New Jersey Lawyers Blog

Published on: June 3, 2017

The Relationship Between the New Jersey Construction Lien and Federal Bankruptcy Law

worried-30148__340-217x300 In the case of In re Linear Electric Company, Inc., the Third Circuit was presented with whether construction liens filed by a supplier under New Jersey law were valid and enforceable against a contractor who filed a petition for Chapter 11 bankruptcy protection prior to when the construction liens were filed.

New Jersey’s Construction Lien Law, N.J.S.A. §2A:44A, et seq., provides contractors, subcontractors, and suppliers with the right of filing a lien for work, services, or materials provided pursuant to a written contract. These protections are limited based on several factors including but not limited to whether the person or entity filing the construction lien is defined as a “claimant” under New Jersey’s Construction Lien law, what the unpaid portions of the contract price is, and compliance with strict time restrictions for filing the lien itself and a subsequent lawsuit based on the lien.

Under the Federal Bankruptcy Code, a debtor who files for bankruptcy is afforded the relief of an automatic stay that prevents most collection actions from continuing including acts to create, perfect, or enforce liens against property. The protections of an automatic stay are broad and expansive but do include several expectations and limitations for certain debts.

Published on: June 1, 2017

New Jersey Discrimination and Retaliation Claims Not Preempted by Federal Labor Management Relations Act

by Maurice W. McLaughlin

strategy-1710763__340-300x160 One of the most difficult issues for New Jersey employment attorneys is when federal law preempts New Jersey employment law. One of the most thorny areas is the intersection of the Federal Labor Management Relations Act, which governs the interpretation and application of collective bargaining agreements (union contracts) in the private sector. Fortunately, New Jersey’s Appellate Division has recently issued an important opinion clarifying this complex area in the context of disability discrimination and retaliation by an employer against an employee for filing a workers compensation claim.

Background

Brian Hejda was a truck driver for Bell Container Corp., and a member of Teamsters Local Union 813. He suffered a workplace knee injury. He had various restrictions on what he could do at work, and he was medically limited to light duty. He filed a workers compensation claim; Bell denied that he sustained a disabling injury. Eventually Hejda was asymptomatic and able to return to full duty, although his doctors advised that he would eventually need arthroscopic surgery to repair the damage. Hejda reported to work for a week but was not given much to do. When he returned the following week, he was told to leave.

Published on: May 31, 2017

Confidentiality Privileges in Internal Employer Investigations

by Pauline M.K. Young

puzzle-693873__340-300x228 An attorney-client relationship involves the reasonable reliance by an individual (the client) on the professional knowledge and/or skills of an attorney who is aware of and accepts responsibility for that reliance. While a written agreement is not required for this relationship to exist, there must be some mutual understanding, consensus, and/or act manifesting the acknowledgement of the relationship.

One of an attorney’s obligations to a client the duty to maintain the confidentiality of communications with the client. The New Jersey Supreme Court has said that:

Such an obligation is necessary for several reasons. Persons who seek legal advice must be assured that the secrets and confidences they repose with their attorney will remain with their attorney, and their attorney alone. Preserving the sanctity of confidentiality of a client’s disclosures to his attorney will encourage an open atmosphere of trust, thus enabling the attorney to do the best job he can for the client.

Published on: May 22, 2017

Discharge Federal Estate Tax Liens Prior to Sale of Property

by Jennifer C. Meusel

key-2114044__340-300x169 Generally, before the estate of a decease person can sell real estate, the individual(s) named as executor in the will must probate and be formally appointed as executor. If there is no will, then the closest heir at law must apply to the surrogate’s court to be appointed as administrator of the estate. An administrator would follow the same steps as an executor in order to sell real estate.

Estates with a value in excess of $5,450,000 are subject to federal estate tax pursuant to IRC Section 6324. IRS estate tax liens automatically attach to real property (“real estate”) which was owned by a decedent on her date of death. In order to have this tax lien discharged, the seller must follow these steps in order to close on the sale of the property and have the federal estate tax lien discharged:

The executor of the estate must complete and file IRS Form 4422 and provide the required supporting documents. In order to compete this form you must know the value of all estate assets and expenses. And you must have the required supporting documentation including: the last will and testament, the contract for sale of the real estate, the closing statement or proposed closing statement for the sale (which shows all payments, credits, expenses and offsets), the federal estate tax form 706 and documentation reflecting the value of all the estate’s assets. With Form 4422 the executor must also submit for 8821, a tax information authorization form. Additionally, IRS Form 4422 must be filed at least 45 days prior to the closing of the sale of the real estate.

