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Employment Law Monitor

Insights on Recent Developments in Federal and State Labor & Employment Matters

New Jersey’s “Ban the Box” Legislation Signed Into Law

Posted in Employment Policies and Practices, Harassment, Discrimination and Retaliation

Last week, New Jersey Governor Chris Christie signed the Opportunity to Compete Act (Bill S2124) into law, thereby barring New Jersey employers from inquiring about job applicants’ criminal histories during the preliminary job application process.  Known more commonly as “Ban the Box” legislation, the Opportunity to Compete Act makes New Jersey the sixth state in the nation (following Hawaii, Illinois, Massachusetts, Minnesota and Rhode Island) to extend such protections to job applicants in the private sector.

The legislation precludes employers who employ 15 or more employees from requiring job applicants to identify information about their criminal histories when filling out a job application, or from listing information in job postings which suggests that individuals with a criminal record will not be considered for the position.  However, the law still allows employers to investigate applicants’ criminal histories after an initial interview or earlier if the issue is raised by the applicant himself/herself.  Employers violating the Opportunity to Compete Act will face fines of $1,000 for a first offense, $5,000 for a second offense, and $10,000 for each subsequent violation.  The law is scheduled to take effect on March 1, 2015.

As reported in this earlier blog post, the legislation is designed to assist capable, qualified individuals with criminal backgrounds to avoid recidivism and have a fair opportunity to apply for jobs without being judged at the outset based on their troubled histories.  The enacted legislation, however, does provide employer exemptions for jobs where criminal background checks are mandated by law or for certain sensitive, security-related positions.

In contrast to the “Ban the Box” restrictions imposed on employers’ job applications, the New Jersey Appellate Division recently expanded employers’ rights to curtail job applicants’ ability to sue.  In the Appellate Division’s June 2014 decision in Rodriguez v. Raymours Furniture Co. Inc., Case No. A-4329-12T3, the Court ruled that New Jersey employers may limit the applicable statute of limitations for prospective employees seeking to sue their employers via the inclusion of a clear, unambiguous and reasonable provision in job applications.  In that case, an individual’s claims under the New Jersey Law Against Discrimination, which carries a two (2)-year statute of limitation, were dismissed after he was deemed to have waived the statute’s protections by signing the company’s employment application, which shortened the applicable statute of limitations to six (6) months.

Given the recent developments in the law under the Opportunity to Compete Act and the Rodriguez decision, it is recommended that New Jersey employers seek legal counseling and guidance with their job application processes and policies.

EEOC Issues Guidelines on Pregnancy Discrimination in the Workplace

Posted in Employment Policies and Practices, Harassment, Discrimination and Retaliation

For the first time in 30 years, on July 14, 2014, the Equal Employment Opportunity Commission (“EEOC”) has issued comprehensive guidelines for employers dealing with pregnant employees in the workplace (the “Guidance”).  Employers must remember that while EEOC guidance is not law, the Agency’s position on such topics will be relied upon by the courts.  The Guidance is available at: [http://www.eeoc.gov/laws/guidance/pregnancy_guidance.cfm]

The Guidance is extensive and addresses the treatment of pregnant and non-pregnant workers under the Pregnancy Discrimination Act (“PDA”) which amends Title VII of the Civil Rights Act of 1964 (“Title VII”), the Americans with Disabilities Act and the Family and Medical Leave Act.  Some of the highlights of the Guidance include the EEOC’s position on the following topics:

  • Employers may not discriminate against employees who are pregnant, or against a woman with a medical condition relating to pregnancy or childbirth, all of which is prohibited as sex discrimination;
  • The PDA requires employers to provide pregnant workers with equal access to employment benefits such as leave, light duty and health benefits; and
  • The Americans With Disabilities Act (“ADA”), with its broader definition of “disability,” applies to individuals with pregnancy-related impairments.

Of particular note, the Guidance “discourages” employers from even asking employees about pregnancy and other gender-related issues.  In addition, the Guidance establishes that employers must offer light duty to pregnant employees if they offer such positions to non-pregnant employees.  The Guidance also addresses the requirement that employers provide health insurance benefits that treat pregnancy-related costs in the same manner as non-pregnancy related costs.  The Guidance is extensive and addresses other issues not discussed in this post.

Practically, the Guidance provides “Best Practices” for employers to consult to avoid claims related to pregnancy.  Employers are well advised to become familiar with such practices.

