Labor & Employment Insights — 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

New Jersey’s Pay Transparency Act Becomes Effective June 1st, 2025

Published on: May 15, 2025 | by Lisa Gingeleskie

On June 1st, 2025, New Jersey’s Pay Transparency Act (the “Act”) goes into effect, requiring New Jersey employers to identify certain wage or salary information in both internal and external job postings. The Act is another effort in a series of steps taken by the state of New Jersey to promote pay equity.

Posting Requirements

The Act applies to employers, with ten (10) or more employees over twenty (20) calendar weeks, who conduct business or accept applications for employment in the state of New Jersey. To meet this threshold, the Act does not specify whether the employer must have ten (10) or more employees who actually work in the state or whether employers must also count remote employees. Since the Act is silent on this point, we recommend that employers with ten (10) or more total employees prepare for compliance.

The Supreme Court Establishes Plaintiff-Friendly Pleading Standards Regarding ERISA Prohibited Transaction Claims

Published on: May 12, 2025 | by James K. Estabrook, Elizabeth Engert Manzo and Lisa Gingeleskie

On April 17th, 2025, the United States Supreme Court issued a unanimous opinion in Cunningham v. Cornell University establishing a plaintiff-friendly pleading standard applicable to prohibited transaction claims under the Employee Retirement Income Security Act (“ERISA”). The Court’s holding makes it significantly easier for plaintiffs to defeat early-stage motions to dismiss, engage in costly discovery, and extract a settlement as to an alleged prohibited transaction claim.

Background

ERISA bars certain prohibited transactions between a plan and a related party, i.e. a “party-in-interest,” to prevent conflicts of interest. However, there are several exemptions that allow plans to interact or conduct business with a party-in-interest if specific requirements are met. In Cunningham, the plaintiffs accused Cornell’s retirement plans of engaging in prohibited transactions by paying excessive fees for recordkeeping and other administrative services. The University responded that these transactions were exempt under ERISA Section 408(b)(2), which allows certain transactions with parties-in-interest if the following three (3) requirements are met: 1) the service is necessary for the establishment and operation of the plan, 2) such service is furnished under a reasonable contract or arrangement, and 3) compensation paid for the service is reasonable. The district court dismissed the participants’ transaction claims, and the Second Circuit affirmed the dismissal, ruling that the plaintiffs must plead and prove the absence of such exemptions in order to state a claim under ERISA Section 406(a)(1)(C).

The New Jersey Supreme Court Rules: Commissions are Wages

Published on: March 21, 2025 | by Lisa Gingeleskie

On March 17, 2025, the New Jersey Supreme Court issued a unanimous decision finding that commissions are wages under the New Jersey Wage Payment Law (“WPL”) because they are “direct monetary compensation for labor or services rendered by an employee.” There are no exceptions – compensating an employee by paying a commission for a labor or service always constitutes a wage under the law.

The Underlying Dispute

Plaintiff, Rosalyn Musker (“Musker”), worked as a sales manager for the Defendant company, Sukhi, Inc. (“Suuchi”), which provided a proprietary software platform for apparel manufacturers and primarily generated revenue from subscriptions to its services. Musker earned a base salary of $80,000 and was entitled to receive commissions based on different tiers of sales that she reached in accordance with Suuchi’s Sales Commission Plan (the “SCP”), which included language intended to “cover all sales situations.”

The New Jersey Data Protection Act is in Effect

Published on: February 24, 2025 | by Lisa Gingeleskie

On January 16, 2025, New Jersey’s Data Protection Act (“NJDPA” or the “Act”) went into effect, making New Jersey the nineteenth state to adopt a comprehensive data privacy law. The opportunity to cure any defects under the law will sunset on July 1, 2026. Therefore, it is critical that covered entities, or “controllers” of personal data, act now to ensure compliance with the law’s requirements as outlined more fully in this article.

To Whom Does the Law Apply?

The NJDPA applies to companies that:

New Jersey Employment Law: What to Expect in 2025

Published on: February 13, 2025 | by Lisa Gingeleskie

As we are already a few weeks into the new year, now is a good time for employers to review their employee handbooks and policies to ensure compliance with the following changes in New Jersey employment law or best practices.

The Pay Transparency Act

Effective June 1, 2025, New Jersey employers with ten (10) or more employees over twenty (20) calendar weeks doing business or taking applications for employment in the State of New Jersey must disclose “the hourly wage or salary, or a range of the hourly wage or salary, and a listing of benefits and other compensation programs for which the employee would be eligible within the employee’s first 12 months of employment.” Notably, this requirement does not prohibit an employer from increasing the wages, benefits, and compensation identified in the job posting at the time of making an offer for employment to an applicant.

Social Media in the Hiring Process: Pitfalls and Protections

Published on: December 20, 2024 | by Lisa Gingeleskie

Employers commonly utilize social media to gather information about prospective employees as part of the hiring process. Although social media can be very useful for this purpose, the law on what is permissible use by an employer is underdeveloped. While we wait for the law to catch up to technology, it is imperative that employers are advised as to the existence of certain legal pitfalls when using social media in the hiring process, as well as those practices they can implement to help avoid future liability.

Targeted Advertising

Federal, state and local anti-discrimination laws prohibit discrimination in hiring based on a prospective employee’s protected class. Employers can unwittingly run afoul of these laws, however, when they use social media to recruit or research prospective employees. For example, more and more employers are using targeted advertising to recruit employees. This form of advertising allows employers to use social media platforms, like Facebook, to select a targeted audience based on a range of factors, including age, race and interest. Using the extensive data it collects from its members, social media sites are then able to specifically isolate the employer’s advertisement so that it is shown only to those recipients that fall within the employer’s chosen audience.