The New Jersey Employment Law Firm Blog

July 31, 2019

National Labor Relations Board, Department of Labor’s Wage and Hour Division Rulings on Classification of Rideshare Drivers Contrast with New Jersey Law

The “sharing economy” has brought significant changes, both good and bad, to many aspects of the job market. Rideshare companies, for example, give drivers flexibility in terms of when and how long they work, but this has come with disadvantages. Some rideshare drivers have sought the protection of employment statutes in claims for unpaid wages and other matters. The question of whether they are employees, who are eligible for relief under those employment laws, or independent contractors remains largely unresolved. Various courts and administrative agencies have reached different conclusions. Two federal agencies, the National Labor Relations Board (NLRB) and the Department of Labor’s Wage and Hour Division (WHD), recently issued opinions holding that rideshare drivers are independent contractors. The bases for their conclusions differ from the legal standard used in New Jersey.

A worker in New Jersey is deemed an “employee,” and therefore not an independent contractor, unless their employer can satisfy the three-prong “ABC test.” First, the employer must demonstrate that they do not exercise control over how the person does their job, and that their agreement with the person indicates that they will not exercise such control. Next, they must show that the job performed by the person is not part of their usual business, or that the person does their work away from the employer’s place of business. Finally, they must establish that the person has their own “independently established trade, occupation, profession or business.” N.J. Rev. Stat. § 43:21-19(i)(6).

The New Jersey Supreme Court adopted the ABC test in a 2015 ruling. Several other states have also adopted it. The test generally applies to employee misclassification claims under state law. The 2015 case, for example, involved alleged violations of New Jersey’s wage and hour statutes. Claims under federal law may require separate analyses.
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July 26, 2019

Court Affirms Class Action Status in New Jersey Misclassification Lawsuit

by Resnick Law Group, P.C.

When a large number of individuals have similar claims against a defendant, federal and state law allow them to consolidate their claims into a single lawsuit. This is known as a “class action” in most circumstances. The Fair Labor Standards Act (FLSA) allows a claimant to bring a “collective action” on their own behalf and on behalf of others with similar claims. A group of distributors filed suit against a food manufacturer in 2015, alleging that the company misclassified them as independent contractors in violation of the FLSA, New Jersey wage laws, and other state laws. A federal court conditionally certified the case as a collective action under the FLSA in 2017. The court recently denied a motion by the defendant to decertify the case. In the same order, issued in May 2019, the court granted the plaintiffs’ motion for class certification under Rule 23 of the Federal Rules of Civil Procedure (FRCP).

In order to assert claims for violations of federal and state wage laws, a claimant must be able to demonstrate that an employment relationship exists. Individuals who work as independent contractors are not eligible for legal relief in most circumstances. A 2015 ruling by the New Jersey Supreme Court adopted a test for determining whether an individual is an employee or independent contractor, known as the “ABC test.” An individual is presumed to be an employee, absent evidence of three elements:
1. The individual performs their work “free from control or direction” by the employer;
2. The services performed by the individual are either “outside the usual course of the [employer’s] business,” or performed away from its usual place or places of business; and
3. The individual has their own “independently established” business, trade, or professional practice. N.J. Rev. Stat. §§ 43:21-19(i)(6)(A) – (C).

The FLSA allows collective actions when the claimants are “similarly situated,” and each claimant has consented in a document filed with the court. 29 U.S.C. § 216(b). Certification as a class action requires proof of four elements: (1) numerosity, (2) commonality of claims, (3) typicality of the claims of the representative parties, and (4) fair and adequate representation of the entire class by those parties. Fed. R. Civ. P. 23(a).
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July 19, 2019

NLRB Rules on Successorship of Employers in Collective Bargaining Disputes

by Resnick Law Group, P.C.

A collective bargaining agreement (CBA) is a contract between a labor union, which is legally authorized to negotiate on the employees’ behalf, and the company that employs the union’s members. When ownership of a business changes hands, the new owner is only subject to all of the terms of an existing CBA if it is a “perfectly clear successor” to the previous owner. The National Labor Relations Board (NLRB) developed a set of guidelines, known as the “perfectly clear successor” (PCS) rule, based on a 1972 ruling by the U.S. Supreme Court. In April 2019, the NLRB issued a ruling that seems to limit the scope of the PCS rule.

The National Labor Relations Act (NLRA) prohibits employers from interfering with or restraining efforts by employees to organize for the purpose of collective bargaining, either by forming a union or joining an existing organization. Employers may not discriminate or retaliate against employees who exercise any of the rights protected by the statute. Once an employer and a union enter into a CBA, the employer commits an unlawful act if it refuses to negotiate with its employees’ authorized representative.