The PDA, Title VII and the ADA apply to private employers with 15 or more employees, as well as government employers, labor organizations, employment agencies, and apprenticeship and training programs.

Employers are also reminded of the Patient Protection and Affordable Care Act’s amendment to the Fair Labor Standards Act, which establishes the requirement that employers provide a reasonable break time and private place for breastfeeding employees to express milk.

New Jersey Senate Bill Aimed at Protecting Job Applicants With Criminal History

Posted in Employment Policies and Practices, Harassment, Discrimination and Retaliation

Earlier this month, the New Jersey State Senate Budget and Appropriations Committee advanced a bill seeking to bar employers from inquiring about the criminal history of job applicants during initial interviews and on job applications.  Captioned as the “Opportunity to Compete Act”, Bill S2124 is aimed at affording job applicants with criminal backgrounds an opportunity to avoid early screening by employers based solely on their troubled pasts.  If the legislation is enacted, employers with 15 or more employees over the course of 20 calendar weeks will be precluded from asking an applicant questions about his/her criminal history or from conducting a criminal background check until after making a conditional job offer.  Employers breaking the law would face fines starting at $1,000 and capping at $10,000 based on the number of violations.  Exemptions from the Opportunity to Compete Act would apply to jobs in which criminal background checks are mandated by law or positions involved in law enforcement and homeland security, amongst others.

Backed by the New Jersey Institute for Social Justice, the bill is designed to assist criminal convicts returning to the labor force to live productive lives and avoid recidivism.  On the other hand, several employer and industry groups have expressed opposition to the bill, fearing that it unfairly restricts a company’s decisions on who to consider for employment and their means of doing so.  However, under the proposed legislation, while employers are prohibited from initially screening for job candidates with criminal backgrounds, they would still be able to later reject such applicants based on a subsequent review of their criminal histories.

Newark’s Paid Sick Leave Ordinance to Take Effect on June 21, 2014

Posted in Employment Policies and Practices

As we previously posted on March 20, 2014, the City of Newark, New Jersey passed a paid sick leave ordinance (the “Ordinance”), which requires private employers to provide paid sick leave to employees who work at least 80 hours per year in Newark.  According to the City of Newark’s official website, the Ordinance will take effect on June 21, 2014. A copy of the Ordinance can be found by clicking here.

Under the Ordinance, employees of private-sector employers who work at least 80 hours per year in Newark are eligible to earn such paid sick time. The Ordinance, however, specifically exempts public employees, employees of construction unions covered by collective bargaining agreements, and employees covered by collective bargaining agreements that specifically waive paid sick leave requirements. Employers with ten or more employees are required to provide up to 40 hours of paid sick leave per year. Employers with fewer than ten employees are required to provide up to 24 hours of paid sick leave per year. Child care workers, home health workers, and food service workers can accrue up to 40 hours of paid leave time in any given year, regardless of the number of employees their employer employs.

By June 21, 2014, employers in the City of Newark (and others who may be subject to the Ordinance) must notify employees of their rights under the Ordinance by providing written notice to each employee at the commencement of his/her employment, or as soon thereafter as practicable, concerning the Ordinance. Employers are also required to post a notice of worker’s rights under the Ordinance in a “conspicuous location around the workplace.” The notice required by the Ordinance must be posted in English and any language spoken by at least ten percent (10%) of the employer’s workforce. The City of Newark has not yet issued a “model notice” for employers to follow, and in the interim, employers subject to the Ordinance should prepare a written notice which conveys the keys terms of the Ordinance for their employees.

The City of Newark has also posted a list of Frequently Asked Questions (“FAQ’s”) on its website, which provides helpful information and can be found by clicking here.

Employers subject to the Ordinance should review their current paid sick leave policies to ensure they comply with the Ordinance. Employers should also prepare the proper notices required by the Ordinance, and post and distribute the required notices by no later than June 21, 2014.

Attention New York City Employers: New Unpaid Intern Protections to Take Effect June 14, 2014

Posted in Employment Policies and Practices, Harassment, Discrimination and Retaliation

As we previously posted on April 16, 2014 (click here), the recently-passed “unpaid intern” amendments to the New York City Human Rights Law (the “NYCHRL”) will become effective this weekend on June 14, 2014.  The timing of the amendments could not be more appropriate as many New York City employers are in the early days of their summer internship programs.  The amendments broaden the scope of the existing NYCHRL protections to include unpaid interns, who will now have the same rights as employees to sue employers for discrimination and harassment based upon their age, sex, race, national origin, disability or sexual orientation, amongst other protected class categories.

