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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).

lemon-citrus-fruit-juicy-juice-3225459Under 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.

Restaurant BillThe Fair Labor Standards Act (FLSA) establishes a nationwide minimum wage, which has been $7.25 per hour since 2010. This does not apply to all workers, however. The minimum wage that employers of tipped employees, such as restaurant servers, must pay is considerably less than $7.25 per hour, with the understanding that tips received from customers will at least make up the difference. In late 2017, the U.S. Department of Labor (DOL) proposed a rule that would give employers more control over the distribution of tips, which met with considerable criticism. In March 2018, a member of the House of Representatives from Connecticut introduced the Tip Income Protection (TIP) Act of 2018. While this bill has not advanced, a similar measure made it into the Consolidated Appropriations Act (CAA) of 2018, which was signed into law on March 23. This effectively rendered the proposed DOL rule moot.

A “tipped employee,” under the FLSA, is someone who, in the course of their job, “customarily and regularly receives more than $30 a month in tips.” 29 U.S.C. § 203(t). Employers are obligated to pay tipped employees a base rate of $2.13 per hour. Id. at § 203(m)(1), 29 C.F.R. § 531.50(a). If the amount of tips received by a tipped employee, when added to this base income amount, is less than $7.25 per hour, the employer must pay the employee the difference. 29 U.S.C. § 203(m)(2). The statute allows tipped employees to pool their tips, but employers may not require them to do so. A New Jersey wage and hour lawyer can help you bring a claim if your employer instituted an improper tip pooling program.

In December 2017, the DOL published a proposed rule that would remove restrictions on employers’ control over tips paid by customers, essentially allowing them to require tip pooling. 82 Fed. Reg. 57395 (Dec. 5, 2017). The DOL claimed that this would allow a more fair allocation of tip income among employees, including cooks and dishwashers who do not ordinarily receive tip income. Since the proposed rule would only apply to employers that already pay tipped employees at or above the minimum wage, critics alleged that the rule would allow employers to pocket any tip income above the minimum wage threshold. The proposed rule received more than 218,000 comments from the public.

Employment laws in New Jersey prohibit discrimination based on disability. Most employment statutes include an exception for situations in which a particular individual’s specific disability prevents them from performing the ordinary duties of a particular job, even with reasonable accommodations by the employer. Several recent lawsuits claiming disability discrimination based on the medical condition known as sleep apnea have raised questions about whether the condition falls under this exception. Different courts have reached different conclusions about whether sleep apnea constitutes a “disability” under employment anti-discrimination laws.

CPAPThe New Jersey Law Against Discrimination (NJLAD) offers a broad definition of “disability,” which includes both mental and physical conditions that impede “normal” functioning. N.J. Rev. Stat. § 10:5-5(q). A “physical disability” or “infirmity…which is caused by…illness” qualifies as a disability under the NJLAD. Id. The definition provided by the federal Americans with Disabilities Act (ADA) focuses on whether a condition “substantially limits one or more major life activities.” 42 U.S.C. § 12102(1)(A).

Both statutes bar employers from denying employment to a person, or firing them, on the basis of a disability. The NJLAD provides an exception in New Jersey disability discrimination cases in which an employer can “clearly show[] that a person’s disability would prevent such person from performing a particular job.” N.J. Rev. Stat. § 10:5:29.1. The ADA includes this exception in its prohibition on discrimination by specifying that it only applies to “qualified individuals,” defined as people who “can perform the essential functions of the employment position” that they have or want. 42 U.S.C. §§ 12111(8), 12112(a).

arm-wrestlingWhen an employee ceases to work for an employer, many employers will want to protect their investment in that employee in any way they can. Nondisclosure agreements and trade secret laws cover confidential and proprietary information that employees might obtain during their employment. Employees who bring a particular set of skills or knowledge, and who might obtain additional valuable skills through their work for the employer, could potentially have a negative impact on the employer’s business if they took that knowledge to a competitor. Some employers therefore try to protect themselves with noncompete agreements, which state that the employee may not accept employment with a competitor after they leave the employer. New Jersey employment laws only allow enforcement of noncompete agreements when they have strict limitations, such as a limited geographic area and a limited duration. A New Jersey Superior Court judge in Bergen County recently ruled in favor of a former employee who was seeking to invalidate a noncompete clause. Abuaysha v. Shapiro Spa, No. L-000988-18, complaint (N.J. Super. Ct., Bergen Cty., Feb. 1, 2018)

