The New Jersey Employment Law Firm Blog

June 16, 2017

Placement of Comma Determines Appellate Court Decision in Overtime Wage Dispute

Employment law is composed of statutes and regulations at multiple levels of government. It is perhaps inevitable that disputes will arise over the meaning of particular legal provisions. Courts have the responsibility of determining how to apply a law or regulation when its meaning is unclear, usually through a process known as statutory construction. If the “plain language” meaning of the rule or statute is ambiguous, they may look at the legislative history to see what lawmakers intended. A recent federal appellate court decision interpreted a statute based on the legislature’s use of punctuation. O’Connor v. Oakhurst Dairy, 851 F.3d 69 (1st Cir. 2017). The court found that a missing serial comma, also known as the “Oxford comma,” in a list of exemptions from a state overtime wage law created a very narrow exemption, which did not include the plaintiffs. This meant that the plaintiffs were entitled to overtime pay.

State and federal employment laws require employers to pay non-exempt workers one-and-a-half times their regular hourly rate for work performed in excess of 40 hours in a week. States may differ in how they define exemptions from overtime law. New Jersey, like most jurisdictions, exempts workers “employed in a bona fide executive, administrative, or professional capacity,” as well as numerous specific jobs. N.J. Rev. Stat. § 34:11-56a4. The O’Connor case deals with Maine’s overtime statute, which exempts workers employed in “the canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of” various food products. 26 Me. Rev. Stat. § 664(3)(F). The dispute centered on the lack of a serial comma between the words “shipment or distribution.”

The “Oxford comma” appears before the final item in a written list of three or more items. For example, in the sentence “I would like an apple, a banana, and a pear,” the Oxford comma appears after the word “banana.” The same sentence without that comma is equally grammatically correct: “I would like an apple, a banana and a pear.” Usually, use of the Oxford comma is purely a question of style—some style manuals require it, while others do not. At times, though, the lack of an Oxford comma creates an ambiguity.

June 8, 2017

Third Circuit Court of Appeals Rules in Employee’s Favor in FMLA Discrimination Claim

by Resnick Law Group, P.C.

Employment statutes often use broad language that leaves much open to interpretation. The federal and state agencies charged with administering and enforcing these statutes develop their own interpretations of the statutes, which may or may not match the interpretations of the court system. The U.S. Supreme Court has held that courts must defer to agencies’ interpretations of the statutes that they administer, provided that those interpretations do not exceed the agencies’ legal authority. This is known as the “Chevron doctrine,” after the court’s decision in Chevron v. Natural Resources Defense Council, 467 U.S. 837 (1984). The Third Circuit based a recent decision, which involved a Family and Medical Leave Act (FMLA) discrimination claim, on Chevron. Egan v. Delaware River Port Authority, No. 16-1471, slip op. (3rd Cir., Mar. 21, 2017).

The FMLA requires covered employers to provide unpaid leave to qualifying employees for specific medical- and family-related reasons. The statute is heavy on qualifications regarding which employers are covered, how and when employees qualify for leave, and which situations provide a valid basis for requesting leave. The U.S. Department of Labor’s Wage and Hour Division (WHD) has promulgated additional rules and procedures for determining who is entitled to leave. See 29 U.S.C. § 2611 et seq., 29 C.F.R. Part 825. Employers cannot interfere with the rights guaranteed by the FMLA, and they may be liable to aggrieved employees for damages if they do. 29 U.S.C. §§ 2615, 2617.

In the context of employment litigation, the Chevron doctrine comes into play with regard to rules promulgated by agencies like the WHD to help identify statutory violations. See Auer v. Robbins, 519 U.S. 452 (1997). The regulation at issue in Egan involved the evidence required to prove discrimination and retaliation under the FMLA. The WHD has interpreted the statute as prohibiting employers from “us[ing] the taking of FMLA leave as a negative factor in employment actions.” 29 C.F.R. § 825.220(c). The question before the Third Circuit involved whether the plaintiff had to prove that his FMLA leave directly resulted in an adverse employment action.

