplace poster is available at:
https://nj.gov/labor/forms_pdfs/mw565sickleaveposter.pdf

Naturally, if you have any questions regarding your obligations or rights under the Sick Leave Law, or other employment-related laws, please do not hesitate to contact any member of the Firm's Employment Law Group.

Attorney: Lauren Topelsohn
Related Practice: Labor and Employment
Category: Paid Sick Leave

Employment Law Intersects with Commercial Litigation

November 27, 2018

The Labor and Employment Law Group at Mandelbaum Salsburg, P.C. prides itself on being able to handle difficult employment litigation cases that also involve commercial disputes. These days, more and more cases straddle employment and other areas of the law. One such case, Metro Commercial Management Services, Inc. v. Istendal, was just decided by the New Jersey Appellate Division on November 19, 2018.

In Metro Commercial an at-will employee brought a minority shareholder oppression claim pursuant to N.J.S.A. 14A:12-7(1)(c), which provides that an action may be brought:

[where] the directors or those in control have acted fraudulently or illegally, mismanaged the corporation or abused their authority as officers or directors or have acted oppressively or unfairly toward one or more minority shareholders in their capacities as shareholders, directors, officers, or employees.

Oppression in the context of an oppressed minority shareholder action, however, does not require illegality or fraud by majority shareholders. Brenner v. Berkowitz, 134 N.J. 488, 506 (1993); “Oppression has been defined as frustrating a shareholder’s reasonable expectations.” Id. Often in these cases, the minority shareholder, as in Metro Commercial, is also a terminated employee and argues that the majority interfered with his reasonable expectation of continued employment by firing him, causing him lost wages and other benefits.

The Appellate Division in Metro Commercial indicated that termination of a minority shareholder’s employment may constitute oppression because a person who acquires a minority share in a closely-held corporation often does so “but for the assurance of employment in the business in a managerial position,” citing Muellenberg v. Bikon Corp., 143 N.J. 168, 181 (1996). Such a person has a reasonable expectation that they will enjoy “the security of long-term employment and the prospect of financial return in the form of salary,” and will have “a voice in the operation and management of the business and the formulation of its plans for future development.” Id. Where these expectations are frustrated by majority shareholders, a court may find that oppression occurred.

In Metro Commercial, the Appellate Division noted that there was no case law in New Jersey that addresses whether an at-will employee’s status is relevant when analyzing whether an employee has a reasonable expectation of continued employment. In Metro Commercial, the Appellate Court affirmed the trial Judge’s finding that the former employee and minority shareholder could not have a reasonable expectation of continued employment where the shareholder agreement provided that “[e]ach [s]hareholder acknowledges that []he is an ‘employee-at-will’ and this can be terminated by the corporation at any time for any reason …” The Appellate Division’s decision is not surprising. However, one wonders how the Appellate Court would have ruled had the minority shareholder been an at-will employee without any form of written agreement. It appears likely that the holding would have been different because the Appellate Division, commenting on the case law from other jurisdictions relied upon by the minority shareholder, stated that in those other matters “there were no written employment agreements …” The Metro Commercial case, thus leaves the door open for minority shareholders to bring wrongful termination claims under the Minority Oppression statute in circumstances where they are employed at-will without any form of written agreement.

The take-away from the Metro Commercial decision is that corporations awarding minority shareholder interests to employees should do so only if there is a provision in the shareholders’ agreement or separate employment agreement making it clear that the corporation may terminate the minority shareholder’s employment with or without cause. It would also be helpful to include a provision confirming that, as an at-will employee, the minority shareholder has no reasonable expectation of continued employment.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Employment Litigation

The Holiday Season and Accommodating Religious Beliefs

November 27, 2018

As we are now in the middle of the holiday season, it is worth noting a recent, interesting decision concerning an employer’s obligation to accommodate an employee’s religious beliefs. In Miller v. The Port of Authority, 15-cv-6370 (KM)(MAH), the District Court rejected a worker’s suit that the Port Authority of New York and New Jersey (the “Port Authority”) failed to accommodate his religious beliefs that precluded him from working on the Sabbath.

There are two types of religious discrimination, a disparate treatment claim (where an employee claims he is being treated differently because of his religion) and a claim for a failure to accommodate. In Miller, plaintiff argued the latter, that his request for an accommodation was rejected by his employer. In contrast, the employer argued that it offered various options to Miller, including the option to swap shifts with other employees, or that he could use vacation, personal excused time or compensatory time for religious purposes. The Port Authority also argued that exempting Miller from work on the Sabbath, without first offering that option to more senior employees, would have violated the governing collective bargaining agreement’s (“CBA’s”) seniority provision. The Hon. Kevin McNulty held that the religious accommodation offered by the Port Authority was reasonable and that the blanket exemption proposed by plaintiff would have imposed more than a de minimis hardship. Therefore, the employer was not required to accept it, and granted summary judgment in favor of defendant.

