Articles Posted by John H. Schmidt Jr.

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As yet another consequence of the #metoo movement, the New Jersey Legislature has passed legislation aimed at prohibiting employers from including certain waiver provisions and non-disclosure clauses routinely found in employment agreements. Senate Bill No. 121 (“the Bill”) , which is expected to be signed by signed by the Governor, will bring about a sea change for employers on several fronts.

The Ban on Waiver of Rights Under the LAD: Until now, employers were free to enter into agreements with employees to waive rights to jury trial and arbitrate all employment-related claims, including claims under the New Jersey Law Against Discrimination (“LAD”). In recent years New Jersey courts have declined to enforce individual arbitration agreements unless the employer agrees to preserve certain procedural and substantive rights, such as statutory rights to punitive damages and attorney fees, the full benefit of the statute of limitations period, and the absorption of the costs of arbitration by the employer. Nevertheless, properly crafted waivers and arbitration agreements were enforced by the courts despite the employee’s surrender the right to a jury trial in a judicial or arbitral forum.

Under the Bill, a provision “in any employment contract that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation or harassment shall be deemed against public policy and unenforceable.” Moreover, the Bill bars any prospective waiver of any right or remedy under the LAD or any other state statute. Whereas the rights conferred by the LAD include a jury trial, the Bill effectively prohibits an employer from entering into any agreement i) to waive a trial by jury of LAD claims in a judicial forum, or ii) to arbitrate LAD claims which necessarily dispenses with a jury. At the very least, employers may be required to exclude claims for discrimination, retaliation and harassment from arbitration agreements. No surprisingly, these mandates do not apply to collective bargaining agreements.

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How many of us remember the iconic holiday party in the movie “Scrooged?”  As Bill Murray is passing out mail, the staff is drinking more than they should, employees are groping each other, and how can anyone forget the employee who is copying their bottom while sitting on the Xerox machine? “Enjoy yourself, it’s the Christmas party.”

How many of us have attended such events?  Probably more than we would like to admit.

Regardless of your point of view, times have changed.  Sexual harassment is the law. Drunk driving jeopardizes public safety and can cause you and/or your employees to end up in jail.  Social mores no longer condone the conduct demonstrated in that now famous “Scrooged” party.

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Effective Monday, January 8, the New Jersey Law Against Discrimination was amended to include breastfeeding as a protected status. As a result, an employer cannot refuse to hire, cannot discharge, and cannot treat someone adversely with regard to the terms, conditions or privileges of their employment because that employee is breastfeeding and needs workplace accommodations.

Additionally, the new law requires employers to provide reasonable accommodations to an employee who is breast feeding her infant child, including reasonable break time each day and a suitable, private room other than a toilet stall, in close proximity to the employee’s work area in which the employee can express breast milk for the child.

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Although it is presently illegal under the New Jersey Law Against Discrimination (the “LAD”) to pay people different wages for performing the same work under similar working conditions because of their gender, there is currently pending in both the State Senate and Assembly legislation “concerning equal pay for women and employment discrimination, requiring public contractors to report certain employment information.”

Implications for All Employers: As proposed, the new legislation will make it an illegal act of discrimination to pay any employee at a rate of pay, including benefits, which is less that the rate paid by the employer to employees of the other sex for substantially similar work, when viewed as a composite of skill, effort and responsibility. Unlike prior legislation in this area, the proposed legislation codifies five circumstances justifying a pay differential between the sexes, but the employer bears the burden to prove that any of those circumstances exist. In so doing, the bill materially changes the legal standard for establishing wage discrimination.

The proposed legislation also adopts recent New Jersey Supreme Court jurisprudence by specifying that an unlawful employment act occurs each time an individual is adversely affected by a discriminatory compensation practice and paid less because of their sex. Contrary to the federal Lilly Ledbetter Fair Pay Act and current New Jersey law, however, the new legislation does not limit the amount of back pay the aggrieved employee can receive for violations that occur within the applicable statute of limitations period. Rather, under the new bill there is no statute of limitation, and an aggrieved employee can collect back wages retroactive to the date that discriminatory compensation first occurred, so long as the violation continues into the applicable two year statute of limitation of the LAD. Moreover, the proposed legislation prohibits employers from requiring individuals to agree to a shortened statute of limitation as a condition of employment.