June 2, 2017

New Jersey Court Clarifies Liability for Violations of Statute Governing Consumer Background Reports

by Resnick Law Group, P.C.

Background checks enable employers to obtain a vast amount of information about prospective employees. In order to safeguard people’s privacy, the Fair Credit Reporting Act (FCRA) establishes limitations on the collection and use of people’s personal information during the hiring process. The law regulates both employers and consumer reporting agencies (CRAs), which collect consumer information and compile it into reports for employers and others. Both CRAs and employers are potentially liable to job applicants for violations of the FCRA, but liability generally arises under different circumstances. Two recent decisions from New Jersey federal courts clarify who is primarily liable to a job applicant for FCRA violations. Muir v. Early Warning Svcs., et al., No. 2:16-cv-00521, op. (D.N.J., Sep. 15, 2016); Geter v. ADP Screening & Selection Svcs., et al., No. 2:14-cv-03225, op. (D.N.J., Apr. 23, 2015).

The FCRA defines a “consumer report” as any collection of information about an individual with regard to factors like “credit worthiness,…character, general reputation, personal characteristics, or mode of living.” 15 U.S.C. § 1681a(d)(1). A consumer report may include financial information like delinquent accounts and bankruptcies, as well as arrests, criminal charges, convictions, and other legal information. The statute defines a CRA as any individual or business that routinely compiles consumer information into reports in exchange for financial compensation. Id. at § 1681a(f).

A CRA may not issue a consumer report to an employer until the employer certifies that it has complied and will continue to comply with its obligations under the FCRA. Id. at § 1681b(b)(1). An employer must obtain the job applicant’s written consent to obtain a consumer report, and it must provide the applicant with a written disclosure explaining that the employer may use the report in making a hiring decision. Id. at § 1681b(b)(2).

May 26, 2017

Federal Law Protects Privacy Rights of Employees and Job Applicants During Hiring Process

by Resnick Law Group, P.C.

Employers frequently conduct background checks on job applicants by obtaining a consumer report from a credit reporting agency (CRA). In some cases, such as jobs in law enforcement or jobs requiring security clearances, employers are required to conduct background checks for specific issues. Background checks also make sense for certain types of jobs. For example, an employer hiring for a position that involves handling large amounts of money might want to check for excessive problems with debt or past convictions for offenses like fraud or embezzlement. By relying on CRAs to provide background information on job applicants, employers rely on the accuracy of the information they provide. Since these reports are not always accurate, the federal Fair Credit Reporting Act (FCRA) regulates both CRAs and employers. The Federal Trade Commission (FTC) recently offered some guidance to employers regarding FCRA compliance in a blog post. Job applicants might find the FTC’s post useful as a guide to potential warning signs in the job application process.

In the context of employment, the FCRA requires both CRAs and employers to follow specific procedures. An employer must give a job applicant a “clear and conspicuous disclosure…in a document that consists solely of the disclosure” detailing its intent to obtain a consumer report as part of the hiring process, and it must obtain the applicant’s written consent. 15 U.S.C. § 1681b(b)(2). A CRA may not issue a consumer report to an employer unless it obtains a certification from the employer stating that the employer has fulfilled all of its obligations regarding disclosure and consent and that it will comply with all additional requirements under the FCRA. Id. at § 1681b(b)(1).

If an employer decides not to hire an applicant because of information contained in a consumer report, the FCRA requires it to provide a copy of the report to the applicant, along with a written description of the applicant’s legal rights. Id. at §§ 1681b(b)(3), 1681g(c). This allows the applicant to review the information that the employer saw and to use other legal mechanisms provided by the FCRA to correct incorrect or incomplete information. The employer must allow a reasonable amount of time for the applicant to review the report and communicate with the CRA that issued it.