Judge McNulty’s decision is interesting for a number of reasons. First, it notes that “the standard imposed on employers for a religious accommodation is not as demanding as the accommodation of a disability required under the Americans with Disabilities Act.” As noted above, the Court held that an accommodation would impose an “undue hardship” if it would impose more than a de minimis burden on the employer. “Such a burden may take the form of economic costs, but may also include non-economic costs, such as damage to employee morale or compromise of a CBA …” Second, the decision confirms that an employer’s accommodation proposal simply must be “reasonable.” It is not required to totally eliminate any conflict and an employer is not required to accommodate the religious practices of an employee in exactly the way the employee would like. Third, while noting that the Third Circuit Court of Appeals hasn’t endorsed the approach, Judge McNulty held that an employer could offer a combination of accommodations, and found that what the Port Authority offered was reasonable.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Discrimination

Equal Pay Act Compliance

November 21, 2018

Without question, the most aggressive and wide-ranging Equal Pay Act in the country was enacted this past year by the New Jersey Legislature. It is wide-ranging because it applies not only to pay disparity based on sex, but also based on an employee’s race, age, religion, disability, or any other classification of employees who are protected from discrimination in employment by the New Jersey Law Against Discrimination (“NJLAD”). There are more than a dozen such classifications.

It is the most aggressive Equal Pay Act because it goes far beyond the concept of “equal pay for equal work.” An employer must pay an employee, who is in any one of these protected classifications, equal to any employee who is not so-protected, if the work the two employees perform is “substantially similar,” that is, nearly equivalent or approximately the same work. This also applies to equality in terms of other benefits, such as health insurance.

Compliance with the Act effectively requires that the employer conduct an analysis of its entire workforce, and on an ongoing basis, as new employees are hired and/or changes are made in the workforce.

The Act provides truly draconian penalties, in terms of treble damages and the employer having to pay the employee’s attorneys’ fees.

The Labor and Employment Law Department has been assisting a number of its clients, along with Human Resource consultants we have retained, to perform the detailed workforce audits required to comply with this Act.

Attorney: Dennis Alessi
Related Practice: Labor and Employment
Category: Equal Pay Act

Time To Review Your Company's Personnel Policy

November 14, 2018

As the weather gets colder and the days shorter, the end of the year can’t be too far away. Now is a good time to start reviewing your Company’s personnel policies so that your house can be in order to start the new year.

Here are a few questions for your HR team to answer to determine whether you need outside counsel to review your personnel policies and practices:
  1. When was the last time your Employee Manual was reviewed? There have been a number of significant changes in the law that might impact your policies.
  2. Does your Company’s sick leave policy comply with NJ’s paid sick leave law? The new law took effect October 29th.
  3. Has the Company reviewed its pay policies? There were significant changes this year in New Jersey concerning equal pay. In just the past few days Hewlett Packard was hit with a gender pay gap lawsuit.
  4. Do you have a workforce in New York state? If so, has your Company provided them with mandatory sexual harassment prevention training? Has your Company issued a compliant policy? This law became effective October 9th and applies to all employers. It requires annual training. New Jersey also requires training of managers and staff members.
  5. Does your Company require employees to arbitrate disputes? When was the last time your arbitration policy was reviewed? There have been some significant changes in this area. Both Google and Facebook recently announced that they will not require employees to arbitrate sexual harassment claims.
  6. Does your Company require releases when severance is paid? Do the agreements require confidentiality? If so, it might interfere with the Company being able to deduct the severance payments as a business expense.
The Labor & Employment Law Group at the Firm is available to answer any questions you may have or help bring your Company into compliance.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Employee Benefits

The Uniformed Services Employment and Reemployment Rights Act

November 13, 2018

We hope you enjoyed Veterans Day yesterday but we should honor our military every day throughout the year. In that regard, we want to remind employers of their legal obligations to those in the military, including those in active or reserve military status.

The Uniformed Services Employment and Reemployment Rights Act (“USERRA”) was signed into law by President Bill Clinton in 1994 to protect the civilian employment of active and reserve military personnel called into active and reserve military duty. Its main purpose is to eliminate employment discrimination by employers, regardless of size, because of an employee’s military status. USERRA ensures that persons who serve or have served in the Armed Forces, Reserves, National Guard or other uniformed services (1) are not disadvantaged in their civil careers because of their service; (2) are promptly reemployed in their civil jobs upon return from duty; and (3) are not discriminated against based upon past, present or future military service. It, therefore, provides protection for both active military service and veterans.

The New Jersey Law Against Discrimination (“NJLAD”) also protects those in the military by making service in the military a protected class. Just last year the NJLAD was amended to broaden the protection for those in the military by prohibiting discrimination in the context of, among other things, housing and loans. It also requires that contractors and subcontractors on state projects guarantee equal employment opportunities to all veterans.

So let’s honor our military throughout the year by treating them right, as required by USERRA and the NJLAD.

Attorney: Steven Adler
Related Practice: Labor and Employment

NJ Paid Sick Leave Policy

October 9, 2018

Every employer in New Jersey, regardless of size, needs a written Paid Sick Leave policy in place and distributed to employees no later than October 29, 2018. Please contact us if you need assistance drafting this policy or updating your other personnel policies.

Whether as stand-alone policies or those accumulated in an employee manual, the following are the types of policies which must, or at the very least should, be in writing in NJ:

  1. Paid Sick Leave policy;
  2. Anti-harassment policy;
  3. Equal Employment Opportunity policy (recommended);
  4. Vacation policy;
  5. Equal Pay Act policy;
  6. Whistleblower (CEPA) policy;
  7. Family and Medical Leave Act/NJ Family Leave Act policy (for employers with at least 50 employees);
  8. Confidentiality, Non-Solicitation and Non-Compete policy; and Arbitration policy.
Now is a great time to update your company’s policies so that they can be rolled out to your employees in 2019.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Paid Sick Leave

Diane B. Allen Equal Pay Act: A Compliance Nightmare

October 8, 2018

The Diane B. Allen Equal Pay Act (“the Act”) is unique from other employment anti-discrimination laws in New Jersey which creates a compliance nightmare for employers. It is important to understand the four main differences of the Act and the challenges they bring.