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As the State legislature continues to debate the merits and the provisions of a comparable state law governing paid sick leave, Morristown has moved forward.  Morristown now becomes the 13th municipality in New Jersey to adopt a paid sick leave ordinance that is applicable to all non-union, non-governmental employers operating within its city limits.

The Morristown ordinance is very similar to one that was earlier adopted by the City of Newark.  It provides that all employers who have employees working in Morristown for at least 80 hours in a given benefit year, except any governmental employees or members of a construction union covered by a collective bargaining agreement, are obligated to comply with  the ordinance that provides:

  • Employees accrue one hour of paid sick time for every 30 hours worked.
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In light a recent decision of the New Jersey Superior Court, Appellate Division, in Sheridan v. Egg Harbor Township Board of Education, it certainly is.

The Facts: Barbara Sheridan, an obese individual, was employed for eight years as a custodian by Egg Harbor Township Board of Education (the “Board”). After observing Ms. Sheridan breathing heavily and turning red while performing her custodial job duties, her supervisor became concerned that she might be unable to climb ladders, would have trouble climbing stairs, and could injure herself or others while attempting to complete her job duties. In response to these concerns, the Board required Ms. Sheridan to undergo a fitness for duty examination (“FDE”) administered by an independent physician. In conducting the FDE, the physician relied upon a job description provided by the Board detailing the physical tasks required of all custodians in the district, including a requirement to lift and carry 75 pound objects a distance of 50 yards. Ms. Sheridan failed several portions of the FDE, prompting the Board to conclude that she was physically incapable of performing the duties of school custodian and terminated her employment. Ms. Sheridan filed suit alleging she was discriminated against because of her obesity in violation of the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq. The trial court concluded that the Board was justified in relying upon the results of the FDE in reaching its termination decision and dismissed the case. Ms. Sheridan appealed.

The Appeals Court’s Decision: In reversing the favorable decision for the Board and sending the case back for trial, the Appellate Division concluded that while an FDE could provide a legitimate, non-discriminatory basis for the Board’s termination decision, the FDE had to be based upon a “fair and realistic” job description for the position in question. In this case, the court held that “reasonable jurors could conclude that the more strenuous exercise of lifting seventy-five pounds for fifty yards, as was tested in the FDE here, is not a fair or realistic physical expectation to have for a school custodian.” In addition, the Board’s principal witness testified that the only time she could recall custodians lifting 75 pounds was twice a year to lift paper deliveries, which were then loaded directly onto carts. Finally, while the Board pointed to concerns about Ms. Sheridan’s ability to climb ladders, the FDE did not assess her ability to do so. The Appellate Division reasoned that when an employer chooses to rely upon an FDE as a legitimate reason for terminating an employee, the job description used to conduct the FDE must accurately correspond to the day-to-day job duties and physical demands of the position, factors the court found lacking in this case. Moreover, the FDE must also assess the physical requirements relied upon by the employer as a basis for its termination decision.

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As we begin 2016, employers should be mindful of changes that have taken place with respect to New Jersey and Federal employment laws. Outlined below are some of the more notable changes which employers should be aware.

