New Jersey Labor Law

February 24, 2025

National Labor Relations Board General Counsel Takes on Non-Compete Clauses

Workers have the right, under both federal and New Jersey employment laws, to engage in activities related to organizing and negotiating with their employers. This might involve joining or forming a labor union, but the law also protects more informal activities that have the goal of protecting workers’ interests. Employers may not interfere with employees who are trying to exercise these rights, nor may they retaliate against employees who have engaged in protected activities. The National Labor Relations Board (NLRB) is responsible for investigating alleged violations of the federal labor rights statute. Its General Counsel (GC) may set certain policies for how the agency investigates and prosecutes charges of unlawful activity. In early October 2024, the GC issued a memo outlining her position that certain provisions in employment contracts, including non-compete agreements, violate federal law.

In a May 2023 memorandum, the GC defined a non-compete agreement as an agreement that “prohibit[s] employees from accepting certain types of jobs and operating certain types of businesses after the end of their employment.” Courts around the country have reviewed the validity and enforceability of non-compete agreements. They must balance an employer’s interest in protecting their business with an employee’s need for a job in their chosen career path.

While the specifics vary from one jurisdiction to another, most courts have held that non-compete agreements are enforceable when they have a limited scope in both duration and geography. A non-compete agreement that prohibits an employee from working for a competitor anywhere in the country for ten years, for example, would probably be unenforceable. It would prevent the employee from earning a living in their field of knowledge and experience. An agreement that only restricts competition within a twenty-mile radius of the employer for six months might be enforceable since it sets reasonable limits.
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February 5, 2025

Four Federal Agencies Partner to Investigate Antitrust Violations Affecting Workers in New Jersey and Nationwide

by Resnick Law Group, P.C.

Employees who have experienced unlawful practices in the workplace, such as wage and hour violations, misclassification, or discrimination, can turn to New Jersey employment laws. Some employment practices may violate antitrust laws at the federal and state levels. Antitrust laws prohibit actions that prevent or inhibit competition among businesses. The less businesses can compete, the more consumers will suffer without free market incentives to keep prices low. This can apply to employment, such as when employers collude to limit employees’ options for finding a new job. Several federal agencies entered into a memorandum of understanding (MOU) this fall. They agreed to cooperate and share information when investigating mergers that might violate antitrust law and harm employees.

The Sherman Antitrust Act of 1890 addresses monopolies that restrain trade. This may include employment practices, such as when competing businesses agree to fix wages or refrain from hiring one another’s employees. This can deprive employees of opportunities to advance in their careers or demand better wages. If employers know their employees have no other prospects in their area, they have no incentive to raise wages or improve other working conditions.

The Clayton Antitrust Act of 1914 deals with practices that Congress did not specifically address in the Sherman Act. This includes mergers that may harm consumers or employees. The law prohibits mergers that could create a monopoly in a particular market. Employees may suffer from an unlawful merger if it substantially reduces the number of employers in a market or geographic area.
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November 18, 2024

NLRB Final Rule Reinstates Several Union Organizing Tools That May Affect New Jersey Workers

by Resnick Law Group, P.C.

Under federal and New Jersey employment laws, workers have the right to organize themselves for collective bargaining and other activities related to advocacy for their interests in the workplace. The National Labor Relations Board (NLRB) oversees multiple aspects of federal labor law. This includes investigating alleged violations of workers’ rights under the National Labor Relations Act (NLRA), overseeing union elections, and bringing administrative cases against employers or unions. Some of the NLRA’s language is rather vague, leaving interpretation and implementation of the law to the NLRB. The administrative rulemaking process allows the NLRB to create rules and regulations based on the NLRA. These rules tend to shift as different administrations move in and out of the White House. This summer, the NLRB issued a final rule that makes several changes to the regulations. Some — but not necessarily all — of the changes may be helpful to New Jersey workers.

