Business Law

Published on: March 15, 2021

State Supreme Court Finds Promissory Estoppel Viable New Jersey Employment Law Claim for Withdrawal of Job Offer, Including Those to Investment Advisors

A frequent problem in New Jersey employment law occurs when a business offers someone a job without a contract, that person then quits their current employment, the business rescinds the offer, and the employee is left without a job. There is no contract, so the employee cannot sue for breach of contract. What can she do? In an important New Jersey employment law decision, the State Supreme Court ruled in the case of Goldfarb v. Solimine that the employee signature-3113182__340-300x200 has a viable claim for promissory estoppel and may recover “reliance damages” from the prospective employer based on what she would have made had she not quit in reliance on the promise and stayed at her prior job. Promissory estoppel is a legal doctrine which provides that a party should be responsible for the consequences when a promisee relied on its promise and suffers damages when the promisor fails to perform.

Background

David Solimine offered Jed Goldfarb a job managing his family’s investment portfolio. Goldfarb would receive an annual salary of $250,000-$275,000, plus ten to twenty percent of profits made because of his efforts or advice. Neither the offer nor a contract were ever put in writing. However, Goldfarb left his current job as a financial analyst (where he had made between $308,000 and $466,000 per year) in reliance on Solomine’s promise of employment. After Goldfarb quit, Solimine withdrew the offer and Goldfarb found himself unemployed.

Published on: March 9, 2021

How the New Recreational Marijuana Law May Effect New Jersey Employment Law

by Pauline M.K. Young

In February of 2021, Governor Murphy finally signed the long awaited “New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act” which legalizes recreational, adult (at least 21 years old) use of marijuana (or “cannabis”).

One of the major concerns which has existed since the very beginnings of this Act was how it was going to effect drug testing in the workplace and what job protections might need to be created in relation to employees’ marijuana use. The Act does address job protections. However, while several sections of the Act photo__1894482_mclaughlin_nardi_4712 came into effect immediately, the employment-related provisions are not expected to take effect until the newly-created Cannabis Regulatory Commission establishes regulations providing specific procedures and rules for generally practices in compliance with the Act. That Commission is supposed to do so within 180 days of the passing of the Act, bringing us to approximately August 21, 2021 before marijuana job protections will come into effect.

The Marijuana Act specifically prohibits employers from refusing to hire, firing, or taking some other adverse action against someone specifically because that person uses marijuana recreationally. Indeed, an employer cannot discriminate against an individual in compensation or in any terms, conditions, or privileges of employment based upon marijuana use outside of the workplace. Thus, marijuana use appears to have the same protections as other protected classifications such as race and gender discrimination. Again, we will have to see how the Committee addresses this to see what the specific rules will be.

Published on: March 6, 2021

Bedrock Principles of New Jersey Business Law Examined in New Jersey Appellate Decision

by Maurice W. McLaughlin

In New Jersey, sale of a business is governed by the contract negotiated by the parties. But what if the contract is unclear, or the parties don’t agree on what the terms of an oral contract are? In the case of Lee v. Lee, involving the sale of a restaurant and liquor license in Bergen County, the Appellate Division examined several bedrock principles of New Jersey business law, including oral contracts, the duty of good faith and fair dealing, and how parties are required to deal with each other. The opinion offers good guidance for the behavior of the parties in the sale of a business in New Jersey.

Background

Mikyung Lee and Seoung Ju Bang orally agreed with Jung Lee to sell them a restaurant he owned in Fort Lee, together with its liquor license. The purchase price was $892,000, with a $50,000 initial deposit, and then another $50,000 when the contract was signed, with the remainder to be paid over time. The buyers paid the first deposit, but before a contact was signed, Jung Lee said he needed the second $50,000 deposit. Believing him to be acting in good faith, they gave him the second deposit. He promised to send a written contract with the terms they agreed on, which included having Lee’s company, Plan J. Inc., a part of the transfer because it held the liquor license.

