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Employment Law Blog

What Should You Know About the New Ban on Forced Arbitration of Employee Sexual Abuse Claims?

April 20, 2022

There is a general belief that arbitration favors employers and large businesses. However, an important change in the law, backed by bipartisan support, has advanced employee rights significantly by increasing their access to courts for certain claims. Specifically, the new law affects an employer’s ability to enforce an arbitration agreement and handle sexual harassment/assault claims privately through arbitration.

On March 3, 2022, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “Act”) into law. This law, which amends the Federal Arbitration Act, prohibits forced arbitration of sexual harassment and sexual assault claims.

Under the new statute, a litigant who brings a sexual harassment or sexual assault case will not be bound by an arbitration agreement or a waiver of a collective or class action that they entered into before the dispute arose. Specifically, the Act provides:

at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.

Many have commented on the overall purpose of the Amendment. For example, one senator said that the law will ensure that the voices of sexual assault and sexual harassment survivors voices will not be silenced. The senator also noted that the law is narrow in scope and application and should not be the catalyst for destroying employment arbitration agreements entered into prior to a dispute arising.

Continue reading here.

Attorney: Melody Lins
Related Practice: Labor and Employment

Restrictive Covenants for Doctors and the Need to Remain Vigilant

March 21, 2022

It has long been the law in New Jersey that doctors can be bound to reasonable restrictive covenants. This includes those arising out of a sale of a medical practice as well as non-competition clauses contained in employment agreements. Karlin v. Weinberg, 77 N.J. 408 (1978); Cnty. Hosp. Group, Inc. v. More, 183 N.J. 36 (2005). However, medical groups should not just stick them in a file and forget about them after they are signed because circumstances change. A victory we had last week in the New Jersey Appellate Division highlights the need for medical practices to remain vigilant with regard to their restrictive covenants.

In Avhad v. Precision Pain, et al., Docket No. 2261-20 (N.J. App. Div., March 14, 2022), which can be found here, the Plaintiff-doctor was retained by Defendant-medical group pursuant to a written agreement. The agreement contained the usual confidentiality, non-solicitation and non-competition clauses. As to the non-compete, it provided that Plaintiff would not compete after she left the Practice for two years and within a ten-mile radius of Defendant’s two offices in Edison and Hamilton, New Jersey. The agreement also contained a merger clause confirming that the agreement constituted the complete understanding of the parties and could only be amended by a subsequent written agreement signed by the medical group and the doctor.

A few years later, the medical group opened a third office, this one in North Brunswick. Before the medical group allowed Plaintiff to work in that office it alleged that she verbally agreed to be bound by that same ten-mile radius from the new office. Thereafter, the doctor left the medical group and opened her own office two miles from the medical group’s North Brunswick location.

Subsequently, the doctor filed an order to show cause without restraints but requested on the return date that a declaratory judgment be entered that the restrictive covenant did not apply to the North Brunswick office because the agreement only referenced the other two locations. The trial Court agreed, finding that the merger clause required any changes to the non-compete to be in writing. It, therefore, held, in what the Court claimed was a “final order”, that the doctor could continue to practice near the medical group’s North Brunswick office and dismissed the lawsuit. On March 14, 2022, the Appellate Division reversed.

The Appellate Court held that the trial Court should not have granted final relief on the return date of an order to show cause. Moreover, it held that, notwithstanding the merger clause, there was a factual dispute concerning whether the doctor orally agreed not to practice near the North Brunswick location. The Appellate Division, therefore, remanded the case to the trial Court.

The take-away: if medical groups want to protect their valuable relationships with their patients, they periodically need to have counsel review their non-compete agreements with their doctors and physician assistants, especially when opening new locations. Moreover, this area of the law is not statutory but driven by case law and, therefore, non-competition agreements should be reviewed from time-to-time to ensure they remain enforceable as case law changes.

Steven I. Adler, Esq., Co-Chair of the Labor and Employment department at Mandelbaum Barrett is available to answer any questions about restrictive covenants you may have.

Attorney: Steven Adler
Related Practice: Labor and Employment

Steven Adler and Brian Block co-author article for New Jersey Law Journal titled "How Not to Handle the Trial of an Employment Case"

March 14, 2022

Mandelbaum Barrett Partners Steven Adler and Brian Block have co-authored an article in the March 9, 2022 issue of the New Jersey Law Journal titled "How Not to Handle the Trial of an Employment Case"-- A hypothetical case provides a crash course on employment litigation, including the after-acquired evidence doctrine, the cat’s paw doctrine, stray remarks and the same actor inference.


Read the full article here.

Attorneys: Steven Adler and Brian Block
Related Practice: Labor and Employment

Four Employment Law Issues Small Business Owners Need to Be Aware of in 2022

February 18, 2022

1)  Marijuana Use by Employees: While the federal government is not going to legalize recreational marijuana, states and local jurisdictions continue to propose and pass legislation that addresses decriminalization of marijuana, recognition of medical marijuana use and legalization of recreational marijuana. Currently 34 states permit medical use of cannabis products, and 18 states and the Washington D.C. permit recreational use of marijuana. The laws in some of these states prohibit employers from taking adverse action against an employee.

What does this mean for your Practice? Regarding recreational marijuana you can still prohibit employees from being under the influence while working. With respect to medical marijuana, you must engage in the “interactive process” and determine if a “reasonable accommodation” can be provided to an employee whose medical condition requires that they be under the influence during working hours. Your practice should review its substance abuse policy to ensure that it complies with your state and local laws, and you should identify a local lab that can perform the testing required to determine if an employee is under the influence while at work.

2) Paid Leave: Although the paid leave requirements of the federal government’s covid relief legislation has sunset, many states, counties, and cities have enacted or are considering enacting paid leave laws. Additionally, the Build Back Better Act would provide each worker with four weeks of paid family/sick leave. Some of these laws will require paid sick leave, others will provide for paid family leave. Given that these laws can vary from state to state and even city to city it is important that you review your Practice’s paid and unpaid leave policies to ensure that you are following the requirements for each practice location.

3)  Pay Equity: This is no longer just a question of equal pay for equal work. In fact, in some states the standard has been revised to provide equal compensation, including benefits, for substantially similar work. Additionally, some states have enacted legislation that prohibits a prospective employer from inquiring about a candidate’s salary history. The Biden Administration has made this issue a priority and we anticipate some additional action from the Executive Brach. We recommend that you review the salaries and benefits being provided to all employees to ensure that there is consistency within each employee group.

4)  Worker Classification: The U.S. Department of Labor recently withdrew the prior administration’s final rule designed to simplify the classification of workers as independent contractors, leaving open the possibility that the agency might be looking to propose a new rule. Such a rule could expand the number of workers considered to be employees under the Fair Labor Standards Act. Additionally, some states have made the misclassification of an employee a crime.

We also expect continued focus on exempt v. non-exempt status. Failure to pay even a minimal amount of overtime can result in the Practice being responsible for the back wages, a penalty, treble damages, and attorney fees. Practices are required to comply with multiple federal and state laws and agency guidance when determining worker status, applying wage and hour and tax laws and eligibility for fringe benefits. If you have a question about whether an employee is exempt you should seek the advice of an experienced employment law attorney before designating the employee as ineligible for overtime. Brent Pohlman, a Partner in the Employment Law practice group at Mandelbaum Barrett is ready to help with these questions.

Attorney: Brent Pohlman
Related Practice: Labor and Employment

Brian Block authors article for The New Jersey Law Journal titled "When Enforcing Restrictive Covenants, Timing is Everything"

January 21, 2022

Mandelbaum Barrett Litigation and Employment Law partner, Brian Block, Esq. has authored an article in the January 21, 2022 issue of the New Jersey Law Journal titled "When Enforcing Restrictive Covenants, Timing is Everything." In this analysis, Brian details a New Jersey case as an example to answer the question, "What point in time should a court focus on when assessing whether an employer has legitmate interests to protect?"

Read the full article here.

Attorney: Brian Block
Related Practice: Labor and Employment

The Fearless Forecaster Once Again Predicts Key Employment Law Issues For The New Year

January 6, 2022

For those old enough to remember Johnny Carson and his character Carnac the Magnificent, every year I inherit Carnac’s super-powers to predict the upcoming year’s likely hot topic employment issues.

Last year my crystal ball was spot-on, predicting that the Occupational Safety and Health Administration (“OSHA”) would enforce stricter COVID rules, there would be a new “normal” with regard to flexible work policies, mandatory vaccinations would be considered, and pay equity litigation would be on the rise. Hopefully, this year my predictions will be as prescient.

In no particular order, here are my prognostications.

Vaccine Mandates.
 This topic once again makes the list. On November 4, 2021, OSHA mandated that employees of companies with one hundred (100) or more employees be vaccinated or provide weekly negative COVID-19 test results. There are numerous lawsuits challenging this requirement and President Biden has chosen not to enforce it until the Court decides. The Supreme Court has expedited this matter and will hear oral argument on January 7, 2022. Prediction? The mandate will be upheld.

Employee Relations.
 This is an easy one as it has already begun. It is a “seller’s market” as the demand for labor is high. To retain or recruit top talent, employers will be more flexible in 2022, continuing to allow more remote work and flexible work weeks. But that is not all that will be done in the upcoming year to retain employees. Millennials and Gen Z employees are highly influenced by social media. To attract them, employers will work to improve their social media presence, and will place more emphasis on company culture and social causes.

Pirating Employees and Restrictive Covenants. 
With the demand for labor high, inevitably there will be more wholesale moves of departments to competitors and not just one-off hires. What is the easiest way to increase profits? Hire your competitors’ best employees and staff. “Pirating” is an old claim, see United Board & Carton Corp. v. Britting, 63 N.J. Super. 517 (Ch. Div. 1959), and best described by New Jersey Supreme Court Justice Morris Pashman while still on the trial court bench in Wear-Ever Aluminum, Inc. v. Townecraft Industries, Inc., 75 N.J. Super. 135 (Ch. Div. 1962). While a restrictive covenant is unnecessary for such a claim, non-compete litigation often goes hand-in-hand with a cause of action for pirating. This Firm’s Employment Law and Healthcare Litigation Departments probably handle more non-compete cases throughout New Jersey than any other law firm in the State. There was a tremendous uptick in this litigation last year and we expect it to continue in 2022.

Age Discrimination.
 Age discrimination claims have remained relatively constant over the past few years. According to the United States Equal Employment Opportunity Commission (“EEOC”), age discrimination charges make up approximately 22% of all workplace discrimination claims. As Baby Boomers reach the end of their work lives and Gen X employees are now covered by the Age Discrimination in Employment Act (“ADEA”) (covering those 40 years of age and older), this trend will continue for the foreseeable future.

Employee Misclassification.
   Employee misclassification will be a hot topic in 2022. A bill, effective January 1, 2022, streamlines the identification of employee misclassification. It makes misclassification of employees for purposes of evading payment of insurance premiums a violation of the New Jersey Insurance Fraud Prevention Act (“NJIFPA”), N.J.S.A. 17:33A-3, and imposes civil and potentially criminal penalties.

Mental Health. 
Discussing one’s mental health is no longer taboo. We have seen it come to the forefront in professional tennis and football, and in recent television commercials. Expect to see more discrimination claims involving a plaintiff’s mental health or at least employers struggling with trying to determine whether an employee has a legitimate claim or is a malingerer. 

The Fearless Forecaster is comfortable with the above predictions, but employment law is constantly evolving. Now is a great time for employers to review their policies to best insulate themselves for whatever the new year may bring.

Attorney: Steven Adler
Related Practice: Labor and Employment

The New York State Department of Labor ("DOL") adopted long-awaited Regulations for the New York Paid Sick and Safe Leave Law

January 3, 2022

On December 22, 2021, the New York State Department of Labor (“DOL”) adopted long-awaited Regulations for the New York Paid Sick and Safe Leave Law which went into effect on September 30, 2020. The Rules, codified as Section 196 to Title 12 of the NYCRR, address several key issues in response to public comments relating to (1) how to count the number of employees for purposes of determining leave; (2) how to calculate sick leave accrual; (3) carryover of accrued leave; and (4) documentation.

How Much Sick Leave is Provided?

The New York State Sick Leave Law requires all private employers to provide paid or unpaid annual sick leave. The type and amount of leave depends on the number of employees and the employer’s revenues in the prior tax year.

•   Employers with 100 or more employees must provide up to 56 hours (7 days) of paid sick leave per calendar year.

•   Employers with 5 to 99 employees must provide up to 40 hours (5 days) of paid sick leave per calendar year.

•   Employers with 4 or fewer employees and net income of greater than $1 million in the previous tax year are required to provide up to 40 hours of paid sick leave per calendar year.

•   Employers with 4 or fewer employees and net income is $1 million or less in the previous tax year are required to provide up to 40 hours of unpaid sick leave per calendar year.

How to Count Employees:

The number of employees is determined by the “highest total number of employed at any point during the calendar year,” and includes all employees nationwide, part-time and full-time must be counted. (Although only New York State based employees are eligible for leave).

What if the size of your work force changes during the year?   If the workforce increases and moves to the higher threshold, employees must accrue additional leave from that date forward. If the workforce decreases, the employer cannot reduce the annual number of hours until the following calendar year.

How to Calculate Accrued Hours:

Employees accrue one hour of leave for every 30 hours worked. When determining accrual for time worked in increments of less than 30 hours, employers may round accrued leave to the nearest 5 minutes, one-tenth, or quarter of an hour.

Carry Over of Rules:

The NYS DOL confirmed that even where employers frontload the maximum amount of sick leave at the beginning of each calendar year, they must allow employees to carry over unused sick leave to the next calendar year. However, employers have the discretion to allow employees: (1) to use and be paid for sick leave prior to the end of a calendar year or to carry over unused sick leave; or (2) only to carry over unused sick leave. With both options, the Sick Leave Law explicitly permits employers to cap sick leave use in a calendar year at 40 hours or 56 hours, depending on employer size.

Medical Documentation:

Employers may only require employees to provide medical verification for leave lasting three or more consecutive days or shifts. The DOL explained that employers cannot require that employees provide advanced notice for sick leave for foreseeable events, such as a pre-scheduled doctor’s appointment. As such, employers should not discipline employees who request time off for a doctor’s appointment at the last minute.

What Employers Should Do Now?

Employers should review their paid time off and sick leave policies to ensure compliance with New York law and consult counsel.

For Additional Details:

NOTICE OF ADOPTION Sick Leave Requirements I.D. No. LAB-49-20-00012-A Filing No. 1233
Filing Date: 2021-12-08
Effective Date: 2021-12-22
located here:

Attorney: Lauren Topelsohn
Related Practice: Labor and Employment

Client Update on OSHA Vaccine and Testing Mandate

November 5, 2021

On Thursday November 4, 2021 the United States Department of Labor, Occupational Safety and Health Administration (“OSHA”) issued the long-awaited temporary rule addressing mandatory COVID-19 vaccination and testing in the workplace.

Who Is The Rule Applicable To?

This temporary rule applies to all entities in the United States that employ 100 or more full or part time employees. Additionally, this rule will be applicable to public sector employers that satisfy the covered employee criteria in those states that have an approved public OSHA programs.

Vaccination & Testing Requirements:

The temporary rule requires that employers develop, implement, distribute, and enforce a mandatory COVID-19 vaccination policy, unless the employer adopts mandatory testing for unvaccinated employees. Unvaccinated in-person employees are required to wear face coverings while working in-doors or in a vehicle with another person. Employers must still accommodate those employees with medical conditions that prevent administration of the vaccine, and those who possess sincerely held religious beliefs that preclude vaccine administration. Unvaccinated in-person employees must be tested weekly. Employees that work from home or work entirely outdoors are exempt from the vaccination and testing requirement. Any unvaccinated employee who is returning to in-person work must be tested within seven (7) days of their return.

Covered employers are required to provide full-time and part-time employees with up to 4 hours paid time off for vaccine administration, and provide employees paid time off, if needed, to recover from side effects of the vaccine.

Record Keeping Requirements:

  • Employers are required to determine vaccination status of all employees.
  • Employers are required to obtain acceptable proof of vaccination status.
  • Employers are required to maintain records documenting employee vaccination status.
  • Employers are required to maintain a vaccination status roster that is accurate and up to date at all times.

Positive Test Protocol:

Employers must require that all employees provide prompt notice of positive COVID-19 test results. Employers must then remove the employee from in-person work until the employee produces a negative NAAT test.  

An employer does not have an obligation to pay for testing as per the OSHA temporary rule, however testing may be obligated under certain state laws, collective bargaining agreements, insurance contracts, or if the employee is unable to be vaccinated as a result of a medical condition. Employers are not required to pay for facial coverings for unvaccinated employees.

