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

Another Nail in the Coffin For Non-Competes? NLRB General Counsel Issues Memo Claiming That Most Non-Competes Violate The NLRA

Published on: June 1, 2023 | by Kathleen M. Connelly

On May 30, 2023 Jennifer Abruzzo, General Counsel for the National Labor Relations Board , sent a memorandum to all Regional Directors expressing her view that except in limited circumstances, non-compete provisions in employment and severance agreements constitute unfair labor practices under Section 7 of the National Labor Relations Act (“NLRA”) because they “tend to chill employees in the exercise of Section 7 rights” which protect employees’ rights to take collective action to improve working conditions. While many mistakenly believe the NLRA’s reach only extends to unionized workplaces, both unionized and nonunionized employers are liable for unfair labor practices that violate employee Section 7 rights.

More specifically, the memorandum claims that non-competes interfere with employees’ ability to:

Concertedly threaten to resign to secure better working conditions;

EEOC Issues Guidance Highlighting the Risks to Employers Using AI In Employment Selection Procedures

Published on: June 1, 2023 | by Kathleen M. Connelly

BACKGROUND

Title VII prohibits employers from using neutral selection procedures that disproportionately exclude individuals on the basis of race, color, religion, sex or national origin unless the employer can show the procedures are “job related for the position in question and consistent with business necessity.” In 1978, the U.S. Equal Opportunity Commission (EEOC) adopted Uniform Guidelines on Employee Selection Procedures providing guidance for employers to determine whether selection procedures commonly used in making employment decisions ran afoul of Title VII’s protections.

In response to the increased use of algorithmic decision-making tools (commonly referred to as artificial intelligence or “AI”) to assist in making a wide array of employment decisions, in May 2023, the EEOC issued new guidance entitled “Assessing Adverse Impact in Software, Algorithms, and Artificial Intelligence Used in Employment Selection Procedures Under Title VII of the Civil Rights Act of 1964.” While the EEOC’s guidance does not have the force of law and is not binding upon employers, it serves as a warning that the EEOC will be monitoring AI use to ensure that these decision-making tools do not adversely impact protected groups in violation of Title VII.

Terminated Employee Who Tested Positive for Marijuana After a Workplace Driving Accident Can Pursue His Wrongful Termination Claim

Published on: May 3, 2023 | by Kathleen M. Connelly

A recent decision from the New Jersey District Court illustrates the extraordinary job protections for recreational marijuana users under the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (“CREAMMA”).

THE LEGAL BACKDROP

The job protection provisions of CREAMMA prohibit employers from disciplining employees “solely due to the presence of cannabinoid metabolites in the employee’s body fluid.” Although CREAMMA expressly permits workplace reasonable suspicion, post-accident and random testing for marijuana, it also mandates a physical evaluation be conducted “by an individual with the necessary certification” to determine the employee’s current state of impairment before discipline can be imposed. The physical evaluation requirement was included because current tests can only determine recent marijuana use, not current impairment. However, the physical evaluation requirement was temporarily waived by regulation until such time that the NJ Regulatory Cannabis Commission (the “Cannabis Commission”) develops standards for a Workplace Impairment Recognition Expert (“WIRE”) certification. Thus, for the time being a physical evaluation is not a prerequisite for taking action against an employee who tests positive for cannabis.

New Jersey Court Ruling: Private Social Media Posts Are Subject To Discovery

Published on: March 23, 2023 | by Lisa Gingeleskie

On March 16, 2022, the New Jersey Appellate Division concluded in Davis v. Disability Rights of New Jersey that a plaintiff-employee’s privacy interests in her social medial posts and personal cell phone bills did not restrict her employer’s right to the production of these records when defending against claims that the plaintiff’s termination violated New Jersey’s Law Against Discrimination (the “NJLAD”) and caused her to suffer emotional distress. This decision is the first in New Jersey to detail the scope of discovery regarding a litigant’s private social media posts.

The Background

In Davis, the plaintiff filed a NJLAD complaint against her former employer alleging wrongful termination and emotional distress. In its discovery requests, the employer demanded that the plaintiff produce copies of all her social media content “concerning any emotion, sentiment or feeling of [p]laintiff, as well as events that could reasonably be expected to evoke an emotion, sentiment, or feeling.” The employer also sought the production of the plaintiff’s personal cell phone bills on the grounds that she had used her personal cell phone to perform work duties remotely.

The United States Supreme Court Rules Highly Paid Employees May Still Be Eligible For Overtime

Published on: March 14, 2023 | by Lisa Gingeleskie

On February 22, 2023, the United States Supreme Court in Helix Energy Solutions Group, Inc. v. Hewitt held that a highly compensated executive employee paid a guaranteed daily rate is not paid on a ‘salary basis’ and therefore, is a nonexempt employee entitled to overtime pay under the Fair Labor Standards Act (FLSA). The decision should alert employers to review their classification of employees as exempt versus nonexempt to ensure compliance with applicable federal and state requirements.