First, the Act is not an equal pay for equal work law. It is actually an equal compensation for substantially similar work law. Employees, who are in those categories protected from employment discrimination under the New Jersey Law Against Discrimination (“NJLAD”), must receive not only equal pay, but also equal employment benefits, (i. e., insurances, retirement plans, paid time off, severance pay, etc.), when these protected employees perform substantially similar work as employees who are not protected by the NJLAD. This comparison must be made based on a composite considerations of skill, effort and responsibility.

“Similar work” is not the same as equal work. Similar work means almost or nearly the same work. And “substantially” means in most respects but not in all. Consequently, if an employee, who is in a category protected by the NJLAD, performs almost the same work in most respects as an employee who is not in a protected category, then this protected employee must receive equal salary and all other benefits of employment.

Deciding what equal work is appears to be an easy task by comparison to this type of analysis which an employer must perform to ensure compliance with the Act.

Secondly, the Act is not an anti-discrimination law for women in the workforce. It was initially proposed as such but, as ultimately enacted, it applies to all approximately 14 categories of employees who are protected against employment discrimination by the NJLAD. (Just some of these protected categories include, in addition to women, race, color, national origin, age, religion, disability, family and marital status, veterans status, and sexual orientation, among others.) This means that an employer with any degree of diversity in its employees must analyze its entire workforce to ensure compliance with the Act.

Third, the Act does not appear to require that the employer have any intent to discriminate. Apparently, for an employer to have violated the Act, an employee need only prove that he/she is a member of a protected category under the NJLAD; that the employee performed substantially similar work as another employee who is not in a protected category; and that this protected employee received less compensation, in salary and/or in any benefits of employment, as the employee not in a protected category.

Admittedly, an employer can raise three defenses: that the differential in compensation is due to a seniority system, a merit system, or some legitimate, bona fide and job-related difference(s) in characteristics between the employees in the protected categories and those that are not so protected. For example, inequality in compensation does not violate the Act if it is directly and wholly the result of job-related differences in training, education, experience or the quantity and quality of production. Obviously in many situations these differences will be subjective; difficult to measure; will require extensive supporting documentation developed over time; and the burden will be on the employer to prove them.

Fourth, the most distinctive and troublesome aspect of the Act is what actions employers must take to comply with it. For most employment discrimination laws an employer need only adopt a personal policy to implement the law, and then follow the policy wherever situations arise to which the law applies. But with the Act, an employer needs to implement and maintain, on an on-going basis, a comprehensive compliance plan.

The plan necessitates a comparative evaluation of the education, training, knowledge/skills and experience of each employee and their individual productivity; an analysis of the duties, tasks and responsibilities of each position in the workforce; then a determination of which employees in which positions are performing substantially similar work. Once these substantially similar employees are identified, then the final step, undoubtedly the easiest, is to determine if the salary and other benefits of these employees are equal as between protected and non-protected categories of employees under the NJLAD. (The employer cannot reduce the compensation of the higher paid substantially similar employee; but must raise the compensation of the lower paid employee).

Such an in-depth analysis of an entire workforce is a monumental task for an employer, even with a fully staffed HR Department. We appreciate the even greater difficulty for an employer with far less HR resources. Nevertheless, the need for compliance is of paramount importance because of the severe penalties for a failure to do so. These include trebel damages (i.e., the employee receives three dollars for each dollar of equal compensation which the employee did not receive in violation of the Act), and the employer having to pay the employees attorneys’ fees.

In addition, the Act provides a six (6) year statute of limitations, and allows an employee to potentially claim damages for even a longer period of time in the past under the “discovery rule.” This rule means that the six (6) year statute of limitations only begins to run after the employee discovers that he/she was not paid equally. Finally, a separate violation of the statute occurs each time the employer issues a paycheck which is less than equal pay for substantially similar work.

The “bottom line” is that, while implementing a compliance plan for the Act may be a nightmare, failure to comply could be a real life horror show for any employer.

Attorney: Dennis Alessi
Related Practice: Labor and Employment
Category: Discrimination

New York's #MeToo Moment

September 5, 2018

In what may seem to some a matter of political expediency, and to others a long-overdue effort to eradicate workplace sexual harassment, New York Governor Andrew Cuomo and New York Mayor Bill de Blasio appear to be competing for the “#MeToo Movement Championship.” Whatever their motivations, they have signed into law sweeping legislation that affects all New York employers.

Click here to read more.

Attorney: Lauren Topelsohn
Related Practice: Labor and Employment
Category: Harassment

Secretly Recording Work Chats: Not Cut and Dried

August 31, 2018

Billy Joel wrote in his song “Shades of Grey” that what was “perfectly clear with the vision of youth” is not quite so clear anymore. “Black and white is how it should be, but shades of grey are the colors I see.” This holds true with regard to secretly tape recording at work, too.