May 19, 2017

Definition of “Nation” Might Be at Issue in New Jersey National Origin Discrimination Lawsuit

by Resnick Law Group, P.C.

A New Jersey teacher’s lawsuit for alleged national origin discrimination took an unusual turn in a recent court hearing, according to media reports. The plaintiff alleges that she was subjected to disparate treatment and retaliation because of her Palestinian heritage. Hashem v. Hunterdon Cty., et al., No. 3:15-cv-08585, 2d am. complaint (D.N.J., Oct. 19, 2016). During a hearing in early 2017, the defendants reportedly claimed that the case lacks merit because Palestine is not a “nation,” and therefore the plaintiff cannot claim “Palestinian” or “Palestinian-American” as a national origin. While this does not appear to be a prominent element of the defendants’ legal arguments, it captured media attention, and it raises important questions about how U.S. and New Jersey employment laws define “national origin.”

Title VII of the Civil Rights Act of 1964 and the New Jersey Law Against Discrimination (NJLAD) both expressly identify national origin as a protected category for discrimination claims. See 42 U.S.C. § 2000e-2(a), N.J. Rev. Stat. § 10:5-12(a). The term “nation” can have multiple meanings, depending on the context. It can refer to a sovereign country, such as the United States, Canada, or Mexico. It can also refer to a group of people with a shared heritage, language, or culture who do not have their own distinct country, like the Indian tribes of the United States, the First Nations of Canada, and trans-national regions like Kurdistan. Palestine, with its limited international recognition and “non-member observer” status at the United Nations, would seem to fit the second definition.

Since “countries” can come into being and cease to exist, multiple courts have held that “national origin” is not limited to countries in existence at the time of a discrimination claim. In Pejic v. Hughes Helicopters, a court held that Serbians were a protected class at a time when Serbia was part of Yugoslavia. 840 F. 2d 667, 673 (9th Cir. 1988). Serbia had been independent in the early 20th century and would become independent again in the 1990s. The Pejic court cited a district court decision finding that Louisiana Acadian—a/k/a Cajun—is a national origin under Title VII. Roach v. Dresser Ind. Valve & Instrument Division, 494 F. Supp. 215, 218 (W.D. La. 1980).

May 8, 2017

Federal Appellate Court Expands Definition of “Joint Employer” Under the FLSA

by Resnick Law Group, P.C.

The modern workplace often involves complex relationships among employers and between employees and employers. An individual employee might have an employer that issues their paychecks but has them work at the site of, or under the direct supervision of, a different employer. Should an employee need to assert a cause of action under an employment statute like the Fair Labor Standards Act (FLSA), a clear definition of the employee-employer relationship is critical. Federal caselaw and regulations establish guidelines for identifying “joint employers” for the purposes of the FLSA and other statutes. A recent decision from the Fourth Circuit Court of Appeals expands the definition of “joint employer” beyond the definition used in the Third Circuit, which includes New Jersey and other jurisdictions. Salinas v. Commercial Interiors, Inc., No. 15-1915, slip op. (4th Cir., Jan. 25, 2017).

The FLSA governs wage and hour issues, establishing a nationwide minimum wage and requiring employers to pay non-exempt workers time-and-a-half for work in excess of 40 hours in a week. The statute provides some of the broadest definitions of certain key terms in the entire United States Code. It defines “employee” as “any individual employed by an employer,” and its definition of “employ” merely states that it “includes to suffer or permit to work.” 29 U.S.C. §§ 203(e)(1), (g). It does not provide a distinct definition of “employer.”

Regulations promulgated by the U.S. Department of Labor (DOL) note that the FLSA does not limit individual employees to one employer. The DOL attempts to distinguish between “joint employment,” in which multiple employers employ an employee in a single position, and “separate and distinct employment,” in which an individual employee has more than one job with different employers. 29 C.F.R. § 791.2(a). Under DOL regulations, a “joint employment” situation may exist when two or more employers have “an arrangement…to share the employee’s services,” when one employer “act[s]…in the interest of the other employer (or employers),” or when one employer is partly or wholly under the control of another employer. Id. at § 791.2(b).

