Labor and Employment

Published on: November 25, 2019

New Jersey Supreme Court Rejects Newark School District’s Firing of Tenured Secretary in Major Public Employment Law Decision

Both New Jersey’s tenure laws in Title 18A, which govern employees in New Jersey’s public schools, and the New Jersey Civil Service Act in Title 11A and Civil Service regulations are designed to ensure that government employment decisions, such as hiring, firing, promotion, etc., are made based on merit rather than nepotism, cronyism, racism, sexism, favoritism or politics. Of course, these factors still come into play, and employers seek ways around these laws. The New Jersey Supreme Court recently rejected such an attempt by the Newark School District to terminate a tenured secretary.

Brenda Miller was an employee of the Newark School District, which had been taken over and operated by the State of New Jersey. The District had adopted the Civil Service Act, Title 11A of New Jersey Statutes, to govern its employees. As public school employees, however, their employment was also governed by Title 18A, which governs New Jersey’s public grammar schools, middle schools, high schools and state colleges.

Brenda was hired in 1998 and held clerical and secretarial positions through 2012. By virtue of this service she had acquired tenure under Title 18A. These positions were also governed by the Civil Service System, and were considered “classified” titles. In 2012, however, the District reclassified Brenda’s current position to an “unclassified” confidential assistant, which as an unclassified title did not have the same civil service protections as classified positions – indeed, unclassified positions have little more protection than an employment at will job in the private sector. In 2014, citing the unclassified status of Brenda’s title, the District terminated her. It did not provide her with notice or a hearing.

Published on: November 19, 2019

Equal Pay Act

by Pauline M.K. Young

Refugees, Economic Migrants

Governor Murphy signed New Jersey’s Equal Pay Act into law in 2018. The NJEPA takes a necessary step in making pay discrepancies in the workplace more transparent with the hopes that this will address the pay differential between white men minorities, and women. Essentially, it bars any penalty to any employee for requesting or disclosing information regarding any employee’s job title, rate of compensation, benefits, race, gender, ethnicity, or other protected characteristic when the purpose of the inquiry or disclosure to investigate the possibility of discriminatory treatment. (While the NJEPA was originally intended to address inequitable pay for women, it was expanded to cover all protected classes of people.)

This allows for employees to obtain information which previously (and even now) is largely safeguarded by employers as “private” in order to determine whether they are being discriminated against based upon a protected classification. Any employer “policy” which forbids discussing compensation in the workplace could be considered void by the law.

The NJEPA amended New Jersey’s Laws Against Discrimination to enable the use of the protections of that statute. The NJEPA also specifically makes it unlawful to pay employees in protected classes a different rate of compensation when performing substantially similar work considering skill, effort, and responsibilities. Differentials may still exist when based on seniority, merit, education, productivity, experience, and other legitimate business reasons. The Act also allows expands upon the LAD’s typical 2-year statute of limitations by setting forth that limitation period restarts each time the employee receives unequal compensation resulting from a discriminatory decision or practice. The employee may also recover up to 6 years of back pay as a result of a violation by the employer. Additionally, the employee may receive treble damages – meaning that they may recover three times the monetary damages awarded as a result of the pay discrepancy.

Published on: November 11, 2019

Chancery Division Issues Ruling on Valuation of Limited Liability Companies Under the New Jersey Revised Uniform Limited Liability Company Act

by Maurice W. McLaughlin

One of the most difficult questions in New Jersey Business law concerning the retirement of a business owner is determining the value of the laptop-3175111__340-300x200 owner’s share of the business which the remaining owners must pay to buy out his share. This can be difficult even if the departure itself is on good terms. The method and amount of the valuation can cause vicious disputes even among friendly partners. The Chancery Division of the Superior Court of New Jersey in Bergen County recently issued a published decision on this problem in the context of a limited liability company.

Background

In that case, Namerow v. Pediatricare Associates, LLC, four pediatricians were members (owners) of a medical practice named Pediatricare Associates, LLC. The Amended Operating Agreement which governed valuation of the business upon member retirements provided that:

Published on: October 22, 2019

Equitable Damages in New Jersey Business Law Disputes for Breach of Contract

by Maurice W. McLaughlin

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Types of Contract Damages

In New Jersey business law disputes, there are two broad categories of damages, legal damages and equitable damages.

Briefly, legal damages, or remedies in law, are money damages. Legal damages are for harms which can be compensated by the payment of money by the party which breached the contract. In New Jersey contract law, punitive damages are not allowed. Likewise, attorneys fees cannot be recovered unless the contract provider for it. Compensatory damages, which are the amount of money needed to make the innocent party whole, may be awarded when they can be proved. In business disputes these are often lost profits, but may also include other damages such as diminution of value of property.

Published on: October 21, 2019

Decision on Objections to Fraud and Criminal Activity of Whistleblowers by New Jersey Supreme Court

by Maurice W. McLaughlin

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Decision on Objections to Fraud and Criminal Activity of Whistleblowers by New Jersey Supreme Court

In the recent case of Chiofalo v. State, Division of State Police, the Supreme Court of New Jersey issued an important employment law decision dealing with whistleblower retaliation.