The NLRA addresses a variety of issues involved in labor relations.
– Section 7 of the statute defines employees’ rights, although it does so in very general terms. These include the right to organize, engage in collective bargaining, and engage in other activities related to “mutual aid or protection.” Employees also have the right to refrain from any of these activities.
– Section 8 defines “unfair labor practices” by employers and unions, such as restraining or coercing employees with regard to their rights under § 7.
– Section 9 deals with how to designate a union as employees’ official representative for collective bargaining, including procedures for union elections.
– Section 10 outlines the NLRB’s power to investigate and adjudicate complaints.

The NLRB’s new rule rescinds a 2020 rule and reinstates several practices that tend to benefit unions. One such practice is known as a “blocking charge.” This allows regional NLRB directors to postpone a pending election if they receive a charge alleging unfair labor practices that would restrict “employee free choice” in that election. The NLRB can investigate the charge before proceeding with the election. The 2020 rule required regional directors to allow election to go on despite the charge.
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September 18, 2024

New Jersey Courts Reject Effort to Stop Temporary Workers’ Bill of Rights from Taking Effect

by Resnick Law Group, P.C.

The Temporary Workers’ Bill of Rights (TWBOR) became law in New Jersey in February 2023. The Legislature determined that more than 100,000 temporary workers employed by staffing agencies earned substantially less than direct employees performing the same work. It also found that temporary workers are often at risk of abuse or exploitation and that temporary workers do not have the full range of protections offered by New Jersey employment laws. The TWBOR addresses these concerns. The bill took effect on August 5, 2023, after a federal court rejected a challenge by several staffing agency trade organizations. The Third Circuit Court of Appeals affirmed the court’s ruling in July 2024. A month later, the district court denied another motion from the plaintiffs seeking an injunction against the TWBOR. Whether additional appeals will follow remains to be seen.

The TWBOR provides several important legal protections for temporary workers. The law mainly applies to staffing agencies that employ temporary workers and make them available to client companies. Staffing agencies must pay temporary workers at least the same amount that their clients pay their employees for similar work. They must also provide equal benefits. They may not retaliate against workers who exercise the rights the TWBOR guarantees. They must provide workers with written notice for every new assignment that provides information like the work they will be performing, the length of the assignment, and the wage rate they will receive.

A group of trade associations that represent New Jersey staffing agencies filed suit in May 2023 seeking to prevent the TWBOR from taking effect. They sought a preliminary injunction that summer. A federal judge denied their request, finding that they had failed to establish one of the elements required for a preliminary injunction: that they would be likely to succeed on the merits of their claims. The court rejected other arguments from the plaintiffs as well, including a claim that the TWBOR discriminated against out-of-state businesses in violation of the Dormant Commerce Clause and that the law was void because of vagueness. It held that protecting temporary workers is a valid state interest and that the TWBOR was reasonably related to this interest.
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August 25, 2024

Court Blocks FTC’s Non-Compete Ban: What It Means for New Jersey Employees

by Resnick Law Group, P.C.

In a recent case, the U.S. District Court issued a preliminary injunction against the Federal Trade Commission’s (FTC) “Non-Compete Rule,” which was set to take effect on September 4, 2024. The Non-Compete Rule aimed to make most non-compete agreements unenforceable, significantly altering the employment landscape across the U.S., including in New Jersey. Thus, if left to stand, the recent opinion out of Texas could have far-reaching implications for New Jersey employees.

The FTC’s Non-Compete Rule and Its Implications

The FTC introduced the Non-Compete Rule intending to protect employees from restrictive agreements that limit their ability to work for competitors or start their businesses after leaving a job. Historically, non-compete agreements have been widely criticized for stifling competition and limiting workers’ job mobility. If enforced, the FTC rule would have provided greater freedom for employees in New Jersey to seek better job opportunities without fear of legal repercussions from former employers.