  • As of March 1, 2015 New Jersey employers with 15 or more employees are subject to the requirements of “The Opportunity To Compete Act” (more commonly known as “Ban the Box”) which places significant restrictions upon employer inquiries into an applicant or employee’s criminal history during the initial application process. Regulations interpreting that law were issued in late 2015. Employers should review their employment application and corporate hiring practices to ensure compliance with these new legal requirements.
  • Put your anti-harassment employee training on the front burner.  In a landmark decision issued in February, 2015 the New Jersey Supreme Court broke new ground in the law of sexual harassment.  In Aguas v. State of New Jersey, the Court found employers may under certain circumstances be shielded from liability for a supervisor’s sexual harassment provided the employer had developed comprehensive and effective anti-harassment programs which include written policies, complaint procedures, employee training and the prompt investigation of harassment complaints.  In the ensuing year employers should ensure that effective written anti-harassment policies are in place and schedule employee training (an area of serious neglect by many employers) to preserve valuable defenses to harassment claims.
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Section 7 of the National Labor Relation Act protects employees’ right to communicate with one another regarding their terms and conditions of employment and to engage in unionization activities at the jobsite.  However, the National Labor Relations Board (“NLRB”) historically held that employers may place reasonable restrictions on employees’ conduct and communications while on employer property and while on working time without violating Section 7 rights.  Consistent with those holdings, in 2007 the NLRB issued its ruling in, holding that employers could prohibit employees from using the employer’s email system to communicate with each other about union matters or other terms and conditions of employment, even if employees were permitted access to the email system for other purposes.

That all changed with the NLRB’s  recent ruling, reversing the decision. Effectively immediately, employees provided access to employer email systems for work activities may now be permitted to use these systems during non-work time for “statutorily protected communications” concerning unionization efforts, salaries and benefits and other terms and conditions of employment. Employers looking to restrict email access for such purposes must demonstrate that the measures are necessary to maintain production, discipline or other  “special circumstances” warranting restriction of these employee rights.  However, the NLRB cautioned that “because limitations on employee communication should be no more restrictive than necessary to protect the employer’s interests, we anticipate that it will be the rare case where special circumstances justify a total ban on nonwork email use by employees.”

In ruling in favor of employee access to email systems for Section 7 activities during non-work time, the NLRB pointed to a recent observation by the U.S. Supreme Court  that email has become a fundamental means of communication in the workplace and “some personal use of employer email systems is common and, most often, is accepted and tolerated by employers.” The NLRB concluded that employees’ Section 7 rights trump an employer’s property rights to its communications systems.

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When our client, a nationwide operator of educational facilities, was served with a class-action lawsuit alleging Fair Labor Standards Act overtime violations at its 35 locations, our employment law attorneys were asked to defend the company. The class had potentially 135 individuals with a liability exposure of at least $1 million. Through the efforts of the Lindabury employment law team, partners John Schmidt and Kathleen Connelly and associate Sergio Simoes, the potential class was whittled down to 12 employees at a single facility.

The client was concerned that employee morale would suffer from a perception that lengthy legal proceedings were necessary to secure payments rightfully due from the client. Lindabury attorneys thus counseled the client to make voluntary payment in advance of the class certification to the employees who were owed overtime and were potential members of the class. Employees in this group were assured that they were still free to participate in the class action where they might recover additional compensation. When the notice to opt-in to the litigation was issued by the court to all potential class members, only one former employee opted in to the litigation.

Our team was also successful in rebuffing class counsel’s bid to get attorney fees for representation of all of the potential claimants. Ultimately, he received payment for the single claimant and the matter settled for $65,000, inclusive of attorney fees. We further helped the client bring its overtime practices into compliance with current FLSA requirements to avoid future litigation in this fertile area.

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By: John Schmidt, Esq.

The New Jersey Judiciary reported that approximately 40% of lawsuits filed with the courts involve claims by employees against their current or former employers. In this current litigious landscape, are there actions employers can take to protect against potential employment lawsuits? As a result of a recent decision from a New Jersey appellate court, the answer is a resounding “Yes.” Under that decision, employers and employees are permitted to enter into agreements that significantly shorten the statutory time period in which employees can file suit against the employer. Employees who fail to file suit within the agreed-upon time period will be barred from pursuing their claims, notwithstanding the fact that the statutory limitations period has not run.

Statutes of limitation are time periods established by law in which lawsuits must be initiated. The statutes of limitation vary depending upon the causes of action being asserted. For example, breach of contract claims can be filed up to six years after the alleged breach; suits alleging violations of the New Jersey Law Against Discrimination (“LAD”) and the New Jersey Wage & Hour Law must generally be filed within two years of the accrual of the claim; and whistleblower lawsuits under the Conscientious Employee Protection Act must be filed within one year of the accrual of the claim.

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