Under the amended statute, “interns” are defined as temporary workers, closely supervised by existing staff, whose work provides them with training or supplements an educational experience in a way that is intended to benefit those individuals.  This definition applies equally to all interns regardless of whether they are paid or unpaid.  If they have not done so already, New York City employers are strongly encouraged to review their discrimination and harassment policies and procedures to ensure that they are adequately protecting interns (and themselves) under the new amendments.

New Jersey State Senate Supports Bill Protecting Against Unemployment Bias

Posted in Employment Policies and Practices, Harassment, Discrimination and Retaliation

Earlier this week, the New Jersey State Senate advanced a bill (by a vote of 23-13) aimed at protecting unemployed New Jersey job seekers.  The proposed language of bill S1440 would prevent employers from discriminating against job applicants in any employment decisions with respect to “hiring, compensation or the terms, conditions or privileges of employment because the applicant is, or has been, unemployed.”  Employers found to have violated the proposed legislation will face fines of $1,000 for a first violation, $5,000 for a second violation and $10,000 for each additional violation thereafter.

The bill’s sponsors believe that the legislation is an important safeguard for the thousands of unemployed residents of New Jersey who face an already-uphill battle in the improving (albeit slowly) job market.  It should be noted, however, that the bill does not entirely preclude employers from taking an applicant’s unemployment status into consideration, only that they cannot discriminate on that basis.  This essentially means that while employers may consider a job applicant’s unemployment status during the hiring process, that can only be one factor amongst many which leads to the ultimate decision whether or not to hire.  Accordingly, the proposed language still allows employers to, amongst other things, inquire into an applicant’s employment history and the reasons for their separation from prior places of employment.  The bill is currently pending with the State Assembly.

As we had previously reported, New Jersey already prohibits employers from publishing job postings explicitly requiring applicants to be currently employed elsewhere.  [Click here for the January 10, 2014 post.]  The pending legislation will expand upon and fill the gap in the existing state of the law by protecting against less overt forms of unemployment discrimination and bias.  Under the existing law, though employer job postings may not require applicants to be currently employed, nothing otherwise prevents them from discriminating purely on the basis of job status.

New York Votes to Protect Unpaid Interns from Discrimination

Posted in Employment Policies and Practices, Harassment, Discrimination and Retaliation

On March 26, 2014, the New York City Counsel voted unanimously to amend the New York City Human Rights Law (the “NYCHRL”) to allow unpaid interns to sue for harassment and discrimination.  The bill was likely drafted in response to a federal judge’s decision in October 2013, which dismissed an unpaid intern’s sexual harassment claim against her boss, because she was not an “employee” under the NYCHRL.  New York City joins Oregon and Washington, DC as places that are extending such significant protections to unpaid interns.

The bill is expected to be signed by Mayor Bill de Blasio, and could become effective sixty (60) days thereafter, just as the summer internship season kicks into high gear.  The bill changes the scope of the existing NYCHRL to extend coverage to unpaid interns.  The bill will allow unpaid interns to sue for harassment, as well as discrimination based on their age, sex, race, creed, color, national origin, sex, disability, marital status, partnership status, sexual orientation, citizenship status, or status as a victim of domestic violence, sex offense or stalking.  The bill defines an intern as:

An individual who performs work for an employer on a temporary basis whose work: (a) provides training or supplements training given in an educational environment such that the employability of the individual performing the work may be enhanced; (b) provides experience for the benefit of the individual performing the work; and (c) is performed under the close supervision of existing staff.

Importantly, the bill makes clear that “interns” include “individuals without regard to whether the employer pays them a salary or wage.”  Interns will now be entitled to bring civil lawsuits under the NYCHRL.

When the bill is signed by the Mayor, unpaid interns will require the same protections as regular employees against harassment and discrimination.  Employers should take the opportunity to review their applicable discrimination and harassment policies to make sure all classes of persons are adequately protected.