May 2, 2017

New Jersey Antitrust Class Action Accuses Employers of “Anti-Poaching” Agreements

by Resnick Law Group, P.C.

In 2015, a group of technology companies settled a class action filed on behalf of thousands of employees for about $415 million. The lawsuit alleged that the defendants violated antitrust laws by entering into “anti-poaching” agreements, by which they agreed not to solicit or hire each other’s employees. These types of agreements make it difficult, if not impossible, for workers to advance in their fields, and they also tend to drive wages downward. More recently, a putative class action that partly originated in New Jersey made similar allegations against two major electronics companies. Frost v. LG Corp., et al., No. 5:16-cv-05206, complaint (N.D. Cal., Nov. 8, 2016). A judge granted the defendants’ motion to dismiss the case in April 2017, based on pleading defects, but will allow the plaintiffs to make corrections in an amended complaint. The case remains a good example of how state and federal antitrust laws can affect employment.

The main federal antitrust statute is the Sherman Act, originally enacted by Congress in 1890 in an effort to address monopolistic practices across the country. It prohibits any “contract…in restraint of trade or commerce among the several states,” 15 U.S.C. § 1, and allows both civil and criminal penalties. The New Jersey Antitrust Act uses almost identical language to describe prohibited contracts. N.J. Rev. Stat. § 56:9-3. The attorneys general at the state and federal levels are empowered to investigate and prosecute anticompetitive practices, and both state and federal laws allow civil causes of action by aggrieved parties.

The Frost lawsuit is actually a consolidation of two lawsuits filed in California and New Jersey. It asserts claims on behalf of three classes of employees: nationwide, in California, and in New Jersey. The two defendant employers are American subsidiaries of South Korean companies. Their parent companies are also named as defendants. The lead plaintiff for the New Jersey class worked for one of the defendants in Englewood Cliffs for about eight years, beginning in 2006.

April 25, 2017

NLRB Counsel Issues Memo on Labor Practices at Universities

by Resnick Law Group, P.C.

The National Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq., protects a wide range of activities by employees related to organizing for collective bargaining and other purposes. Whether or not a particular individual is an “employee” within the meaning of the NLRA is a critically important component of determining whether the statute applies. This has been a contentious issue on college and university campuses around the country in recent years. The National Labor Relations Board (NLRB) has issued several opinions affecting people who work, or who perform services that resemble “work,” for colleges and universities, including faculty members, student assistants, and scholarship athletes. A memorandum issued by the NLRB General Counsel in late January, identified as GC 17-01, offers new guidance in light of three of these decisions. While the memorandum does not have the force of law, it could have an impact on future decisions by both the NLRB and the courts.

Employees have the right to “self-organization” under the NLRA, which includes forming or joining labor unions and engaging in “concerted activities” aimed at collective bargaining or “other mutual aid or protection.” 29 U.S.C. § 157. The plain language of the statute indicates that employers are only obligated to respect this right for “employees.” The NLRA’s basic definition of “employee” as “any employee…not…limited to the employees of a particular employer” is not very helpful. Id. at § 152(3). The statute identifies specific exclusions from the definition of “employee,” such as agricultural laborers and independent contractors, but it offers little guidance otherwise. The task of identifying who falls under the statute’s definition has mostly fallen to the NLRB, and the university environment has shown the difficulty of defining the term.

The first case cited by the NLRB counsel involved the board’s jurisdiction over private colleges and universities that identify themselves as religious in nature. Pacific Lutheran University, 361 NLRB No. 157 (Dec. 16, 2014). The U.S. Supreme Court had determined that church-operated schools were not subject to the NLRB’s jurisdiction in NLRB v. Catholic Bishop of Chicago, 440 U.S. 490 (1979). The Pacific Lutheran decision modified the NLRB’s earlier interpretation of the Supreme Court ruling, finding that the school must establish that “First Amendment religious rights…are even implicated” before claiming a religious exemption. Pacific Lutheran at 6.

