Articles Posted in Retaliation

New Jersey employees are entitled by law to receive overtime compensation, at a rate equal to one-and-a-half times their usual wage, for time worked in excess of forty hours in a week. Although state and federal law identify various groups of employees who are exempt from this requirement, nonexempt employees may recover damages in court if their employer fails to pay them at the overtime rate. Employers are also prohibited under federal law from retaliating against employees who report alleged wage violations. A lawsuit filed last month in a New Jersey federal court alleges that a company failed to pay overtime to the plaintiff, and then fired him in retaliation for reporting the matter to the human resources department. Buchspies v. Pfizer, Inc., No. 2:18-cv-16083, complaint (D.N.J., Nov. 13, 2018). The complaint asserts causes of action under both federal and state law.

The federal Fair Labor Standards Act (FLSA) requires employers to pay nonexempt workers “at a rate not less than one and one-half times the regular rate” for any amount of time over forty hours in a week. 29 U.S.C. § 207(a)(1). The statute provides a lengthy list of exempt employees, such as “bona fide executive, administrative, or professional” employees, certain agricultural workers, employees of small newspapers, certain individuals informally employed as domestic caregivers, and border patrol agents. Id. at §§ 213(a)(1), (6), (8), (15), (18). New Jersey wage law requires overtime pay at the same rate. It includes an exemption for “executive, administrative, or professional” employees, as well as other groups. N.J. Rev. Stat. § 34:11-56a4. The FLSA also states that employers may not take adverse action against employees who make a complaint alleging violations of the statute. 29 U.S.C. § 215(a)(3).

The plaintiff in Buchspies, according to his complaint, began working for the defendant in 2013 “as a chemical analyst in a pharmaceutical laboratory.” Buchspies, complaint at 2. He claims that the defendant’s payroll system identified him as an “overtime eligible employee.” Id. He states that he received a base pay rate of $34.00 per hour. Although he allegedly worked more than forty hours during some weeks, he claims that the defendant only paid him at the rate of $34/hour, instead of the $51/hour that would be payable for overtime hours under the FLSA and state law. The plaintiff states that he complained about the overtime issue to human resources in May 2018, and alleges that he was fired two weeks later, with no reason given.
Continue reading

A federal jury recently found in favor of a former employee claiming national origin and age discrimination under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), and state law. Middlebrooks v. Teva Pharmaceuticals USA, Inc., et al, No. 2:17-cv-00412, 2nd am. complaint (E.D. Pa., Apr. 25, 2017). The case is notable in part because the plaintiff alleged that the defendants, an Israeli pharmaceutical company and its American subsidiary, discriminated against him because of his “American origin.” Id. at 1. If you have questions of this nature, contact a New Jersey employment discrimination attorney.

In early 2018, the court allowed the plaintiff’s claims against the Israeli parent company to proceed under a theory of joint-employer liability. The case went to trial against both defendants in November 2018. The jury awarded the plaintiff over $6 million in damages.

Title VII prohibits discrimination on the basis of national origin, among other factors, and retaliation for reporting alleged unlawful acts. 42 U.S.C. §§ 2000e-2(a)(1), 2000e-3(a). The ADEA prohibits discrimination on the basis of age against individuals who are at least forty years old. 29 U.S.C. §§ 623(a)(1), 631(a). Unlawful discrimination may include harassment on the basis of a protected category, particularly when it creates a hostile work environment that prevents an individual from performing their job duties effectively.

The Sarbanes–Oxley Act of 2002 (SOX) regulates a wide range of activities by publicly traded companies. Section 806 of SOX, 18 U.S.C. § 1514A, protects whistleblowers against retaliation for reporting suspected legal violations. It allows employees to file a complaint with the U.S. Department of Labor (DOL), potentially followed by a lawsuit in federal district court. The DOL’s Administrative Review Board (ARB) has held that a whistleblower need only have a “reasonable belief” that a legal violation has occurred to engage in “protected activity” under § 806 of SOX. Sylvester v. Parexel Int’l, ARB Case No. 07-123 (ARB, May 25, 2011). The Third Circuit Court of Appeals, whose jurisdiction includes New Jersey, recently ruled on the question of “reasonable belief” in an SOX whistleblower claim, which could have an impact on New Jersey whistleblowers. Westawski v. Merck & Co. Inc., No. 16-4075, slip op. (3d Cir., Jun. 27, 2018).The whistleblower protection provisions of § 806 apply to companies that have securities registered under the Securities Exchange Act of 1934, or that are required to file reports under that statute. Employees who report suspected fraud, wire fraud, bank fraud, or securities fraud, or who cooperate in an investigation of one of these alleged offenses, are entitled to protection. 18 U.S.C. § 1514A(a), citing 18 U.S.C. §§ 1341, 1343, 1344, and 1348. An employee must file a complaint with the DOL. If the DOL has not issued a ruling within 180 days, the employee can usually file a complaint in federal court. Available damages include reinstatement, back pay, court costs, and attorney’s fees.