Third Circuit Embraces Successor Liability for Wage-and-Hour Violations of the Fair Labor Standards Act

Posted in Employment Policies and Practices, Wage and Hour and Executive Compensation

In a recently decided case, Thompson v. Real Estate Mortgage Network, Case No. 12-3828 (3d Cir. Apr. 3, 2014), the Third Circuit Court of Appeals determined for the first time that a successor-employer may be held financially accountable for its predecessor’s wage-and-hour violations under the Fair Labor Standards Act (“FLSA”).  This ruling potentially exposes employers to additional claims under the FLSA and provides plaintiffs with further potential sources of recovery for wage-and-hour claims.

The plaintiff in Thompson sought to hold her previous employer, as well as its predecessor company, liable for alleged failures to pay her overtime compensation in violation of the FLSA and the New Jersey state wage-and-hour laws.  (Slip Op. at 4-5).  The FLSA allows employees to recover damages where employers fail to pay sufficient overtime compensation when an employee works over forty (40) hours in a given week, among other things.  See 29 U.S.C. § 207(a)(1).  New Jersey’s wage-and-hour law similarly requires employers to compensate certain employees for overtime worked “in excess of 40 hours in any week.”  N.J.S.A. § 34:11-56a4. 

Thompson filed suit under both laws against Security Atlantic Mortgage Company (“Security Atlantic”), her original employer, and Real Estate Mortgage Network (“REMN”), the successor company to Security Atlantic.  (Slip Op. at 3-4).  One issue addressed by the Third Circuit in evaluating whether Thompson sufficiently plead her claims against either defendant was whether REMN, as an alleged successor to Security Atlantic, could be held liable for any wage-and-hour violations committed by its predecessor.  In determining that issue of first impression, the Third Circuit examined whether the New Jersey state law test for successor liability applied or the less burdensome federal common law approach.

As the Third Circuit explained, the federal common law “presents a lower bar to relief than most state jurisprudence” to protect employment-related policies.  (Slip Op. at 16).  It requires consideration of the following factors in determining whether successor liability should be imposed: “(1) continuity in operations and work force of the successor and predecessor employers; (2) notice to the successor-employer of its predecessor’s legal obligations; and (3) ability of the predecessor to provide adequate relief directly.”  Id.  By contrast, under New Jersey law, successor companies are considered legally distinct from their predecessors and do not assume any debts or obligations of the predecessor unless: (1) the successor agrees to assume such liabilities; (2) the transaction amounts to a consolidation or merger of the buyer and seller; (3) the purchasing company is merely a “continuation” of the selling company; or (4) the transaction was consummated to fraudulently escape its liabilities and debts.  (Id. at 14-15).

The Court determined the federal common law standard governed whether successor liability applied to Thompson’s claims as “the logical extension of existing case law,” pointing to the Seventh and Ninth Circuit’s adoption of the same broad test.  (Slip Op. at 17).  In part, the Court reasoned that adopting the less stringent standard for successor liability would make it more difficult for violators to escape liability by selling assets without the buyer assuming the associated liabilities.  (Id. at 18).  The Court also explained the broader approach comports with the federal statute’s purpose of fostering labor peace and protecting workers’ rights.  (Id. at 17).

Under the approach embraced by the Third Circuit, the Court determined Thompson satisfied her pleading burden.  As to the first factor, she alleged “all facets of the business at issue, including operations, staffing, office space, email addresses, employment conditions and work in progress, remained the same” after the successor company took over, thus showing a “continuity in operations and work force.”  Id. (citations omitted).  As to the second factor of notice to the successor company, Thompson alleged Security Atlantic was controlled by a small management group, including two individuals who worked at both companies and possessed ongoing knowledge of the “systematic” FLSA violations.  (Id. at 22).  Finally, as to the third factor, she alleged the predecessor company was now “defunct”, meaning it would likely be unable to satisfy any damages awarded to Thompson.  Id.  Accordingly, the Court found Thompson asserted a plausible claim for relief under the FLSA through the federal common law theory of successor liability.

As a result of the Third Circuit’s adoption of this less stringent successor-liability test, employers should understand and inquire about potential FLSA and state wage-and-hour violations when acquiring new business operations to assess the risk of successor liability for a predecessor’s non-compliant actions.

Newark Becomes Second City in New Jersey to Pass Paid Sick Leave Ordinance

Posted in Employment Policies and Practices

The City of Newark, New Jersey recently passed a paid sick leave ordinance (the “Ordinance”) which requires private employers to provide paid sick leave to employees who work at least 80 hours per year in Newark.  Newark is the second city in New Jersey to adopt such legislation, following Jersey City.  Newark Mayor Luis A. Quintanta signed the Ordinance into law on January 29, 2014, and the Ordinance takes effect on May 29, 2014. 

