Insights Archives — Lindabury, McCormick, Estabrook & Cooper, P.C. Firm News & Events

Third Circuit Restricts Employers’ Use of Computer Fraud and Abuse Act Against Employees

Published on: September 8, 2025 | by Joshua L. Weiner and Gozde Celik

Background

The Third Circuit recently ruled that an employee’s violation of workplace cyber policies does not amount to “unauthorized access” under the federal Computer Fraud and Abuse Act (CFAA). In NRA Group, LLC v. Durenleau, the company sued two former employees for sharing passwords and accessing systems in violation of company policy, arguing that this triggered CFAA liability. The Court disagreed, finding that the CFAA was intended to target true “hacking” of protected computers, not policy breaches by employees who already had system access. The Court explained that if mere policy violations triggered the CFAA, millions of everyday employees could be treated as criminals.

Why This Matters for Employers

Supreme Court Rules ADA Does Not Protect Retirees

Published on: June 30, 2025 | by Gozde Celik and Joshua L. Weiner

On June 20, 2025, the U.S. Supreme Court held in Stanley v. City of Sanford that retirees are not “qualified individuals” under the Americans with Disabilities Act (ADA) and therefore cannot bring employment discrimination claims based on events that occurred after they retire. Writing for the majority, Justice Neil Gorsuch explained that ADA protections under Title I apply only to individuals who currently hold a job or are seeking employment. Thus, once an individual has fully retired and is no longer in the workforce, they fall outside the scope of the statute.

The facts in Stanley were fairly straightforward. The plaintiff, a retired firefighter, sued the City of Sanford, Florida, alleging that its policy of providing only 24 months of health insurance coverage to those who took early retirement due to disability – while offering lifetime coverage to those who retired at the standard age of 65 – was discriminatory. The policy had been in place since 2003, but the firefighter challenged it only after retiring due to her disability.

The Court rejected her claim, emphasizing that the ADA protects people, not benefits, and that Congress intended to reserve Title I claims only to current employees or job applicants that could plead and prove they could perform the essential functions of their current or sought-after job with or without accommodation. Importantly, the Court noted that had the plaintiff brought her claim while still employed or during the period between her diagnosis and her retirement – when she still could have been considered a “qualified individual” – her claim might have been viable.

SCOTUS Decision Makes it Easier for Employees of a Majority Group to Prove “Reverse Discrimination”

Published on: June 13, 2025 | by Gozde Celik and Joshua L. Weiner

On June 5, 2025, the United States Supreme Court in Ames v. Ohio Department of Youth Services unanimously held that plaintiffs from majority demographic groups do not have to satisfy a heightened burden to prove discrimination under Title VII. Although lower courts were split on the issue, the Court’s decision endorsed the view that was already in place in the Second and Third Circuit, under which plaintiffs do not have to show “background circumstances” as to why their employer was the “unusual employer who discriminates against the majority.”

The Court’s reasoning rested on the spirit behind Title VII, which, as the Court explained in its opinion, prohibits discrimination against any individual in a protected group and that requiring a heightened evidentiary standard against specific groups violated the language and the purpose of the statute.

Why This Matters

Proposed Regulations for Classification of Independent Contractors May Prove to be Problematic for Employers

Published on: May 22, 2025 | by Joshua L. Weiner and Lisa Gingeleskie

On April 3rd, 2025, the New Jersey Department of Labor and Workforce Development proposed new rules, which are designed to clarify the application of the “ABC test.” The ABC test is a legal standard used to determine whether a worker is an independent contractor or an employee for purposes of various New Jersey laws, including the Unemployment Compensation Law, the Wage Payment Law, and the Earned Sick Leave Law.

On May 5th, 2025, the proposed rules were published, triggering a 60-day review and comment period. This proposal is significant for businesses and independent contractors as it seeks to codify the department’s very broad application of the statutory ABC test.

Prongs of the ABC Test

Avoiding Misclassification of New Jersey Workers

Published on: December 17, 2024 | by Joshua L. Weiner

When determining whether to classify a worker as an employee or an independent contractor, employers in New Jersey must follow the “ABC” test. Under this test, an individual receiving remuneration in return for rendering services is presumed to be an employee unless the employer can meet its burden of proving all three of the following elements:

The individual has been and will continue to be free from control or direction over the performance of work performed, both under contract of service and in fact.
The work is either outside the usual course of the business for which such service is performed, or the work is performed outside of all the places of business of the enterprise for which such service is performed.