The statute requires that the whistleblower “reasonably believes” that their employer has violated one or more of the enumerated federal fraud statutes. Id. at § 1514A(a)(1). The ARB has interpreted this requirement as having two parts:  (1) the employee has “a subjective belief that the complained-of conduct constitutes a violation of relevant law”; and (2) “the belief is objectively reasonable.” Sylvester at 14. As long as the employee’s belief is both subjectively and objectively reasonable, the ARB held, their actions are protected even if no legal violations actually occurred.
Continue reading

The U.S. Constitution limits the government’s ability to infringe on a range of rights, including the First Amendment right to free speech. In the context of New Jersey employment matters, this usually places far more limits on public employers than private employers. As a general rule, a private employer does not infringe on an employee’s freedom of speech if they discipline or fire that employee because of statements they have made. Since public employers are part of the government, they have less leeway with regard to employee speech. A lawsuit filed earlier this year, however, alleges that a private employer violated the plaintiff’s constitutional rights by firing her because of her speech. Briskman v. Akima, LLC, No. 2018-5335, complaint (Va. Cir. Ct., Fairfax Cty., Apr. 4, 2018). The plaintiff claims that the defendant fired her “out of fear of unlawful retaliation by the government for constitutionally protected speech,” id. at 8, and that this makes her termination a violation of her First Amendment rights.

Caselaw has largely established broad protections for the free speech rights of public employees with regard to their employment. According to the U.S. Supreme Court, a public employee who speaks out about “issues of public importance” cannot be subject to termination by their employer, unless their statements were “knowingly or recklessly” false. Pickering v. Board of Education, 391 U.S. 563, 574 (1968). This does not apply, however, when the employee is speaking in their official capacity as a government employee. Garcetti v. Ceballos, 547 U.S. 410 (2006).

Private employers have fewer restrictions with regard to disciplining employees, including terminating them, for statements they have made. This often applies even when the statement or statements at issue involved matters of public concern that were unrelated to the employee’s position with the employer. Some exceptions apply, such as when the speech involves activities protected by the National Labor Relations Act, 29 U.S.C. § 157, or when a state or local anti-discrimination law includes protections for “political activities,” N.Y. Lab. L. § 201-D. The Third Circuit Court of Appeals has ruled that termination for an employee’s political activities, or their refusal to participate in political activities, could violate public policy. Novosel v. Nationwide Ins. Co., 721 F. 2d 894 (3rd Cir. 1983).

Businesses have an obligation to protect their assets and interests, but not in ways that damage their employees. New Jersey employers can protect their interests with covenants not to compete, also known as noncompete clauses, which limit employees’ ability to work for, or become, a competitor after their employment ends. A bill pending in the New Jersey Legislature would significantly restrict the enforceability of noncompete clauses. An Assembly committee reported favorably on A1769 in May 2018, while the Senate counterpart, S635, is still awaiting a committee hearing.

In order for a noncompete clause to be enforceable under current New Jersey employment law, it must be reasonably limited in both time and geographic scope. A noncompete clause that purported to prohibit a former employee from ever working for a competing company anywhere in New Jersey would be unenforceable on its face because it is not even close to being reasonably limited to the protection of the employer’s interests at the moment the employee ceases to be employed. If the noncompete clause only restricted employment with a competitor within, for example, five miles of the employer’s location for six months, it would probably be enforceable. Even then, however, noncompete clauses often require workers to relocate or change fields solely to avoid liability to their former employer.

A1769 and S635 state that noncompete clauses “driv[e] skilled workers to other jurisdictions” and “requir[e] businesses to solicit skilled workers from out-of-State.” The Assembly Labor Committee made some changes to the bill, but most provisions remain the same as in S635. The bill establishes a 10-part test that a noncompete clause would have to meet in order to be enforceable:
Continue reading