The Fair Labor Standards Act

While the FLSA requires that most employees be paid overtime for work time in excess of 40 hours, it exempts several categories of positions from that requirement. The most common exemptions from overtime are referred to as the “white-collar exemptions,” which include executive, administrative, professional, outside sales, IT professionals, and highly compensated executive positions.

New Jersey Passes Landmark Legislation Expanding Temporary Workers’ Rights

Published on: February 14, 2023 | by Lisa Gingeleskie

On February 6, 2023, Governor Murphy signed new legislation into law significantly expanding the rights of temporary workers. The law, known as the “Temporary Workers’ Bill of Rights” (A1474/S511), is aimed at advancing pay equity, increasing government oversight of temporary staffing agencies, and prohibiting retaliatory conduct against temporary workers. A1475/S511 applies to workers in designated classifications, including protective services, food preparation, construction labor and trade, personal care services, and building, grounds cleaning, and maintenance occupations. The range of protections afforded by the new law, as outlined below, are expansive and will have significant implications on staffing agencies as well as third-party clients who utilize these agencies to place temporary workers.

New Protections

Equal Pay and Benefits

New Jersey Implements WARN Act Amendments Mandating Severance for Mass Layoffs and Business Closures

Published on: January 19, 2023 | by Kathleen M. Connelly and Alexander Avellan

On January 10, 2023, Governor Murphy signed legislation implementing amendments to the Millville Dallas Airmotive Plant Job Loss Notification Act (“NJ WARN Act”) that were placed on hold during the COVID-19 pandemic. The amendments, which go into effect on April 10, 2023, impose new requirements on employers of 100 or more who implement mass layoffs or plant closures.

Background

Governor Murphy initially signed an amended NJ WARN Act on January 21, 2020, which was scheduled to take effect on July 20, 2020. However, in April 2020, the Governor signed Executive Order 103 declaring COVID-19 a public health emergency and postponing the effective date of NJ WARN Act amendments until 90 days after the conclusion of the state of emergency. Although the COVID-19 state of emergency remains in effect, the Legislature “unlinked” the amended NJ WARN Act from the state of emergency, thus permitting the implementation of the amendments to take effect on April 10, 2023.

Congress Passes the Speak Out Act Prohibiting Nondisclosure and Non-Disparagement Agreements in Sexual Harassment and Assault Cases

Published on: November 29, 2022 | by Kathleen M. Connelly and Alexander Avellan

Following a unanimous vote in the Senate, on November 16, 2022, the House of Representatives passed the Speak Out Act (the “Act”) which now heads to President Biden’s desk for signature. The Act is just the latest effort by legislators at the federal and state levels to shine the light on instances of sexual assault and harassment in the workplace. This new legislation renders unenforceable certain non-disclosure and non-disparagement provisions that prevent individuals from disclosing the details of sexual harassment or assault claims that may occur in the future.

In practice, this Act will have a limited impact because its prohibitions only apply to employment or other agreements signed prior to a claim of harassment arising. Thus, the Act will not bar the inclusion of non-disparagement/nondisclosure provisions in separation agreements or settlements of sexual harassment or assault claims. In addition, the Act does not prohibit non-disclosure agreements that bar disclosure of other forms of discrimination (e.g., age, race religion) or workplace misconduct. Finally, the Act explicitly states that nothing in the new law limits employers’ prevalent use of non-disclosure and confidentiality agreements designed to protect trade secrets or critical propriety information.

Impact On New Jersey Employers:

New York City’s Pay Transparency Law

Published on: October 27, 2022 | by Lisa Gingeleskie and Alexander Avellan

As previously advised New York City’s Pay Transparency Law (the “Transparency Law”) requiring most New York City employers to disclose salary ranges in their job postings, takes effect on November 1, 2022. Guidance recently issued by the New York City Commission on Civil Rights (the “Commission”) gives further insight into the employer requirements of this new law.

Under the Transparency Law, employers with four or more employees or one or more domestic workers, must include a good faith minimum and maximum salary range in all job advertisements, promotions, and transfer opportunities for work to be performed in New York City.

Job advertisements for temporary employment at a temporary help firm, such as a staffing agency, are specifically exempted from these disclosure requirements.

The NLRB is Once Again Set to Expand Joint Employer Liability

Published on: October 13, 2022 | by Lisa Gingeleskie

On September 6, 2022, the National Labor Relations Board (NLRB) released a Notice of Proposed Rulemaking (NPRM) addressing the standard for determining joint-employer status under the National Labor Relations Act. Under the proposed rule, two or more employers would be considered joint employers if they “share or codetermine those matters governing employees’ essential terms and conditions of employment.” If finalized, the rule would explicitly rescind the NLRB’s most recent overhaul of the joint employer standard that raised the bar to attain joint employer status and will undoubtedly result in many more joint employer situations.

The Joint Employer Standard’s Seesaw History

Over the past decade, joint employer status has been gone back and forth dramatically as the composition and political control of the Board has shifted.