Published on: May 22, 2017

The Winters Problem: Public Employees’ Catch 22

by Maurice W. McLaughlin

electrician-1080561__340-300x200 Our employment lawyers represent New Jersey public employees at the state and local level. One problem that we have run into representing public employees is a recent opinion by the New Jersey Supreme Court which severely limits public employees’ options when their government employers have taken wrongful actions against them.

Avenues for Redress

New Jersey employment law gives government employees a variety of avenues for redress when their employers have taken action which violates their rights.

Published on: May 17, 2017

New Jersey Court Imposes Restrictions on Police Officers Taking Leave to Hold Elected Office

by Maurice W. McLaughlin

police-car-1889057__340-300x300 Our employment attorneys handle New Jersey civil service appeals and litigation. The Appellate Division of New Jersey Superior Court recently issued a decision on “dual officeholding” which affects the rights of New Jersey Civil Servants.

Gary DeMarzo was hired as a police officer by Wildwood in 1998. In 2007 he was elected a city commissioner. Under New Jersey’s Walsh Act, a “commission type” government combines the functions normally exercised separately by a mayor and council into a single board of commissioners, which exercises both legislative and executive and legislative power for the municipality. The Wildwood Board of Commissioners thus exercised executive power over the Wildwood Police Department. DeMarzo applied for unpaid leave from the Police Department in accordance with the New Jersey Civil Service Act.

The City of Wildwood filed an action in the Superior Court of New Jersey requesting a declaratory judgment that the positions of commissioner and police officer were incompatible. The trial court judge found the two positions were, in fact, incompatible. However, rather than ordering DeMarzo to give up one of the positions, it crafted a set of restrictions on DeMarzo’s function as a commissioner. The City appealed, arguing that the trial judge erred in this ruling.

Published on: May 15, 2017

Guidance for New Jersey Employers and Employees About President Trump’s Executive Order Promoting Free Speech and Religious Liberty

by Maurice W. McLaughlin

rubics-cube-2108030__340-300x200 President Trump recently issued an “Executive Order Promoting Free Speech and Religious Liberty.” We have been asked what this will mean for New Jersey employers or employees. For private sector, and New Jersey state and local public sector employers and employees, the answer is probably not much, if anything. Let’s break it down by some of declarative provisions.

Section 1. Policy. It shall be the policy of the executive branch to vigorously enforce Federal law’s robust protections for religious freedom. ….Umm, well, that’s been the policy of the government for decades now, so nothing much should change there.

Sec. 2. Respecting Religious and Political Speech. All executive departments and agencies (agencies) shall, to the greatest extent practicable and to the extent permitted by law, respect and protect the freedom of persons and organizations to engage in religious and political speech. In particular, the Secretary of the Treasury shall ensure, to the extent permitted by law, that the Department of the Treasury does not take any adverse action against any individual, house of worship, or other religious organization on the basis that such individual or organization speaks or has spoken about moral or political issues from a religious perspective, where speech of similar character has, consistent with law, not ordinarily been treated as participation or intervention in a political campaign on behalf of (or in opposition to) a candidate for public office by the Department of the Treasury. As used in this section, the term “adverse action” means the imposition of any tax or tax penalty; the delay or denial of tax-exempt status; the disallowance of tax deductions for contributions made to entities exempted from taxation under section 501(c)(3) of title 26, United States Code; or any other action that makes unavailable or denies any tax deduction, exemption, credit, or benefit. First, again, protecting free speech and free exercise of religion are already the federal government’s policy. Discrimination by employers against employees is already prohibited by federal law, and both federal and New Jersey employment law require employers to provide “reasonable accommodation” so employees can exercise their religion, so no change there. And if you’re in the private sector – too bad; the First Amendment only protects you from the government, not your private sector employer. Further, those protections already exist in the public sector.

Published on: May 2, 2017

New Jersey Court Rules that Unemployment Benefits Should Not Lower Lost Pay Recoverable from Employer Which Discriminates Against Disabled Employee

by Maurice W. McLaughlin

wheelchair-1365410__340-300x300 Our employment lawyers represent employers and employees in New Jersey labor and employment litigation. Each employment case has two parts. The first is liability – did the employer commit the wrongful act of which it is accused by the employee? If the answer is no, the case is over; if the answer is yes, then the employee must prove damages. One question which has bedeviled courts is whether unemployment compensation received by an employee should reduce the damages she can receive for lost pay resulting from an allegedly discriminatory firing. The Appellate Division of the Superior Court of New Jersey has now answered this question with a resounding “no.”