In the past, employment lawyers told employers they should strictly prohibit employees from secretly recording anything at work. There were a number of reasons for this advice. First and foremost, audio or video recording could result in the misappropriation of an employer’s trade secrets. In fact, for trade secret protection, a company must show that it took reasonable steps to protect that information and, therefore, a written policy is important. Second, fear among supervisors that they are being surreptitiously recorded could lead them to mistrust certain employees, which is not conducive to a healthy work environment.

But times have changed somewhat. From the #MeToo movement, we now know that harassment and even sexual assault have been rampant in certain industries. If employees are allowed to secretly record at work, would the likelihood of harassment be reduced? It could, but probably not. However, it would make it easier to prosecute such a claim against the harasser — and also the employer. This is why the harassment claims of Gretchen Carlson against Roger Ailes supposedly settled so quickly. It also is why we were able to recover millions of dollars to resolve whistleblower claims of a senior executive against the CEO of a major brokerage firm. This type of proof is powerful, because harassment cases often are “he said-she said” situations with no other witnesses. Juries also often expect to hear this type of evidence because they know how easy it is to obtain.

Recordings also allow employees to fend off false accusations by others at work. Recent examples include Omarosa Manigault Newman, the former White House communications director, who allegedly has audio and video recordings of President Donald Trump, and attorney Michael Cohen, who secretly tape recorded discussions he had with his client, Trump. On rare occasions, secretly taping at work can also be harmful to an employee’s case. Years ago, we defended a Berkshire Hathaway company in a gender discrimination and sexual harassment lawsuit involving an employee who had about 10 hours of recordings. The people recorded said nothing inappropriate and we were able to make good use of the plaintiff’s numerous admissions on those tapes to tear apart her case.

The National Labor Relations Board also has held that blanketly denying employees, whether unionized or not, the right to secretly tape record could violate their right to engage in concerted activity regarding their conditions of employment. The NLRB held that photographs and recordings, as well as the posting them on social media, are protected by Sec. 7 of the National Labor Relations Act if “employees are acting in concert for their mutual aid and protection and no overriding employer interest is present.” For example, employees should be allowed to document unsafe equipment or hazardous working conditions. As a result, employers should have their policies reviewed to make sure they explain the business justification for the restrictions on recordings and to confirm that they don’t ban all recordings.

Regardless of a company’s prohibition against recordings, recording no doubt still will take place, considering how easy it is to do these days from anyone’s phone. For this reason, in all harassment and discrimination litigation, it is important to inquire about the existence of this evidence. Keep in mind that improperly obtained evidence, such as a secret recording in a state that requires both parties’ consent, or a recording in violation of an employer’s policy, still can be admissible in a civil case. Unlike criminal cases, where an improper search and seizure by the government may lead to the discovery of other evidence that will be suppressed at trial based upon the “fruit of the poisonous tree” doctrine, that doctrine is inapplicable in civil cases in New Jersey. In other words, secretly recorded conversations are admissible at a civil trial even if improperly obtained.

Weighing all the pros and cons, it is still best for employers generally to preclude covert tape recording, but the policy should be tailored to the specific client especially where employers have valuable trade secrets. Employers should combat harassment using other tools, including anti-harassment training and strong policies.

In the past, black and white were easy to see, but now drafters of employee handbooks and policies need to also see various shades of grey.

Attorney: Steven Adler
Related Practice: Labor and Employment

The Times They Are a-Changin' for NJ Employers

August 8, 2018

Gather round employers, there’s a battle outside and it’s ragin’. The new employment laws will soon shake your windows and rattle your walls, for the times in New Jersey they are a-changin’.

Nobel laureate Bob Dylan was writing about different times, but his song “The Times They Are a-Changin’” surely applies to the state of employment law since New Jersey Governor Phil Murphy took office in January.

No New Jersey employment lawyer would argue with the general proposition that, for decades, our state has been far more liberal than most when it comes to protecting employees’ rights. While Governor Christie did his best to put a halt to that trend, since his first day in once our new governor has made it clear the direction he wants to travel. The train is now barreling down the tracks toward more employee rights.

Click here to read more

Attorney: Steven Adler
Related Practice: Labor and Employment

Class Action Liability Risks for Violations of ADA and New York Human Rights Laws

July 6, 2018

In January 2018, the federal government conformed its website accessibility requirements to the Web Content Accessibility Guidelines (WCAG), an international set of standards intended to make web content more accessible to users with perceptual or physical challenges. The WCAG addresses low vision, color perception, cognition, manual dexterity, screen reading technology, and other issues related to user abilities. The Department of Justice (DOJ) promised to do the same in the private sector by mid-year, but that initiative has been deferred.

As a consequence, there has been a surge of class action lawsuits alleging Americans with Disabilities Act (ADA) violations based on access to website information that the Courts have been addressing individually. The first federal court decision that a website violated the ADA was in early 2017. The decision was followed by 800 federal lawsuits that year alone, alleging ADA as well as state law civil rights violations. (New York led the way with more cases than any other state). Until a clear standard is set by Congress or the appropriate regulatory agency, web site ADA lawsuits will continue to increase.