The vaccination and testing mandates will be effective January 4, 2022.  There are numerous other components of this temporary rule that what has been discussed above. As such, our firm recommends that covered employers have a compliant policy in place prior to the end of 2021. We anticipate there will be immediate legal challenges by numerous business organizations and States. However, we strongly recommend that covered employers begin the process of developing a plan to comply with the temporary rule. The Corporate and Labor & Employment Law Departments at Mandelbaum Barrett PC are ready to assist our clients in developing, implementing, and distributing a compliant policy and record keeping practices. If you have any questions, please contact Brent Pohlman at or (973) 243-7997.


Attorney: Brent Pohlman
Related Practice: Labor and Employment

EEOC Updates its Interpretation of the Law Relating to Religious Accommodations and COVID-19 Vaccinations

October 29, 2021

As employers begin to welcome employees back to the office following the long hiatus related to COVID-19, the hot topic that has arisen relates to employees who do not want to be vaccinated for religious reasons. Earlier this week, the United States Equal Employment Opportunity Commission issued new Q & A’s to guide employers through this minefield. Here are the key takeaways for employers:

· The EEO laws do not prevent employers from requiring all employees physically entering the workplace to be fully vaccinated subject to the reasonable accommodation provisions of the ADA (for disabilities) and Title VII (for sincerely held religious beliefs.)

·  Employers can refuse to provide an accommodation if it imposes an undue hardship (the meaning of which might be surprising and is discussed below.)

·  Employees do not need to use any “magic words” to request an accommodation

·  As a “best practice,” employers should provide employees and job applicants with information concerning whom to contact, and the procedures to use, to request an accommodation.

·  If employers have an objective basis to question the religious nature or sincerity of the religious belief, they may make a limited factual inquiry and employees who refuse to cooperate risk losing the claim that their employer improperly denied the accommodation.

·  Title VII protects sincerely held religious beliefs but not political views or personal preferences.

·  Whether an employee has a sincerely held religious belief is largely a matter of credibility.

·  Employers can ask for an explanation of how the employee’s religious belief conflicts with the employer’s vaccination requirement.

·  As noted above, employers may deny a religious accommodation if it imposes an “undue hardship,” and this has been interpreted to mean anything more than a minimal cost. 

·  An undue hardship covers not only if there is direct monetary cost involved but also the burden on the business, including the risk of the spread of COVID-19 to other employees or the public, diminished efficiency in other jobs, or co-workers needing to carry the accommodated employee’s share of hazardous or burdensome work.

·  An undue hardship should not be based on speculation but objective information such as whether the employee works inside or outdoors, works in group settings and has contact with other employees or the public.

·  Finally, employers should keep in mind that they do not have to offer the best accommodation, only a reasonable one.

The above are helpful when navigating through the minefield that is our discrimination laws. However, nothing can take the place of sound legal advice and we caution to speak with counsel before denying an employee's religious accommodation. 

If you have any questions, please contact Steven Adler

Attorney: Steven Adler
Related Practice: Labor and Employment

Litigation Continues Challenging Vaccine Mandates

October19, 2021

A vaccine mandate issued by Rutgers University was recently challenged in federal court in New Jersey. In Children’s Health Defense, Inc. et al. v. Rutgers, a number of students sought, but were denied, a temporary restraining order against the school.

The Rutgers’ mandatory vaccine policy requires all students to be vaccinated regardless of whether they attend in-person classes. The only exemptions are for health and religious reasons or for those students enrolled in the school’s fully online degree program.

The lawsuit alleges that the mandate is illegal and unconstitutional in that it coerces students to take an experimental vaccine, violating students’ constitutional right to refuse unwanted medical treatment. One of the Plaintiffs was suspended from accessing her student account and from attending an online course after refusing to be vaccinated. She sought a temporary restraining order to stop the University from suspending her and requiring her vaccination.

Applying the four requirements needed for injunctive relief, Zahid Quraishi, U.S.D.J., held that Plaintiffs lacked a likelihood of success on the merits of their claims, did not establish irreparable harm because they waited five months to challenge the policy, and the equities and public interest favored Rutgers. The Court specifically found that the vaccination policy was reasonably necessary to safeguard the public interest.

This decision did not end the litigation and the case will now proceed like any other lawsuit. However, the interim decision sheds light on how the Court likely will rule should the matter not be resolved prior to trial.

This is not the first such case to rule in favor of a mandatory vaccine policy. In fact, a similar policy implemented by the University of Indiana, another Big 10 school, was also upheld. As we have predicted in previous articles, such policies issued by local and state governments are likely to be found appropriate as a valid exercise of police power or by companies as a legitimate step to protect their employees and/or customers. We will provide updates in this area as the law continues to develop. Please contact our Employment Law Group if you have any questions regarding the vaccine mandate.

Attorney: Steven Adler
Related Practice: Labor and Employment

New Jersey Takes a Stand Against Age Discrimination

October 18, 2021

Last week, the Governor of New Jersey signed into law a bill that amended the section of the New Jersey Law Against Discrimination (NJLAD) governing age discrimination.

The legislation eliminated the provision of the NJLAD that permitted employers to refuse to hire job applicants and/or promote employees 70 years of age or older. An employer that refuses to hire a candidate or promote an employee 70 and over because of that individual’s age will be exposed to significant financial liability. While one might believe this amendment will not protect many people, to the contrary, Americans are living and working longer. The 65 and older age group is going to experience the highest rate of workforce growth in the United States through 2024. This means that many employers can expect to see a significant increase in the average age of its workforce.

Most employers do not intentionally discriminate against older employees. However, there can be an implicit bias as it pertains to the ability of older employees to perform in the workplace. These subconscious beliefs can contaminate what would otherwise be an objective and non-discriminatory hiring or promotional decision.

To insulate themselves from potential liability, employers need to adopt, implement, and follow the following practices:

  1. Prepare thorough and complete job descriptions that specifically identify the material qualifications, abilities and skills needed for each position;
  2. Use objective hiring criteria and document the non-discriminatory factors that resulted in hiring one employee over another; and
  3. Conduct regular performance evaluations that objectively measure performance regarding all key job duties and responsibilities.

Implementing these practices will help ensure that hiring and promotional decisions are based upon objective and non-discriminatory reasons.

The Mandelbaum Barrett Labor and Employment Department can assist employers of all sizes in developing and implementing job descriptions, hiring criteria, and performance evaluations. If you have any questions about this or any other labor and employment issues, please do not hesitate to contact Brent R. Pohlman, Esq. at

Attorney: Brent Pohlman
Related Practice: Labor and Employment

Analyzing Recent Employment Law Headlines

October 7, 2021

Mandatory COVID-19 Vaccinations at Work Gain Steam; Botched Sexual Misconduct Investigations Involving USA Gymnastics and the National Women’s Soccer League Remind Employers to be Vigilant.

We continue to keep our clients ahead of the curve on important employment law developments, in order to help insulate employers from liability. Events from just the past week or two bring home this point.

Many large employers across the country, including those in private industry and the government, have now advised their staff that they are mandating COVID-19 vaccinations as a condition of returning to work. Taking their lead, many small to midsized employers are considering similar measures. One month ago, we addressed the legality of requiring a vaccine, and predicted that vaccine mandates likely will be upheld in the courts. Of course, mandatory vaccine policies must provide for reasonable accommodations for employees who have disabilities or sincerely held religious beliefs. 

Two other news headlines also merit attention. The first is the resignations of the Commissioner of the National Women’s Soccer League (NWSL) and its general counsel, both women, and the cancellation of NWSL games last weekend due to allegations of sexual misconduct by a team coach. The other headline relates to the Justice Department’s inquiry concerning the FBI’s botched investigation of Larry Nassar, the former team doctor for USA Gymnastics.

What jumps out to employment lawyers is the horrific way these two matters were mishandled. With regard to Nassar, those in power looked the other way when gymnasts began reporting their allegations. Similarly, in the NWSL matter, the commissioner appears to have been notified of the coach’s actions months ago and sat on the information. To make matters even worse, when the Commissioner eventually appointed an organization to investigate, she chose one closely tied to the league that appears to be biased.

There are a number of lessons to be learned from these matters. First, as your employees begin to return to the office after the COVID-19 shutdowns, make sure your policies are clear with regard to vaccination requirements and medical testing. Also, be prepared, and know what you will require from employees who request an accommodation.

As to the matters involving the NWSL and USA Gymnastics, employers should review their anti-harassment and discrimination policies – especially now that there will be more people working together again in the office. Employers also should not delay when notified of an allegation of sexual misconduct or harassment, because the law requires employers to take prompt and effective action to remediate any inappropriate behavior. Finally, employers should retain truly independent counsel to investigate such claims or, if sued, they will have a difficult time in court convincing a jury that they properly fulfilled their duties and should not be held liable. 

Attorney: Steven Adler
Related Practice: Labor and Employment

President Biden Enlists Employers in the Fight Against COVID-19

September 10, 2021

On Thursday, September 9, President Biden signed executive orders requiring all federal executive branch employees and most federal workers to be vaccinated or face discipline. The President also announced a plan to mandate vaccines at all businesses with 100 or more workers or face mandatory weekly testing. His efforts to bring employers into the fight against COVID-19 will affect 80 million workers. 

According to the White House, the Occupational Safety and Health Administration (“OSHA”), which is part of the Department of Labor, is drafting an emergency temporary standard to implement this requirement at large employers. Certain companies, such as United Airlines, Disney and even Fox News, already meet this requirement. President Biden also indicated that employers meeting this size will be obligated to give employees paid time off to receive the vaccination.

Will there be pushback from the anti-vaxxers and those with vaccine hesitancy?

Will there be push back from businesses?
With current labor shortages and additional administrative burdens, yes.

But is there solid legal ground to order vaccines?
The answer also is yes.

Over 100 years ago, the United States Supreme Court decided a case eerily similar to the arguments we are now hearing about why vaccines should not be mandated. In Jacobson v. Massachusetts, 197 U.S. 11 (1905), the Cambridge Board of Health mandated that everyone receive the smallpox vaccine. Jacobson (supported by The Anti-Vaccination Society) refused, having previously had a bad reaction to a vaccine when he was a child. The Supreme Court, in a 7-2 decision, upheld the mandate, stating that real liberty for all could not exist under the operation of a principle which recognizes the right of each individual person to use his own, whether in respect of his person or his property, regardless of injury that may be done to others. The Jacobson decision relied in part on a New York case from the year before upholding, based upon the police power, the Legislature’s requirement prohibiting children from attending school unless they were vaccinated.

Our current, extremely conservative Supreme Court ultimately could have a say concerning the legality of President Biden’s actions. However, the Court has already refused to hear another case involving the University of Indiana’s student vaccine mandate. Moreover, for years many state departments of health have required children to be vaccinated to attend school and imposed similar requirements for teachers. In the end, we expect President Biden’s strong action to curb COVID-19 to be upheld.

For more information, please contact Steven Adler

Attorney: Steven Adler
Related Practice: Labor and Employment

The Lesson to Be Learned from Governor Andrew Cuomo's Resignation

August 11, 2021

If one reads the detailed report released yesterday by New York Attorney General Letitia James, the allegations against Governor Andrew Cuomo, which included unwanted touching, inappropriate comments of a sexual nature and the like, are no different than most other cases of sexual harassment. It is, therefore, not surprising that Governor Cuomo, a former champion of the “Me Too” Movement, resigned rather than face impeachment proceedings.

But one thing is different here, and it is an important lesson to be learned by all employers. It should no longer be acceptable for a supervisor to be an “equal opportunity” bully in the workplace. Employers should put an immediate stop to this boorish behavior because, as we have seen with Governor Cuomo, the nuanced argument that an equally tough and highly demanding boss does not discriminate, easily can be refined further by proving that bullying of women is different. In this regard, the law is clear: if women are treated differently because of their sex, even without conduct directed at them of a sexual nature, they nevertheless can state a claim for sexual harassment.

Title VII, which protects employees from race, gender and religious discrimination, and its state law counterparts, have been held not to be “a general civility code” that prohibits verbal or physical harassment in the workplace. Therefore, a supervisor who bullies all of his or her employees—whether by, for example, using gender-neutral language while they harshly criticize subordinates, call them incompetent or stupid, or require them to work long hours or under oppressive circumstances-- does not violate the discrimination laws because the supervisor treats men and women equally poorly. In the case of Governor Cuomo, however, those complaining alleged that his bullying of women was different from how he treated men. They claim that he targeted them and would not have treated men in the same heavy-handed way.

What is the lesson to be learned here? Employers taking the position in litigation that a supervisor is difficult and gruff with all gets a plaintiff to the goal line and it is not that difficult for plaintiff’s counsel to carry the ball into the end zone by proving that the supervisor was even tougher on women. Therefore, employers need to make clear to all supervisors, especially those who are “rough around the edges,” to tone it down and act civilly when dealing with all employees.

Attorney: Steven Adler
Related Practice: Labor and Employment

New Jersey Adopts Potent New Weapon Against Worker Misclassification

July 19, 2021

On Thursday, July 8th, 2021, Governor Phil Murphy signed four bills into law as part of a bipartisan effort to protect workers from “worker misclassification.” Bills A.5890, A.5891, A.5892, and A.1171 are New Jersey’s most recent foray into regulating the so-called “gig economy.”

Worker misclassification is the practice of an employer improperly misclassifying its employees as “independent contractors.” Because New Jersey law requires employers to pay certain taxes and insurance benefits on behalf of their employees (but not for independent contractors), some employers have circumvented their obligations by deeming employees mere “independent contractors.” The Governor’s office estimates that, because of this practice, in 2018 alone New Jersey workers lost more than $450 million in wages and benefits.

Bill A.5892, the subject of this blog post, sweeps employee misclassification within the domain of the New Jersey Insurance Fraud Prevention Act (“IFPA”). In addition, the Bill provides a schedule of penalties and enforcement actions to be administered by the Commissioner of Banking and Insurance.

Particularly noteworthy is the new language added to section 4 of the IFPA, which provides that any “person, organization, or business” engages in worker misclassification by “purposely or knowingly” misrepresenting the status of an employee with the “purpose of evading the full payment of insurance benefits or premiums.” Section 4 now also provides that it is a violation of the IFPA to coerce, solicit, encourage, employ, contract, or otherwise conspire with another person to make such misrepresentations “for the purpose of wrongfully obtaining the benefits or of evading the full payment of insurance benefits or insurance premiums.”

The Bill also amended Section 5 of the IFPA such that the first violation now carries a civil and administrative penalty of $5,000; the second violation carries a civil and administrative penalty of $10,000; and every subsequent violation carries a civil and administrative penalty of $15,000. In addition to the penalties, the Commissioner of Banking and Insurance shall “order restitution to any insurance company or other person who has suffered a loss” as a result of the misclassification.

States have varied in their approach to regulating the gig economy, but this has been, and will be, a hot button issue for years to come. For example, California recently passed “Proposition 22,” which allows Uber and Lyft to retain drivers as independent contractors. “Prop 22” was the subject of more campaign spending than any other ballot initiative in state history. While states have taken different approaches in this arena, Governor Murphy has made clear that he intends New Jersey to remain staunchly pro-labor and to be at the forefront of protecting against worker misclassification.

Attorney: Steven Adler
Related Practice: Labor and Employment

Returning to Work? EEOC Updates Guidance for Employers During the Pandemic

June 1, 2021

After this Memorial Day weekend, there is some light at the end of the COVID-19 tunnel as many employers begin welcoming employees back to their physical offices. If you’re an employer who is navigating this process, many questions will arise as you tiptoe through the minefield of pandemic-related employment laws.

For that reason, we suggest all employers consult the United States Equal Employment Opportunity Commission’s (“EEOC”) Technical Assistance Questions and Answers, which was updated last Friday.

This update conveniently divides employers’ most commonly asked questions into eleven categories, as follows:
  • Disability-Related Inquiries and Medical Examinations
  • Confidentiality of Medical Information
  • Hiring and Onboarding
  • Reasonable Accommodation
  • Pandemic-Related Harassment Due to National Origin, Race or Other Protected Characteristics
  • Furloughs and Layoffs
  • Return to Work
  • Age
  • Caregivers/Family Responsibilities
  • Pregnancy
  • Vaccinations
Much can be written about each topic, but we suggest all employers start by consulting this publication.

If you have specific questions, please reach out to Steven Adler

Attorney: Steven Adler
Related Practice: Labor and Employment

Does the FDA's EUA of the COVID-19 Vaccine Impact Whether Employers Can Require Employees to Take the Vaccine as a Condition of Returning to Work?

December 22, 2020

We write to clarify our last employment law blog article concerning whether employers can mandate that employees take the COVID-19 vaccine as a condition to returning to their places of employment.