Texas District Court Strikes Down DOL’s Regulation Increasing Minimum Salary Requirement for White Collar Overtime Exemption

Published on: November 22, 2024 | by Joshua L. Weiner and Gozde Celik

The U.S. Department of Labor’s (“DOL”) final regulation increasing the salary threshold for the “white collar” overtime exemption came to a halt on November 15, 2024, when the U.S. District Court for the Eastern District of Texas vacated and set aside the regulation as exceeding the DOL’s statutory rulemaking authority.

The regulation sought to increase the salary requirements established in 1975 for the executive, administrative, and professional (“EAP”) exemptions (commonly referred to as the “white collar” exemptions) to the overtime requirements under the Fair Labor Standards Act (“FLSA”). The FLSA generally requires overtime pay for employees who work over forty hours in a week. However, under the EAP exemptions, those overtime requirements do not apply to employees employed in a bona fide administrative, executive, or professional capacity. To be classified under one of the EAP exemptions, the employee must i) meet or exceed a minimum salary requirement, and ii) meet certain duties tests mandated by the FLSA.

The challenged rule issued by the DOL raised the previous minimum salary requirement of $684 per week, or $35,568 per year, in three stages. The initial stage was rolled out on July 1, 2024, and raised the minimum salary for EAP overtime exemption to $844 per week, or $43,880 per year, placing an estimated one million previously exempt employees into nonexempt status. The second rollout, which was set to take place on January 1, 2025, sought to raise the minimum salary requirement to $1,128 per week/$58,656 per year. Following these initial increases, the minimum salary requirement was set to be raised every three years based on contemporary earnings data.

NJ Supreme Court Limits Use of Non-Disparagement Provisions in Employment Settlement Agreements

Published on: May 9, 2024 | by Joshua L. Weiner

In a unanimous opinion, the New Jersey Supreme Court recently held that a non-disparagement provision in a settlement agreement that prevented a former employee from revealing details about allegations of sexual harassment, sex discrimination and retaliation was against public policy and cannot be enforced.

The plaintiff, a former police sergeant, appealed a trial court order enforcing a non-disparagement provision in a 2020 settlement agreement reached in her employment discrimination case. Under the non-disparagement clause, the plaintiff was barred from making any statements “regarding the past behavior of the parties” that would “tend to disparage or impugn the reputation of any party.” The agreement clearly stated that the provision extended to statements to the media, government offices and the general public. After the settlement was reached, the plaintiff was interviewed by a reporter for NBC’s Channel 4 News, where she stated that the police department had not changed because “it’s the good ol’ boy system,” among other things. The department and various officers then filed a motion to enforce the non-disparagement provisions of the agreement.

The trial court granted the defendants’ motion, ordering the plaintiff not to give further interviews or to make disparaging statements. The judge declined to award the roughly $23,000 in damages sought by the defendants but awarded counsel fees of $4,917.50 for the plaintiff’s breach of the clause. The Appellate Division affirmed in part and reversed in part, holding that while the terms of the non-disparagement provision were enforceable, the plaintiff did not break them during the television interview.

SCOTUS Imposes More Stringent Standard For Employers Managing Requests for Religious Workplace Accommodations

Published on: July 7, 2023 | by Joshua L. Weiner

On June 29, 2023, a unanimous U.S. Supreme Court issued its decision in Groff v. DeJoy, clarifying employers’ obligations to accommodate employees’ religious practices under Title VII of the Civil Rights Act. The Court reinterpreted the meaning of “undue hardship” and held that Title VII requires an employer who denies an employee’s request for a religious accommodation to show that the burden of granting an accommodation would result in “substantial increased costs in relation to the conduct of its particular business.” In doing so, the Court rejected a commonly applied, employer-friendly interpretation that an undue hardship exists if an employer can show that the accommodation would result in “more than a de minimis cost.”