The ADA prohibits discrimination on the basis of a disability “in places of public accommodations”.  As such, any business is potentially an ADA class action target. Class actions require only one named plaintiff (who brings suit individually and on behalf of those “similarly situated”), and one defendant (potentially, you). Whether you are a large or small business, brick and mortar, or web-based only, defending an ADA/Human Rights Law class action promises to be costly in two ways. Not only is there the risk of a potential damage award, the ADA is a “fee shifting statute.” As a result, a defendant must pay its own legal costs to defend the action and may be required to pay those of a successful plaintiff as well. These costs alone may run into the tens or hundreds of thousands of dollars.

Now, with the website accessibility lawsuit floodgate open, it imperative for businesses to ensure ADA compliance. The easiest and most economical approach is a website compliance audit and action-item checklist conducted by legal counsel experienced in ADA website accessibility issues. For instance, does your website include:

  • Visual Alternatives (pre-recorded text for audio, descriptors for images)
  • Sound alternatives (text descriptors for audio)
  • Color Contrasting (that meet the minimum ratios)
  • Key board navigation (i.e. function and/or tab key, not mouse-only options)
  • Adjustable font size (without content or acuity loss)
  • Semantic HTML (descriptive headings that identify the content that follows)

Many of these features are easy (and inexpensive) to implement once you (and your website consultant) know what is required. Please contact the firm’s cybersecurity practice attorneys Steven Teppler or Lauren Topelsohn to discuss our fixed fee consultation details.

Attorneys: Steven Teppler and Lauren Topelsohn
Related Practice: Labor and Employment

New Jersey Sick Leave Law

June 13, 2018

New Jersey’s Sick Leave Law (the “Law”) takes effect on October 29, 2018. It establishes a uniform, state-wide law that pre-empts all municipal sick leave laws and prohibits the passage of similar, local laws.  

Who is Covered?
The Law applies to all NJ employees (full and part-time) and any business with NJ-based employees (regardless of size). The only exclusion are construction industry employees covered by a collective bargaining agreement, per diem healthcare workers, and public employees who already receive this benefit.

How is Time Accrued?
Employees accrue one (1) hour of paid sick leave for every thirty (30) hours worked, up to forty (40) hours (five days) in a benefit year. Alternatively, an employer may "frontload" the entire forty (40) hours on the first day of a benefit year (as well as implement a more generous program).

A “benefit year” is any 12 consecutive months designated by the employer. Once established, an employer may only change the “benefit year” by first notifying the NJ DOL.

Sick leave benefits begin to accrue for:

  • Current employees, who have not already accrued sick leave under an existing policy or law, on October 29, 2018 (the effective date of the Law).
  • Employees hired after October 29, 2018 on the first date of employment. New employees may be required to wait 120 days after hire before “using” earned sick leave.

Carry Over?
Employers must either (a) allow up to 40 hours to carry over from one benefit year to the next or (b) pay employees for that time. It is the employee’s choice which alternative to accept.

Existing Policy?
Employers may comply with the Law if they already offer employees paid sick leave or paid time off (“PTO”) that accrues at a rate equal to or greater than one (1) hour of leave per 30 hours worked, and the policy is otherwise consistent with the Law.

“Sick Leave” Uses?
Earned sick leave may be used for:

  • Diagnosis, care or treatment of, recovery from and/or preventative care for an employee's own, or his/her family member’s, mental or physical illness or injury.
  • Absence due to a public health emergency that caused the closure of the employee’s workplace or the school or childcare facility of the employee’s child, or that requires a member of the employee’s family to seek care.
  • Absence to obtain medical treatment, legal services or to relocate related to an employee's or his/her family member's status as a victim of domestic or sexual violence.
  • To attend any school conferences requested or required by school staff to discuss a child's health condition or disability.

“Family members” is broadly defined 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. Indeed, an employee may also 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.

What May Employers Do?

  • Require up to seven (7) days advance notice if an absence is “foreseeable,” and limit the use of “foreseeable” sick leave to certain dates.
  • Request notice “as soon as practicable” if an absence is “unforeseeable,” and the employee is aware of this requirement.
  • Request documentation to substantiate sick leave, but only if an employee is absent for 3 or more consecutive days.

Employer Obligations?
Employers must:

  • Notify current employees of their rights under the Law (by posting and distributing a notice) and new employees at the time of hire.
  • Maintain records of hours worked, and used, earned sick leave for 5 years.  (Failure to do so will result in a rebuttable assumption that the employer failed to allow employees to accrue time)

Employers are subject to private claims, and the penalties and remedies contained in the New Jersey Wage and Hour Law, including fines and possible imprisonment.

Recommendations?
Employers with NJ-based employees should review and adjust their current paid time off policies to ensure compliance with the New Jersey Sick Leave Law prior to October 29, 2018. 

Attorney: Lauren Topelsohn
Related Practice: Labor and Employment
Category: Paid Sick Leave

Supreme Court Curtails Employees' Right To File Class Actions

May 29, 2018

On May 21, 2018 the United States Supreme Court delivered another blow to employee rights. In Epic Systems v. Lewis, the Court issued a monumental decision protecting employers from class action lawsuits.

In Epic Systems, the Court upheld the right of employers, as a condition of employment, to require employees to arbitrate claims individually on a one-on-one basis rather than collectively or as a class. According to the Court, this can be accomplished simply by sending an e-mail to employees informing them if they don’t note their objection, they will be considered to have consented to arbitration on an individual basis. This decision effectively precludes workers from suing in court or filing for arbitration when their claims are small, such as when suing for an employer’s failure to pay minimum wages or overtime pay. According to Justice Ruth Bader Ginsburg in her dissent, “[t]he inevitable result of today’s decision will be the underenforcement of federal and state statutes designed to advance the well-being of vulnerable workers.”  Tip to Employers: Consider requiring employees to sign arbitration agreements or send an e-mail informing employees that, if they don’t object, they will be bound to arbitrate their dispute on an individual basis. 