Published on: February 24, 2021

Appellate Division Issues Troubling New Jersey Construction Law Decision

by Maurice W. McLaughlin

The Appellate Division of the State Superior Court recently issued an opinion on New Jersey construction law in the case of In re Protest Of Contract Award For Project A1150-08, N.J. Executive State House Comprehensive Renovation And Restoration which has troubling NJ_State_House-300x200 implications for contractors. The decision is published, so it is precedent for future cases in which contractors challenge the award of New Jersey construction contracts by state and local governments. In this post I won’t dwell on the details of which contractor was right and which was wrong, but rather I’ll focus on the Appellate Division’s examination of the procedures followed, which is a cautionary tale about the ability of New Jersey construction contractors to meaningfully object to the award of public contracts.

Background

On November 15, 2019, the New Jersey Division of Management and Construction (“DPMC”) awarded a contract for renovation and restoration of the New Jersey State House to Daniel J. Keating Company, the lowest bidder at $199,498,000. Hall Construction Co., Inc., which had bid $205,777,000, was the second lowest bidder.

Published on: January 21, 2021

New Jersey Supreme Court Explores Goof Faith Defense For Employer’s Failure to Pay Overtime Under New Jersey Wage and Hour Law

by Maurice W. McLaughlin

The New Jersey Wage and Hour Law regulates minimum wage and overtime requirements. It is New Jersey’s counterpart to the Federal Fair Labor Standards Act. The Wage and Hour Law and Fair Labor Standards Act are bedrock elements of New Jersey employment law. Under the Wage and Hour Law, New Jersey employers must pay overtime at a rate of one and half times an employee’s regular pay if she works more than forty hours a week. However, if the employer is in imagesCAWQ89PS the trucking industry, the employer is only legally required to pay overtime at the rate of one and half times minimum wage. However, if the employer should have paid the higher rate but paid the lower rate, it can raise the defense that it did so in “good faith” reliance on government orders or regulations.

In the case of Branch v. Cream-O-Land Dairy, Elmer Branch filed a class action lawsuit in the New Jersey Superior Court against his employer, Cream-O-Land Dairy, on behalf of himself and similarly situated truck drivers employees, for non-payment of overtime in violation of the Wage and Hour Law. Cream-O-Land argued that it was not required to pay the higher rate for two reasons. First, it argued that it was a “trucking industry employer,” and that all the employees were paid at least the lower overtime rate. Second, it argued that it met the “good faith” defense. The trial agreed that Cream-O-Land satisfied the good faith defense and dismissed the case on that ground. Branch appealed to the Appellate Division of the Superior Court which reversed, finding that the matters on which Cream-O-Land relied did not satisfy the statutory requirements of the Wage and Hour Law.

Cream-O-Land then appealed to the Supreme Court of New Jersey. Because the trial judge did not address the exemption for trucking industry employers the Supreme Court, like the Appellate Division, examined only whether Cream-O-Land satisfied the good faith defense. It ruled that it did not.

Published on: January 19, 2021

New Jersey Construction Law Opinion Explains Elements of Construction Lien Law and Prompt Payment Act

by Maurice W. McLaughlin

The Appellate Division of the Superior Court recently issued an opinion illustrating several important points regarding construction liens under the New Jersey Construction Lien Law and collection of payment under the New Jersey Prompt Payment Act.

Background

In that case, Prime Time Construction, LLC vs. Vimco, Incorporated, , Prime Time Construction, LLC was the general contractor on three construction projects in construction-machine-3412240__340-300x202 Paterson. The properties were owned by three limited liability companies which were related to Prime Time. Prime Time executed written subcontracts with Build Logistics, Inc. (“BL”) to do the masonry and excavation work on the projects. BL executed a written contract with Vimco to provide materials for two of the projects. Vimco provided the materials directly to BL; it had no contract with Prime Time or the owners. Prime Time paid BL the full amount under the contract for all the work it performed and materials it provided. However, BL abandoned the project and failed to pay Vimco.

Published on: December 28, 2020

Small Business Assistance Expect in the New Stimulus Package

by Pauline M.K. Young

Following a $2 trillion plus stimulus bill passed in the Spring of 2020, the Congress has finally been able to come to terms on another economic stimulus and relief bill, and the president has finally signed it into law. The bill is over nearly 5,600 pages long and has a whole host of miscellaneous provisions included therein.