The More Lenient “Undue Hardship” Standard Applied by the Lower Courts:

Under Title VII, employers are required to accommodate an employee’s religious practices unless doing so would impose an “undue hardship on the conduct of the employer’s business.” In Groff, a postal carrier who was unwilling to work on Sundays because of his religious practices sued his employer (the United States Postal Service), alleging that it could have accommodated his Sunday Sabbath without undue hardship. Initially, Groff’s position did not include Sunday work. This later changed, however, causing Gross to transfer to a small postal station that did not make Sunday deliveries. Once this station began making Sunday deliveries, however, Groff’s Sunday deliveries were redistributed to other workers. He was disciplined for failing to work on Sundays, and he eventually resigned. The trial court granted the employer summary judgment, which the Third Circuit Court of Appeals affirmed, finding that exempting Gross from Sunday work resulted in more than a de minimis cost, as the exemption had “imposed on his coworkers, disrupted the workplace and workflow, and diminished employee morale.”

Why Employers Need Consistent Records of Employee Performance

Published on: September 9, 2022 | by Joshua L. Weiner

In an example of how informal management can come back to haunt employers, a U.S. District Court judge recently ruled that a former Starbucks regional manager had sufficiently demonstrated that a jury could determine that the justification Starbucks provided in terminating her was pretext for unlawful discrimination.

Plaintiff Shannon Phillips, who is Caucasian, claims that Starbucks discriminated against her and other white employees to repair its public image after drawing negative media attention for the 2018 arrest of two Black men at a Starbucks in Philadelphia, alleging reverse discrimination under Title VII of the Civil Rights, and the New Jersey Law Against Discrimination. Starbucks denies engaging in discrimination, alleging that Plaintiff was terminated for failing to lead and perform her role as a regional manager and, more specifically, was aloof, overwhelmed by the position, and failed to perform the essential functions of her job.

On Starbucks’ motion for summary judgment, the judge determined that Plaintiff had presented sufficient evidence allowing a reasonable jury to conclude that the company discriminated against her and other white employees. The judge further found, however, that Starbucks presented a legitimate, non-discriminatory reason for Plaintiff’s termination. As part of the burden-shifting analysis conducted in discrimination claims, when an employer produces sufficient evidence of legitimate, non-discriminatory reasons for the employee’s termination, the employee must then provide evidence that the employer’s reasons were pretext for discrimination. As it applied to Plaintiff’s claim of discrimination, the judge found that she had presented sufficient evidence creating a genuine dispute of material fact that Starbucks’ stated rationale for terminating her constituted pretext.

OUT WITH THE OLD… NO LONGER: New Jersey’s Law Against Discrimination Amended to Eliminate Exceptions for Certain Age-Based Employment Actions

Published on: October 7, 2021 | by Joshua L. Weiner

In response to an increasingly older workforce and higher ages in which employees are choosing to retire, on October 4, 2021, Governor Murphy signed a bill expanding the scope of the New Jersey Law Against Discrimination (“LAD”) by eliminating certain decades old provisions that permitted employers to make age-based decisions in certain circumstances. For private sector employers, this legislation amends the LAD to extend protections to older workers by: (1) eliminating a provision of the LAD that permitted employers to not hire or promote employees over 70 years of age; and (2) expanding the remedies available to an employee unlawfully forced to retire due to age to include all remedies available under the LAD.

These amendments are a significant alteration of the LAD, and now places age on equal terms with other recognized protected categories, including but not limited to race, gender, national origin, disability, religion, and sexual orientation. While the LAD has historically been touted as one of the most progressive anti-discrimination laws in the country, it nonetheless placed age on a separate footing with other protected categories, paradoxically putting it at odds with much less progressive State and federal anti-discrimination laws. Clearly, this new legislation seeks to remedy that contradiction.

These amendments will serve the laudatory goal of protecting older workers against workplace discrimination, and employers refusing to hire or promote otherwise qualified individuals simply because they are over age 70 may find themselves defending age discrimination claims. Thus, employers are advised to review and update employee handbooks and workplace policies to ensure compliance with the LAD amendments. Moreover, employers must be mindful of these amendments when making any personnel decisions affecting older employees to ensure they are made for legitimate business reasons unrelated to age.