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New Jersey Business Law and Liquidated Damages

Business parties draft contracts to give them a measure of certainty in their future relationship.  However, it is not a secret that contracts are frequently breached, so parties often want a degree of certainty about what able-account-300x214will happen in the event of a future breach.  This gives rise to greater likelihood that the contract will be performed, and hopefully limits litigation costs if there is a breach.  However, New Jersey business law, and indeed contract law generally, prohibits penalties in contracts.  Thus, damages for breach of contract must reflect actual damages to put the innocent party in as good a place as it would have been had the breach not happened, rather than a greater amount to penalize a breaching party.

But when drafting a contract for a business relationship which will be performed in the future, it is often impossible to know what the amount of damages will be.  Too many things are unknown, such as whether the relationship will be profitable and if so how profitable; and how much time will remain on the contract when a breach occurred, and thus how long the damages will accrue.   For this reason New Jersey contract law allows for liquidated damages.  Liquidated damages are an estimate of actual damages included in a contract to give more certainty about what will happen in the event of a breach.  But liquidated damages must be a good faith estimate of actual damages in order to be valid and enforced.

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In my last post I wrote about the Appellate Division case of In the Matter of Ambroise, which demonstrated that employees will get a fair hearing before the New Jersey Civil Service Commission and in appeals to state appellate Courts.  Another recent Appellate Division opinion columns-round-300x201in the case of In the Matter of Christopher Dunlap, Fire Fighter (M1838W), Township of Hillside shows that the Civil Service Commission and Appellate Division are not afraid to call B.S. on employers when the situation warrants.

Background

Christopher Dunlap passed the civil service examination for firefighter, and his name was placed on the eligible list.  His name was certified for employment with Hillside Township.  He completed the application process, but was rejected by the Township for allegedly making a “material misrepresentation” on his application.  Making any “material misrepresentation” in the hiring process will cause an applicant to be removed from the eligible list.  The Township said that he failed to disclose juvenile charges against him.  Facts are everything, so I will quote at length from the Appellate Division’s decision.

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A recent appellate opinion in the case of In the Matter of Ambroise demonstrates that New Jersey civil service employees will receive a fair hearing in appeals with the New Jersey’s Civil Service Commission and appeals courts.us-supreme-court-300x200

Background

Ambroise was terminated as a senior correctional police officer (SCPO) by the New Jersey Department of Corrections (DOC).  The DOC alleged that Ambroise engaged in oral sex with an inmate at the Edna Mahan Correctional Facility for Women.

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The New Jersey Wage and Hour Law and Wage Payment Law

Like the Federal Fair Labor Standards Act, New Jersey’s Wage and Hour Law requires that employers pay non-exempt employees minimum wage for all hours that they work, and overtime (time and a half) when employees work more than forty hours per week.  New Jersey’s Wage Payment Law requires that employers pay employees pay allemployment_law_damages wages that they are due, and sets forth the timing and procedures for payments and permitted deductions.  This is a much-litigated area of New Jersey employment law.

Suits under the New Jersey Wage and Hour Law and Wage Payment Law have long been required to be brought within two years of the violations or they would be time barred.  However, in 2019 the New Jersey Legislature amended both laws to extend the time for filing a civil lawsuit for violation of the laws from two to six years.  The amendments were silent about whether they would apply retroactively or only going forward.  Generally, unless the Legislature provides for retroactive application of new statutes of limitations they apply only prospectively – in other words they normally apply only going forward to acts which occurred after the amendment, not looking backward to what happened before.  These amendments were to take effect immediately upon enactment, which occurred on August 6, 2019.

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New Jersey employment law in the public sector contains few more contentious areas than the confidentiality of the disciplinary and personnel records of law enforcement officers.  A trio of published New Jersey State and Federal court opinions have shed light on this contentious and evolving area of the law.police-1714956__340-300x200

In re Attorney General Law Enforcement Directives: Disciplinary Records

The Legislature has tasked the New Jersey Attorney General with supervising law enforcement throughout the state.  In 2020, in the midst of the George Floyd protests, the New Jersey Attorney General used that authority to issue two directives which would release the names of law enforcement officers who have committed violations resulting in “major discipline,” and to issue summaries of the underlying complaints and discipline imposed. Although the directives apply to all State and local jurisdictions, they define “major discipline” similarly to New Jersey civil service law: suspension of greater than five days, demotion, or termination.  The Attorney General’s given reasons for the directives were to “promote trust, transparency and accountability.”

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New Jersey employees have significant protections during mass layoffs under New Jersey employment law.

In 1988 the United States Congress passed the Worker Adjustment and Retraining Notification Act (the “WARN” Act).  The Act went into effect in 1989.  The purpose of the Act was to try to assist employees with large layoffs orwarn-300x201 large plant or factory closures. The Act essentially required advanced notice and other assistance to workers so that they would have time to find other employment.

In December of 2007 New Jersey passed its own Act similar to the federal WARN Act which was officially called the Millville Dallas Airmotive Plant Job Loss Notification Act, but is often just referred to as the New Jersey WARN Act in reference to its federal counterpart.

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New Jersey is one of the most employee-friendly states in the nation; and its becoming more and more employee-friendly every year. On February 6, 2023, Governor Murphy signed the Temporary Workers’ Bill of Rights Act into law.  This law clarifies and expands employee protections for non-exempt (hourly) employees who work forphoto__1894482_mclaughlin_nardi_4712 temporary staffing agencies.

As a preliminary matter, it is important to note that this Act does not apply to all temporary workers.  Indeed, a prior version of the law was vetoed by Governor Murphy who requested a narrower application of the law. As a result, the final law defines “temporary laborers” as those who contract for employment in a “designated classification placement” with a temporary staffing agency. “Designated classification placement” is further defined to include:

  • Food Preparation and Serving Related Occupations;
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What is tenure?

Under New Jersey employment law, tenure is an added layer of job protection for certain public school employees.

What protections does tenure provide for eligible New Jersey education employees?

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What is a Preliminary Notice of Disciplinary Action?

A Preliminary Notice of Disciplinary Action, also known as a PNDA or a Form 31-A, is a New Jersey Civil Service form which notifies an employee that her employer seeks to impose discipline, including an immediate suspension in someimagesCAWQ89PS cases.

What should I do if I receive a Preliminary Notice of Disciplinary Action?

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Progressive discipline is a concept used in New Jersey civil service discipline law and teacher tenure charges.  It can serve to increase or decrease the severity of a penalty based on the employee’s prior disciplinary record.  Recently, an appellate opinion examined the concept ofbully-3233568__340-300x272 progressive discipline in the context of a civil service discipline appeal in the case of Matter of Stuiso, Bergen County Department of Public Works.

Background

Ronald Stuiso was a maintenance worker for Bergen County. He filled out two repair forms reporting unsafe conditions.   He directed another employee, Francesco Azzollinni, to submit the forms.  Azzollinni met with Vincent Rothenburger, a department supervisor.  Rothenburger raised his voice at Azzollinni, leading Stuiso to intervene and raise his voice at Rothenburger while getting in his face.  The two continued yelling until separated by co-workers.

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