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

So You Think Your Handbook Disclaimer Is Adequate? Think Again . . .

Published on: April 27, 2018 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

This past February the Appellate Division of the New Jersey Superior Court issued its unreported opinion in Maselli v. Valley National Bancorp (the “Bank”), a case that serves as a stark warning to employers of the exacting standards that must be met before a contractual disclaimer in an employee handbook (or other document) will be deemed adequate by the courts.

By now, most employers are aware that employee handbooks or other policies describing the terms and conditions of employment may give rise to contractual obligations unless the employer includes a clear and prominent disclaimer of any contractual obligation. In its seminal decision in Woolley v. Hoffman La Roche, the New Jersey Supreme Court suggested that the disclaimer indicate that “there is no promise of any kind by the employer contained in the manual; [and] that regardless of what the manual says and provides, the employer promises nothing…”

In Maselli, the plaintiff claimed she was transferred and ultimately terminated because the Bank failed to comply with that anti-harassment and bullying provisions of its Code of Conduct. The Bank moved to dismiss, pointing to the following disclaimer that was prominently displayed on the first page of its employee manual:

New Jersey Legislature’s Potential Response To The #MeToo Movement

Published on: April 27, 2018 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

Since the #MeToo movement captured the public’s attention, state legislatures across the country have proposed legislation banning the confidentiality of settlement agreements and mandatory arbitration of sexual harassment claims.

A comprehensive bill pending before the New Jersey State Legislature, Senate Bill S3581, goes farther, banning employers from including a jury waiver, mandatory arbitration clause, or non-disclosure provision in any settlement agreement or employment contract. Unlike many of the bills proposed in other jurisdictions, this prohibition extends to all potential discrimination claims under the NJLAD, not just to sexual harassment claims.

The Legislature’s effort to address the ongoing issue of workplace harassment by banning confidentiality in settlements ignores the fact that in some instances the complaining employee may want the settlement to remain confidential, not to mention the disincentive to employers to quickly and fairly resolve cases without engaging in protracted litigation. Given both the legislative and cultural climate changes brought on by the #MeToo movement, it is critical for employers to review their anti-harassment policies and employment, arbitration and settlement agreements to ensure they stay compliant with any legal developments in this changing area. More important, employers should develop a robust employee training program to educate employees about the wide array of unlawful behaviors that are prohibited in the workplace, and to demonstrate the Company’s commitment to eradicating these behaviors and fostering an environment that accords respect to all employees.

Legislature Amends The NJLAD To Significantly Expand Equal Pay Rights And Curtail The Ability Of Employers To Enter Into Agreements With Employees To Waive Protections Of The NJLAD

Published on: April 27, 2018 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

On April 24, 2018 Governor Murphy signed into law a bill amending the New Jersey Law Against Discrimination (NJLAD) to strengthen its existing pay equity protections and other remedies available under the statue. These changes will go into effect on July 1, 2018. Although principally aimed at remediating the pay gap between male and female employees, the pay equity amendments apply to all other protected classes, paving the way for disparate wage claims on the basis of race, age, disability and any other status protected by the NJLAD.

Moreover, the amendments prohibit employers from securing agreements from employees to shorten the statute of limitations for filing NJLAD claims or waving any of the other protections available to employees under the NJLAD (e.g., jury trial, attorney fees).

Changes to the Burdens of Proof in Wage Disparity Claims: Under current pay equity protections, an employee can bring a wage claim alleging that she is being paid at a rate that is lower than a male counterpart engaged in “similar” or “substantially equal” work. If the employee argues and establishes that the work is “similar,” the employer then bears the relatively light burden to merely articulate (not prove) a legitimate, nondiscriminatory reason for the pay differential. If the employer meets this light burden, the employee then bears the burden to show that the articulated reason is a pretext, and that the pay differential is attributable to her gender. However, if the employee argues she is paid at a lower rate than male employees performing “substantially equal” work, the employer faces a heightened burden. In this situation, the employee bears the initial burden of showing that the jobs are “identical” because they require “substantially similar skill, effort, and responsibility.” If the employee meets this burden, the burden then shifts to the employer who must prove that the pay differential is attributable to one of four factors: i) a seniority system; ii) a merit system; iii)a system that measures earnings by quantity or quality; or iv) a factor other than gender. Thus, employees pursuing “similar” work claims faced a heavier burden than those claiming “substantially equal” work claims.

Under What Circumstances May Private Employers Test Employees And Job Applicants For Alcohol And Illegal Drugs?

Published on: April 23, 2018 | by Lisa Gingeleskie

Employees impaired by drugs or alcohol impact workplace safety, as well as productivity. Therefore, private employers may choose to implement drug and alcohol testing program as part of an effort to maintain the safety and health of their workplace. There is no New Jersey statute that currently regulates how or when employers may test employees or applicants for drugs and alcohol. The New Jersey Supreme Court in 1992 decided the case of Hennessey v. Coastal Eagle Point Co., which has become the most-cited authority on the issue thus far. Hennessey strongly implies that common law privacy rights forbid “random” drug testing in the private sector except for employees in “safety-sensitive” positions. Employees in other positions may be tested only “for cause,” and all testing programs must conform to certain procedural due process safeguards discussed in more detail below.

SOLUTION: Generally NJ employers may conduct drug and alcohol testing under the following circumstances:

Pre-employment testing: Courts have adopted the distinction that job applicants have lesser privacy rights than those of current employees. Therefore, New Jersey law allows employers to test employees for unlawful drugs before employment begins. Nonetheless, applicant testing programs should be in writing and applicants’ signed consent forms should be obtained prior to any testing. However, because alcohol testing is considered a medical examination under the Americans with Disabilities Act, an employer cannot request a job applicant to undergo alcohol testing before a conditional offer of employment is made.

How Do I Minimize the Risk of Discrimination in the Workplace?

Published on: April 20, 2018 | by Lisa Gingeleskie

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.

What is the Risk of Creating For-Cause Employment Relationships?

Published on: April 17, 2018 | by Lisa Gingeleskie

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.

Why Do I Need An Employee Handbook?

Published on: April 9, 2018 | by Lisa Gingeleskie

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;

Kathleen Connelly Questions WXYZ’s Investigations of Malcom Maddox’s Allegation of Sexual Harassment

Published on: April 4, 2018 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

Tresa Baldas of Detroit Free Press recently interviewed Kathleen Connelly in reaction to the ongoing investigation of TV Station WXYZ ‘s inadequate response to Anchorman Malcom Maddox allegations of sexual harassment. Kathleen, who specializes in employment law and workplace investigations questioned the TV Station WXYZ’s investigation given the severity of the allegations.

“It appears that the company did not handle this situation properly and perhaps conducted a sham investigation,” said Connelly, who has practiced employment law for nearly 30 years. “In this situation, if the allegations are true … the two-week suspension does not appear to be a sufficient penalty.”

To read the full online article click here.

How Can An Employer Avoid Discrimination And Legal Liability When Implementing A Dress Code?

Published on: April 2, 2018 | by Lisa Gingeleskie

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.

How Can Employers Protect Themselves Against Liability Arising From Claims of Sexual Harassment?

Published on: March 23, 2018 | by Lisa Gingeleskie

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:

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