Articles Posted in Labor and Employment

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american-963191__340-300x200Background

On February 4, 2019, Governor Phil Murphy signed legislation which will raise the minimum wage in increments culminating in a minimum wage of $15 per hour on January 1, 2024.  The new law puts New Jersey at the forefront of the “living wage” movement, while the phase in is designed to lessen the impact on small businesses.  The new law amends the New Jersey Wage and Hour Law, which governs minimum wage and overtime requirements.

The legislation is the result of negotiations between the Governor and Legislature lasting more than a year.  The amendment was praised by labor unions and most Democrats in the state, but opposed by the New Jersey Chamber of Commerce and most Republicans.

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contract-1464917__340-300x200Senator Marco Rubio recently introduced the Freedom to Compete Act. This proposed law would prohibit employers from entering into or enforcing non-compete agreements with lower level employees while simultaneously protecting employers’ trade secrets.

Non-Compete Agreements

Non-compete agreements are binding contractual restrictive covenants which limit an employee’s ability to compete with her employer after she leaves or while she is employed. These agreements normally prohibit the employee from forming a competing business, and also from directly or indirectly capacity by working for a competitor or soliciting their employer’s customers.

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macbook-336704__340-300x200The Benefits and Responsibilities of Ownership

Becoming the owner of a business has tremendous advantages:  Owners can rise or fall based on their own merits, and when expenses are paid the remaining profits belong to the owners.  However, there are also disadvantages, such as the risk that the business will lose money, and responsibility for the business’s payroll and debt.  In addition to this stands business owners’ duties to their co-owners, be they partners in a partnership, shareholders in a corporation, or members in a limited liability company.

Under New Jersey business law, owners are placed in a special position of trust vis a vis their fellow owners, and the law thus imposes special responsibilities on them.  These responsibilities are known as “fiduciary duties.”

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baby-2242638__340-300x210New Jersey’s Law Against Discrimination gives employees some of the strongest legal protections against discrimination and harassment in the nation.  However, these protections have recently been expanded.  In one of his last acts as governor, Chris Christie signed the Legislature’s amendment to the Law Against Discrimination its protections to include mothers who are breastfeeding.

The New Jersey Law Against Discrimination

The Law Against Discrimination was enacted in 1945, placing New Jersey at the forefront in protecting employees’ from workplace discrimination.  Indeed, the Law Against Discrimination was the first statewide civil rights enforcement law.  Since then it has been amended many times by legislation and court decisions, always expanding and strengthening New Jersey’s protections against discrimination.

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the-dollar-3125419__340-300x200Some of the areas in which businesses make their largest investments of time and expense are trade secrets (including customer lists) customer relations and client development, and employee development.  However, these interests may conflict, especially when highly placed employees leave a firm.  This is an area of potentially bitter dispute in New Jersey business law and employment law.

Businesses have many trade secrets, but the most important of these is often information regarding its customers.  Because of intense competition, and the time, effort and expense which businesses invest in cultivating their clients, customer lists, especially customer lists in service industries, are protected by the common law and New Jerseys Trade Secrets Act.

Businesses also invest significant expense in training and developing their employees, even aside from salary and benefits.  Thus, New Jersey business law and employment law imposed a duty of loyalty on employees, even those who do not have a restrictive covenant.  This duty of loyalty prohibits employees from competing with their employers while they are employed.  An employee may not induce her employer’s employees or customers to leave her employer, nor may she appropriate her employer’s trade secrets.  The employee may plan to leave, and if the employee does not have a restrictive covenant she can even seek employment with competitors or even set up a business entity which will compete with the employer after she leaves. However, the employee cannot go beyond the planning stage while still employed.

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help-164755__340-300x199The New Jersey Appellate Division recently issued a decision which found an arbitration agreement unenforceable against a plaintiff who was alleging age discrimination under New Jersey’s Law Against Discrimination, N.J.S.A. 10:5-1 (“LAD”). Our attorneys represent both employers and employees in employment law, and the determination of whether an arbitration agreement is enforceable is one of the first issues that must be decided in any case where there is a signed arbitration agreement.

The decision was in the case of Flanzman v. Jenny Craig, Inc.  In that case, the employer, Marilyn Flanzman, was an eighty-two year old former weight loss counselor who worked for Jenny Craig, Inc. for twenty-six years.  Who filed suit for alleged age discrimination and harassment.  The trial court below compelled the case to proceed to arbitration.  Marilyn filed an appeal based on the trial court’s order to compel arbitration.  On appeal, the Appellate Division was asked to determine whether the arbitration agreement between the parties was invalidated because the parties failed to identify any arbitration forum or process for conducting the arbitration.