In 1972, the Supreme Court ruled that a successor employer must recognize a union’s authority when it has retained a majority of the union members as employees. This does not mean, however, that the successor employer is bound by the substantive terms of its predecessor’s CBA. The court held that a successor is not bound by the old CBA and is therefore free to set the initial terms for employment, unless “it is perfectly clear that the new employer plans to retain all of the employees in the unit.” NLRB v. Burns Int’l Security Services, Inc., 406 U.S. 272, 294-95 (1972).
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July 5, 2019

U.S. House of Representatives Passes Bill Adding Employment Discrimination Protections Already Found in New Jersey Law

by Resnick Law Group, P.C.

Federal employment anti-discrimination law identifies five protected categories: race, color, religion, national origin, and sex. Court decisions have added nuance to these categories, particularly with regard to sex discrimination. Most courts, in interpreting federal law, have been unwilling to extend the law’s prohibition against discrimination on the basis of sex to include factors like sexual orientation or gender identity. New Jersey and other states have amended their own anti-discrimination laws to include specific protections against these forms of discrimination in employment, housing, and other areas. The U.S. House of Representatives passed H.R.5, known as the Equality Act, in May 2019. The bill would amend federal law to match anti-discrimination laws in states like New Jersey.

The New Jersey Law Against Discrimination (NJLAD) includes “affectional or sexual orientation,” “sex,” and “gender identity or expression” in its list of protected categories. N.J. Rev. Stat. § 10:5-12(a). The law defines “affectional or sexual orientation” as a person’s actual, perceived, or presumed orientation with regard to “affectional, emotional or physical attraction or behavior” towards members of the opposite gender, one’s own gender, or either gender. Id. at § 10:5-5(hh) – (kk). “Gender identity or expression” refers to a person’s actual or perceived identity or mode of expression that might not be “stereotypically associated with a person’s assigned sex at birth.” Id. at § 10:5-5(rr). This may include people who identify with a different gender than the one assigned at birth, or people who identify as non-binary.

Title VII of the Civil Rights Act of 1964 does not include protections against discrimination based on sexual orientation or gender identity or expression, at least officially. The Equal Employment Opportunity Commission has taken the position that the statute’s prohibition on sex discrimination includes prohibitions on both additional forms of discrimination. The Seventh Circuit Court of Appeals reached the same conclusion regarding sexual orientation in 2017, followed by the Second Circuit in 2018. The U.S. Supreme Court has agreed to hear the appeal of the Second Circuit’s ruling, alongside the appeal in an Eleventh Circuit case that reached the opposite conclusion. It will also hear the appeal of a Sixth Circuit decision applying Title VII to a gender identity discrimination claim.
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June 26, 2019

Failure to Accommodate, Part 2: Resnick Law Group Attorney Successfully Argues Disability Discrimination Claim Before New Jersey Appellate Division

by Resnick Law Group, P.C.

The Resnick Law Group recently represented a teacher in a disability discrimination case at the New Jersey Superior Court, Appellate Division, and obtained a reversal of a lower court order dismissing the case. The teacher alleges that her employer’s failure to provide a reasonable accommodation for her disability caused her to suffer injury when she collapsed at work. One of the questions before the court involved whether she could assert a cause of action for disability discrimination under the New Jersey Law Against Discrimination (NJLAD) without evidence of an “adverse employment action.” The court held that she could.

The NJLAD prohibits discrimination on the basis of actual, perceived, or past disabilities. N.J. Rev. Stat. § 10:5-12(a), N.J.A.C. § 13:13-1.3. This includes a requirement that employers provide “reasonable accommodations” to employees with disabilities, which would allow them to perform the functions of their jobs. The plaintiff taught science at a middle school in the defendant’s school district. She had Type 1 diabetes, which means that she must eat on a rather strict schedule to prevent her blood sugar from getting too low. The defendant denied requests to modify her class schedule so she could always have an early lunch period. She alleges that, as a result, she suffered a hypoglycemic episode in front of her students. She fell and hit her face and head on a table and the floor. After a successful claim for workers’ compensation, she filed suit under the NJLAD.

The trial court dismissed the plaintiff’s NJLAD failure to accommodate claim, finding that she had failed to establish an adverse employment action. The Appellate Division identified three questions it had to address:
1. Does a plaintiff alleging failure to accommodate a disability have to establish an adverse employment action in order to avoid summary judgment dismissal?
2. If not, is a bodily injury claim brought under the NJLAD barred by the Workers’ Compensation Act (WCA)?
3. If the case were to proceed, should any recovery be offset by workers’ compensation payments?
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June 26, 2019

Failure to Accommodate, Part 1: New Jersey Teacher Alleges Disability Discrimination Against School Board

by Resnick Law Group, P.C.