However, for small businesses several issues were of particular concern. First, there have been a host of issues, questions, and need for clarification on the small-business-300x215 previously created Paycheck Protection Program (“PPP”). Back in the Spring of 2020, that program was created to provide money to small businesses to help them pay their payroll while suffering from financial issues caused by the Covid-19 pandemic and widespread shut-downs and stay-at-home orders. The new stimulus bill clarifies that expenses paid with these funds may still be used in tax deductions and the amount of the PPP loan would not be considered in calculating the company’s gross income.

PPP funds were generally supposed to be used for (and would only be forgiven for) use in covering payroll, mortgage interest, rent, and utility payments. The new bill should be expanding forgivable expenses to operational expenditures for software or computing services for business operations, property damage due to public disturbances that were not covered by insurance or other compensation, payments to suppliers where the supplies were essential to the operations, made pursuant to a contract prior to the covered period, or for perishable goods, or worker-protection costs required to comply with requirements of state or local governments, the CDC, OSHA, or the Department of Health and Human Services.

Published on: December 23, 2020

Paid Leave Requirements Under the Families First Coronavirus Response Act Are Important New Jersey Employment Law Developments

by Pauline M.K. Young

As a result of the COVID-19 pandemic, the federal government passed the Families First Coronavirus Response Act (“FFCRA”) on March 18, 2020. This law includes two Acts providing for paid leave to be enforced by the US Department of Labor’s Wage and Hour Division. They provide great protections for New Jersey employees which should help the economic recovery.

These 2 Acts are the Emergency Family and Medical Leave Expansion Act, and the Emergency Paid Sick Leave Act. While the provisions were initially only supposed to apply from the effective photo__1894482_mclaughlin_nardi_4712 date of April 1, 2020 through December 31, 2020, they may be extended. Much depends on the current standoff between Congress and President Trump.

The Emergency Paid Sick Leave Act applies to all employers with less than 500 employees. No prior employment or employment history with the employer is required for employees to be covered. The Act generally provides for 80 hours (or 2 weeks) of paid sick leave to qualifying employees.

Published on: December 18, 2020

Opinions in Other Areas of New Jersey Law Provide Guidance When Challenging Arbitration Agreements in New Jersey Employment Contracts

by Maurice W. McLaughlin

It is interesting that the trend in New Jersey employment law is to enforce arbitration agreements in employment contracts, while at the same time finding them unenforceable in consumer and commercial contracts. However, the law is the same: whatever the area, arbitration agreements are interpreted and enforced – or not enforceable – under New Jersey contract law. It’s therefore worth looking at two recent opinions in these areas to see what can be learned.

The Knight Case: Consumer Contracts and Consumer Fraud

In the first, a published opinion in case of Knight v. Vivint Solar Developer, LLC, the Appellate Division of the Superior Court of New Jersey stuck down an arbitration agreement which the defendants tried to enforce in a consumer fraud lawsuit over the sale of solar panels. After Knight sued, Vivint filed a motion to courthouse-1223280__340-300x200 dismiss her complaint and enforce an arbitration agreement which required the parties to arbitrate their disputes.

Published on: December 3, 2020

Appellate Division Decision Demonstrates Enforceability of Arbitration Awards in New Jersey Construction Law

by Maurice W. McLaughlin

Construction Arbitration

Complex New Jersey construction law cases can be extremely expensive to litigate in court because of the amount of documents involved, the number of witnesses, and the need for experts. Therefore, many construction contracts contain arbitration provisions. The view is that arbitration can save money in the 352099_construction_3-002-300x225 litigation process, but still provide an enforceable dispute resolution process.

However, it would not be accurate to call construction arbitration “cheap” or “inexpensive.” Essentially, arbitration is a private litigation process with limited discovery and appeal rights. By limiting discovery, particularly depositions, a significant source of expense is eliminated, and by limiting appeal rights, arbitration can provide more finality. However, there is still discovery. Documents are generally exchanged before the hearing, so there is still expense, but costs are saved because arbitration rarely involves depositions. Likewise, while experts are not normally deposed, they are still required and must prepare pre-hearing reports about their expected testimony. All of this entails significant expense. In addition, while there are minimal filing fees and the services of courts are generally free, the use of an arbitration forum in construction law disputes entails significant fees, and in addition the parties have to pay the arbitrator for all his or her time.