Employees who report or object to practices that they believe to be illegal or contrary to public policy are commonly known as “whistleblowers.” Some of the biggest cases of fraud and corruption in recent history—both in government and in the private sector—have resulted from whistleblower reports. Employees and other insiders are often in the best position to provide evidence of wrongdoing, but doing so can pose great risk to their own jobs. Numerous laws therefore protect whistleblowers from retaliation, including New Jersey’s Conscientious Employee Protection Act (CEPA). A lawsuit filed in New Jersey alleges that an automobile manufacturer retaliated against the plaintiff, in violation of CEPA, after he reported concerns to several supervisors and managers about possibly deceptive practices. Williams v. Tesla, Inc. et al., No. BUR-L-000194-18, complaint (N.J. Super. Ct., Burlington Cty., Jan. 26, 2018); removed to No. 1:18-cv-04120 (D.N.J., Mar. 23, 2018).Under CEPA, employers may not retaliate against an employee who reports suspected illegal, fraudulent, or otherwise wrongful conduct to a supervisor or a public body, including law enforcement, regulatory agencies, and legislative bodies. Retaliation is also prohibited if an employee participates in a public investigation of allegedly fraudulent or illegal activity, such as by testifying or providing other information; or if an employee “objects to, or refuses to participate in” acts that the employee believes to be illegal or in violation of public policy. N.J. Rev. Stat. 34:19-3. Aggrieved employees can file suit, and remedies may include reinstatement, lost wages, attorney’s fees and costs, and injunctive relief. Id. at § 34:19-5.

The defendant in Williams manufactures electric-powered automobiles and sells them to the general public. The plaintiff states in his complaint that he began working for the defendant in 2011. He claims that he became aware that the defendant “fail[ed] to disclose to consumers high-dollar, pre-delivery damage repairs prior to any transaction with consumers.” Williams, complaint at 2. The plaintiff “believed this practice to be illegal and/or fraudulent.” Id. He also allegedly learned that the defendant would “receiv[e] vehicles designated as ‘lemons,’” a term referring to a car with irreparable defects. Id. The plaintiff claims that the defendant would sell these vehicles to consumers without disclosing their “lemon” status, as required by state law. See N.J. Rev. Stat. § 56:12-35.

The plaintiff alleges that he reported his concerns to his direct supervisor, a regional manager, and a vice president in late 2016 and early 2017. He was working as a regional manager at that time. The supervisor and the regional manager reported to a director identified in the plaintiff’s complaint. The plaintiff claims that this director demoted him from regional manager to service manager, allegedly telling the plaintiff that he had “a ‘brand’ at the company and that there was no place for” him there. Williams at 3. The director allegedly demoted him again in July 2017, and he claims that a regional manager terminated him in September of that year, offering only pretextual reasons.

Enforcement of a wide range of laws and regulations depends on reporting by people with knowledge of possible violations, often known as “whistleblowers.” In cases involving suspected wrongdoing by an employer, many potential whistleblowers may hesitate to speak out, for fear of losing their jobs. In New Jersey, employment statutes protect whistleblowers against retaliation by their employers. The U.S. Supreme Court recently ruled on a dispute over the whistleblower protections in the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”). It held that, unlike many other whistleblower protection laws, Dodd-Frank protects people who report their concerns to the government, but not those who only report internally. Digital Realty Trust, Inc. v. Somers, 583 U.S. ___ (2018).

New Jersey whistleblowers may report their concerns to government regulators or to internal control officers. The New Jersey Conscientious Employee Protection Act (CEPA) protects public and private employees who disclose suspected legal violations, or who refuse to take part in acts that they reasonably believe are illegal or unethical. This includes disclosures made “to a supervisor or to a public body.” N.J. Rev. Stat. § 34:19-3(a). The language of Dodd-Frank, however, is not as clear on this issue.

Congress passed Dodd-Frank as a response to the financial crisis of 2008. The statute defines “whistleblower” as one or more individuals who report alleged violations of securities laws or regulations “to the Commission, in a manner established, by rule or regulation, by the Commission.” 15 U.S.C. § 78u-6(a)(6). The term “Commission” is defined elsewhere in the same chapter as the Securities and Exchange Commission (SEC), with an exception when “the context otherwise requires” a different interpretation. Id. at § 78c(a)(15). The question for the Supreme Court was whether Dodd-Frank’s whistleblower protections apply to someone who makes a report to someone other than the SEC.

In New Jersey, employment laws at the federal and state levels protect a variety of employee rights. When federal and state laws conflict with each other, the preemption doctrine holds that federal law usually supersedes state or local laws. The New Jersey Supreme Court ruled last year on an appeal of of a ruling that a New Jersey whistleblower claim was preempted by federal law. The court reversed the lower court rulings, finding that the plaintiff’s claims were not preempted. Puglia v. Elk Pipeline, Inc., 141 A.3d 1187 (N.J. 2016).

The New Jersey Conscientious Employee Protection Act (CEPA) prohibits retaliation against employees who report suspected violations of law by their employers. N.J. Rev. Stat. § 34:19-3. The plaintiff in Puglia had complained of alleged violations of New Jersey’s Prevailing Wage Act (PWA), which governs wages paid by companies involved in public works contracts and which allows employees to protest alleged violations. Id. at § 34:11-56.34.