Injunctive relief is one of the main methods of enforcing a noncompete agreement. Employers often file suit against a former employee and seek a preliminary injunction, but it is also possible for a former employee to file suit first. In order to obtain a temporary injunction in New Jersey, a movant must establish four elements:  (1) “irreparable harm” without the injunction, (2) a settled legal right underlying the movant’s claim, (3), “a reasonable probability of ultimate success on the merits,” and (4) a balance of hardships faced by the parties that favors granting the injunction. Crowe v. De Gioia, 90 N.J. 126, 132-34 (1982). In the case of noncompete agreements, courts must look closely at the second and third parts of this test.

New Jersey courts use the “Solari/Whitmyer test,” named for two New Jersey Supreme Court decisions, to determine whether a noncompete agreement is enforceable. Solari Industries, Inc. v. Malady, 55 N.J. 571 (1970); Whitmyer Bros., Inc. v. Doyle, 58 N.J. 25 (1971). This test has three parts:  (1) protection of legitimate employer interests, (2) no undue hardship on the employee, and (3) no injury to the public. When determining whether a noncompete agreement protects the employer’s interests, the court has noted that an “employer has no legitimate interest in preventing competition as such.” Whitmyer, 58 N.J. at 33. Examples of legitimate interests include protection of confidential information, trade secrets, and customer relationships. Id. The geographic limits, duration, and other restrictions in a noncompete agreement must be “no broader than necessary to protect the employer’s interests.” Cmty. Hosp. Grp., Inc. v. More, 183 N.J. 36, 58-59 (2005).

interviewEstablishing an employer-employee relationship is the first step in claims under most federal and New Jersey employment statutes, but that relationship is not always easy to identify. Multiple individuals or organizations can act in the capacity of an employer over a particular worker. They can cause the same harm that employment statutes were created to address, so courts have recognized the concept of “joint employment” for this type of situation. In 2015, the National Labor Relations Board (NLRB) expanded the earlier standard for determining joint employment in cases brought under the National Labor Relations Act (NLRA). Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015). Two years later, the NLRB reversed this ruling in Hy-Brand Industrial Contractors, Ltd. (“Hy-Brand I”), 365 NLRB No. 156 (Dec. 14, 2017), but this victory for employers was short-lived. The NLRB vacated its ruling after finding that one of the board members who voted in Hy-Brand I should have recused himself. Hy-Brand Industrial Contractors, Ltd. (“Hy-Brand II”), 366 NLRB No. 26 (Feb. 26, 2018).

In Browning-Ferris, the NLRB revised its standard for determining joint employment. The standard in place at the time looked at the extent of control actually exercised over an employee by an alleged joint employer. The NLRB found that this standard was too narrow. It held that an alleged joint employer does not need to exercise control “directly and immediately.” Browning-Ferris at 1. Instead, indirect control, “such as through an intermediary,” could suffice to establish joint employment. Id. The key was that an alleged joint employer had the authority to exercise control, and therefore it could do so at any moment.

In Hy-Brand I, the NLRB reversed Browning-Ferris by a 3-2 vote. It affirmed the finding by the administrative law judge (ALJ) that the companies at issue were joint employers under the NLRA, but it went on to address the legal standard that the ALJ used. It found the Browning-Ferris standard to be “a distortion of common law,” “contrary to the [NLRA],” and “ill-advised as a matter of policy.” Hy-Brand I at 2. It restored the earlier standard, holding that joint employers must “have actually exercised joint control over essential employment terms” and that “the control must be direct and immediate” rather than “limited and routine.” Id. at 35.

LedgerEnforcement 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.