Attorney: Steven Adler
Related Practice: Labor and Employment

It Is Time To Take Your Company's Temperature Concerning HR Compliance

May 29, 2018

How healthy is your Company? Does it comply with all of its obligations under ever-expanding employment laws? Considering all of the recent developments in New Jersey and New York employment law, now is an appropriate time to take your Company’s temperature.

If your Company has an employee manual, now is the time to update it especially considering that New Jersey and New York recently passed legislation dealing with paid sick leave which may impact your current sick leave policy.

As a result of the #Metoo movement, and as reported recently in this blog, there have been significant changes concerning having employees sign settlement agreements in sexual harassment cases or separation agreements containing non-disclosure/confidentiality provisions waiving these claims. Both New York and federal law have changed in this regard. It is, therefore, important to review any form releases your Company uses when terminating employees.

As also reported previously in this blog, the law also has changed concerning equal pay. In New Jersey, it will not only apply to women who are paid less than men but also all other protected classes in the New Jersey Law Against Discrimination. It is, therefore, important to take your Company’s temperature with regard to employee pay.

Lastly, based upon an executive order recently signed by Governor Murphy organizing a task force to review the issue of misclassification of workers, we expect a crackdown on employers who misclassify workers as independent contractors. Now is the time to review those relationships as well.

In summary, having experienced legal counsel help in taking your Company’s temperature now will enable your Company to avoid costly litigation not too far down the road.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Employee Benefits

Notorious R.B.G. and Gender Equality

May 26, 2018

Today we are not blogging about a recent development in employment law.  Instead, we wish to call attention to an entertaining source to help non-lawyers understand how we arrived at the current state of the law concerning gender equality.

A must-see movie, regardless of your political persuasion, is the documentary R.B.G. which premiered at the 2018 Sundance Film Festival.  The movie starts off with a bang when the notorious Ruth Bader Ginsburg quotes abolitionist and women’s suffragist Sarah Grimke’, stating that she asks “…no favor for my sex.  All I ask of our brethren is that they take their feet off our necks.”

Ginsburg, the diminutive dynamo, was one of only nine women in a class of 500 at Harvard Law School and the first woman on the Harvard Law Review.  She accomplished this feat while caring for her ill husband and young child.  Ginsburg did for gender discrimination in the 1970’s what Thurgood Marshall accomplished for blacks during the civil rights movement in the 1960’s. 

The movie chronicles Ginsburg’s quest for equal protection for women, including the six cases she argued before the Supreme Court (five of which she won), including United States v. Virginia, in which the Supreme Court held that qualified women could not be denied admission to the all male Virginia Military Institute.  Ginsburg also trumpeted male gender equality by successfully arguing in Weinberger v. Wiesenfeld, 420 U.S. 636 (1975) that widowed fathers were entitled to the same benefits under the Social Security Act as widowed mothers.  More recently, Ginsburg has been a dissenter to many decisions rendered by our conservative Supreme Court, including in the Lilly Ledbetter equal pay case.  While the Supreme Court denied Ledbetter relief, Ginsburg’s dissent resulted in Congress creating new law effectively overruling the Supreme Court’s majority decision and making it easier for women to sue for previously unknown disparate pay.

The #MeToo movement has resulted in the media refocusing on gender discrimination and harassment. The R.B.G. documentary does an excellent job of explaining how we arrived at the current state of the law and Ginsburg’s role in shaping gender equality.  

Attorney: Steven Adler
Related Practice: Labor and Employment

NYC's Earned Safe and Sick Time Act Takes Effect

May 16, 2018

On May 5, 2018, NYC’s Earned Safe and Sick Time Act (the “ESSTA”) went into effect. It amends NYC’s Earned Sick Time Act by (a) permitting an employee to use accrued “sick leave” for “safe leave” and (b) expanding the definition of “family member.”  Employers are required to provide notice to employees by June 4, 2018. 

Under the ESSTA, employees have the right to use leave for the medical care of themselves or a family member, as well as the right to seek assistance or take other safety measures if the employee or a family member is a victim or has been threatened with domestic violence, “unwanted sexual contact”, stalking or human trafficking.

“Safe leave” includes absences to:

  • Obtain services from a domestic violence shelter, rape crisis center or other similar program
  • Participate in safety planning, temporarily or permanently relocate for safety reasons or take other actions to increase the safety of the employee or family member
  • Meet with a civil attorney or other social service provider to obtain information and advice on, and prepare for or participate in, any criminal or civil proceeding, including but not limited to matters related to a family offense matter, sexual offense, stalking, human trafficking, custody, visitation, matrimonial issues, orders of protection, immigration, housing, discrimination in employment, housing or consumer credit
  • File a complaint or domestic incident report with law enforcement
  • Meet with a district attorney’s office
  • Enroll children in a new school; or
  • Take other actions necessary to maintain, improve, or restore the physical, psychological, or economic health or safety of the employee or family member or to protect those who associate or work with the employee. 