Our last article set forth the issues facing employers under a scenario where the FDA gives its full approval licensing the vaccine. Currently, however, the FDA is making Pfizer’s and Moderna’s vaccines available under an Emergency Use Authorization (“EUA”).

Under an EUA, the FDA has an obligation to ensure that eligible vaccine recipients are informed of the vaccine’s known and potential benefits and risks, of any available alternatives to the product, and that those eligible have the option to accept or refuse the vaccine. Does this also mean that employers cannot require the vaccine? The EEOC does not specifically address this issue in its most recent Guidance.

Regardless, as we previously wrote, there are still issues employers must consider before any termination decision should be made. This includes whether to accommodate under the ADA and state disability laws an employee who refuses the vaccine, including possibly allowing the return to the office with a mask and proper social distancing or allowing the employee to work remotely. Employers should also consider their obligations under federal and state leave laws.

In summary, employers will be on more solid ground to demand vaccines once the FDA gives them their full licensing approval but, even when that occurs, employers must carefully walk the minefields before making any termination decision.

Attorney: Steven Adler
Related Practice: Labor and Employment

Employers Can Require Workers To Get Vaccinated For Covid-19 But There Are Exceptions

December 21, 2020

There is a light at the end of the long, dark tunnel. Pfizer’s COVID-19 vaccine is now being administered and the Moderna vaccine will soon be next. This has led many employers to ask whether they can require employees to get vaccinated as a pre-condition for returning to the office or a company’s premises. The short answer is yes, as confirmed this week by the United States Equal Employment Opportunity Commission (“EEOC”).

Employers are obligated to ensure a safe workplace. This means they may be able to bar an individual from their premises who poses “a significant risk of substantial harm to the health or safety of the individual or others in the workplace that cannot be eliminated or reduced by a reasonable accommodation.” This analysis requires an “individual assessment.” This does not necessarily mean, however, that such an employee can be terminated.

Employees with a disability, who are pregnant or have a “sincerely held” religious belief that prevents them from getting inoculated are exempt, according to the EEOC. They have the right to request a reasonable accommodation. For example, if they still can perform the essential functions of their job from home, that is one possible accommodation. Another option might be to allow the employee to return to the workplace if he or she is able to wear a mask and the position enables the employee to practice social distancing.

However, discussions concerning one’s disability are a slippery slope. Employers can ask whether an employee has been inoculated, but they generally are prohibited from asking about a disability unless it is “job-related and consistent with business necessity.”

Keep in mind that if an accommodation is not possible, the employee may be entitled to unpaid leave or other entitlements under the law. Once their job protection ends, however, employers may be able to terminate the employee but only if they can demonstrate that a requested accommodation would impose an undue hardship.

More information on this subject can be found in the EEOC’s Revised COVID-19 Guidance, at section K, or by contacting Mandelbaum Barrett.

Attorney: Steven Adler
Related Practice: Labor and Employment

New York State's Paid Sick Leave Law - New Guidance

December 1, 2020

On September 30, 2020, New York’s State Sick Leave Law (NYSSL) went into effect. Under the NYSSL, employees began accruing sick leave benefits at a rate of one hour of leave for every 30 hours worked. Employers may require employees to wait until January 21, 2021 before they use any accrued leave.

What Must Employers Do?

New York issued its first guidance on the NYSSL on October 20, 2020. Employers have until November 30, 2020 to comply and avoid potential penalties.

How Much Leave, and is it Paid?

NYSSL requires all private employers to provide either paid or unpaid sick leave annually, depending on their size and revenue. Employers with 99 or fewer employees must provide up to 40 hours of paid sick leave annually; those with 100 or more employees, must provide up to 56 hours of paid leave. For employers with four or fewer employees, and annual net income of less than $1 million, the leave is unpaid.

Impact on New York City Employers?

The NYSSL does not preempt New York City’s Earned Safe and Sick Time Act (NYC-SSL). New York City amended the NYC-SSL on September 28, 2020 to align with the NYSSL, and recently updated its FAQ. However, differences remain, and employers covered by the NYC-SLL must continue to provide employees with benefits that exceed those under the NYSSL.

Attorney: Lauren Topelsohn
Related Practice: Labor and Employment
Category: Paid Sick Leave

Hope On The Horizon As We Approach Year End

November 23, 2020

On Saturday, Governor Phil Murphy, signed Executive Order 200, extending the public health emergency. Likewise, Governor Andrew Cuomo imposed new restrictions, including limitations on indoor and outside dining. Those moves are a stark reminder that as we approach year end, many people would like to forget 2020. But progress on the vaccine front gives us a glimmer of hope that 2021 will be a better year. For the vast majority of us, this cannot come soon enough.

In 2020, blue collar workers in this country have taken the biggest hit from COVID-19. They have had to continue to work on-site, doing their best to social distance while many white collar workers have been able to work remotely. With the rampant spread of coronavirus again, many people who were previously furloughed will remain out of work, will become unemployed again, or will lose their jobs for the first time. Now, however, unless Congress acts quickly to provide a new stimulus package, there is no safety net for those falling to the ranks of the unemployed.

At the end of this year, approximately 12 million Americans will lose their unemployment benefits. More than seven million freelance and gig workers will lose their benefits under the Coronavirus Aid, Relief and Economic Stimulus Act (the “CARES Act”), and almost five million workers will be dropped from another CARES Act program that provided an additional 13 weeks of jobless aid beyond most states’ typical 26 weeks of unemployment benefits. These losses are on top of the $600 weekly CARES Act federal unemployment insurance benefits that stopped at the end of July.

While Congress will be considering a new stimulus package, another round of stimulus checks and additional funding of business through the Paycheck Protection Program will likely not occur until early 2021. In the meantime, businesses that are still operating are limping along, and big businesses, like those in the airline industry, are laying off thousands of workers.

Many people are expecting “a long cold lonely winter,” to quote the Beatles. However, with vaccines on the horizon, Spring should allow for “smiles returning to [our] faces.” “It seems like years since it’s been here.”

Attorney: Steven Adler
Related Practice: Labor and Employment

New Jersey's Governor Signs Executive Order 192, Imposing New COVID-19 Safety Requirements on Employers

October 30, 2020

Effective 6:00 a.m., November 5, 2020, Governor Murphy’s Executive Order 192 requires every New Jersey employer (“business, non-profit and governmental or educational entity”), to take additional COVID-19 safety measures to protect their in-person workforces.

What are the New Requirements?

Pursuant to EO 192, employers who “require or permit” any of part of their workforce to be physically present at a worksite, must:

(1) Conduct daily health checks, such as temperature screenings, visual symptom checks, self-assessment checklists, and/or health questionnaires, consistent with CDC guidance; and

(2) Notify all employees of any known COVID-19 exposure in the workplace, consistent with all applicable confidentiality laws.

In addition, employers must, with respect to their on-site workforce and visitors:

(3) Require such persons to remain “at least six feet” apart, including in common areas, restrooms, and when entering or exiting the workplace.

However, if a workspace does not allow for six feet in distance, employers must:

  • Ensure the employee wears a protective mask (as required in 4 below)
  • Install physical barriers between workstations “wherever possible.”

(4) Require employees, customers and other visitors “entering the worksite to wear cloth or disposable face masks while on site in accordance with CDC recommendations.”

  • Author’s note: employees may remove their masks while at their workstations provided the stations are at least 6-feet apart.
  • Excluded from this requirement are children under two, or where it is impracticable (such as when a person is eating or drinking) or if a service cannot be performed if an individual is “wearing a mask” (such as a dental procedure).

(5) Provide hand sanitizers with at least 60% alcohol and sanitizing wipes at no cost to employees and visitors.

(6) Ensure employees practice hand hygiene and provide breaks for that purpose.

(7) Routinely clean and disinfect all high-touch areas (doorknobs, handrails, etc.)  

(8) “Separate” and “send home” from the workplace, any employee who appears to have COVID-19 symptoms as defined by the CDC; and

(9) In the event employee has been diagnosed with COVID-19 illness, clean and disinfect that employee’s worksite in accordance with CDC guidelines.

EO 192 Enforcement?

The NJDOL and the Department of Health are to establish a complaint-intake, investigation and inspection process and procedure. If a business is found to have violated the Order, it may be subject to penalties under N.J.S.A. App. A:9-49 and A9-50.

Training Programs and Postings Required

Finally, EO 192 directs the NJDOL to provide compliance and safety training for employers and employees, and materials to inform employers of their obligations and workers of their rights.

OSHA Stepping Up Enforcement At Health Care Businesses

October 27, 2020

Increase in Fines and Penalties

Since July of 2020, the U.S. Department of Labor’s Occupational Safety and Health Administration (“OSHA”) has significantly increased COVID-19-related enforcement activities, levying fines against 112 establishments within the New York metropolitan area. The fines and penalties imposed by OSHA between mid-July and mid-October 2020 amount to just over $1.6 million.

Action Against OSHA

This latest regulatory sweep comes on the heels of claims, levied earlier this year by U.S. labor giant AFL-CIO, that the watchdog agency had done too little to protect American workers from the ravages of the COVID-19 pandemic. In May, the AFL-CIO filed a petition in the D.C. Circuit Court of Appeals to force OSHA to implement and enforce stronger protection for U.S. workers against the coronavirus, just as states were beginning to re-open for the summer months. The petition alleged that, nationwide, workers had been exposed to the coronavirus without adequate health and safety measures. The complaints included lack of workable guidelines for respiratory health and the use of personal protective gear, along with lack of accurate reporting of COVID-19-related illnesses and fatalities. Since then, OSHA has drastically stepped up enforcement action.

Targeting Health Care Businesses

Notably, most of OSHA’s targets in New York, New Jersey and Connecticut have been health and medical-related businesses. Nationally, more workers are injured in the healthcare and social assistance industry sector than any other, with 582,800 accident or injury cases in 2017. To put this in perspective, that number constitutes 153,900 more accident or injury cases than the manufacturing sector. With health and medical facilities squarely within OSHA’s sights, the larger health systems have not been spared. The Hackensack Meridian Health System was cited by OSHA for violations which resulted in total penalties of $143,735, with one of their nursing homes hit with the largest single penalty, $28,070, based upon five separate safety issues. OSHA also conducted 26 such inspections in New York, resulting in $374,564 in penalties. Similarly, businesses in Connecticut were fined $100,126, based on seven OSHA inspections, while five inspections in Massachusetts yielded $83,854 in OSHA fines.

Already overburdened with a surge in coronavirus cases, including increased hospitalizations, health care entities in the tri-state area will have to step up their infection control compliance programs, in the event that OSHA pays an unannounced visit to their facility. The penalties associated with non-compliance with OSHA standards could easily dwarf the cost of compliance with such standards. As such, it would be prudent for healthcare businesses to verify their compliance with these standards. 

Mandelbaum Barrett’s Health Practice Group and Employment Practice Group have experience in assisting healthcare businesses in achieving compliance with OSHA’s standards and defending against enforcement actions by OSHA. For more information on our services, please feel free to contact us.

Category: Regulatory Compliance

Category: Regulatory Compliance

Federal Wage and Hour Division Issues Guidance as Schools Prepare to Reopen

September 4, 2020

COVID-19 has redefined the term “back to school” this year. On August 27, 2020, the Department of Labor (“DOL”) Wage and Hour Division updated is Guidance and added FAQs 98-100 to address employer and employee questions as schools implement remote, in-person and combined learning options.

The Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, part of the Families First Coronavirus Response Act (the “FFCRA”), applies to employers with fewer than 500 employees and to leave taken between April 1, 2020 and December 31, 2020. FFRCA provides eligible employees with both up to two weeks of paid sick leave and up to 12 weeks of expanded family and medical leave (10 of which are paid) if an employee needs to “care for a child whose school or place of care is closed, or whose child care provider is unavailable, due to COVID-19 related reasons.”

According to the DOL, the FAQS “issued” specifically address “qualifying for paid leave when a child attends a school operating on an alternate day basis; a parent chooses remote learning when in-person instruction is available; and a school begins the year with remote learning but may shift to in-person instruction if conditions change.”

Children with Alternating or Hybrid Attendance (FAQ 98)

Employees with a child who attends a school that operates on an alternate-day or other hybrid schedule, may take paid leave under the FFCRA on the days that his/her child “is not permitted to attend school in person” and must participate remotely instead provided that no other suitable person is available to take care of the employee’s child. For the purposes of the FFCRA, the “school is effectively closed” on the days when the employee’s child cannot attend.

Employees Who Choose Remote Learning Over In-Person Attendance (FAQ 99)

If the school provides both in-person and remote learning options at the parent’s election, and the employee chooses the remote option due to COVID-19 concerns, the employee is not entitled to paid FFCRA paid leave. The rationale is that the school is, in fact, open. However, if the child is under a quarantine order or medical directive to self-isolate the employee may be eligible for paid leave if no other adult is available to care for the child.

Children with Remote Learning Option Only but Subject to Change (FAQ 100)

If the school announces that the school year will start out remotely due to COVID-19 concerns, but may open later in the year, the employee may take paid leave under FFCRA while the school remains closed. Later, if the school reevaluates its decision and decides to open, the availability of FFCRA leave “will depend on the particulars of the school’s operations” as discussed in FAQ 98 and 99.   

If, prior to the start of the school year, an employee has already exhausted his/her FFCRA leave, the employee is not entitled to additional leave merely because a new school year is beginning. Finally, as stated above, FFCRA leave obligations remain in effect until December 31, 2020 unless extended by Congress. As such, any “replenishment” of paid leave, whether to address school-related issues or otherwise, is a matter for Congress.

The foregoing information is current as of the date published. For up-to-date information, please be feel free to contact us.

Category: Wage & Hour

Requiring COVID-19 Vaccines as A Condition for Returning to Work

August 31, 2020

At some point—hopefully in the not-too-distant future—we will have a vaccine for COVID-19. When that occurs, should employers require employees to be inoculated as a condition for returning to work or remaining employed?

Many employers, to guard against liability, will require employees to be vaccinated to protect others from getting sick at work. Other employers, like people who are anti-vaxxers, will not require shots knowing they are protected from litigation based on the workers compensation laws which generally preclude employees from suing their employers in court.

This is not the first time in our history where society has had to deal with a pandemic. A little over ten years ago, to a much lesser extent, we dealt with the H1N1 virus. At that time, the United States Equal Employment Opportunity Commission (“EEOC”) issued a Guidance which, as its name suggests, is not a law or regulation. With regard to that virus, the EEOC suggested that employers could require employees to be vaccinated if there were carveouts for people to object based on religious grounds under Title VII of the Civil Rights Act of 1964, or because they had an underlying medical condition under the Americans with Disabilities Act (“ADA”). 

That Guidance, which was recently reissued to address COVID-19, also makes clear, however, that an employer only has to provide a reasonable accommodation if it does not impose an undue hardship on the employer, and the accommodation does not impose a direct threat to the health or safety of other employees or the general public. The hardship argument obviously is more difficult for an employer to meet than the direct threat argument because, under the circumstances involving COVID-19, most people would readily agree that failing to get vaccinated could pose a direct health threat. In fact, the Guidance indicates that whether there is a direct threat depends on the severity of the illness and points out that the Center for Disease Control already has determined that COVID-19 meets the standard.

While we currently do not know whether the EEOC will issue a new Guidance under the ADA or Title VII relating to COVID-19, it is likely that any new Guidance would follow the EEOC’s previous pronouncement concerning the H1N1 virus. The existing Guidance states that employers covered by the ADA cannot compel employees to take the influenza vaccine regardless of their medical condition or religious beliefs. It further states that, “[g]enerally, ADA-covered employers should consider simply encouraging employees to get the influenza vaccine.” 

At this time, the best advice—when the vaccine is finally here—is to strongly encourage all employees to get vaccinated or, if the employer wants to mandate it, there should be carveouts based upon employees’ preexisting medical conditions and religious beliefs. 

LGBT and "Sex-Plus-Age" Now Recognized as Protected Classes Under Federal Discrimination Laws

August 31, 2020

Many employers are currently considering workforce reductions due to the impact of COVID-19. As a result of recent court decisions which expand the scope of Title VII of the Civil Rights Act of 1964, employers now need to be even more vigilant when reviewing their termination decisions.

In June, the United States Supreme Court in Bostock v. Clayton County, Georgia ruled that Title VII’s prohibition of sex discrimination covers the LGBT community. Now, the United States Court of Appeals for the 10th Circuit in Frappied v. Affinity Gaming Black Hawk, LLC, No. 19-1063 (10th Cir. 2020) has held that Title VII also covers “sex-plus-age” disparate impact (where a facially neutral policy has a great impact on people in a protected class) and disparate treatment claims.

