Labor & Employment Insights

Discrimination is one of the most significant areas of legal exposure for employers. Employers face potential liability for discrimination claims throughout every stage of the employment relationship. Avoiding employment liability requires sensitivity to a wide variety of legally protected characteristics, including race, color, religion or creed, national origin or ancestry, age, physical or mental disability, sex (including gender and pregnancy), marital status, civil union status or domestic partnership status, familial status, affectional or sexual orientation, gender identity or expression, veteran status, and genetic information.

Most employers are subject to federal and state laws prohibiting employment discrimination, but not all employers appreciate the related legal risks. In 2015, the Equal Employment Opportunity Commission (EEOC) reported 89,385 total individual charges alleging discrimination. These numbers are likely to remain high, in part, because claimants may be awarded significant sums without a great deal of personal cost. In contrast, employers sued for discrimination violations often face large financial losses. It is common for employers to pay thousands of dollars in legal fees defending against meritless claims and thousands more settling well-founded claims.

Solution: Employers can minimize the risk of legal exposure by understanding the legal basics and taking the following preventative measures during the employment relationship.

You may recall an earlier discussion of at-will employment in the context of employee handbooks where we defined at-will employment as meaning that either the employee or employer may terminate the employment relationship at any time and for any non-discriminatory reason. In contrast, a for-cause employment relationship can only be terminated for a reason specified in an employment contract as grounds for termination.

Although employees are generally presumed to be at-will, employers should be mindful of unintentionally converting an otherwise intended at-will employment relationship to a for-cause employment relationship. This conversion can happen simply by making oral or written statements suggesting job security, permanent employment, or that a job will be available provided the employee performs their job, during the recruiting or interviewing process. The risk also exists when applying inflexible discipline policies, particularly progressive discipline policies to at-will employees. Disciplinary policies that allow for discipline only under specific circumstances or through progressively rigorous disciplinary steps may inadvertently modify at-will employment status.

Solution: Be Careful to Avoid Converting an At-Will Relationship into a For-Cause Employment Relationship.

Although there is no federal law requiring private employers to provide handbooks to their employees, there are numerous reasons for employers to do so, including:

• Providing an opportunity to formally welcome new employees, introduce the organization and explain expectations;
• Grouping various employment policies together in a handbook makes it easier for an employer to ensure that each employee receives copies of all relevant policies;

Although not required by federal or New Jersey law, many employers utilize policies, which govern appropriate dress and grooming standards for employees in the workplace. For example, when attending business meetings with visitors or clients, employers may require that employee attire reflect that of the individuals with whom that employee is meeting. In other circumstances, employees may simply rely upon common sense and good judgment regarding their appearance and clothing in the workplace or employers may choose to give employees examples of what is appropriate and inappropriate attire. In doing so, however, employers need to be mindful of the potential implications under federal laws such as Title VII of the Civil Rights Act of 1964 (“Title VII”), the Americans with Disabilities Act (“ADA”), or state laws like the New Jersey Law Against Discrimination (“NJLAD”).

Specifically, employers need to be aware of the following potential forms of discrimination that that may arise as a result of a dress code policy:

• Disability: A policy that does not take into account a reasonable accommodation to its dress code for an individual with a disability may lead to claims under the ADA or NJLAD, unless doing so would result in undue hardship.

Workplace harassment remains a harsh and unavoidable reality for employers. Given the recent #MeToo movement, employers can expect to see a continued rise in complaints concerning harassment, specifically sexual harassment. Although no guidelines can define sexual harassment with complete clarity, unwelcome sexual advances, requests for sexual favors, and other physical, verbal or visual conduct based on sex constitutes sexual harassment when:

1. Submission to such conduct is made either explicitly or implicitly a term or condition of an individual’s employment, or;
2. Submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting the individual, or;

Both New Jersey and the Federal government have established laws prohibiting workplace harassment in any form including discrimination that is based on a person’s race, color, religion, sex (including gender identity and pregnancy), national origin, age, disability, genetic information, sexual orientation, or marital status. In addition, these laws prohibit retaliation against any employee who invokes his or her right to a workplace free of discrimination and harassment.

Internal investigations by employers into allegations of unlawful harassment and other workplace misconduct are becoming more and more common in today’s work environment. The practice of conducting workplace investigations is often the best way to avoid litigation, as employees who feel their employers have heard their complaints and taken appropriate action are typically less likely to seek redress in court. In the event an employee does decide to pursue legal action, however, an employer’s internal investigation of a complaint can play a crucial role in developing a comprehensive defense against potential claims of liability.

Solution: Conduct Workplace Investigations In a Timely and Effective Manner to Minimize Risk of Legal Exposure to the Employer.

Employers must give careful consideration to questions asked during the hiring process. While most employers are aware that they cannot ask questions that directly relate to a prospective employee’s protected status (age, gender, religion, national origin, disability, etc.), employers also need to be mindful to exercise care when inquiring into a prospective employee’s criminal history and/or compensation history.

Criminal history inquiries and questions regarding a prospective employee’s compensation history remain an important tool for employers. They are a necessary and vital means by which employers may protect themselves against various forms of liability, including negligent hiring claims. Given the increasing risk of liability, however, employers should proceed with caution with respect to both inquiries throughout the application process.

Solution: Stay Abreast of Any Changes in New Jersey Law and Update Application Materials to Ensure Compliance with Those Changes.

An employer may find itself in a position where, without immediate relief, it may suffer a loss that cannot be made whole by monetary damages alone. For example, a party may feel that a breach of contract or impending breach of contract requires immediate action to protect its interests and prevent further harm. Under these circumstances, the employer may seek injunctive relief in the form of either a preliminary injunction or a temporary restraining order. Preliminary injunctions restrain a party from going ahead with a course of conduct or compel a party to continue with a course of conduct until the case has been decided. A temporary restraining order or a TRO is generally used to prevent irreparable harm and to preserve the status quo until the court decides whether or not to issue a preliminary injunction.

Injunctive relief is a unique remedy with difficult standards and potentially expensive consequences if the employer fails to make its case. New Jersey Courts are to exercise great “caution, deliberation and sound discretion” when considering a party’s request for injunctive relief. Sherman v. Sherman, 330 N.J.Super. 638 (Ch. Div. 1999). When determining whether to pursue this extraordinary remedy, it is recommended that employers seek the advice of counsel to assist in evaluating the likelihood of obtaining the relief sought against the costs associated with seeking such relief.

SOLUTION: Analyze the Likelihood of Obtaining Injunctive Relief Before Making a Determination.

The termination of an employee requires careful consideration of business and legal issues. There are various legitimate reasons as to why companies terminate employees including, but not limited to, misrepresentation of experience, education, or qualifications; inadequate job performance; violation of work rules or employer policy; unexcused absences and excessive tardiness; or a reorganization or other significant change eliminates a position or results in a layoff or reduction in force.

You may recall one of our earlier discussions, which focused on the process behind the decision to terminate, including the importance of documenting performance problems. Once the decision to terminate has been made, however, employers face the risk of defending claims against former employees alleging that their employment was terminated for an unlawful reason. Whether or not they have merit, wrongful discharge claims can result in lengthy and expensive legal battles, adverse publicity and damage morale in the remaining workplace.

Solution: Establish Legitimate Reasons for Termination and Deliver the Message Appropriately.