Employment Law Monitor : Employment Lawyer & Attorney : Cole Schotz Meisel Forman & Leonard Law Firm : NJ, Mid-Atlantic Wage & Hour, Wrongful Termination

The most recent case to highlight the importance of having properly drafted electronic personnel policies is Stengart v. Loving Care Agency. In Stengart, the New Jersey Superior Court held that an employee who used her web-based Yahoo email account on the Company’s computer waived her attorney-client privilege. In Stengart, the employee emailed her attorney during business hours from the laptop issued to her by her employer, Loving Care, before she left its employ. 

After Stengart brought suit alleging hostile workplace and constructive discharge claims against Loving Care, the Company conducted a routine review of her computer to comply with the Court’s discovery rules. During this review, the Company came upon the privileged communication. While Stengart argued that the email should be returned or destroyed and the Company had no right to retain it, Loving Care countered that Stengart waived the privilege by communicating with her attorney on Company time and through the use of a Company-issued laptop. Importantly, the Court relied upon the Company’s comprehensive handbook provisions that prohibited employees from using the email system for “employment activities outside the scope of the Company business” or for “solicitation or outside business ventures.” Moreover, the Court cited the Handbook’s provision that emails sent on the Company’s server are not to be considered private or personal to any employee. Finally, the Court noted that Stengart herself helped create and distribute the Handbook and, therefore, she could not reasonably claim that she was unaware of the policy. 

This decision confirms the importance of having properly drafted email, computer and personnel policies.

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There have been recent changes to the statutes of limitation applicable to many employment claims.  Steven Adler, Chair of the Employment Law Department of Cole Schotz and Kathryn Dugan, an associate in the Department, recently had an article on the subject published in the April 13, 2009 issue of the New Jersey Law Journal.  Click here to read the article.

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The New York Legislature recently signed three pieces of legislation aimed at enhancing employment opportunities for individuals with prior criminal convictions. The new laws relate to Article 23-A of New York’s Correction Law, which provides that employers are prohibited from discriminating against an applicant based on a prior criminal conviction unless (a) there is a “direct relationship” between one or more of the criminal convictions and the specific employment sought or held by the individual; or (b) granting or continuing employment would involve an “unreasonable risk” to property or to the safety or welfare of specific individuals or the general public. Article 23-A of the Corrections Law indentifies a list of factors that an employer must consider before making an employment decision on the basis of an individual’s criminal background. Some of these factors include: the relationship between the prior offense and the individual’s ability to perform specific duties of the job; the length of time elapsed since the offense; the individual’s age at the time of the offense; the seriousness of the offense; and information produced in regard to the individual’s rehabilitation and good conduct.

The first piece of legislation, effective September 2008, amends the New York Human Rights Law to protect New York employers from negligent hiring claims brought by third parties alleging an employee with a criminal conviction caused harm in the workplace. Under the amendment, if an employer has evaluated an applicant’s criminal history in accordance with the factors outlined in Article 23-A and decided in good faith to hire the individual, then the employer is afforded a rebuttable presumption that information regarding the individual’s criminal background should be excluded from evidence. The second piece of legislation, effective February 2009, requires all New York employers to post a copy of the Article and related regulations conspicuously in the workplace. The third piece of legislation, also effective February 2009, requires all New York employers to provide a copy of Article 23-A to (1) prospective employees subject to background checks and (2) any employee whose background check uncovers a prior criminal conviction, regardless of whether the employer takes adverse employment action against that individual.

Employers operating in New York should be mindful of these regulations and review and revise their employment policies and practices to ensure compliance with both the anti-discrimination and posting provisions of the new laws.

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The American Recovery and Re-Investment Act of 2009 (“ARRA”), enacted on February 17, 2009, made significant changes to federal COBRA, as previously reported on this blog. New Jersey employers with less than twenty (20) employees, who are subject to New Jersey’s mini-COBRA statute (“NJ COBRA”), should also be aware that the ARRA makes significant changes to NJ COBRA.

“Assistance eligible individuals” who elect COBRA (or NJ COBRA) may receive a government subsidy equal to 65% of their health insurance premium for up to nine (9) months and remain obligated to pay 35% of the premium. Under NJ COBRA, “an assistance eligible individual” is an individual who loses group health coverage because of an employee’s involuntary termination between September 1, 2008 and December 31, 2009 and who is otherwise eligible for New Jersey continuation coverage. Under New Jersey law, employees who are terminated for “cause” are not eligible for continuation coverage. The NJ COBRA premium subsidy is also not available if the individual’s income that year exceeds $125,000.00 for an individual filer and $250,000.00 for a joint filer. Finally, the NJ COBRA premium subsidy is not available if the employee is otherwise eligible for other insurance coverage, such as through a spouse’s plan or Medicare.

New Jersey’s small employers with less than 20 employees should be aware of their obligations to provide NJ COBRA notices to eligible employees. Employees who are involuntarily terminated between September 1, 2008 and February 16, 2009 must elect the subsidy no later than April 18, 2009. Those who are involuntarily terminated between February 17, 2009 and December 31, 2009 must elect New Jersey continuation coverage within thirty (30) days after their coverage ended due to an involuntary termination of employment. These individuals must also sign up for the subsidy within that same thirty (30) day period. This thirty (30) day period is different than the election period applicable to COBRA. 

Employers should also be aware that individuals who initially declined to elect group continuation coverage or initially elected coverage and then lost it due to their failure to pay premiums will have an additional opportunity to elect group continuation coverage and receive the subsidy. In this situation as well, individuals will have until April 18, 2009 to enroll. Coverage for eligible individuals who enroll will end on the date coverage would have ended had they initially elected continuation coverage following their termination. 

Unlike COBRA, under NJ COBRA only the person who is involuntarily terminated may make a continuation election, and not the employee’s dependents. 

Small employers should make note of those “take away” items referenced in the Firm’s March 6, 2009 posting on the ARRA and its impact on COBRA. Employers should also note that the Department of Labor has issued model forms for employers to use when notifying individuals of their rights under COBRA and NJ COBRA. These forms can be found at http://www.dol.gov\ebfa\COBRA.html.

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