The Appellate Division ultimately ruled that the parties lacked a “meeting of the minds” and therefore held that the arbitration agreement was invalid, reversing the trial court’s decision below.  The Court came to its decision because neither party could identify the rights that plaintiff was given under the arbitration agreement in exchange for plaintiff waiving her right to a jury trial.  In its opinion, the Appellate Division found “selecting an arbitral institution informs the parties, at a minimum, about the institution’s general arbitration rules and procedures.  Without knowing this basic information, parties to an arbitration agreement will be unfamiliar with the rights that replaced judicial adjudication.  That is the parties will not reach a ‘meeting of the minds.’”

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agreement-300x200The Appellate Division of New Jersey’s Superior Court recently issued an instructive decision about arbitration agreements in employment law disputes.  The case does not invalidate arbitration agreements – they are protected by both federal and New Jersey law – but it does show that the trend is that arbitration agreements are being construed strictly against the employers which drafted them.

The Skuse Case

In the case of Amy Skuse v. Pfizer, Inc., the Appellate Division invalidated an electronic arbitration agreement used by Pfizer for all its employees.  The “agreement” was not on paper, but an electronic “training module.”  Employees received an email which instructed them to complete the “electronic training.”  Even if they didn’t, complete the training module, the employees would have be deemed to have agreed to the arbitration provision by continuing to work for Pfizer for another 60 days.  The module allowed them to scroll past the text of the provision, and did not provide for the employees to indicate their agreement to arbitration, only their “acknowledgement” of the policy.  The module then thanked the employee for “reviewing” the policy, but not for agreeing to it.

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defense-attorney-840062__340-300x237In December of 2017 New Jersey’s then-Governor Chris Christie signed off on several pieces of legislation to help those with criminal histories turn their lives around and become more productive members of society. For example, Governor Christie signed off on a bill barring employers from inquiring about an applicant’s criminal history during the initial job application process. Around that same time, he also enacted a law to alter the requirements for individuals to be eligible for an expungement of their criminal records. Those changes took effect as of October 1, 2018.

An expungement of criminal records generally has the effect of causing the arrest, conviction and/or any related proceedings to be deemed not to have occurred. In most cases, a person who has had her records expunged may answer “no” to any questions relating to whether an arrest, conviction, or any such proceeding occurred. There are a few exceptions. For instance, in a job application for a position with the court (judicial branch); in an application for another expungement, or to a court in relation to accepting the person into a treatment or other diversion program, the fact of an expungement and the criminal history may still need to be disclosed. However, the records are not made available for any type of background check in other instances (such as for private employment).

The new changes to New Jersey’s expungement laws include several significant alterations in the eligibility requirements for expungements. For instance, an individual used to have to wait 10 years to expunge a felony conviction. That has now been reduced to 6 years. There is also an early pathway for such expungements if the applicant can establish that the expungement is in the public interest, and in consideration of the nature of the offense and the character of the applicant. That early pathway was available previously, and remains in place with a waiting period of only 5 years. Also, the waiting period for expunging juvenile offenses was also reduced from 5 years to 3 years.

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yes-3029367__340-300x158The United States District Court for the District of New Jersey recently issued a decision which illustrates some of the weaknesses in both Federal and New Jersey Employment law, particularly Title VII of the Civil Rights Act of 1964 and New Jersey’s Law Against Discrimination.  Our attorneys represent both employers and employees in employment law, and this issue is of utmost concern to us.

The decision was in the case of Axakowsky v. NFL Productions, LLC, d/b/a NFL Films.  In that case, Nadia Axakowsky sued NFL Productions, LLC, for sexual harassment under Title VII of the Federal Civil Rights Act of 1964 and New Jersey’s Law Against Discrimination.  The judge dismissed the case on summary judgment, ruling that Axakowsky was an independent contractor and therefore was not protected by either law.

The judge undertook a detailed analysis under federal case law interpreting Title VII.  Culminating with the United States Supreme Court’s decision in Nationwide Mutual Insurance Company v. Darden in 1992, the federal courts have developed a test to determine whether a worker classified as a contractor is in reality an employee entitled to protection under Title VII.  The judge went into detail examining all the factors in the relationship, and determined that Axakowsky was in reality a contractor, not an employee, and therefore not entitled to protection under Title VII.  Without going into detail, given that Axakowsky worked only one and a half hours per week as a voice-over artist and continued to audition for and accept other work, the analysis was in all likelihood correct.

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silhouette-3299358__340-300x274As previously discussed here, on May 2, 2018, New Jersey’s Governor, Phil Murphy signed into law New Jersey’s Paid Sick Leave Act (the “Act”).  The Act took effect on October 29, 2018.  The New Jersey Department of Labor and Workforce Development (“NJDOL”) issued proposed regulations to further address the employees’ rights and employers’ obligations under the Act.

Below is a list of several areas where the proposed regulations provided additional guidance to the Act itself:

1. Exempt Employees under the Act.

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