In Frappied, plaintiffs alleged that the defendant discriminated against older women as part of a reduction in force. While several trial court decisions and the United States Equal Employment Opportunity Commission recognize sex-plus-age claims, Frappied is the first federal appellate court to recognize this cause of action. The court held that such claims are cognizable under Title VII even though they are also available under the ADEA, the federal law protecting employees from age discrimination. The court confirmed that “if changing the employee’s sex would have yielded a different choice by the employer, a statutory violation has occurred.” In other words, this selection would have resulted “because of sex” if the employer would not have terminated a male employee with the same “plus” category, even if the plus category, here age, is not a protected class under Title VII.

The 10th Circuit also noted that its conclusion is consistent with Title VII’s legislative purpose of striking at the entire spectrum of disparate treatment of men and women resulting from sexual stereotypes. It is not difficult to imagine, for example, a casino letting older women go as cocktail waitresses and discriminating against them because of the combination of their gender and age would actionable according to Frappied.

What is the takeaway? If your company is considering downsizing, be sure to analyze not only the impact the layoffs may have on protected categories of employees, such as age, race and gender, but also on the LGBT community and “plus” categories.

Category: Discrimination

New Jersey Supreme Court: Employers May Deem Employees to Assent to Arbitration Agreements Through Continued Employment

August 24, 2020

On August 18, 2020, the New Jersey Supreme Court issued its decision in Skuse v. Pfizer, Inc., concerning employees’ arbitration of claims against their employers. Reversing an intermediate appellate court, the Supreme Court upheld an employer’s arbitration policy that it had disseminated through email and that deemed an employee to have assented to arbitrate any employment claims by continuing to work for the employer for a certain period.

Pfizer’s Emails

The employer, Pfizer, sent a series of two emails to its employees, including plaintiff Amy Skuse. The first included an arbitration agreement that contained a clause advising employees that if they continued working for sixty days after receipt of the policy, they will have been “deemed to have consented to, ratified and accepted” the agreement, whether or not they affirmatively acknowledged the agreement. 

In the second email sent the next day, Pfizer sent its employees a “training” module called “Mutual Arbitration and Class Waiver Agreement and Acknowledgement,” that was an “activity” to be completed within two months. That module consisted of four slides, one of which similarly stated that even if the employee does not acknowledge the arbitration agreement, the employee will be “deemed to have consented to, ratified and accepted” the agreement by continuing to work for sixty (60) days after receipt of the policy. At the end of the slide was button that said: “CLICK HERE to acknowledge,” and the final slide thanked the employee for “reviewing” the agreement and allowed the employee to exit the “course.”

Skuse received both emails and completed the “training” module and was terminated just over sixty days later after refusing to get vaccinated against corporate policy. The foregoing was found sufficient to form an agreement to arbitrate. 

The Ruling

First, the Court held that the arbitration agreement itself and attendant communications clearly informed Skuse that she would waive her right to sue in court if she continued her employment for sixty days. It premised its holding on the general rule of contract law that “conduct can constitute contractual assent.” The Court pointed to the language of the agreement advising her that she was deemed to consent by continued employment for sixty days—with no express acknowledgment of the agreement by the employee required. 

Second, the Court found that email transmittal of the arbitration agreement was sufficient and appropriate. Nothing in the emails concealed the agreement or understated its importance. Interestingly, the Court did express disapproval of Pfizer’s decision to label the slideshow a “training” module, because “training” was not the most accurate terminology to describe what was occurring. That misnomer was, nevertheless, not grounds to invalidate the arbitration agreement, given the “content and tone” of Pfizer’s communications. 

Lastly, the Court rejected the argument that the “CLICK HERE to acknowledge” button—as opposed to “to agree”—was insufficient, because Skuse had assented to the arbitration agreement by way of “Pfizer’s designated method of assent -- her continued employment for an additional sixty days” after receipt of the agreement. In other words, whether she clicked the acknowledgement button was effectively irrelevant. It was just another reminder that regardless, her consent to arbitrate was by her conduct of remaining employed for sixty days.

Justice Albin Lays Groundwork for Future Challenges to Arbitration Agreements

Justice Barry Albin, the author of the Court’s landmark—though oft-debated— 2014 decision in Atalese v. U.S. Legal Services Group, L.P., concurred in the judgment. However, he expressed his view that the Court would soon have to confront the “more profound question” of whether employment arbitration agreements are contracts of adhesion contrary to the fundamental constitutional right of a civil jury trial and, therefore, unconscionable and unenforceable. He observed that Skuse had not raised that issue. In other words, Justice Albin laid the groundwork for future employee-plaintiffs to challenge their arbitration agreements on that more fundamental ground, such that the issue may be brought before the Court in the not-so-distant future.

The Chief Justice’s Dissent

Chief Justice Stuart Rabner dissented. He could not find “clear and unmistakable” proof—the standard used in the Court’s previous arbitration decisions—that Skuse had assented or agreed to the arbitration provision. Neither the clickable “acknowledge” button nor Pfizer’s “one-sided declaration that consent would be deemed by default, met that standard,” according to the Chief Justice. It was his position that an employer cannot unilaterally declare an employee’s agreement to waive rights because, as with any other contract, “one side cannot simply declare that the other agrees.” He believed that Pfizer’s unilateral declaration of an employee’s assent was an attempt to bypass basic contractual principles.

The Chief Justice also pointed out that, while the majority’s decision critiqued Pfizer’s language used in their communications, the fact that the Court nevertheless upheld the agreement would “usher in a new day for arbitration agreements.” More precisely, he posited that, going forward, no employers will ask their employees to expressly agree to arbitration, but instead, will simply ask employees to acknowledge their receipt of arbitration policies and advise that they are deemed to consent by “continuing to show up for work.”

Four Key Takeaways from Skuse

What is the big picture takeaway from the Skuse decision? At least in the employment context:

  1. Employers may disseminate arbitration agreements to their employees electronically via email, slideshow, or combination thereof.
  2. Those agreements need not request that employees expressly “agree” to arbitrate any employment claims—by signing their names or clicking a button that they “agree.” 
  3. Arbitration agreements need only advise employees that they will be deemed to assent to arbitration by accepting employment or continuing their employment for a certain period. 
  4. Employers, however, should not mislabel such arbitration-related emails or modules as “trainings” or “activities,” given the Court’s admonition that misnomers could invalidate arbitration agreements under other circumstances.

It isn’t hard to believe that the Chief Justice’s intuition will come to fruition—and quickly. We may soon see the extinction of employers expressly seeking their employees’ agreement to arbitrate claims. To be sure, Justice Albin’s concurrence paves the way for future, more fundamental challenges to industry-wide employment arbitration agreements.

However, it’s hard to envision a majority of this Court essentially reversing course and declaring unconscionable and unenforceable what it just recently found enforceable. The probable confirmation of Fabiana Pierre-Louis as the newest Justice of the Court will likely not be enough to chart a new course. She will take the seat of retiring Justice Walter Timpone, who was not in the four-Justice majority in Skuse.

U.S. Court of Appeals Sends Warning Shot: Non-Compete Clauses of Furloughed Employees May Not Be Enforceable

August 21, 2020

COVID-19 has greatly impacted many of us. Are you aware that it also may have affected the restrictive covenants used by employers?

Many employers protect their customer relationships by requiring salespeople to agree not to solicit or do business with them should they ever leave. If your company furloughed employees with these non-compete clauses, they may no longer be enforceable if employees are recalled to work – even if their absence was short-lived.

A recent decision from the United States Court of Appeals for the First Circuit is instructive. In Russomano v. Novo Nordisk, Inc., 960 F.3d 48 (1st Cir. 2020), the First Circuit confirmed a District Court decision holding that an employer who laid off an employee on August 3 and rehired that person on August 6, without asking the employee to sign a new restrictive covenant, lacked a probability of success on the merits. In other words, the Court found that the non-compete was likely unenforceable. The pharma company was therefore denied injunctive relief against its former employee.

Restrictive covenant cases are won, or lost, often at the very beginning of a lawsuit. If a court informs an employer during an application for a temporary restraining order that its non-compete likely will not be upheld at trial, and that during the pendency of the suit the former employee may compete, employers usually get the message that they should settle or not pursue the claim. Alternatively, if a temporary restraining order is granted, most employees “scream uncle” and approach their former employers concerning acceptable settlement solutions.

What can an employer do to increase the likelihood that its non-compete will pass the test for immediate injunctive relief? Based on the Russomano decision, it would be wise to have all employees who had non-competes before their COVID-19 furlough sign new ones. Non-compete agreements are carefully scrutinized by courts, and judges often look for ways not to enforce them, since they are by definition, anti-competitive and interfere with an employee finding work to support their family. Have your non-compete agreements reviewed by experienced counsel to give your company the best shot at protecting your most important asset, your relationships with customers.

U.S. District Court Judge Rejects Preliminary Approval of Harvey Weinstein Settlement

July 17, 2020

On July 14, Judge Alvin Hellerstein of the Southern District of New York rejected a proposed $46.8 million settlement, which likely would have resolved civil suits against Harvey Weinstein and his company for sexual misconduct. When one reviews the details of the proposed settlement, it is clear why the Court reached this decision.

Judge Hellerstein found that the proposed class action was unsuitable for class treatment and that the settlement would have treated all victims the same regardless of each person’s specific allegations of sexual assault. While the proposed settlement called for the appointment of a special master to evaluate each claim and assign a monetary value, Judge Hellerstein rejected that approach because it would abdicate the Court’s responsibility.

Part of the settlement called for $18.9 million for the class and an additional $5.4 million for individual plaintiffs. Certain plaintiffs objected because all of those proceeds were to be paid by insurance and not Weinstein. The settlement also proposed $7.3 million to be paid to the bankruptcy estate of The Weinstein Company to cover administrative and general unsecured claims of creditors in the bankruptcy proceeding. Those unsecured creditors included Weinstein himself, as well as his brother and former Weinstein Company directors. After paying legal fees, litigation and settlement costs, the plaintiffs stood to gain less than the money earmarked in the settlement to Weinstein and The Weinstein Company for legal fees.

Class actions are unique under the law because they provide for court approval of settlements. Here, the court properly exercised its discretion to protect class members.

Category: Class Actions

Protection from High Above: Supreme Court Strengthens Ministerial Exception from Federal Anti-Discrimination Laws

July 13, 2020

Religious institutions no longer need to pray for help when it comes to the discrimination laws. Last week, in a 7-2 decision, the U.S. Supreme Court strengthened the “ministerial exception” that protects religious institutions from federal anti-discrimination laws.

Two teachers at parochial schools challenged their terminations by bringing discrimination lawsuits, one alleging age discrimination and the other discrimination based upon disability. The Supreme Court rejected their claims, finding that they were covered by the exception and thus unable to sue. In a decision written by Justice Alito, the majority held that teachers in almost any kind of religious instruction would be covered no matter their title or whether they themselves practice the faith.

The majority held that “(j)udicial review of the way in which religious schools discharge…. responsibilities [relating to religious education and formation of students] would undermine the independence of religious institutions in a way that the First Amendment does not tolerate.” The majority’s opinion was grounded in the Constitution’s protection of the free exercise of religion. While the decision does not grant religious institutions immunity from all secular laws, it does protect them with respect to internal management decisions that are essential to a religious institution’s central mission.

The two dissenters, Justices Ginsberg and Sotomayor, accused the majority of giving religious institutions “free rein” to discriminate.

Category: Discrimination

Supreme Court Rules: Title VII Protects Gay and Transgender Employees

June 16, 2020

It was a surprise to many, even avid followers of the United States Supreme Court. Yesterday, in a 6-3 vote, the land’s highest court found that Title VII of the Civil Rights Act of 1964 protects the rights of gay and transgender employees from workplace discrimination “because of sex.”

Justice Anthony Kennedy, who had written landmark opinions involving gay rights, including the 2015 decision legalizing same-sex marriage, retired and it was unknown whether any of the conservative members of the Court would take up his mantle. Justice Neil Gorsuch stepped up and wrote the opinion, joined by another conservative, Chief Justice John Roberts, and all of the liberal members of the Court. Not surprisingly, Justices Kavanaugh, Alito and Thomas dissented.

Back in 1964, when the Civil Rights Act passed, a segregationist in Congress proposed adding sex discrimination, “because of sex,” to the bill covering race, creed and religion, perhaps thinking it would result in the bill being defeated. It did not, and it took the Court more than fifty years to rule that Title VII also protects gay and transgender workers. Conservative groups are attacking Justice Gorsuch, claiming he enabled the Supreme Court to legislate and read into the law based on current sentiments and not what was intended years ago when the law was adopted.

This is a monumental decision for many parts of the country. New Jersey, however, has protected gay rights for years under its Law Against Discrimination.

Anyone having any questions concerning discrimination in the workplace should contact Steven I. Adler, Co-Chair of the Firm’s Employment Law and Litigation Departments.

Category: Discrimination

EEOC's Practical Guidance on COVID-19

May 7, 2020

This summary covers only the legal considerations and not public health and safety recommendations for preventing the spread of COVID-19. Employers should consult the Center for Disease Control and public health agencies for how to keep their workforces safe.

In 2009, the Equal Employment Opportunity Commission (“EEOC”) issued guidance entitled “Pandemic Preparedness in the Workplace and the Americans with Disabilities Act.” More than a decade later, the EEOC has published updated guidance to address the ongoing national emergency caused by COVID-19. This week, EEOC followed-up with further practical guidance, in the form of an FAQ. The advice is crucial because—while on the periphery of many employers’ thoughts—aggressive workplace policies that may minimize the spread of the disease may also risk violation of federal anti-discrimination laws.

The guidance largely focuses on two concerns:

(1) how can employers ensure that new hires are not bringing COVID-19 into the workplace?
(2) how can employers respond to current employees exhibiting symptoms or who have possible exposure to COVID-19?

The following is a brief summary of both.

(1) New Hires

The ADA strictly prohibits employers from inquiring into the health of applicants before offering employment. However, they may require medical examinations after extending a conditional offer of employment. While designed to prevent exclusion of disabled applicants, it poses obvious concerns in the time of COVID-19, since safety-conscious employers may be overly zealous in attempts to protect their workforce.

The practical concern is how to treat applicants that test positive for COVID-19 during the post-offer examination. Typically, the ADA would not allow rescinding an offer to an employee for medical reasons, unless it prevents them from performing the essential functions of their job. This is not applicable to COVID-19.

Simply put, COVID-19 is considered a “direct threat” to health and safety under the ADA. This determination is based on the CDC’s severity classifications and the recommended precautionary measures that we are all familiar with (e.g., restaurant closures, canceled gatherings, etc.). As a result, the EEOC has stated that the “individual cannot safely enter the workplace, and therefore the employer may withdraw the job offer.”

This sets a tone that is notably different than the case-by-case, individualized assessment that the ADA usually requires. The EEOC’s decision to allow for a per se rule against hiring employees with conditional offers of employment that test positive for COVID-19 is, perhaps, one of the most significant indications of the seriousness of the current crisis.

Further complicating the issue, the FAQ distinguishes between applicants that test positive for COVID-19 and applicants that are at a higher risk for complications (e.g., over 65 years old; pregnant; etc.). Where a post-offer exam reveals that the applicant is at a higher risk, an employer is not permitted to withdraw an offer or unilaterally postpone the start date. Rather, the EEOC instructs employers to allow the applicant to telework or discuss with them if they would like to postpone their start date. Effectively, the employer must engage in a modified interactive process, where the vulnerable employee has the final say.

(2) Active Employees

Ordinarily, employment decisions based upon an employee’s health are unadvisable. That said, a national emergency and global pandemic are not “ordinary.” As one might expect, the circumstances provide leeway for employers to keep their workforce safe and healthy. Therefore, the EEOC has issued the following guidance to employers:
  • an employer may send an employee home if they are experiencing COVID-19 related symptoms;
  • if an employee reports feeling ill or calls out sick, the employer may explicitly as them if they are experiencing COVID-19 symptoms;
  • an employer may take employees’ temperatures as a condition of entering the workplace;
  • when an employee has possible exposure to COVID-19 (e.g., travel; proximity to someone with symptoms, etc.), employers do not need to wait until symptoms develop to instruct them to remain home; and
  • while not absolved of providing accommodations to disabled employees that request one, the EEOC recognizes that there may be reasonable delay in engaging in the interactive process; and
  • as a practical matter, even where access to medical professionals is likely difficult, employers may still require a note certifying a returning employee’s fitness for duty.
Additionally, while falling short of saying it explicitly, the EEOC suggests that—due to COVID-19’s classification as a “direct threat”—employers may ask employees without symptoms whether they have any medical condition that make them vulnerable to complications related to COVID-19.