However, the court’s recent decision temporarily blocks the FTC’s Non-Compete Rule, questioning the FTC’s authority under the Federal Trade Commission Act to implement such a sweeping regulation. In this case, the court found that the FTC might lack the substantive rulemaking power to enforce the Non-Compete Rule, raising concerns about the agency’s ability to regulate unfair methods of competition in this manner.

May 20, 2024

Federal Judge Vacates NLRB’s Joint Employer Rule

by Resnick Law Group, P.C.

“Joint employer” rules help workers and their advocates in situations where more than one person or entity exercises control or authority over a worker. New Jersey employment laws establish obligations that employers owe to their employees. To assert a claim for damages under these laws, an employee must identify which employer or employers have those legal obligations. This issue can arise in disputes over labor rights under the National Labor Relations Act (NLRA), such as when an employee receives a paycheck from one company but works at a site operated by another company under a contract between the two companies. Joint employer rules allow workers to hold employers jointly and severally liable for unlawful practices. The National Labor Relations Board (NLRB) issued a final rule in late 2023 establishing a new standard for joint employment under the NLRA. In March 2024, however, a federal judge vacated the rule.

The NLRA protects employees’ rights to organize themselves, bargain collectively with their employers, and engage in other activities related to advocating for their rights and protecting their interests. Employers may not interfere with or retaliate against employees who are engaging in protected activities. Like many employment laws, the statute only briefly defines “employer,” leaving it to the NLRB to go into detail.

The NLRB’s joint employer rule looks at the amount of control an alleged employer has over a worker’s “essential terms and conditions of employment” (ETCEs). This includes issues like wages or salary, job assignments, supervision, workplace safety, and employment policies. In 2020, the NLRB adopted a rule that would only deem an entity a joint employer if it had “substantial direct and immediate control over one or more” ETCEs. This presents a fairly high bar for employees, which the NLRB sought to address with a revised rule.
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February 2, 2024

Two Pending Cases Before the U.S. Supreme Court Could Substantially Impact New Jersey Employment Law

by Resnick Law Group, P.C.

Protecting the rights of employees and job applicants in New Jersey and around the country requires a complex system of courts and government agencies. Both federal and New Jersey employment laws rely on agencies to interpret, implement, and enforce those laws. Many employment disputes must go through an administrative process before a person can file a lawsuit in court, such as the process of filing a discrimination charge with the Equal Employment Opportunity Commission (EEOC). Some agencies have administrative law judges (ALJs) who can rule on disputes. This helps keep court dockets from becoming even more overloaded. If a case does go before a federal court, a 1984 U.S. Supreme Court decision states that judges should defer to agencies’ interpretations of the law in certain situations. Two cases currently pending before the Supreme Court could upend this system.

Administrative Law Judges

Many employment law disputes go before ALJs, who have the authority to adjudicate certain matters. ALJs with the U.S. Department of Labor handle various employment-related claims. The National Labor Relations Board (NLRB) has ALJs who adjudicate labor complaints.

ALJs are not part of the federal court system. Article III of the U.S. Constitution addresses the Judicial Branch of the federal government. ALJs are part of the system of administrative agencies under the Executive Branch. This is part of the dispute now before the Supreme Court in Securities and Exchange Commission v. Jarkesy.
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January 19, 2024

NLRB Issues Final Rule on Joint Employer Status

by Resnick Law Group, P.C.

To assert a claim for violations of New Jersey employment laws, a person must be able to demonstrate that an employer-employee relationship exists. State and federal employment statutes tend to provide vague definitions of terms like “employee” and “employer.” Courts and regulatory agencies provide more detailed definitions. For example, the New Jersey Supreme Court has adopted a test to distinguish between employees with the full protection of state and federal employment law and independent contractors with contractual rights and remedies. In other situations, multiple entities may exercise control over an employee’s work, making it difficult to determine who is their “employer” under the law. The National Labor Relations Board (NLRB) recently issued a new rule for determining when an employee has “joint employers.” The rule can help employees hold employers liable for violations of federal labor law.