The Resnick Law Group recently won a notable victory for New Jersey employees related to a failure to accommodate an employee’s disability. This post discusses the legal background of the case, while a subsequent post will cover the court’s opinion. The New Jersey Law Against Discrimination (NJLAD) prohibits discrimination on the basis of disability, among many other factors. This includes terminating or refusing to hire a person because they have a disability, Under rules found in the New Jersey Administrative Code, disability discrimination also includes refusing to provide a reasonable accommodation to an employee with a disability. One of our attorneys recently argued a case before the New Jersey Superior Court, Appellate Division, on behalf of an employee who was denied an accommodation for a chronic illness. After the defendant allegedly denied the employee’s request for an accommodation, she collapsed at work and suffered injuries. The appeal involved questions of whether a failure to accommodate claim under the NJLAD could proceed without evidence of an “adverse employment action,” and whether state workers’ compensation law barred her bodily injury claims. In early June 2019, the Appellate Division ruled that the employee’s lawsuit could move forward.

The term “disability” has a very broad definition under the NJLAD. In additional to various injuries and congenital conditions, it includes “physical…infirmity,…which is caused by…illness.” N.J. Rev. Stat. § 10:5-5(q). State regulations adopt this definition, but also add the perception or belief that a person has a disability, regardless of whether they actually do, and a history of “ha[ving] been a person with a disability at any time.” N.J.A.C. § 13:13-1.3.

The statute requires employers to “make a reasonable accommodation to the limitations of an employee…who is a person with a disability.” Id. at § 13:13-2.5(b). The employee in the Appellate Division case referenced above has Type 1 diabetes and needs accommodations in the daily work schedule to manage their blood sugar. State regulations include “modified work schedules” among the accommodations employers must consider for employees with disabilities. Id. An employer can avoid the obligation to provide a reasonable accommodation only if they “can demonstrate that [it] would impose an undue hardship on the operation of its business.” Id.
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June 24, 2019

Appellate Division Overturns Summary Judgment in New Jersey Employment Discrimination Case Based on Appearance

by Resnick Law Group, P.C.

The New Jersey Superior Court, Appellate Division has revived a lawsuit alleging employment discrimination on the basis of gender under state and federal laws. The plaintiffs allege that a set of “personal appearance standards” (PAS) maintained by their employer, an Atlantic City casino, discriminated on the basis of gender. They further claim that the defendant enforced the PAS in a harassing manner. The case has followed an unusual path. In 2015, the Appellate Division partially reversed a Law Division order granting summary judgment to the defendant. The Law Division proceeded to grant summary judgment to the defendant again in July 2016. The Appellate Division reversed the Law Division’s order in May 2019. It found that the Law Division was bound by the 2015 ruling and that the court erred by dismissing the case on remand. The appellate court remanded the case once more, ruling that “after a decade of motion practice and appeals, plaintiffs are entitled to their day in court.”

State and federal employment statutes in New Jersey prohibit employment discrimination on the basis of sex and gender. Court decisions and statutes have defined multiple forms of unlawful sex discrimination. These include “hostile work environment,” a form of sexual harassment in which pervasive and unwelcome sexual remarks or behavior render an employee unable to perform their job duties. Discrimination on the basis of “sex stereotyping,” in which an employer takes an adverse action against an employee because they do not fit certain stereotypes about members of their sex, is also unlawful. In some situations, employees can establish violations of anti-discrimination laws based on the disparate impact of a policy or practice, even if the employer did not intend to discriminate on the basis of sex or another factor.

The plaintiffs in the above-described lawsuit worked as “costumed beverage servers.” They had to agree to the PAS as a condition of employment. The PAS mandated specific features like “a natural hourglass shape” for women and “a natural ‘V’ shape with broad shoulders and a slim waist” for men. The defendant reportedly modified the PAS in February 2005 in order “to elucidate the ‘weight proportioned to height’ standard.” The revised PAS stated that employees’ weight could not increase by more than seven percent, as compared to their weight when they were hired. Weigh-ins occurred at seemingly random times. These changes formed the basis of many of the complaints leading to the lawsuit.
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June 21, 2019

Third Circuit Rules on Due Process Claims by Former New Jersey State Employees

by Resnick Law Group, P.C.

Employment in New Jersey is considered to be “at will,” meaning that an employer can terminate an employee for any reason, or no reason at all, as long as they do not violate any employment statutes or contractual provisions. Some government employees have an additional layer of protection under the Due Process Clause of the Fourteenth Amendment, or the Fifth Amendment in the case of federal government employees. The Third Circuit Court of Appeals, whose jurisdiction includes New Jersey, ruled on a Due Process claim against Passaic County and several county officials in early May 2019. The ruling, along with several earlier Third Circuit decisions, offer some ideas about how a civil service employee could assert a constitutional claim based on deprivation of a property interest.