Co-op activismThe National Labor Relations Act (NLRA) regulates numerous interactions related to to labor organizing. It allows employees to assert New Jersey sex discrimination claims against both employers and unions for unfair labor practices. Labor unions’ obligations under the NLRA include a duty of fair representation. A recent decision by the National Labor Relations Board (NLRB) addressed an employee’s claim that a labor union breached this duty by discriminating against her on the basis of sex. The ruling harshly criticized the administrative law judge (ALJ) who ruled in the union’s favor. The NLRB vacated the ALJ’s ruling, finding that he “erred by relying in part on improper bases in making his credibility determinations.” International Longshoremen’s Association, Local 28 (Ceres Gulf Inc.) (“ILA”), 366 NLRB No. 20 at 1 (Feb. 20, 2018).

Labor organizations commit an unfair labor practice when they “restrain or coerce employees in the exercise of the rights guaranteed” by the NLRA. 29 U.S.C. § 158(b)(1)(A). Courts have identified specific ways that labor unions might unlawfully interfere with employees’ NLRA rights. The U.S. Supreme Court has held that a union has a duty “to represent nonunion or minority union members…without hostile discrimination, fairly, impartially, and in good faith.” Steele v. Louisville & N. R. Co., 323 U.S. 192, 204 (1944). A union violates the duty of fair representation “when it acts in a manner that is ‘arbitrary, discriminatory, or in bad faith.’” Vaca v. Sipes, 386 U.S. 171, 207 (1967). The NLRB views a breach of the duty of fair representation as an unfair labor practice.

The charging party in ILA has been a member of the union since 2001, usually working as a truck driver. According to the ALJ’s ruling, she began receiving union work referrals again in 2015 after an eight-year “union employment break.” ILA at 2. She alleges that she asked the union’s training coordinator to put her in training classes offered by the union several times during 2016, but he refused all of her requests. She further alleges that the coordinator sexually harassed her “when she periodically stopped by [his] office to request training.” Id. at 3. She allegedly made 36 requests for training, and she experienced sexual harassment while making 10 of those requests. She filed a complaint with the NLRB, alleging breach of the duty of fair representation through sex discrimination. She claimed that the coordinator denied her training opportunities because of her sex, and also because she refused his advances.

ToyotaFederal and state laws in New Jersey protect the rights of people with disabilities to have fair access to employment and to accommodations in the workplace that allow them to do their jobs. The Americans with Disabilities Act (ADA) of 1990 prohibits discrimination on the basis of a disability and requires employers to make reasonable accommodations for workers who are dealing with a wide range of disabilities. Since the ADA is a federal statute with nationwide reach, lawsuits and court rulings in other states can potentially affect New Jersey disability discrimination laws. Two recent ADA lawsuits illustrate how the statute can help New Jersey workers. One case involves an alleged refusal to hire an applicant because of their participation in an addiction recovery program. Equal Emp’t Opportunity Comm’n v. Volvo Group N. Am., LLC, No. 1:17-cv-02889, consent dec. (D. Md., Jan. 12, 2018). The other involves an alleged failure to engage in ADA-required processes regarding a request for an accommodation. McClain v. Tenax Corp., No. 1:17-cv-00049, order (S.D. Ala., Jan. 12, 2018).

The ADA’s definition of “disability” includes both “physical [and] mental impairment[s]” that are severe enough to “substantially limit[] one or more major life activities.” 42 U.S.C. § 12102(1)(A). It includes both “actual or perceived” impairments, meaning that a person who does not have a disability may still fall within the ADA’s protection if others think that they do. Id. at § 12102(3). The statute prohibits discrimination because of disability. This includes failing to make reasonable accommodations for an employee and refusing to hire an applicant in order to avoid making such accommodations. An employer does not have to make a requested accommodation if it can show that doing so would “impose an undue hardship” on its business. Id. at § 12112(b)(5)(A).