The federal National Labor Relations Act (NLRA) and Labor Management Relations Act (LMRA) govern collective bargaining agreements (CBAs) between management and labor unions. Section 301 of the LMRA gives federal courts jurisdiction over disputes between employers and labor organizations. 29 U.S.C. § 185(a). The U.S. Supreme Court has “given broad substantive effect” to this provision. Puglia, 141 A.3d at 1192. It therefore preempts almost any case that involves “what the parties to a labor agreement agreed.” Id. at 1193, quoting Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211 (1985).

Numerous New Jersey employment laws at both the state and federal levels prohibit employers from retaliating against employees, including in the forms of termination, suspension, demotion, and other adverse actions, for engaging in various legally protected activities. Proving that a particular adverse action was motivated by an employee’s protected activities can be difficult and often requires documentation of contacts between an employee and the employer’s management. Unlawful retaliation often occurs in connection with other unlawful acts by an employer, such as discrimination or harassment. It can also occur, however, in connection with lawful acts by an employee, of the sort that we want to encourage as a matter of public policy. Several years ago, New Jersey enacted a law aimed at protecting workers who volunteer to serve their communities in times of emergency. The New Jersey Emergency Responders Employment Protection Act (NJEREPA), which took effect in 2010, protects workers from adverse employment actions for missing work due to volunteer emergency service.

Retaliation claims frequently arise along with claims under the New Jersey Law Against Discrimination or Title VII of the Civil Rights Act of 1964, such as when an employer terminates an employee for reporting unlawful discrimination. The purpose of these laws’ anti-retaliation provisions is to encourage workers to come forward with reports of sexual harassment and other discriminatory acts. The National Labor Relations Act prohibits retaliation by employers against workers engaged in labor organizing and related activities, with the goal of helping workers assert their rights through collective bargaining. The Family and Medical Leave Act protects workers’ right to legally authorized leave by prohibiting retaliation for taking leave.

The NJEREPA applies to “volunteer emergency responders,” defined as individuals actively involved in emergency responses with a volunteer fire department, a “first aid, rescue or ambulance squad,” or a local emergency management department. N.J. Rev. Stat. § 40A-14-214(a). The statute prohibits employers from retaliating against an employee who misses work because of service as a volunteer emergency responder, provided that the employee meets two criteria:  (1) the employee notifies the employer at least one hour before a scheduled work shift, and (2) the employee provides the employer with “a copy of the incident report and a certification by the incident commander” when they return to work. Id. at § 40A-14-214(b). The employer is not required to pay the employee for time missed from work.

When lawmakers and their staffs draft proposed legislation, they must consider any and all possible interpretations of the language they use. Even then, the legislative process may alter or amend a bill in ways that affect the potential meaning of certain words or phrases. Confusion over ambiguities in some statutes is inevitable. The U.S. Supreme Court recently granted certiorari in a case that involved a dispute over the meaning of the word “whistleblower” in the anti-retaliation provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or “Dodd-Frank.” The lower-court decision from the Ninth Circuit deferred to the interpretation of the Securities and Exchange Commission (SEC), which applied a broad definition of the term. This conflicts with a Fifth Circuit decision finding that Dodd-Frank’s whistleblower protection is limited to a narrow definition provided within the statute. Thus, the status of New Jersey whistleblowers remains unclear pending the Supreme Court’s resolution of the issue.

Dodd-Frank creates incentives for “whistleblowers”—employees and other insiders—to report violations and protects them from retaliation. Employers may not terminate or otherwise retaliate against whistleblowers for reporting Dodd-Frank violations to the SEC, or for “making disclosures that are required or protected” by other statutes. 15 U.S.C. § 78u-6(h)(1). Reading this provision in isolation, one might think that it applies to people who report legal violations to the SEC, other government agencies, or company management. An earlier subsection, however, defines “whistleblower” specifically as someone who reports securities law violations to the SEC. Id. at § 78u-6(a)(6). The dispute before the Supreme Court concerns whether Dodd-Frank’s anti-retaliation provision only applies to this narrow definition of “whistleblower,” or whether it uses a broader definition.

The plaintiff worked for the defendant as a Vice President. He made several reports to his superiors “regarding possible securities law violations by the company,” and he was fired shortly afterwards. Somers v. Digital Realty Trust, Inc., 850 F.3d 1045, 1047 (9th Cir. 2017). He sued for retaliation under Dodd-Frank. The district court held that he was a “whistleblower” within the meaning of the statute, even though he did not make a report to the SEC. The Ninth Circuit affirmed this ruling on several grounds.

Contact Information