Interestingly, the EEOC explicitly reminds employers that, if they require employees to wear Personal Protective Equipment (“PPE”), they must undergo the traditional interactive process for employees that request an accommodation for disability or religious reasons. Unless it poses an undue hardship, the employee is entitled to a reasonable accommodation (e.g., providing non-latex gloves; modified masks for employees that read lips; etc.).

Due to this recent guidance, prior advice regarding recommended “best practices” is ill-fitted for guiding employment decisions during the pandemic. Rather, employers looking to take preemptive safety measures are advised to adjust their workplace policies and handbooks (possibly through formal addendum) to provide notice to employees and establish uniform practices to combat the crisis.

U.S. Women's National Soccer Team Fails to Score A Goal in Its Equal Pay Act Lawsuit

May 4, 2020

In a well-reasoned decision issued on Friday, May 1, 2020, United States District Court Judge R. Gary Klausner, sitting in the Central District of California, gutted most of the equal pay and discrimination claims brought by the United States Women’s National Soccer Team (“WNT”). While the WNT should be commended for its play on the field and for team members serving as role models for girls, the WNT was not an ideal plaintiff.

The Equal Pay Act (“EPA”) provides, in relevant part, that:
No employer…shall discriminate…between employees on the basis of sex by paying wages to employees…at a rate less than the rate at which it pays wages to employees of the opposite sex…for equal work on jobs the performance of which require equal skill, effort, and responsibility, and which are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other facts other than sex.

In the lawsuit the United States Soccer Federation (“USSF”) argued, and the Court agreed, that total compensation of the women and men should be compared. It so held because plaintiffs received more than one category of wages, and higher pay in one category of wages can offset lower pay in another category for purposes of the EPA. The evidence before the Court showed that the women’s team earned about $220,000 per game compared $212,000 for the men’s national team (“MNT”). The Court also rejected the WNT’s argument that it would have earned more under the MNT’s collective bargaining agreement (“CBA”). “[M]erely comparing what each team would have made under the other team’s CBA is untenable in this case because it ignores the reality that the MNT and WNT bargained for different agreements that reflect different performance, and the WNT explicitly rejected the terms they now seek to retroactively impose on themselves.”

The Court also threw out a large part of the WNT’s sex discrimination claim under Title VII, holding that the WNT’s lacked evidence of pretext, that they were forced to play on inferior field surfaces because of their gender rather than due to financial considerations as proffered by the USSF. The Court did, however, find that the WNT could go to trial over whether they were discriminated against with regard to travel arrangements and medical and training support.

Fame and the groundswell of support for the WNT were simply not enough to get the ball in the net. While the players have much to be commended for, they simply were a poor choice to set legal precedent for equal pay for women.

Category: Equal Pay Act, Discrimination

OSHA Releases COVID-19 Guidance

April 28, 2020

The federal Occupational Safety and Health Administration (“OSHA”) has released “Guidance for Preparing Workplaces for COVID-19.” The 35-page Guidance includes specific actions that employers should take in the wake of the Coronavirus outbreak to meet OSHA’s safety and health standards and regulations. Businesses should assess their operations and employees’ exposure risks, incorporate social-distancing practices, and take steps to provide at-risk employees with appropriate personal protective equipment (“PPE”).

The Guidance is available here.

If you have any questions regarding OSHA’s recommendations, or other employment obligations related to COVID-19, please do not hesitate to contact a member of our Employment and Labor Group. And of course, stay safe! 

Employers: One More Matter to Worry About Relating to COVID-19

April 27, 2020

If you thought employers already have enough on their plates to worry about—such as simply being able to stay afloat in this economy—one more matter should be added to the list: an expected uptick in whistleblower litigation related to COVID-19. This is especially true in New Jersey.

New Jersey has one of, if not, the broadest whistleblower protection laws in the country. The New Jersey Conscientious Employee Protection Act (“CEPA”) applies to all employers regardless of size. It protects employees and even certain independent contractors from retaliation for complaining about practices that violate a rule, regulation, law or clear mandate of public policy. It even covers employees who reasonably believe there is a violation when, in fact, there is none.

New Jersey employers with ten or more employees, regardless of what state they work in, are required to conspicuously post in the workplace and distribute annually a written or electronic CEPA notice in English, Spanish and other language spoken by a majority of the workforce, advising employees of their rights. The notice must provide the name and contact information of the person designated by the company to whom complaints should be directed.

Why is it inevitable that there will be a tremendous increase in the number of whistleblower complaints? When one considers the sheer number of layoffs, furloughs and other adverse employment actions taken against employees resulting from the pandemic and the difficulty these severed employees are having locating new employment, many will likely believe the best place for them to turn will be to sue their former employers.

This belief will also be fueled by federal and state agencies reminding employees to report violations to these agencies’ enforcement arms. For example, in OSHA’s recent Guidance relating to COVID-19, it reminds employees that it is against the law for an employer to retaliate against an employee who complains about unsafe working conditions. Considering the scarcity of certain personal protective equipment (“PPE”) and other safety products, complaints to OSHA will surely rise as employees return to work. The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) also creates opportunities for whistleblowers to complain about a company’s misuse of stimulus funds. Likewise, under the federal False Claims Act, individuals are incentivized to report violations to the SEC relating to financial misconduct with the possibility of recovering ten to thirty percent of the recovery as a bounty.

The takeway: as with most employment matters, it is best to be proactive rather than reactive. Check now whether your company has a written whistleblower policy. Make sure it is posted and is distributed. Confirm that it clearly spells out how employees are to lodge complaints and be prepared to promptly and thoroughly investigate any allegations. Finally, be sure to document the non-retaliatory reasons for each termination decision as well as all decisions relating to rehiring.

Category: Whistleblowing

Now What? Employees Returning to Work After COVID-19

April 20, 2020

All employers soon will be on the front-line leading the battle against the further spread of the deadly COVID-19 virus. On April 17, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued revised Guidance for employers dealing with the COVID-19 pandemic, adding advice for employers when allowing employees back to work.

Permissible Steps to Screen Employees

The EEOC’s Guidance confirms that employers are allowed to make disability-related inquiries and conduct medical examinations if they are job-related and consistent with business necessity. Inquiries and medical examinations are permissible if they are necessary to exclude employees with a medical condition that would pose a direct threat to health or safety.

Deciding what is a direct threat must be based upon the best available objective medical evidence, such as guidance from the Center for Disease Control or other healthcare organizations. For example, employers may take employees’ temperatures, ask questions about symptoms and require self-reporting. However, employers must be careful not to engage in disparate treatment based upon employees being in a protected category such as gender or race.

Personal Protective Equipment

The term Personal Protective Equipment, or “PPE” has been added to everyone’s lexicon in 2020. The EEOC’s Guidance makes it clear that employers can require employees to wear PPE, such as gloves and masks, when returning to work. Employers can also require employees to abide by social distancing and regularly wash their hands.

Reasonable Accommodations

Employers must engage in the interactive process when employees request an accommodation upon returning to work. Employers are not obligated to provide the best accommodation, only a reasonable one. For example, no accommodation is required if it imposes an undue hardship on an employer. The EEOC recognizes in its Guidance that, in certain circumstances, what may not have been an undue hardship prior to COVID-19 may pose one now. The EEOC recognizes that an employer’s loss of income due to the pandemic is relevant to this inquiry.

Certain accommodations are relatively easy. For example, an employee may need non-latex gloves or a different type of gown. Employers also can provide an accommodation on a temporary or trial basis while awaiting receipt of medical documentation from an employee. Employers should also take into consideration an employee’s pre-existing disability, if it places the employee at greater risk during the pandemic.

Category: Discrimination

Changes To The New Jersey Family Leave Act And Proposed Changes To New Jersey's Mini-WARN Act Resulting From COVID-19

April 14, 2020

In response to COVID-19, yesterday the New Jersey Senate made significant changes to the New Jersey Family Leave Act (“NJFLA”) and proposed changes to the Millville Dallas Airmotive Plant Job Loss Notification Act (the “mini-WARN Act”).

Changes to the NJFLA

As to the NJFLA, the Senate expanded the law to cover situations that stem from coronavirus, such as school closures and the quarantine of a family member. In keeping with the history of the NJFLA, the amendment does not cover an employee for time off to deal with his or her own COVID-19 related illness.

While the recent federal legislation known as the Families First Coronavirus Response Act (“FFCRA”) amended the federal Family and Medical Leave Act (“FMLA”) to provide up to ten weeks of paid family leave to care for a child home due to school or daycare closure, this state legislation provides for job protection and unpaid leave in the event of a state of emergency declared by the Governor or when indicated by the Commissioner of Health or other public health authority due to an epidemic of a communicable disease which requires (1) in-home care of a child due to closure of a school or daycare, (2) mandatory quarantine of a family member in need of care by the employee or (3) a family member in need of care by the employee who undergoes self-quarantine. 

This leave can be used intermittently and is also covered by New Jersey’s Temporary Disability Benefits Law. The amendment does away with the seven-day waiting period for disability benefits. Like other leave under the NJFLA, an employee can take up to 12 weeks of unpaid leave in a 24-month period.

Proposed Changes to NJ’s mini-WARN Act

The New Jersey Senate is also considering changes to the State’s mini-WARN Act. 

Starting in mid-July, 2020, that law will require employers with at least 100 employees to pay one week of severance for every year of service as part of a “mass layoff,” defined as any reduction in force which results in terminations in any 30-day period of 50 or more employees. However, the proposed changes include an exclusion for a mass layoff resulting from the coronavirus pandemic. 

Moreover, the Senate is considering moving the effective date of this law to 90 days after the end of the state of emergency declared by the Governor. In other words, the proposed change will enable New Jersey employers to avoid having to pay severance to employees discharged due to the coronavirus. 

For more information, contact Steven I. Adler at

Category: FMLA/FLA

DOL Explains Small Business Exemption from Federal Leave

April 7, 2020

The U.S. Department of Labor has published “temporary regulations” to explain how small businesses (fewer than 50 employees) may exercise the exemption from certain leave obligations under the Families First Coronavirus Response Act (“Families First Act”).

As previously reported, the Families First Act has two leave components: paid leave under the Emergency Paid Sick Leave Act (“PSLA”), and paid and unpaid leave under the Emergency Family and Medical Leave Expansion Act (“EFMLA”).

A small employer (less than 50 employees) is exempt from the PLSA’s and EFMLA’s leave requirements if the requested leave would jeopardize the viability of the business as a going-concern.  Importantly, the exemption applies only to child-care related leave, where an employee is unable to work or telework due to the need to care for his/her minor child whose school/daycare has been closed or whose childcare provider is unavailable as a result of COVID-19. (PSLA qualifying reason #5, and EFMLA’s only qualifying reason).

A small employer may invoke the carve-out if an authorized officer of the business determines that:

  • The leave would result in the business’s expenses and financial obligations exceeding available revenues such that the small business would cease to operate at minimal capacity;
  • The employee’s absence would entail a substantial risk to the small business’s financial health or operational capability because of the employee’s unique skill, knowledge of the business operation or responsibilities; or
  • There are not sufficient workers who are able, willing and qualified (and available at the time and place needed) to perform the employee’s services which are needed for the small business to operate at minimal capacity.

The DOL’s regulations require a small employer seeking to invoke the exemption to document its determination, including which of the above criteria it relied on.  At this time, employers need not send the documentation to the DOL but must retain it, presumably in the event of a future DOL inquiry or audit.

Finally, all employers, including small employers exercising this exemption with respect to one or more employees, must post (or deliver via email) the DOL’s poster informing employees of these new laws which can be found here

DOL Announces FFCRA Regulations

April 2, 2020

Yesterday, the U.S. Department of Labor (“DOL”) announced a “new action” regarding the protections and relief available under the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act, both part of the Families First Coronavirus Response Act (“FFCRA”). The Department’s Wage and Hour Division “posted a temporary rule issuing regulations pursuant to the new law, effective April 1, 2020,” available here.

FFCRA requires all private employers with less than 500 employees (subject to exemptions) to provide up to 80 hours (or 10 days) of paid sick leave for a “qualifying reason” related to COVID-19. In exchange, employers will receive a “tax credit” for the cost. According to the DOL, “[t]he legislation will ensure that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus, while at the same time reimbursing businesses.” 

For any questions regarding your obligations under FFCRA, please feel free to contact any member in our Labor and Employment Practice Group.

Category: Paid Sick Leave

COVID-19 Highlights The Importance Of Having Employers' Personnel Policies And Employee Handbooks Reviewed And Updated Now By Counsel

March 26, 2020

As we all continue to struggle with the impact of the coronavirus, the pandemic has highlighted why employers must stay vigilant with regard to updating their personnel policies and employee handbooks.

Those businesses considering furloughs (unpaid leaves of absence), individual terminations and/or downsizings must consider whether those affected have written employment agreements and whether they are covered by any stand-alone personnel policies or policies contained within an employee handbook. This must be done while at the same time analyzing numerous employment statutes and laws. For example, what does an employee’s contract say about the right to terminate with or without cause? What does it provide for vacation and sick pay? Similarly, what does your businesses personnel policies and handbooks say about whether the company must pay paid time off, vacation and/or sick days if an employee is terminated?

Once an employer understands its contractual obligations, an analysis must be done of state paid sick leave laws, wage and hour laws, whether the adverse employment action could result in a discrimination or retaliation claim or implicates the WARN Act, whether it complies with the new Families First Coronavirus Response Act (“FFCRA”), enables those terminated to receive the benefits of the stimulus package that should be approved tomorrow, and on and on.

While it may or may not be too late to change an employers’ employee handbooks now to deal with immediate employment actions that employers are considering, it is important to make certain immediate changes that could protect the company as we continue down the rocky road still ahead of all of us as a result of the pandemic.

Employers who wish to have their personnel policies and employee handbooks reviewed should contact Steven Adler at

COVID-19, Remote Work and Other Cybersecurity Risks – What You Need to Know

March 26, 2020

With hundreds of millions of workers advised or required to stay at home, employers and employees are left with no other alternative but to work remotely. The sudden emergence of the COVID-19 virus pandemic has resulted in a virtual stampede into remote computing, or “remoting”. Businesses should understand that now, more than ever, they must address not only the logistics of remoting, but also grapple with an issue joined at the hip with remoting: cybersecurity.

Social distancing and working from home has, for now, become the new normal. While keeping employees productive and companies in business, however, migrating to operating away from the watchful eyes of information technology and cybersecurity staff could leave firms even more vulnerable to technology-related issues and a variety compromises.

Companies rushing to deploy remoting capabilities are either expanding their computing capabilities into the “red zone” (think auto RPMs) or deploying ad-hoc or home-grown patchwork solutions to keep information – and revenues – flowing. Cybercriminals have not been asleep at the wheel, and taking active measures to benefit both from companies that in their rush to stay in business, either do not have, or have not yet adapted their cybersecurity infrastructure to protect what is their most valuable asset (other than employees) – their data.

Current Corporate COVID-19 Related Cyber Threats

Remote Computing – In the rush to remoting, companies are permitting, and in some instances even requiring, employees to use non-corporate-owned computing devices to conduct everyday business, including home computers, laptops, phones and other mobile devices, commonly known as “bring your own device” or “BYOD”. Some organizations do already run a pre-existing secure BYOD program using mobile device management programs (MDMs) that, in the event of a real or suspected compromise, permit them to “brick” or disable either an entire mobile device, or any corporate information resident on that device. Permitting or requiring the use of these devices without instituting protective measure such as MDMs and associated policy monitoring and enforcement may be expedient in the rush to ramp up employee utilization under current circumstances, but it also immediately injects a much higher degree of cyber-risk, in both nature and scope, into a companies’ everyday functions. Even where BYOD devices have MDM protection installed, there is no guarantee that information from even a protected device will be effectively shielded from threats from malware resident on that device, or from email attachments and seemingly trustworthy links.

Employee use of any BYOD introduces a high degree of risk that those devices are not well-protected. Even with the ability to use so-called “secure cloud computing” the security of BYOD will be largely unknown to the company, and these unknown unknowns (these concerns are the ones that keep cybersecurity professionals awake at night) abound:
  • Are these devices encrypted?
  • Is the BYOD password enabled?
  • Is the BYOD password of sufficient complexity and strength?
  • Who is permitted/authorized to use BYOD? (e.g., significant others/children)
  • Are they been updated?
  • Are they been patched?
  • Do they have anti-malware programs installed?
  • Are they using an older, insecure operating system (think Windows 7)?
  • Do these devices have unauthorized or suspicious programs installed that may harbor malware?
  • Does company’s insurance policy or cyberinsurance policy provide business continuity/disaster recovery coverage for a COVID-19 type pandemic, especially if it has been compromised by a BYOD?
It bears repeating that even where cloud computing is utilized, the risk of malware attacks is heightened by the use of BYOD.