New Jersey provides a wide range of employment protections to employees. These laws provide for a range of remedies if employees are the victim of unlawful conduct by their employer. Some laws provide for recovery of damages for emotional distress. Sometimes, in especially egregious cases, punitive damages may be available. If the particular statutes provide for it, such as New Jersey’s Law Against Discrimination (known as the “LAD”) and the Conscientious Employee Protection Act (known as “CEPA”), if the employee is successful at trial the court may even order the employer to pay the employee’s attorneys fees.

The basic element of damages in employment cases, however, is lost pay. All other elements of damages flow from lost pay. If an employee is unemployed for a year, the pay she would have made during that time is recoverable as damages if she wins her suit. If after a year she then gets a job earning $10,000 per year less, the difference is recoverable as well. If after a year she gets a job making the same or more money, her damages end when she gets the new job.

Published on: April 25, 2017

Continued Clarifications of the Conscientious Employee Protection Act

by Pauline M.K. Young

police-1714956__340-300x200 New Jersey’s Conscientious Employee Protection Act (“CEPA”) provides a remedy for employees who are wrongfully terminated in retaliation for objecting to conduct which is believed to be illegal. This Act is often referred to as the New Jersey “whistleblower law.” In fact, it is one of the most liberally interpreted and expansive whistleblower laws in the country. CEPA is a relatively new law, enacted n 1986, and thus has been the subject of much debate, misunderstanding, and misapplication.

CEPA provides wrongfully terminated or retaliated against employees with an avenue to seek redress. An employee is protected under CEPA if she disclosed, objected to, or refused to participate in an act, policy, or practice of the employer which the employee reasonably believed violated a law, regulation, or public policy. If the employee is then fired, harassed, or otherwise retaliated against as a direct result of the disclosure, objection, or refusal, that employee may have a claim under CEPA.

In the recent case of Fraternal Order of Police, Lodge 1 v. City of Camden, police officers brought an action against the City claiming (among other things) retaliation in violation of CEPA for the officers’ objections to the City’s policies regarding police-civilian interactions, based upon the belief that the policy violated the anti-quota law.

Published on: April 6, 2017

Sexual Orientation Discrimination in the Seventh Circuit and Comparison with New Jersey’s Law Against Discrimination

by Maurice W. McLaughlin

pencil-1385100__340-300x200 Here at the New Jersey Lawyers Blog we usually stick to New Jersey law (the name is probably a giveaway). However, a federal decision this week in the United States Court of Appeals for the Seventh Circuit (with jurisdiction over appeals from the federal courts in Illinois, Indiana and Wisconsin) deserves mention. In the case of Hively vs. Ivy Tech Community College of Indiana, the Seventh Circuit held that firing an employee because of her sexual orientation is illegal sex discrimination in violation of Title VII of the Civil Rights Act of 1964. It became the first Federal appeals court to so hold. It broke with many of its sister circuits. The United States Supreme Court has never decided the issue.

Kimberly Hively was a part-time adjunct professor at Ivy Tech. She applied for at least six full time teaching positions but was rejected each time. Finally, her part-time contract was not renewed. Hively was only lesbian. She filed a complaint with the U.S. Equal Employment Opportunity Commission (the “EEOC”) alleging sex discrimination in violation of Title VII because she claimed that had been terminated because of her orientation. The EEOC issued a right to sue letter, and she filed suit in the United States District Court for the Northern District of Indiana pro se (on her own without a lawyer). The District Court dismissed her suit, ruling that discrimination because of sexual orientation was not protected by Title VII. She appealed to the Seventh Circuit. Initially a three judge panel of the Seventh Circuit agreed with the District Court and ruled against her. However, the entire court then voted to hear her appeal en banc (by the whole court), and reversed its prior decision.

The Seventh Circuit had several reasons for its holding. First, in 1989 the Supreme Court held that the practice of gender stereotyping was illegal sex discrimination. Then in 1998 it held that it made no difference whether or not the harasser was of the same or a different gender as the victim provided that the harassment was because of the victim’s gender. It then reasoned that if the stereotype is that a woman should marry a man Hively would not have been fired if she had married a person of the other sex, then she was discriminated against because of her gender because she married a woman, a person of the same sex.