Under the Ordinance, employees of private-sector employers who work at least 80 hours per year in Newark are eligible to earn such paid sick time.  The Ordinance, however, specifically exempts public employees, employees of construction unions covered by collective bargaining agreements, and employees covered by collective bargaining agreements that specifically waive paid sick leave requirements.  Employers with ten or more employees are required to provide up to 40 hours of paid sick leave per year.  Employers with fewer than ten employees are required to provide up to 24 hours of paid sick leave per year.  Child care workers, home health workers, and food service workers can accrue up to 40 hours of paid leave time in any given year, regardless of the number of employees their employer employs.

Eligible employees will earn one hour of paid sick time for every 30 hours worked.  Eligible employees can also carry up to 40 hours of paid sick time from year to year under the Ordinance.  Employees became eligible immediately upon being hired, but are not eligible to use the paid sick time until they have been employed for at least 90 days. 

The Ordinance allows eligible employees to use paid sick time for: (i) their own or a family member’s mental or physical illness, injury or health condition; (ii) for closure of the employee’s place of business by order of a public health official; (iii) to care for a child whose school or daycare has been closed by order of a public health official; or (iv) to care for a family member whose exposure to a communicable disease would jeopardize the health of others in a community. 

In addition to providing the proper paid sick time under the Ordinance, employers must also provide notice to workers of their right to paid sick leave, the right to be free from retaliation for properly requesting such time off under the Ordinance, and the accrual rate and amount of paid sick time.  Newark’s Department of Child and Family Well-Being has been tasked with enforcing the Ordinance.  Violators can face a fine of up to $1,000 for each infraction of the Ordinance and potential lawsuits. 

Employers with business locations in Newark should review their current paid sick leave policies to ensure they comply with the Ordinance, and employers should also prepare the proper notices required by the Ordinance.  Employers with sick leave policies that are more generous than the Ordinance are not required to provide additional paid sick leave under the Ordinance.

Second Circuit Weighs In On Tort Litigation During Pending EEOC Proceeding

Posted in Harassment, Discrimination and Retaliation

Last week, the Second Circuit Court of Appeals ruled that a plaintiff’s filing of a charge of discrimination with the United States Equal Employment Opportunity Commission (“EEOC”) does not toll the statute of limitations for corresponding state-based tort claims, even if such claims arise out of the same common nucleus of facts.

In Castagna v. Luceno, — F.3d –, 2014 WL 840964 (2d Cir. Mar. 5, 2014), the plaintiff, Patricia Castagna, filed a charge with the EEOC against her former employer, Majestic Kitchens, Inc. (“Majestic”), and its majority owner, Bill Luceno (“Luceno”), alleging employment discrimination based on her gender.  The EEOC complaint was filed approximately 3 ½ months following Castagna’s July 9, 2008 resignation from Majestic.  After receiving a right-to-sue letter from the EEOC on August 14, 2009, Castagna proceeded to file a complaint in November 2009 in the United States District Court for the Southern District of New York (the “Federal Complaint”), nearly a year and a half after her resignation.  The Federal Complaint asserted claims against Majestic and Luceno under Title VII of the Civil Rights Act of 1964, the New York State Human Rights Law, and also alleged several state-based tort claims including intentional infliction of emotional distress and assault and battery (collectively, the “Tort Claims”).  The defendants subsequently moved to dismiss the Tort Claims as barred by New York’s one-year statute of limitations, and the Southern District Court granted their motion, dismissing the Tort Claims.  Castagna appealed, arguing that the statute of limitations on the Tort Claims was tolled as a result of her EEOC filing.

As a matter of first impression, the Second Circuit relied upon the rationale from the Courts of Appeals for the Seventh and Ninth Circuits to conclude, as a matter of law, that the commencement of an EEOC action does not toll the statute of limitations for state tort claims.  The Court declared that this holds true even, where here, Castagna’s tort claims arose out of the same alleged misconduct that formed the basis for her EEOC charge.  Essentially, the Second Circuit found that there was no evidence suggesting that Congress intended to provide claimants with the ability to delay filing state-based tort claims during a pending EEOC proceeding, and Castagna therefore never lost her “unfettered right” to pursue her tort claims during that time.