This heightens the risk of compromise and theft of corporate assets, including cash through fraudulent funds transfers. Added to this toxic mix of threats are the costs from theft of intellectual property, potential civil liability and regulatory penalty for data breaches and identity compromises. These concerns are amplified for companies that use/store sensitive personal information — banking, financial, personal, health care and employment information and records.

COVID-19 Social Engineering – Cybercriminal and threat actors are already taking advantage of the COVID-19 pandemic and engineering their fraud schemes to take advantage of the fear, uncertainty and doubt that inevitably exists in these circumstances. Social engineering, in particular COVID-19-related phishing, involves the sending of fraudulent messaging, advice, offers and cautions, (e.g., public “advisories”, health “alerts”, offers for commodities in short supply, and miracle treatments or cures) to employees – clicking on these links or opening attachments exposes even protected networks to malware. These phishing attacks are on the rise, and can result in compromised email accounts, risk of impersonated emails and fraudulent wire transfers or other unauthorized funds or asset transfers

COVID-19 Corporate Preventive Medicine

Well-crafted social engineering campaigns sidestep technological anti-fraud measures such as firewalls and VPNs because they are aimed at the trusted source – a company’s employees – and management. You can help protect your business from the technology related risks associated with COVID-19 by strengthening management and employee oversight in keeping systems secure. Listed below is a partial list of items every business should consider implementing, or at a minimum, addressing:
  • Increased frequency and auditing of company IT assets and asset use, including network, workstation, and mobile device patch and update management.
  • Review and conduct risk assessments for cloud based cybersecurity protections.
  • Revise and business continuity and disaster recovery policies to make appropriate accommodations for potential pandemic-type events such as COVID-19.
    • Business continuity and disaster recovery contingency plans should be in place and expanded to include remote, air-gapped (not connected to your network when not in use) backups — they should already be in place, and periodically tested.
    • Conduct “tabletop” exercises to test policy effectiveness.
  • Revise cybersecurity policies to address pandemic-type events – e.g., make your cybersecurity infrastructure defensible.
  • Conduct a realistic risk assessment when considering permitting employee BYOD, or alternatively, assign “emergency” mobile devices to employees that are secure (encrypted and managed by corporate mobile device management programs).
    • What are the costs for these devices compared with potential risk of financial loss?
  • Check your insurance policies to ascertain whether business losses arising from COVID-19 related cybersecurity issues are covered – or if they are excluded through some sort of Force Majeure provision.
    • Businesses shuttered as a result of COVID-18 issues – will they have insurable losses for business interruption resulting from pandemic events?
    • Will insurance permit or prohibit use of employee BYOD? If so, are there coverage pre-conditions imposed and are they complied with?
    • Could an anti-concurrent causation clause in insurance policies be applicable?
  • Perhaps most significant, train (and keep training) employees to practice “safe computing” – never click on links within emails or open attachments which have not been requested or are from someone you don’t know. Some people are still using Windows 7, which is no longer supported (meaning no security updates) without a separate (and costly) agreement with Microsoft. Remoting should be prohibited on those devices. Moreover, proper monitoring and enforcing update and patch management even for those using the latest operating systems and software is difficult and resource-intensive at best, and illusory at worst. Security and misconfiguration risks exist even when using a secure, cloud-based solutions, irrespective whether using IAAS (infrastructure as a service). PAAS (platform as a service) or SAAS (software as a service).
  • Where essential employees do not have broadband at home, it may be prudent to provide them with mobile hotspots, particularly where sensitive proprietary, financial, personal or even health related information is in use. While this is a more expensive route for an organization, the productivity loss over even a short period of time, together with enhanced security, will far outstrip the sunk cost for the service, and be exponentially cheaper than defending a data security incident like an exfiltration or ransomware attack.
COVID-19 Corporate Bottom Line

We’re operating in a technology environment that, to date, has only been theorized, at least in the civilian realm. Expect the unexpected.

New York Department of Labor Issues Correction on COVID-19 Disability and Family Leave Benefits

March 25, 2020

As we previously reported, on March 18, 2020, effective immediately, all New York employers must provide sick leave for any employee (with limited exceptions) “who is subject to a mandatory or precautionary order of quarantine or isolation issued by New York, the Department of Health, local board of health, or any government entity duly authorized to issue such order due to COVID-19.” 

New York’s Short-Term Disability and Paid Family Leave have also been expanded to provide these leave benefits for employee absences due to COVID-19 related quarantine/isolation.

Governor Cuomo’s “New York State on PAUSE” Executive Order 202.6 of Friday, March 20, 2020, also known as the “Stay-At-Home” Executive Order (the “Executive Order”), required all non-essential businesses to close by 8 p.m. beginning on March 22, 2020, and for all of their employees to stay home and work remotely if possible.

Since the COVID-19 Paid Leave Law extended disability and paid family leave benefits to employees under quarantine or isolation required by the State; and since the Executive Order required all non-essential workers to stay home; it was initially interpreted that all employees subject to this Executive Order would be entitled to this Leave.  

However, the New York Department of Labor (NYDOL) has now issued a “correction” that the expansion of disability and paid family leave under the COVID-19 Paid Leave Law, does not apply to all employees who have been ordered to stay home under the Executive Order; even though it is clearly a state order of quarantine or isolation for all workers to “stay home,” except for workers in essential businesses. NYDOL now corrects its prior announcement and says that these benefits only apply to employees who have an individualized order of quarantine or isolation.    

We expect this is not the first roll-back “correction” or interpretation” we are going to see as the government calculates the cost of providing these benefits under this and other emergency statutes.

Category: Employee Benefits, Paid Sick Leave

U.S. Department of Labor Publishes Guidance on the Sick Leave And Expanded Family and Medical Leave Under The Families First Coronavirus Response Act

March 25, 2020

Today, the U.S. Department of Labor’s Wage and Hour Division announced “its first round of published guidance” to provide information to employees and employers about the protections and relief offered by the Families First Coronavirus Response Act (“FFCRA”) when it takes effect on April 1, 2020.

The FFCRA requires private businesses with fewer than 500 employees to provide eligible employees with paid leave under its two component parts, the Emergency Paid Sick Leave Act and the Family and Medical Leave Expansion Act, in exchange for which employers will receive tax credit. The legislation is intended to support employees during the pandemic while offsetting employers for the cost of the new benefits.

The guidance includes:
A Fact Sheet for Employees
A Fact Sheet for Employers
A Questions and Answers (FAQ) that addresses specific questions relevant to both employers and employees

New Jersey's Sick Leave Law and Coronavirus - Guidance

March 25, 2020

As previously reported the Sick Leave Law applies to all employers (regardless of size) with NJ-based employees and all NJ employees (full and part-time), excluding construction industry employees covered by a collective bargaining agreement, per diem healthcare workers, and public employees who had this benefit.

Employees accrue and may use up to 40 hours of paid “sick leave” in an employer-designated 12- month period (a “benefit year”). At the end of a benefit year, employers must either payout, or allow employees to carry over to the next benefit year, up to 40 hours of accrued, unused leave.

Coronavirus.  Significantly, “sick leave” may be used for such reasons as:

  1. time required for the diagnosis, treatment or preventative care of the employee or his/her family member; and
  2. absences due to a public health emergency that caused the closure of the employee’s workplace or the school or childcare facility of the employee’s child, or that requires a member of the employee’s family to seek care.

The New Jersey Department of Labor and Workforce Development (“NJDOL”) recently posted a Question & Answer section on its website that specifically addresses the use of sick leave during the COVID-29 emergency available here.

New Rules. On January 6, 2020, the NJDOL issued new “Earned Sick Leave Rules” over a year after the Sick Leave Law went into effect on October 29, 2018. The 50+ page document attempts to provide clarity and to address employer and employee’s questions and concerns.

  • Ban Use it or Lose It Policies. The new “Rules” make it clear that employers may not adopt a “use it or lose it” policy.  However, since the employer elects whether to payout or permit employees to carry over earned/unused sick leave, and employees cannot use more than 40 hours of leave in a benefit year, an employer’s choice may result in the carrying over of leave that the employee will not be able to use.
  • Payment at Separation. The Rules also specify that “upon an employee’s termination, resignation, retirement, or other [employment] separation,” an employer is not required to “payout of unused earned sick leave” unless an employer policy or agreement provides otherwise.
  • Anti-Retaliation. The Rules prohibit employers from retaliating “against an employee because the employee requests or uses earned sick leave in accordance with the Act… or the employer’s own earned sick leave policy,” but does not provide for job protection (which may be available under the federal Family and Medical Leave Act and New Jersey’s Family Leave Act.

Job Protection. On March 20, 2020, New Jersey enacted an Anti-Retaliation Protection Law that prohibits retaliation and includes job protection for workers impacted by COVID-19. Although the law was enacted in response to the COVID-19 emergency, the law does not include a sunset provision. The law does not, however, require employees be paid out for earned/unused leave upon termination. 

New Jersey Expands Essential Retail Businesses Permitted to Operate

March 24, 2020

On March 24, 2020, New Jersey’s Director of Emergency Management, Colonel Patrick Callahan, issued Administrative Order 2020-5, expanding the list of “essential retail businesses” permitted to operate during according to their normal business hours under Governor’s Murphy’s Executive Order 107.

Effective immediately, the following were added to the categories of “essential retail businesses” listed in Executive Order 107:

  • Mobile phone retail and repair shops;
  • Bicycle shops, but only to provide service and repair;
  • Livestock feed stores;
  • Nurseries and garden centers;
  • Farming equipment stores.

Essential retail businesses that remain operational must comply with the social distancing requirements of Executive Order 107.

The Administrative Order also clarifies that municipalities may impose additional restrictions on beaches and boardwalks.

Employers and employees of essential retail businesses that reduce staff, close or remain closed, need to consider the eligibility requirements for paid and unpaid leave under the federal Families First Coronavirus Response Act and New Jersey’s Earned Sick Leave Law.

More information concerning the operation of essential businesses during the Coronavirus emergency is available on the state’s here.

Managing The Many Emerging Challenges of COVID-19 For NJ Employers

March 24, 2020

Facing the impact of COVID-19 while wishing to reserve the capacity of New Jersey’s health care system for the most vulnerable, Governor Phil Murphy on March 21st signed Executive Order No. 107 which directs all New Jersey residents to stay at home until further notice. This unprecedented measure effectively puts many New Jersey workers and their employers out of work or out of business with the exception of those performing “essential services” or whose workers can perform services remotely from their homes.

Employers that do not fit into these exceptions now face potentially massive losses and the need to address employment issues with now idled employees. Employers want to know what they can/must do under such circumstances. Contract law and New Jersey’s complex and comprehensive employment laws, such as the NJ Paid Sick Leave law, create substantial legal impositions for employers.

An employer’s first step should be to evaluate each employee’s current status. Termination may be necessary, but assuming that it is intended for the employee to resume employment once conditions permit, how should the termination be classified? A term that is frequently applied to such circumstance is “lay off.” But what is that?

In the absence of contractual authority, a lay-off is frequently defined to be an involuntary employment separation occurring through no fault of the employee. A “temporary” lay-off implies the parties’ intention that the affected employee will be re-employed once conditions permit. Laid-off employees are usually eligible to collect unemployment compensation up to a maximum of 26 weeks or until re-employed if sooner.

In the turmoil and confusion of the present time, employers are attempting assess what must be done to survive. As a first step, determine what is owed to employees, starting with a review of the Company’s Employee Handbook if one exists and other pay policies. What do these policies say regarding the grant of non-statutory paid time off (PTO)? New Jersey law permits the forfeiture of unused PTO days if employment has ceased for any reason provided the policy provides for such forfeiture. If an employee has the protection of a written employment agreement, such agreement may address the issue of severance. It is not too late to revise your Handbook (at least prospectively) provided the Handbook expressly states that it is not a contract and may be revised at any time.

Regarding New Jersey’s Paid Sick Leave Act, the law provides that payment must be made for:

…Time during which the employee is not able to work because of a closure of the employee's workplace, or the school or place of care of a child of the employee, by order of a public official due to an epidemic or other public health emergency, or because of the issuance by a public health authority of a determination that the presence in the community of the employee, or a member of the employee's family in need of care by the employee, would jeopardize the health of others….

While there is and should be much concern for the welfare of the affected employees, many employers now face a struggle to survive. Effective on April 2, 2020, the Families First Coronavirus Response Act (“FFCRA”) wil l go into effect . This decisive Congressional action creates two new programs: first, the grant of ten (10) paid sick days for employees to permit the paid absence from work due to personal or familial COVID-19 illness issues; and second, the grant of a very liberalized paid family leave for all employers with 500 or less employees and covering virtually all employees who have worked for 30 or more days.

The law provides for possible recompense to employers for such costs through tax credits and/or possible tax refunds if credits are insufficient, but such relief will not be realized tor at least 90+ days. In many cases, smaller employers in particular may not survive to receive such benefit.

The FFCRA will be effective as of April 2nd. We expect that it will be applied only prospectively. Struggling employers must carefully consider whether layoffs should be imposed before that law is effective as a defensive measure. Waiting until the effective date will guarantee the payment of two weeks’ pay to all employees who are still employed as of that date (unless it is determined that employees can be terminated while being paid pursuant to the FFCRA) plus the possible grant of the many other benefits attendant to the drastically revised FMLA: paid leave under certain circumstances at 2/3rds pay plus the possible continuation of health insurance for a maximum of 12 weeks.

These are difficult times for both employers and employees. Unfortunately, the hope of survival may require strategic actions that are very unpleasant and difficult. All legal and economic exposures must be carefully reviewed, and there is little time to take such action.

Please speak with a Member of the Mandelbaum Barrett's Employment Law Department for further advice.

Impact of COVID-19 on Immigration: Issues for Employers to Consider

March 23, 2020

The spread of Coronavirus has caused unprecedented changes to many aspects of life, with ramifications for immigrant workers. Here are a few major changes employers should know about:

  • U.S. consulates and embassies around the world have suspended immigrant and nonimmigrant visa processing.
  • Employers must still complete I-9 forms to verify work authorization for employees but there is some flexibility in the physical inspection requirement if workplaces are operating remotely.
  • Layoffs, furloughs or reductions in pay may cause a foreign worker on an H-1b or other visa to be in violation of his or her status.
  • Copies of original signatures may be accepted on some immigration forms during the crisis.

These are just a few of the situations that have arisen, and every day brings a new question - sometimes without answers- about the impact of COVID-19 on employers' obligations and employees' ability to enter or remain lawfully in the U.S. For these and other situations employers and employees may be facing, it is important to obtain as much up to date and accurate information as possible to remain in compliance with labor and immigration law.

Federal Families First Coronavirus Response Act

March 22, 2020

Federal Families First Coronavirus Response Act (the “Family First Act” or “Act”) was signed on March 18, 2020. The Act’s employment provisions become effective no later than April 2, 2020 and last until December 31, 2020.

The Family First Act includes two leave components: paid sick leave and paid family and medical leave. The Act supplements employees’ rights under any other applicable federal, state or local law, and existing employer policy.

1. Paid Sick Leave:

Provides for up to 80 hours (or 10 days) of paid sick leave for a “qualifying reason” related to COVID-19.


Employees: all employees (regardless of tenure)
Employers: All private employers with less than 500 employees.
Exempt Employers: the Department of Labor is authorized to issue regulations to exempt:
  • Employers with less than 50 employees where such leave would “jeopardize the viability of the business as a going concern” and
  • Health care providers and emergency responders.
Qualifying Reasons:

Leave applies to all employees who cannot work or telework because the employee.
  1. Is subject to a COVID-19 federal, state, or local quarantine order
  2. Has been advised by a health care provider to self-quarantine due to COVID-19 concerns
  3. Is symptomatic and seeking a medical diagnosis.
  4. Is caring for an individual subject to a quarantine order or who has been advised by a health care provider to self-quarantine.
  5. Is caring for a son or daughter whose school/day care is closed, or whose childcare provider is unavailable due to COVID-19 precautions.
  6. Is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
Amount of Time
  1. Full-time employees: 80 hours (10 days) of paid sick time
  2. Part-time employees: equal to the average number of hours the employee worked over a two-week period.
  3. Employees with variable schedules: equal to the average number of hours worked per day over the previous six months. If the employee has not worked six months, it is the employee’s reasonable expectation at the time of hire of the average number of hours per day they would normally be scheduled.