The Due Process Clauses of the Fifth Amendment and the Fourteenth Amendment prohibit the government, its agencies, and its officials from depriving people “of life, liberty, or property, without due process of law.” An employee must establish that they have a property interest in some aspect of their employment, and that their employer wrongfully deprived them of it. A 1972 decision by the U.S. Supreme Court, Bd. of Regents v. Roth, found that establishing a property interest requires “a legitimate claim of entitlement,” rather than merely “a unilateral expectation.”

The Third Circuit cited Roth in a 2006 decision holding that, in an at-will employment state, a person’s job is not inherently a property interest protected by the Constitution. The court ruled that the question of entitlement to a benefit, including retaining one’s job, is a matter of state law. Since the case originated in an at-will employment state, the plaintiff did not have a protected property interest in their job. The court also found that an employee could still demonstrate the deprivation of a constitutionally-protected liberty interest, based on the manner in which their employer terminated them or took some other adverse action. That particular case involved a claim of defamation against the employer. The court left open the possibility that various claims in tort or other law could support a Due Process claim.
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June 20, 2019

Age, Disability Discrimination Lawsuit May Proceed to Trial, New Jersey Court Rules

by Resnick Law Group, P.C.

The New Jersey Law Against Discrimination (NJLAD) bars employers from discriminating against their employees on the basis of factors like age, race, sex, and disability. This includes terminating an employee, refusing to hire a job applicant, demoting or declining to promote an employee, and many other decisions involving employment benefits and conditions. The New Jersey Appellate Division recently ruled (the “Opinion”) that a woman’s claims for age and disability discrimination can move forward, finding that she had raised sufficient questions of fact about the defendant’s claimed reasons for terminating her employment.

The NJLAD prohibits discrimination on the basis of numerous factors, including age and disability. In the Opinion, the court reviewed the process for a claim under the NJLAD. A plaintiff must establish four elements: (1) they are part of a protected class and (2) are qualified for the position they held; and (3) the employer took an adverse employment action and (4) replaced the plaintiff with someone who is not part of the protected class. The burden of proof then shifts to the defendant to “articulate a legitimate, nondiscriminatory reason” for the adverse action. Finally, the plaintiff must demonstrate that the defendant’s alleged reason was pretextual, meaning that it was merely cover for a discriminatory purpose.

Reportedly, the defendant terminated the plaintiff shortly after she underwent gallbladder surgery. She was fifty years old at the time and had recently received “a ‘strong performance’ evaluation” from the defendant. She alleged that the defendant replaced her with “a person nearly half her age.” The reason given by the defendant for the termination involved a claim that she “attempted to defraud [the defendant] by failing to take steps to remove her ex-husband from the company’s health insurance plan.”
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June 18, 2019

New Jersey Legislature Amends Law Against Discrimination to Bar Waivers of Rights, Nondisclosure Agreements

by Resnick Law Group, P.C.

When an employee begins working for an employer, they are often required to sign an employment agreement that establishes numerous features of the employer-employee relationship. Most provisions involve standard matters like job expectations, wages, and termination of the employment relationship. Employment agreements may also include provisions for nondisclosure of various types of information, as well as waivers of certain rights. When employers and employees enter into settlement agreements to resolve disputes, an employer may seek a nondisclosure clause as well. Provisions like these may hinder individuals’ ability to assert their rights under employment statutes like the New Jersey Law Against Discrimination (NJLAD). At least partly in response to increased attention on sexual harassment in the workplace, the New Jersey Legislature enacted a bill in January 2019 that amends the NJLAD to prohibit enforcement of certain nondisclosure agreements, as well as waivers of rights under the NJLAD or similar statutes.

The NJLAD prohibits employers from discriminating against employees on the basis of race, religion, sex, age, sexual orientation, gender identity or expression, and many other factors. Courts have held that prohibitions on sex discrimination in the NJLAD and other laws cover sexual harassment, as well as harassment based on other protected factors. Unlawful harassment generally includes two scenarios: (1) acquiescence to or tolerance of harassing behavior, including sexual advances, is made a condition of employment; and (2) pervasive and unwelcome harassing behavior creates a hostile work environment that interferes with an individual’s ability to perform their job duties.

The #MeToo movement has allowed people all over the country to come forward with their own experiences, when many of them might have been afraid to do so before. Nondisclosure agreements (NDAs) in discrimination and harassment cases may prevent people with similar experiences from sharing their stories. Last year, California and New York enacted limits on NDAs in situations involving alleged sexual harassment. California now prohibits NDAs that purport to “prevent[] the disclosure of factual information related to a” lawsuit or administrative complaint alleging sexual harassment. New York now has similar provisions in its laws barring NDAs in settlements and other resolutions of sexual harassment disputes.
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