“Family member” is now defined as:

  • A spouse, domestic partner, parent, child, sibling, grandparent, grandchild, or the child or parent of the employee's spouse or domestic partner
  • Any other individual related by blood to the employee
  • Any other individual whose close association with the employee is the equivalent of a family relationship

Employers with five (5) or more employees must provide up to 40 hours of paid sick/safe leave; all other employers must provide up to 40 hours of unpaid sick/safe leave.

For more information, see: http://www1.nyc.gov/assets/dca/downloads/pdf/about/Paid-Safe-and-Sick-Leave-Law-Rules.pdf

 

Attorney: Lauren Topelsohn
Related Practice: Labor and Employment
Category: Paid Sick Leave

New York's Six New Sexual Harassment Prevention Laws

May 9, 2018

On April 12, 2018, Governor Cuomo signed New York’s latest budget that includes six laws reflecting the concerns of the Metoo# movement that employers need to know. 

Effective immediately: 

  • Businesses Must Protect Non-Employees from Sexual Harassment.  The law expands the sexual harassment protections under New York’s Human Rights Law to non-employees (independent contractors, vendors, and their employee) who perform services at an employer’s work place. 
  • Settlement/Judgment Involving Government Employees. Government officials and employees may not use public funds to resolve sexual harassment claims, and must reimburse any State or local agency that pays a judgment entered against a government as a result of the offending official or employee’s conduct. 

Effective July 11, 2018: 

  • Restrictions on Non-Disclosure Provisions for Sexual Harassment Claims. Use of such confidentiality clauses are enforceable only if: (1) they conform with the complainant’s preference; and (2) as with a release under Older Workers Benefit Act (OWBPA), the complainant has 21 days to review the agreement (which cannot be shortened), followed by a seven day revocation period. This law impacts all “General Releases” of employment claims that include a confidentiality provisions by requiring that such release “carve out” sexual harassment from the release of any claim under the New York Human Rights Law.
  • Mandatory arbitration, no more? New York’s Civil Practice Law and Rules, Article 75 will be amended to prohibit agreements that require the arbitration of disputes relating to sexual harassment, except “where inconsistent with federal law.” S7507-C, Part KK, Subpart B.  Since Federal law encourages arbitration under the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq., this provision may be pre-empted until (and unless) the United States Congress passes a corresponding prohibition. 

Effective October 9, 2018:
Mandatory Sexual Harassment Policy, Prevention Training and Complaint Procedure.  The New York State Department of Labor and Division of Human Rights are required to develop and publish a model sexual harassment prevention policy and a model sexual harassment prevention training program for use by employers.  All New York employers are required (a) to adopt the model policy and training program or, establish their own that equals or exceeds the minimum standards of the model policy and program; and (b) distribute the written policy and provide sexual harassment training to all employees at least annually.

  • The model sexual harassment prevention policy will:
    • Prohibit sexual harassment
    • Explain what sexual harassment is and provide examples 
    • State that sexual harassment constitutes employee misconduct 
    • Advise what remedies are available under federal, state and local law for victims of sexual harassment, and the available forums (administrative and judicial) for adjudicating such complaints
    • Include a model complaint form and standard investigative procedure;  and
    • Prohibit retaliation for making a sexual harassment complaint, or for testifying or assisting in any proceeding relating to such a claim
  • The model sexual prevention training will explain:
    • What sexual harassment is and provide examples 
    • Additional responsibilities of supervisors
    • Employee’s rights under State and federal laws governing sexual harassment, and available remedies and forums for adjudicating such complaints 

Effective January 1, 2019:
Government Contractors.  As part of the bidding process for State contracts, bids must include a statement certifying that the bidding entity has implemented a written policy addressing sexual harassment in the workplace and sexual harassment training to all of its employees. With respect to no-bid projects, the State has the discretion to request such certification. 

 

Attorney: Lauren Topelsohn
Related Practice: Labor and Employment
Category: Harassment

Executive Order to Review Worker Misclassification in NJ

May 7, 2018

On May 3rd Governor Phil Murphy continued his efforts to protect workers in New Jersey by signing an Executive Order establishing a Task Force on Employee Misclassification. The Executive Order estimates that misclassification of workers may deprive New Jersey of over $500 million annually in tax revenue and deprive workers of employment related benefits and protections.

Employers have a duty to withhold social security, Medicare and unemployment taxes from employees’ paychecks.  Failing to do so could result in significant liability, including penalties and interest. 

Courts in New Jersey now apply the ABC Test when deciding whether workers are independent contractors under the New Jersey Wage Payment Law and the Wage and Hour Law.  Employers must show each of the following:

  1. That the worker is free from the Company’s control in performing the services;
  2. That the worker performs those services outside the usual course of the Company’s business or outside the Company’s place of business; and
  3. That the worker is engaged in an independently established business.

Similarly, the Internal Revenue Service now uses an eleven factor test that is a refinement of its previous twenty (20) factor test.  Its test looks at the extent of behavioral and financial control over the worker as well as the type of relationship (including whether benefits are provided and the permanency of the relationship.)