The Equal Employment Opportunity Commission filed the Volvo lawsuit on behalf of a job applicant claiming disability discrimination. The defendant allegedly rescinded a conditional offer of employment in early 2015, after learning that the applicant was undergoing addiction treatment. While the use of illegal drugs is not considered a disability under the ADA, “participating in a supervised rehabilitation program” while refraining from illegal drug use is. Id. at § 12114. According to the EEOC’s complaint, the applicant ceased the use of illegal drugs and began participation in a supervised treatment program in 2010. The treatment included the use of suboxone, which the applicant reportedly disclosed to the defendant. This allegedly led to the revocation of the offer. The parties reached a settlement in January 2018.

conversationFederal and state laws protect New Jersey employees against discrimination on the basis of disability and other factors. The federal Americans with Disabilities Act (ADA) of 1990 prohibits discrimination and requires employers to provide “reasonable accommodations” for employees with disabilities. One area of ongoing dispute in employment law involves whether employers must provide reasonable accommodations to employees who are pregnant or have recently given birth. The ADA does not specifically mention pregnancy or related conditions. The New Jersey Law Against Discrimination (NJLAD), however, specifically requires employers to make reasonable accommodations available in cases of disability, pregnancy, and religious practices. The “reasonableness” of a particular accommodation can be a subject of dispute under both New Jersey disability discrimination laws and federal disability discrimination laws. A new law in New York City, which will take effect in October 2018, will require employers to engage in “cooperative dialogue” with employees who are requesting an accommodation for multiple possible situations. Int. No. 804-2015-A (NYC, Jan. 19, 2018).

Title VII of the Civil Rights Act of 1964 prohibits discrimination on the basis of religion, sex, and other factors, with “on the basis of sex” defined to include pregnancy. 42 U.S.C. §§ 2000e(k), 2000e-2(a)(1). The statute does not address accommodations for religious observances or the various needs associated with pregnancy and childbirth. The ADA includes a failure to provide reasonable accommodations within its list of discriminatory practices, with an exception if the accommodation “would impose an undue hardship on the operation of the business.” Id. at § 12112(b)(5)(A). It defines “disability” to include a range of “physical or mental impairment[s].” Id. at § 12102(1).

The NJLAD prohibits discrimination in employment on the basis of disability, religion, sex, pregnancy, and multiple other factors. N.J. Rev. Stat. § 10:5-12(a). The definition of “disability” is similar to that of the ADA and includes various conditions “caused by bodily injury, birth defect or illness.” Id. at § 10:5-5(q). An employer violates the NJLAD by denying employment to “an otherwise qualified person” because of a disability, unless the employer can “clearly show[]” that a person’s particular disability “would prevent such person from performing a particular job.” Id. at § 10:5-29.1.

fire truckIn New York City and New Jersey, employment laws prohibit discrimination on the basis of race and multiple other factors. Race discrimination in employment remains a serious problem all over the country, despite advances in the past 50 years. Some organizations, which were once quite open about their willingness to discriminate on the basis of race, still retain elements of that culture to this day. A putative class action filed late last year in a Manhattan federal court alleges that the Fire Department of New York (FDNY) has a long history of discrimination against African American employees and job applicants. Richardson, et al. v. City of New York, No. 1:17-cv-09447, complaint (S.D.N.Y., Dec. 1, 2017).

The New York City Human Rights Law (NYCHRL) prohibits employers from discriminating against employees and job applicants “because of the actual or perceived…race…of any person.” N.Y.C. Admin. Code § 8-107(1)(a). This provision is similar to those found in federal law and in state laws all over the country, including New Jersey race discrimination laws. The federal Civil Rights Act of 1991 protects the right to “make and enforce contracts” on equal terms, regardless of race, which includes employment contracts. 42 U.S.C. § 1981. A government employer, such as a city, state, or federal agency, that engages in employment discrimination on the basis of race may also be liable for civil rights violations under 42 U.S.C. § 1983.

The Richardson complaint describes a history of race discrimination in the FDNY, claiming that only “token integration” started in the 1960s. Richardson, complaint at 1. It notes two prior class actions alleging race discrimination against the FDNY in the hiring of firefighters. The first involved discrimination against African American and Hispanic firefighter applicants. Vulcan Society of New York City Fire Dep’t, Inc. v. Civil Serv. Comm’n, 490 F.2d 387 (2d Cir. 1973). The injunction issued by the court expired in 1977, and the city allegedly resumed discriminatory hiring practices for firefighters. The U.S. Department of Justice eventually filed suit, resulting in a ruling “that the FDNY’s hiring procedures discriminate against black applicants.” United States v. City of New York, 683 F.Supp.2d 225, 250-51 (E.D.N.Y 2010).

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