The Conscientious Employee Protection Act — New Jersey’s “Whistleblower” Law

Published on: October 7, 2019

Third Circuit Rules Adult Dancers Are Employees Entitled to Overtime and Minimum Wage Protections

by Maurice W. McLaughlin

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The Federal Fair Labor Standards Act requires that employers, including New Jersey employers, pay their non-exempt employees minimum wage and overtime (the vast majority of employees are not subject to an exemptions; the major exemptions are for executive, administrative and professional employees, and outside sales). Independent contractors, however, are not protected by the Fair Labor Standards Act. Claims of misclassification of employees have recently led to significant amounts of litigation.

The United States Third Circuit Court of Appeals recently issued an opinion on misclassification of workers in the case of Priya Verma v. 3001 Castor, Inc., which found that adult dancers were employees entitled to the protection of the Federal Fair Labor Standards Act. While the case arose in Pennsylvania Federal Court, the Third Circuit rules on appeals from federal courts in New Jersey, Pennsylvania, Delaware and the United States Virgin Islands, so it’s decisions determine how federal law, including the Fair Labor Standards Act, will be applied are binding in New Jersey.

Background

Published on: September 24, 2019

New Jersey Adds to Its Already Strong Pro-Employee Legislation With New Wage Theft Act

by Robert Chewning, Esq.

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New Jersey passed the Wage Theft Act on August 6, 2019. It is being viewed as one of the strongest and broadest wage theft laws in the nation, and rightly so. The New Jersey Wage Theft Act increases penalties that employers may be subject to under New Jersey’s Wage and Hour Law with the addition of a liquidated damages provision and further protections for employees who bring retaliation claims. The New Jersey Wage Theft Act also expands the employers who may be liable for employee claims by making both employers and labor contractors jointly and severally liable for violations and prohibiting waivers regarding joint and several liability.

What is Wage Theft?

Wage theft can come in a variety of different forms but boils down to circumstances where an employer does not pay an employee the amount he is owed. The following are a few examples where an employee may have a claim for wage theft: (1) an employee is not getting paid for the full amount of hours worked; (2) a non-exempt employee is not be getting paid overtime wage rates for hours he has worked in excess of 40 hours for a week; (3) an employee’s paycheck from his employer bounces; and (4) an employer deducts time out of an employee’s paycheck for breaks which the employee never took. As you can see from these examples, wage theft is not limited to any one industry or job.

Published on: August 29, 2019

New Jersey Appeals Court Addresses Quantum of Proof in Constructive Discharge Case of Cecile Portilla v. Maxim Healthcare, Inc.

by Maurice W. McLaughlin

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New Jersey employment law recognizes the concept of “constructive discharge.” Constructive discharge occurs when an employee’s working conditions are made so intolerable that the employee has no choice but to quit. When the actions causing the hostile work environment are undertaken because of discriminatory harassment, this can constitute wrongful termination even though the employee quit, rather than being fired. However, the burden of proof to prove constructive discharge is on the employee. The Appellate Division of New Jersey’s Superior Court recently issued an unpublished opinion addressing the question of proof.

Background

The Appellate Division explained that the evidence in the case revealed the following facts.

Published on: June 14, 2019

U.S. Third Circuit Court of Appeals Applies Overly Broad Analysis in Reaching Right Decision in Layoff Rights Dispute Under New Jersey Civil Service Law

by Maurice W. McLaughlin

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The United States Court of Appeals for the Third Circuit recently issued an opinion interpreting the New Jersey Civil Service Act regarding the reemployment rights of laid off civil service employees. It probably reached the right decision, but its reasoning was far too broad and may have a negative impact on future cases.

In that case, Tundo vs. County of Passaic, two probationary Passaic County Corrections officers with disciplinary problems were laid off as part of a mass layoff for budgetary reasons. They had not completed their “working test period” (probationary period) yet. Thereafter, the County obtained funds and sought to rehire some of the laid off employees. It therefore contacted the New Jersey Civil Service Commission so that the Commission could create a list from which the County could rehire laid off workers, which the Commission did. There was dispute about whether the list was a “revived” list – or not whether this was a revived “regular reemployment” list or a revived “open competitive” list was left unclear. The County challenged the placement of the two laid off officers on the list. The Civil Service Commission rejected the challenge. The County therefore had the officers apply for the job, but as part of the application process the County required them to sign a release of their right to sue the County. They refused to sign and the Civil Service Commission removed their names from the list. The officers then sued under Section 1983 of the Civil Rights Act of 1871, arguing that their due process rights were violated by their removal from the list. The Third Circuit disagreed, holding that employees do not have a property right to their position on a reemployment list.

The decision was correct in this case because the officers had no right to be on a special reemployment lists. However, in many cases, other officers do have a legal right to be on employment or remployment list, which would give them a “property interest” triggering due process protections before their governmental employer could remove them.

Published on: June 3, 2019

Third Circuit Issues Important Decision on Non-Solicitation and Non-Compete Agreements Under New Jersey Employment Law

by Maurice W. McLaughlin

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The United States Third Circuit Court of Appeals (which hears appeals from the federal district courts in New Jersey, Delaware, Pennsylvania and the United States Virgin Islands) recently had the opportunity to address the state of New Jersey employment law on restrictive covenants in the case of ADP, LLC v. Rafferty.

Background

In the Rafferty case, two ADP employees, Kristi Mork and Nicole Rafferty, agreed to restrictive covenants in exchange for an award of company stock. Because they were high performing employees, they agreed to restrictions in exchange for the stock award which were more onerous than lower performing employees were required to agree to. The restrictions applied whether they quit or were fired.