April 14, 2017

New Jersey Law Requires Employers to Give Specific Notification to Employees During Layoffs and Other Major Upheavals

by Resnick Law Group, P.C.

According to some analysts, New Jersey is experiencing a net loss of residents and businesses, which means it is also losing jobs. When a business decides to cease operations in an entire state, a significant amount of job loss is probably inevitable, but the state has enacted laws that offer some protection to workers in this type of situation. The NJ WARN Act, more officially known as the Millville Dallas Airmotive Plant Job Loss Notification Act of 2007, establishes procedures that many businesses must follow when they take certain actions that result in major job loss. This includes a detailed notification that must be provided to each affected worker. Employers that fail to provide the required notification may be liable for damages to their employees.

The NJ WARN Act generally applies to businesses that have operated in New Jersey for at least three years and that have 100 or more full-time employees. Their obligations under the statute are triggered by certain events, including a “mass layoff,” a “transfer of operations,” and a “termination of operations.” N.J. Rev. Stat. § 34:21-1. The statute defines a “mass layoff” as a “reduction in force” that is not related to a transfer or termination of operations and that results in the termination of (1) at least 500 employees within a 30-day period, or (2) at least 50 employees when that number represents at least one-third of the company’s total full-time workforce. Id. A termination of operations occurs when the company voluntarily closes an entire facility, either permanently or temporarily. A transfer of operations involves moving a facility to another location.

If an employer conducts a mass layoff or a transfer or termination of operations that causes equivalent job loss, the NJ WARN Act requires it to provide a notification to each affected employee, along with severance pay “equal to one week of pay for each full year of employment.” Id. at § 34:21-2(b). The notification must state the number of employees losing jobs, an explanation of why the employer is undertaking these actions, a breakdown of the severance pay, statements of the employee’s legal rights, and information about comparable jobs available with the employer. Id. at § 34:21-3.

April 5, 2017

Supreme Court to Consider Whether Class Action Waivers Are Enforceable in Employment Disputes

by Resnick Law Group, P.C.

The U.S. Supreme Court granted certiorari to three consolidated cases addressing the enforceability of class action and collective action waivers in employment arbitration agreements. Many employment agreements include provisions stating that both employees and employers will submit any employment-related dispute to a neutral arbitrator. A waiver bars employees from filing or joining a class action related to their employment. The Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., appears to authorize this type of provision, but a waiver might violate the National Labor Relations Act, 29 U.S.C. § 151 et seq. The Supreme Court has recently upheld class action waivers in consumer contracts, and it may have agreed to hear this case in order to resolve any uncertainty resulting from those rulings.

In a class action, a plaintiff or group of plaintiffs sues on behalf of a larger group of similarly situated persons. This allows people who lack the resources to file suit, or whose individual claims are too small to justify the expense of suing, to pool their claims into a single lawsuit. Federal law establishes four criteria for certifying a class: (1) the class must be numerous enough to make individual lawsuits, or individual joinder of plaintiffs, impractical; (2) the class members must have common legal or factual questions; (3) the claims of the lead plaintiffs must be typical of the other class members; and (4) the lead plaintiffs must be able to “fairly and adequately” represent the class members and their interests. Fed. R. Civ. P. 23(a).

Arbitration is a method of alternative dispute resolution. Instead of filing suit, the parties submit their dispute to one or more arbitrators, who are usually legal professionals with knowledge of the subject matter at issue. The arbitrator will conduct a hearing, which might resemble a trial in many ways, and recommend an outcome. Employment contracts may require binding or non-binding arbitration. The results of binding arbitration are not subject to review by a court, absent evidence of misconduct by the arbitrator. A common criticism of arbitration is that the process tends to favor whomever is paying the arbitrator’s fees.