Pay Rate

  1. Employee Illness, Symptomatic or Subject to Quarantine Order: if leave is used for reasons (1)-(3), employee’s regular rate or minimum wage, whichever is greater to a maximum of $511/day (and $5,110 in the aggregate).
  2. To Care for Another, Childcare or “Substantially Similar condition”: if leave is used reasons (4)-(6), the rate is no less than 2/3 of employee’s regular rate, to a maximum of $200/day (and $2,000 in the aggregate) or minimum wage, whichever is the greater.
Other Rules:
  • Vesting? No. If it is a “qualifying reason”, paid leave is immediately available. No waiting period permitted.
  • Carryover/payout? No. Leave does not carry over to following calendar year. Unused leave is not paid out at termination.
  • Exhaustion of Other PTO? No. Employers may not require employees with a qualifying reason to use other paid leave first.
  • Notice? After the first workday on leave, employers may require reasonable notice to continue leave.
2. New Family and Medical Leave Act (“FMLA”)

Provides up to 12 weeks of job-protected leave (including up to 10 paid weeks), to employees unable to work (or telework) only due to a COVID-19 school and child-care closing.

  • All Employees who have been employed for at least 30 calendar days with no minimum number of hours worked
  • All employers with fewer than 500 employees subject to exclusions.
  • Exemptions: the Department of Labor is authorized to issue the same carve outs under the Paid Leave component for small businesses (fewer than 50 employees) and health care providers.
Qualifying Reasons

Applies to employees who are unable to work or telework only due to the need to care for the employee’s minor child whose school/daycare has been closed or whose childcare provider is unavailable as the result of a public emergency relating to COVID-19

Amount of Paid Leave
  • The first 10 days may be unpaid (during which an employee may utilize otherwise accrued paid leave).
  • After the tenth day, leave must be paid at a rate of at least two-thirds of the employee’s regular rate according to the number of hours the employee is normally scheduled to work, up to a maximum of $200 per day ($10,000 in the aggregate).

Employees are to be reinstated to the same or an equivalent position with a carve out for small businesses. Employers with fewer than 25 employees do not have reinstate the employee if: (1) the employee’s position no longer exists due to conditions caused by a public health emergency during the leave, (2) the employer makes reasonable efforts to restore the employee to an equivalent position, but those efforts fail and (3) the employer makes reasonable efforts to contact the employee if an equivalent position becomes available for one year after the earlier of 12 weeks after the employee’s leave commences or the date on which the qualifying need to use leave concludes.

Notice: where this leave is foreseeable, employees must provide employers with notice of the need to use leave as practicable.

Tax Credits

Effective no later than April 2, 2020 and expiring on December 31, 2020, employers are entitled to a refundable payroll tax credit equal to 100 percent of the leave paid as sick leave or as enhanced FLMA, with certain caps. The tax credit is allowed against the employer portion of Social Security and Medicare taxes. Self-employed individuals are entitled to a refundable income tax credit.

Sick Leave Cap

The paid sick leave credit is equal to the wages actually paid, up to a maximum of $511 per day while an employee is on paid sick leave to care for themselves, and $200 per day if the employee is on paid sick leave to care for a family member or child. The credit is also limited to 10 days per employee. The credit is refundable to the extent it exceeds the amount the employer owes in payroll taxes.


The amount of qualified family leave wages taken into account for each employee is capped at $200 per day and $10,000 for all calendar quarters. The paid FMLA credit is not available to employers already receiving a credit under the Tax Cut and Jobs Act. The credit is refundable to the extent it exceeds the amount the employer owes in payroll taxes.

Urgent Message Regarding Stay-at-Home Order

March 21, 2020

On March 21, 2020, New Jersey Governor Phil Murphy issued Executive Order 107 (the “Order”), which requires, among other things, that retail businesses, other than certain enumerated essential retail businesses, close their brick-and-mortar premises, beginning at 9:00 p.m. on March 21, 2020, until the Order is revoked by the Governor.

The Order neither requires medical practices or other health care services to close their brick-and-mortar premises nor prohibits NJ residents from seeking medical attention. Indeed, the Order expressly provides that it shall not be construed to limit, prohibit, or restrict in any way the provision of health care or medical services to members of the public. Accordingly, the Order does not require the closure of medical practices and closely-allied healthcare practices (e.g., physical therapy, chiropractic, etc.) or healthcare facilities (e.g., laboratories, ambulatory care facilities or hospitals) (“Healthcare Businesses”). Underscoring the nature of the public health crisis that the State is facing as a result of the COVID-19 pandemic, the Order includes certain healthcare-related retail businesses, such as medical supply stores, pharmacies, medical marijuana dispensaries, and “ancillary stores within healthcare facilities” among the Order’s enumerated “essential retail businesses” that are allowed to remain open.

However, the Order requires Healthcare Businesses to accommodate their workforce, wherever practicable, for telework or work-from-home arrangements. In other words, for example, if a medical practice offers medical services that do not necessarily require an in-person physical examination of the patient, such a medical practice would be required, under the terms of the Order, to allow its physician and non-physician employees to provide telemedicine services from their home.

For those Healthcare Businesses whose brick-and-mortar premises remain open to the public, the Order requires that they “make best efforts to reduce staff on site to the minimal number necessary to ensure that essential operations can continue.” In other words, for example, if a medical practice has employees whose duties need not be performed on-site and may be performed remotely (e.g., administrative personnel who assist with scheduling of appointments and other administrative matters), then the medical practice should endeavor to enable such employees to work-from-home.

If you have any questions, please contact Mohamed Nabulsi at 973.979.1150 at any time.

The Families First Coronavirus Response Act Exemption for Health Care Providers and Emergency Responders

March 21, 2020

Much has been written the past few days about the Families First Coronavirus Response Act (“FFCRA” or the “Act”). As we have reported, the Act provides two specific benefits for employees of companies with less than 500 employees.  First, it provides paid sick leave of up to ten (10) days in addition to whatever paid sick leave states may have already granted by statute.  Second, it provides for paid family leave but only under very limited circumstances.  There is an exemption, however, for “health care providers” and emergency responders.  The Mandelbaum Barrett Coronavirus Task Force has fielded many questions since our Webinars this past week concerning the breadth of the exemption and how it works.

It is clear the exemption was included in the law to keep health care providers and emergency responders at work and on the front lines to fight the pandemic.  Obviously, we don’t want to force those providers who have the virus to expose others.  However, the law did not want to give health care providers and emergency responders the unfettered right to stay home and be paid to care for healthy children who are unable to go to school or childcare because of the coronavirus.  Both the paid sick leave and paid family leave provisions of the Act allow those who are not health care providers or emergency responders to receive these benefits at least to the extent that they cannot telework.

There are two questions that must be answered to determine the applicability of the exemption.  First, who are considered “health care providers” under the Act?  Second, how does an employer take advantage of the exemption?

All employees of a hospital, surgi-center or medical group are not exempted from these benefits.  The Act makes clear that it is not the employer who must be a health care provider or an emergency responder, it is the employee.  Therefore, a secretary or receptionist for a medical group, for example, is a covered employee under the Act and generally entitled to those benefits.

The Act authorizes the Secretary of Labor to promulgate regulations to exclude certain health care providers, as defined in the Family and Medical Leave Act (“FMLA”), from the definition of “eligible employees” under the Act.  The FMLA defines “health care provider” to mean a doctor of medicine or osteopathy who is authorized to practice medicine or surgery.  It also authorizes the Secretary to include as health care providers any other persons whom the Secretary of Labor determines to be capable of providing health care services.  Prior to the adoption of the Act, the Secretary determined that dentists, podiatrists, optometrists, chiropractors, clinical psychologists and nurse practitioners all were health care providers.  See 29 C.F.R. 825.125 (b).  Presumably, this earlier determination enables employers to designate these practitioners as exempt from the Act.  Should the pandemic continue to grow, it would not be a surprise if the Secretary labels others as health care providers exempted from the Act.

Under the Act, It is left up to employers to decide whether to exclude their health care providers from the Act.  No approval is needed from the Secretary of Labor.  The law firm’s Task Force will continue to update you as things develop.

Our attorneys are available to assist you through these difficult times.  Any personnel or employment issues should be directed to Steven Adler, Co-Chair of the Labor and Employment Group and Co-Chair of the Litigation Department, and any healthcare related questions should be directed to Mohamed Nabulsi, Chair of the Healthcare Law Department. 

New York State Requires Paid Leave for Covid-19 Quarantined Employees

March 18, 2020

Effective immediately, and with limited exceptions, all New York employers must provide sick leave for any employee “who is subject to a mandatory or precautionary order of quarantine or isolation issued by New York, the department of health, local board of health, or any governmental entity duly authorized to issue such an order due to COVID-19.

The amount and type of sick leave (paid or unpaid) depends on the number of employees a business had as of January 1, 2020. In addition, businesses with ten or fewer employees must look at their 2019 net income. Based on those variables, employers must provide sick leave as follows:

  • For businesses with ten or fewer employees as of January 1, 2020; and 2019 net income of less than $1 million: Unpaid sick leave (and any other benefit provided by any other law) to an employee under quarantine or isolation until the termination of any quarantine or isolation order. During the leave period, employees are eligible for New York State Paid Family Leave (“PFL”) and short-term disability benefits. 
  • For businesses with ten or fewer employees as of January 1, 2020; and 2019 net income of more than $1 million: At least five days of paid leave, and unpaid leave until the termination of any order of quarantine or isolation. After five days, the employee is eligible for PFL and short-term disability benefits.
  • For businesses with between 11 and 99 employees as of January 1, 2020: At least five days of paid sick leave, and unpaid leave until termination of any quarantine or isolation order. After five days, the employee is eligible for PFL and short-term disability benefits.
  • For businesses with 100 or more employees as of January 1, 2020: At least 14 days of paid sick leave.

Supplemental Sick Leave Benefit. These new benefits are in addition to any other sick leave already provided by the employer. They must be provided without loss to any other accrued sick leave.

Both the federal Families First Coronavirus Response Act, and the New York-specific act were passed on March 18, 2020. In anticipation of the federal act, the New York law provides that to the extent it overlaps with any federal sick leave and/or employee benefits law “related to COVID-19” the New York “quarantine law” benefits are “not available…provided, however, that if the provisions” of New York’s law provides for “sick leave and/or employee benefits in excess of the benefits provided by the federal [act]” an employee is entitled to “to claim such additional sick leave and/or benefits” in the amount of such difference.

Exceptions. New York’s leave law does not apply to an employee who is:

  • Deemed asymptomatic or has not yet been diagnosed with any medical condition and is physically able to work while under a mandatory quarantine through remote access or similar means.
  • Subject to quarantine because: (1) the employee returned to the United States after traveling to a country for which the CDC has issued a level two or three health notice; and (2) such travel was not part of the employee’s employment or at the direction of the employer; and (3) prior to travel, the employee was provided notice of the travel health notice and the eligibility limitations under the law prior. However, the employee may use other accrued leave provided by the employer’s policy or unpaid sick leave for the duration of the quarantine or isolation.

Reinstatement. In addition,employees returning from this leave must be restored to the position they held prior to taking the leave, with the same pay and other terms of employment. Discrimination or retaliation for taking or requesting leave is prohibited.

Finally, employers should be aware that New York’s Short-Term Disability and Paid Family Leave programs have been expanded to provide coverage for COVID-19 quarantine-related absences (for more information see here).

Category: Paid Sick Leave, Employee Benefits

Businesses Injured by the Coronavirus May be Eligible for Economic Injury Disaster Loans

March 18, 2020

Pursuant to the Coronavirus Preparedness and Response Supplemental Appropriations Act, which was signed on March 6, 2020, businesses injured by the coronavirus pandemic may be eligible for Economic Injury Disaster Loans funded by the SBA. On March 17, the Administrator of the SBA announced guidance that made it easier for a state to be declared a disaster by the SBA and expanded businesses’ access to Economic Injury Disaster Loans in disaster areas.

Economic Injury Disaster Loans are designed to provide small businesses or non-profits with low interest rate loans of up to $2 million. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; however businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%. SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

According to the March 17, 2020 guidance, Economic Injury Disaster Loans will now be available to businesses on a state-wide level, provided that the state has been declared a disaster by the SBA. The White House has tentatively allocated $50 billion to fund these loans in response to the coronavirus outbreak and has insisted the SBA implement processes to expedite the evaluation of applications.

To determine if you are eligible for an SBA loan, please contact your local SBA Office to determine if your state has been declared a disaster by the SBA, and initiate the application process. The application can also be completed online (located here).

As of March 17, 2020, the SBA has declared disasters from the coronavirus in 22 states. To see an updated list states declared disasters by the SBA, follow this link.

First Restaurant Claim for Coronavirus Closure Coverage

March 18, 2020

On Monday, March 16th, Ocean Grill, a New Orleans restaurant filed the first-of-its-kind lawsuit asking a state court judge to find that its property and business interruption policy covers losses due to Covid-19 government-mandated closures.

Oceana Grill argued that its "all risk" policy with Lloyd's of London cover its losses since the policy does not exclude losses resulting from viruses or global pandemics.

The Complaint seeks “[a] declaratory judgment determining that the coverage provided under the policy will prevent the plaintiffs from being left without vital coverage acquired to ensure the survival of their business should operations cease due to a global pandemic virus and civil authorities' response.”

At the time the suit was filed, Louisiana Governor John Bel Edwards had only barred public gatherings of 250 or more, with no exception for restaurants. Later Monday night, the Governor and New Orleans Mayor LaToya Cantrell issued new directives limiting restaurants to carry-out, drive-through and delivery services. (Gov. Edwards also further reduced public gatherings to no more than 50 people).

Multiple States (and local governments) have imposed similar restrictions on restaurants which are certain to impact those businesses and their employees. Stay tuned….

The file Petition is available here.

NJ Considers Job Protection for Employees with Coronavirus

March 18, 2020

On March 16, 2020, the New Jersey legislature introduced a bill that would prohibit employers from terminating or otherwise penalizing an employee who “requests or takes time off from work” for a “specified period” based on the “written “recommendation” of a New Jersey licensed “medical professional” that such time is required because the “employee has, or is likely to have,” Covid-19, “which may infect others at the workplace.”

Employers would also be required to “hold” the employee’s job open during such absence. Specifically, the Bill provides that employers

“shall not, following that specified period of time, refuse to reinstate the employee to employment in the position held when the leave commenced with no reduction in seniority, status, employment benefits, pay or other terms and conditions of employment.”

A $2,500 fine is proposed for each violation.

The Bill is currently pending and the full text is available here.

The Proposed Families First Coronavirus Response Act

March 16, 2020

Late Friday, the United States House of Representatives passed a relief bill aimed at containing the widening effects of the coronavirus on the United States economy and public health. The bill H.R. 6201, the Families First Coronavirus Response Act, is supported by President Trump and still needs to pass the Senate. 

Here are some of the key features of the bill:

  • Employers with under 500 workers must provide two weeks of paid sick leave for full-time employees who become infected with the coronavirus or need to care for someone who is infected, as well as employees who are quarantined or whose place of work or children’s school is closed due to the coronavirus.  For part-time workers, employers with under 500 workers must pay them the typical number of hours they work in a typical two-week period;
  • After two weeks of paid leave, employees would receive a benefit from employers that will be no less than two-thirds of employees’ usual pay;
  • Employees of companies with under 500 workers would have the right to take up to three months of job-protected leave to quarantine themselves or to care for family members who are quarantined or for a child whose school has been closed.  Unlike the federal Family and Medical Leave Act (“FMLA”) and the New Jersey Family Leave Act (“NJFLA”), employees need to have been employed only for thirty (30) days to be entitled to this benefit;
  • The bill calls for a tax credit for businesses and self-employed individuals to cover sick leave equal to one hundred percent (100%) of qualified sick leave wages (with certain caps) paid by an employer for each calendar quarter;
  • The bill proposes $1 billion in grant funding for states to expand unemployment benefits for people who lose their jobs due to the coronavirus outbreak.
As noted above, the bill still needs to pass the Senate.  There are also a lot of unanswered questions, including how it will interact with the federal and various states’ family and medical leave laws.  Stay tuned for further developments.

Category: Employee Benefits

May Health Care Providers Refuse To Treat Patients With Coronavirus?

March 16, 2020

Over the last couple of weeks, clients have asked for our advice on how to properly deal with health care providers who are refusing to treat a patient suspected of having Coronavirus. It is well-known that doctors take the Hippocratic Oath to treat patients in need of medical care to the best of their abilities. This Oath state “I swear by Apollo the physician, and Asclepius, and Hygeia and Panacea and all the gods and goddesses as my witnesses, that according to my ability and judgement, I will keep this Oath and this contract: …I will benefit my patients according to my greatest ability and judgement, and I will do no harm or injustice to them.” However, does this Oath require doctors and other health care providers to treat patients who have contagious diseases, such as Coronavirus?