The National Labor Relations Act (NLRA) protects employees’ rights to “self-organization” and “other concerted activities” intended to protect employees or promote their welfare. Employers may not threaten or interfere with employees who are engaging in protected activities. The NLRB investigates claims of unlawful activity by employers.

“Joint employer” status can be an issue in situations where more than one company or other entity has some degree of control over an employee’s work. An employee might draw a paycheck from a staffing agency, for example, but take orders from a business that contracts with the agency. Someone who works for a business that operates a franchise might be subject to requirements from their direct employer, known as the franchisee, and the franchisor. The joint employer rule seeks to determine how many entities are acting as an “employer.”
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September 15, 2023

NLRB Ruling Changes Standard for Many New Jersey Employers’ Workplace Policies

by Resnick Law Group, P.C.

Employers’ workplace policies must comply with New Jersey employment laws. This includes federal laws passed by Congress and state laws passed by the New Jersey Legislature. At the federal level, the National Labor Relations Act (NLRA) protects workers’ rights to engage in organizing activities. The National Labor Relations Board (NLRB) adjudicates complaints from employees that allege violations of their rights. When an employment policy interferes with workers’ ability to organize themselves, the employer might be in violation of the NLRA. An August 2023 decision from the NLRB revises the standards that it uses to assess whether a particular policy or rule infringes on employees’ rights. It reverses a standard put in place in 2017 and reinstates an earlier standard with some modifications.

Workers have the right under § 7 of the NLRA to organize themselves in order to form or join unions. By organizing in this way, workers gain greater leverage in negotiations with their employers through a process known as collective bargaining. Employers violate the NLRA when they interfere with efforts to organize or engage in other activities intended to promote workers’ interests. Violations of these rights are possible even without obvious intent on the part of an employer. Policies or rules that appear neutral can still be unlawful in certain situations.

In 2017, the NLRB issued a ruling that established a standard for evaluating employment policies that remained in place until the recent decision. The 2017 standard gave greater leeway to employers than the standard it replaced. It identified three categories of employment policies, based on the level of scrutiny that it would apply:
– Category 1: Rules that are lawful, either because they generally do not interfere with workers’ rights or they serve a purpose whose important outweighs the possible impact on workers.
– Category 2: Rules that the NLRB assesses on a case-by-case basis to balance the extent of any NLRA violations against possible business justifications.
– Category 3: Rules that unambiguously infringe on workers’ rights.
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August 25, 2023

New Jersey Court Denies Effort to Enjoin Temporary Workers Bill of Rights

by Resnick Law Group, P.C.

In February 2023, the New Jersey governor signed a bill that creates a Temporary Worker Bill of Rights (TWBOR). Employment statutes typically only protect people who meet a fairly specific definition of an “employee” that often excludes temporary workers. The TWBOR expands the protections offered by many New Jersey employment laws to include temporary workers employed by staffing agencies. Its effective date was August 5, 2023, 180 days after the date the governor signed it. In May, several trade organizations that represent staffing agencies filed a federal lawsuit seeking to enjoin the TWBOR on constitutional and statutory grounds. A judge denied their request for a preliminary injunction in late July, allowing the TWBOR to take effect on schedule.

The TWBOR covers temporary workers in multiple industries, including security, building maintenance, personal care services, food preparation, construction, manufacturing, repair, and transportation. These workers are directly employed by staffing agencies and provide services to client businesses. According to the New Jersey Legislature, temporary workers receive significantly lower pay than other employees for the same work and are more vulnerable to abusive workplace practices.

The new law imposes disclosure and recordkeeping requirements on temporary staffing agencies. It limits agencies’ ability to charge temporary workers for expenses like transportation to and from worksites. The provisions of the TWBOR that took effect on August 5 include a requirement that temporary workers receive wages that are at least equal to “the average rate of pay and average cost of benefits” for employees of the client businesses that do “the same or substantially similar work.” Violations of many of these provisions may result in civil fines and liability for damages to aggrieved temporary workers.
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