The Take-away for Employers:  Promptly review your relationship with all consultants and workers you treat as independent contractors using these stringent tests.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Wage & Hour

Governor Phil Murphy's first act as governor was to sign an executive order promoting equal pay for equal work by prohibiting state agencies from asking job applicants about their salary history

April 23, 2018

The Governor is now about to sign legislation amending the New Jersey Law Against Discrimination (“NJLAD”) that will ban employers from paying women and other employees in a protected category less for “substantially similar work.” Rather than a two year statute of limitations, like other types of discrimination, this amendment provides for a six year statute of limitations for these pay disparity claims.  It also calls for treble (triple) damages.  The law also provides that employers cannot preclude employees from discussing their compensation.  Finally, it precludes employers from requiring employees to agree to a shorter statute of limitations for any claims under the NJLAD or to waive any other protections provided by that law.  A copy of the Bill is attached here.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Wage & Hour

Confidential Sexual Harassment Settlements No Longer Tax Deductible

April 22, 2018

The recently enacted Tax Cuts and Jobs Act (the “Act”) has had a tremendous impact on the settlement of sexual harassment cases. Section 13307 of the Act, found here, does away with a tax deduction for the settlement amount paid in a sexual harassment case if the settlement is confidential.  This new provision also precludes a tax deduction for attorneys’ fees if there is a requirement of confidentiality.  It seems that this also applies to a plaintiff’s own legal fees.  This tax change adds new variables to settling sexual harassment claims.  In the past, employers always insisted on confidentiality.  Time will tell whether this changes and whether this provision of the tax law will cause the amount paid to settle these claims to increase.  Plaintiffs will want more money for these claims in order to pay the extra tax liability while employers will want to pay less since they would no longer be able to deduct the settlement amount and their legal fees.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Harassment

Stormy Daniels' gag order explained. Is it fair?

March 21, 2018

The #MeToo and Time's Up movements rekindled the nation's collective awareness concerning sexual harassment and abuse which had all but disappeared since the Clarence Thomas Supreme Court confirmation hearings in 1991.

What contributed to this lack of discourse concerning the prevalence of sexual harassment in our society over the past 25 years? The use of nondisclosure agreements (NDAs) and confidentiality clauses in settlement agreements surely played a part -- as have mandatory arbitration agreements required by employers.

NDAs and confidentiality clauses are standard fare when parties settle sexual harassment and abuse cases.

In exchange for a settlement payment -- such as the $130,000 payment made on President Trump's behalf to Stormy Daniels -- the victim of harassment agrees not to discuss the claims made, or the terms, and sometimes even the existence, of the settlement.

These agreements usually also call for significant financial penalties should the plaintiff violate the confidentiality clause. For example, in the agreement at issue in the Trump-Daniels lawsuit, Daniels, whose legal name is Stephanie Clifford, is required to pay the president $1 million for each of her breaches of the confidentiality clause. Trump's lawyer claims she has violated the terms 20 times.

Is this agreement enforceable?

Probably not because the $1 million liquidated damage amount for each breach appears to be an unenforceable penalty rather than an estimation of likely damages should confidentiality be breached. For the same reason, it also isn't fair and most plaintiffs' attorneys would never allow a client to sign such a provision (unless their client is desperate for the money or the attorney believes the clause is unenforceable).

So far, however, this confidentiality clause has kept Daniels relatively quiet. Had there been no such provision, or if the court in the pending litigation refuses to uphold it, she undoubtedly will "tell all" of the sordid details in a book deal, which is likely to follow -- and, regardless, she may possibly do so on "60 Minutes" this weekend.

Meanwhile, as the porn star touted passing a polygraph test to prove she's not lying about her 2006-2007 tryst with Trump, another woman is suing to get out from under a 2016 confidentiality agreement so she can discuss her alleged affair with Trump. This week former Playboy Playmate of the Year, Karen McDougal, has filed suit in Los Angeles.

Confidentiality clauses serve useful purposes.

They protect the reputation of the alleged harasser when frivolous claims are brought. They also protect the plaintiff who does not want it known that she was subjected to sexual abuse or that she sued her employer. Finally, confidentiality clauses make it easier to settle cases because they protect the good will of the employer.

In fact, companies will pay more to a victim of harassment as hush money to avoid the impact of these types of allegations on their bottom-lines. Bad publicity from these cases can be devastating, as Harvey Weinstein's now bankrupt company recently learned.

On the other hand, as seen lately, confidentiality clauses enable harassers to continue their pattern of abuse and expose other unsuspecting victims to this same treatment. Weighing the advantages and disadvantages of these provisions, the time has come to limit the use of these "gag-orders" and Congress agrees.

Buried deep inside the new Tax Cuts and Jobs Act is a provision which disallows tax deductions for monies employers pay to harassment victims and for legal fees if the parties enter into a confidentiality agreement. In essence, since late December parties must choose between deductibility and confidentiality.

For now this seems to be a fair middle ground. It enables companies to protect themselves and alleged harassers against frivolous claims by insisting upon confidentiality while at the same time also providing victims with some leverage to insist upon no confidentiality.

Lawyers of course will find some work-arounds, whether through stronger clauses confirming that the settlement is not an admission of liability or requiring the victim to confirm in an agreement -- whether or not it is true -- that there simply was no harassment. The settlement value of harassment cases also might go down somewhat to make up for a company's loss of the tax deduction when it is insisting upon confidentiality.

Only time will tell whether this law goes far enough to expose harassers and deter their behavior in the first place.

Attorney: Steven Adler
Related Practice: Labor and Employment