Under common law, a doctor does not have a duty to treat an individual so long as the relationship between physician and patient does not exist. This is referred to as the “no duty” rule. Determining whether a relationship exists, however, is not always easy. It may be established expressly or impliedly. For example, it might result if a doctor’s office schedules someone for an appointment and that person comes to the office for treatment.

Once a relationship is established, generally a doctor has a duty to treat that patient. Moreover, various laws limit a doctor’s right to refuse to provide medical care. One such federal law is the Rehabilitation Act of 1973, which prohibits denying medical care to a disabled person because of his or her disability if that person is in a program actively receiving federal financial assistance. Similarly, the Americans with Disabilities Act (“ADA”) provides broader protection to disabled patients. A disability under the ADA is a physical impairment that substantially limits one or more major life activities, a record of impairment or someone regarded as having an impairment. Various state laws are also implicated and many provide greater protection than the ADA. For example, under the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq. (“NJLAD), a disability is far easier to establish. It covers any “infirmity.”

Under Title III of the ADA, a place of public accommodation cannot deny medical care to an individual because of his or her disability unless the individual poses a direct threat or significant risk to the health and safety of others that cannot be eliminated by adequate precautions or reasonable modification of practices and procedures.

In Bragdon v. Abbott, 524 U.S. 624 (1998), a dentist refused to fill a cavity of a patient with HIV. The Supreme Court held that the patient had a disability and that the dentist had a duty to treat the asymptomatic patient because he posed no direct threat to his health or safety. Finding that a dentist’s office was a place of public accommodation, the Supreme Court relied upon Section 302 of the ADA, which provides that “[n]o individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the … services… of any place of public accommodation by any person who …operates a place of public accommodation.” The Court also referenced 42 U.S.C. 12182(b)(3) of the ADA, which limits that right to treatment “where such individual poses a direct threat to the health or safety of others.” According to the Court, “[t]he existence or nonexistence, of a significant risk must be determined from the standpoint of the person who refuses the treatment or accommodation, and the risk assessment must be based upon medical or other objective evidence.” See School Bd. Of Nassau Cty. v. Arline, 480 U.S. 273, 288 (1987). 

The bottom line: doctors and other health care providers in places of public accommodation, such as hospitals, clinics and doctors’ offices, who are provided masks and other protection, must treat patients they suspect have coronavirus unless there remains objective proof that the patient still poses a direct threat to their health or the health or safety of others. 

As the numbers of Coronavirus patients exponentially increase, it would be prudent for healthcare providers, including practices, facilities, physicians and non-physician providers to adopt and implement a policy and practice that complies with the above laws as well as laws governing employee rights/employer obligations, so as to avoid pitfalls that could result in costly litigation and negative publicity.

Healthcare Litigation Co-Chairs, Mohamed H. Nabulsi, Esq., Steven I. Adler, Esq., and Dennis J. Alessi, Esq., are experienced in advising clients on patient care and employment issues in the medical practice/healthcare facility environments, and can advise you in this area.  They can be reached at and  

NYC Fair Workweek Law Withstands Industry Challenge

March 9, 2020

New York City's Fair Workweek Law requiring predictable scheduling for retail and fast-food workers, adopted in November 2017, withstood its most serious challenge last month from several business groups. 

The Fair Workweek Law, enforced by the Department of Consumer Affairs, provides that fast-food workers (including those who provide food and drink preparation, cooking, off-site delivery, security, stocking, cleaning, etc.) are entitled to estimated schedules, two weeks’ advance notice of work schedules, employees’ written consent to shift changes generally along with premium pay, priority to work shifts before hiring a new employee, and consent plus a $100 premium for opening the store within eleven hours of having closed it (“clopening”).

Several industry groups, including the NY State Restaurant Association, challenged the Fair Workweek Law by arguing that it was invalid because it sought to preempt the New York Labor Law. In a short three-page opinion, Justice Arthur F. Engoron found that New York City’s Fair Workweek Law “interferes with the freedom of contract and distorts capitalism,” and is “problematically enforceable” but concluded it was narrowly tailored and does not infringe on the state’s ability to regulate employment. He, therefore, dismissed the lawsuit.

We will follow any appeal filed by the industry groups as well as multiple bills currently pending before the New York City Council seeking to expand the law. 

Category: Employee Benefits, Wage & Hour

When Chicken Soup is Not Enough: Preparing for the Coronavirus

March 3, 2020

Employers should be gearing up for a possible outbreak of coronavirus in their geographic areas. This includes establishing certain safety precautions as well as issuing a policy concerning certain protocols to be followed in the workplace. The policy should include:                

  1.  notification concerning how the virus is transmitted;
  2.  the incubation period of the virus;
  3.  whether the Company will provide any protective clothing;
  4.  for companies in certain industries, the guidelines OSHA has issued; and
  5.  steps the Company wants employees to follow including hand washing, working from home, providing a doctor’s note before returning to work, etc.

Policies need to be in conformity with the requirements of the Americans with Disabilities Act (“ADA”) and state disability laws such as the New Jersey Law Against Discrimination (“NJLAD”) concerning inquiring about employee’s health and the need to provide any reasonable accommodations.  Leaves of absence also may be necessary and must comply with the federal Family and Medical Leave Act (“FMLA”) for employers with at least fifty (50) employees and the New Jersey Family Leave Act (“NJFLA”) for employers with at least thirty (30) employees.  Employers should also review the EEOC’s guideline entitled “Pandemic Preparedness in the Workplace and the Americans with Disabilities Act.”  We are here (or working remotely) should you need further guidance.

Category: FMLA/FLA, Paid Sick Leave

Behind the Curtain: New NJ Arbitration Organization Regulation Lifts the Veil

January 30, 2020

On January 21, 2020, New Jersey Governor Phil Murphy signed into law what appears to be first of its kind state legislation regulating arbitration organizations, such as the American Arbitration Association (AAA) and JAMS. On its face, the Act (S1490) is directed at “consumer arbitration,” meaning an arbitration involving consumer disputes involving goods and services, wherein arbitration is compelled by what is essentially a contract of adhesion.  Indeed, the first three sections of the Act clearly seek to level the playing field for consumers, including a prohibition on financial conflicts of interest and fee-shifting, and fee waivers for indigent consumers.  Yet, it is Section 4 of the Act mandating publication of data that may have the most wide-ranging, long-term impact on arbitration not just in New Jersey, but across the country.

The Mandate of Section 4

Section 4 of the Act requires that an arbitration organization that administers fifty or more consumer arbitrations each year publish quarterly and make publicly available certain information “regarding each consumer arbitration within the preceding five years.”  That information required to be publicly available includes, but is not limited to:

  • The name of the business that is a party to the arbitration;
  • The type of dispute including, but not limited to “goods, banking, insurance, health care, or employment,” and “in the case of an arbitration involving employment,” the range of the employee’s annual wages (below $100,000, between $100,000 and $250,000, and more than $250,000);
  • Whether the consumer was the prevailing party;
  • The type of disposition of the dispute, if known; and
  • The amount of the claim, award, and any other relief granted.

Section 4 further requires publication of data showing whether the consumer had legal counsel, the name of the arbitrator and fee collected in the arbitration, and how many times the business was previously a party to arbitration or mediation administered by the arbitration organizations.  This Section is also notable for what it does not require: publication of the consumer’s identity.

The Implications of Section 4

Section 4 has several implications and, at the same time, gives rise to several questions. 

Organizations like AAA and JAMS now must publish the above information for “each consumer arbitration.” Based on the Act’s definitions, a “consumer arbitration” encompasses disputes between a business and consumer who signed a standard contract written solely by the business to obtain “any goods and services primarily for personal, family, or household purposes,” including financial and healthcare services and real property.  That definition is expansive, but is largely in line with the definition of consumer arbitration in AAA Consumer Arbitration Rule 1. 

Notably, the Act would seem to require publication of the listed information not solely for consumer arbitrations that occurred in New Jersey or involved New Jersey-based parties.  Instead, the Act appears to force arbitration organizations operating in New Jersey to publish the information for each “consumer arbitration” no matter where the arbitration was conducted or who was involved.  Thus, the Act appears to have the effect of requiring arbitration organizations to collect and publish the required information for consumer arbitrations across the country, potentially numbering in the thousands.  It is not hard to imagine a future challenge to the facial scope of the Act.

Perhaps most conspicuous is the Act’s de facto prohibition on confidentiality concerning the disposition of consumer arbitrations.  The public will now be entitled to see several material aspects of each and every arbitration, most notably the name of the business, and nature and amount of the award or relief granted.  While each consumer’s name will not be published, the Act clearly lifts the veil of confidentiality often associated with private arbitration.  In fact, JAMS Rule 26 requires JAMS and the arbitrator to “maintain the confidential nature of the Arbitration proceeding and the Award,” except as “otherwise required by law.”  Certainly, the Act now requires non-confidentiality of the award (at least the amount and relief).  While AAA Consumer Arbitration Rule 43(c) does allow AAA to publish awards, it requires redaction of the parties’ names absent party consent.  Under the Act, of course, the name of the business party will be known.

In this same vein, Section 4’s publication requirements would seem to nullify any attempt by the parties to agree to the confidentiality of, for example, the arbitration award.  Suffice it to say, the Act largely wipes away confidentiality associated with consumer arbitration dispositions—at least as far as businesses are concerned.

Last, but certainly not least, despite purporting only to target defined “consumer arbitration,” Section 4 contains curious language invoking employment disputes.  Subsection 2 requires publication of the type of dispute involved, including “employment.”  Indeed, it goes on to specify that in an “arbitration involving employment,” the published data must specify employees’ annual wage range.  It is difficult, if not impossible, to envision a scenario in which a “consumer arbitration” as defined is simultaneously an employment dispute.  This begs the question of whether—wittingly or unwittingly—Subsection 2 roped employment arbitration into the publication requirement, thereby similarly eliminating certain confidentiality.  However, given the structure of Section 4, wherein qualification as a “consumer arbitration” is a condition precedent to requiring publication of information, arbitration organizations likely will confine publication of information strictly to consumer arbitrations.

Going Forward

            The Act takes effect May 1, 2020, and applies only to consumer arbitrations commenced thereafter.  Therefore, we likely will not see the full implications of the Act, including Section 4, until much farther into the future.  Nonetheless, qualifying businesses that utilize arbitration or are contemplating utilizing arbitration in their form contracts with consumers should now begin considering the impact of, among other things, the publication of arbitration results mandated by Section 4.  Relatedly, it remains to be seen which option for dissemination each arbitration organization selects: a searchable online database or hard copy.  Based on arbitration organization’s larger business interests, it seems likely that non-electronic publications will be preferred. 

One final, but no less important consideration for businesses is the elimination of fee-shifting by Section 3(a) of the Act.  That section prohibits a consumer from being saddled with attorneys’ fees and costs incurred if the business prevails.  No such prohibition would be encountered in court, where a contractual fee-shifting provision would most likely be enforced.

New Laws Concerning Worker Misclassification

January 24, 2020

On January 20, 2020, Governor Phil Murphy signed into law a legislative package concerning worker misclassification and exploitation. The law cracks down on employee misclassification by allowing stop-work orders against employers who violate state wage, benefits and tax laws. The new law provides for penalties and requires employers to post a notice for their employees regarding misclassification.

From his first day in office, Governor Murphy has focused on the problems caused by worker misclassification. By misclassifying workers as independent contractors rather than employees, businesses avoid minimum wage and overtime laws, family and medical leave laws, tax withholdings and unemployment insurance contributions. This results in workers being exploited and the State not receiving its fair share of payroll taxes.

Under the new law, employers face an administrative “misclassification penalty” up to $250 per misclassified employee for a first offense and up to $1,000 per employee for each subsequent violation. It also provides for a penalty of not more than five percent (5%) of a worker’s gross earnings over the past twelve (12) months. An amendment also makes an owner, director, officer or manager of the employer liable for violations of the State’s wage and hour laws and employer tax laws.

The take-away: promptly have labor law counsel review your pay practices to ensure your business is not misclassifying workers. Ignoring these obligations exposes companies and executives to penalties and personal liability.

Category: Wage & Hour

Challenges Will Continue To Mount For Employers In 2020

January 20, 2020

Remember Johnny Carson’s soothsaying alter-ego Carnac the Magnificent? No? Fine. Instead, settle in for some prognostication from me, the Fearless Forecaster. Once again I will gaze (not Adam Gase who, by the way, I predict will be back next year as the Jets head coach) into my crystal ball and predict what employment laws companies need to be most concerned about in 2020.

Just as the Fearless Forecaster predicted last year, sexual harassment will continue to haunt employers in 2020. My prescient comments a few years ago also will hold true in 2020, that as long as men retain positions of power, and men and women work together in the workplace, there will be work for employment lawyers. New Jersey’s new law, S-477, which just became effective on Dec. 1, 2019, and which permits victims of sexual assault and abuse a new two-year window to bring claims that were previously time-barred, will also provide some additional work for employment lawyers in 2020. New York recently passed a similar law, the Child Victims Act, extending the time for those type of claims.

Employers have other claims to worry about as we enter 2020. New Jersey adopted one of the strongest wage theft laws in the country in 2019. The Wage Theft Act (WTA) significantly enhances penalties should employers not pay workers what they are owed. The WTA provides in appropriate cases for treble damages and there is a six year statute of limitations, exposing employers to much larger claims. It also makes it far more likely that a successor entity will have liability for the sins of the predecessor, so corporate transactional lawyers need to be cognizant of this change when handling sales of businesses.

There also is personal liability under the WTA. The Fearless Forecaster predicts a huge uptick in wage and hour litigation over the next few years as a result. This will also include wage and hour class actions. Finally, just in case the above predictions are not enough to cause lost sleep, employers need to worry about another type of litigation that could prove extremely costly. In 2018 New Jersey adopted the Diane B. Allen Equal Pay Act, requiring pay equality across all protected categories, not just gender. Therefore, if a company pays people of color, for example, less on average than white employees, beware.

Employers can defend these claims if the pay differential is based on a seniority, a merit system or other bona fide factors such as education, experience and training. However, this law lends itself to class-action treatment. A six-year statute of limitations also ups the ante.

The Fearless Forecaster is more confident than ever before concerning his predictions. Let’s see this time next year whether he had 20/20 vision in 2020.

Category: Harassment, Equal Pay Act

The Tight Job Market Should Cause All Employers To Review Their Personnel Policies And Agreements

January 9, 2020

With the economy remaining strong, and qualified employees being in demand, employers must act, if they haven't already, to protect their trade secrets and their other confidential information, including customer lists and other key documents. This should include having employees sign confidentiality, non-compete and non-solicitation agreements. It is often too late to deal with these types of issues as an employee is walking out the door to go to your largest competitor.

Employment law is evolving daily. Therefore, it is imperative that legal counsel review your employee manuals, non-disclosure agreements and personnel policies on a regular basis. We are, of course, here to help review your policies and agreements to make sure you and your company are protected.

New Jersey Bans Discrimination Based on Hairstyles Associated with Race

December 27, 2019

The New Jersey Legislature recently continued its efforts to remain one of the leading states in the Country in protecting employee rights. On December 19, 2019, Governor Phil Murphy signed a law banning discrimination based on hairstyles associated with race.

The law, entitled “Create a Respectful and Open Workplace for Natural Hair Act,” or the “CROWN Act,” amends the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq. (“NJLAD”) to include “traits historically associated with race including … hair texture, hair type and protective hairstyles” such as afros, dreadlocks and cornrows. The law is not limited to the workplace. It also makes it illegal to target people at school and in public spaces.

According to the Guidance on Race Discrimination Based on Hairstyle issued by the New Jersey Division on Civil Rights, “just as it would likely violate the NJLAD to refuse to hire an Orthodox Jewish man because he wears payot, or to refuse to hire a Muslim woman because she wears a hijab, or refuse to hire a Sikh person because he wears uncut hair, it is unlawful to otherwise treat a Black person differently because he wears his hair in a style that is closely associated with being Black. New Jersey is only the third State to pass this type of legislation, following California and New York.

Category: Discrimination

Press Release

December 6, 2019

On December 3, 2019, Mandelbaum Barrett PC obtained another significant victory in its fight to protect doctors and other healthcare providers from being unfairly removed by UnitedHealthcare (“UHC”) from its dual Medicare and Medicaid Community Health Plan (The “Plan”).

“An emergency arbitrator in an American Arbitration Association (“AAA”) hearing enjoined and restrained UHC from taking any action to terminate or not renew our client-physician’s contract pending a final award by a permanent arbitrator, according to Steven Adler, lead trial counsel from Mandelbaum Barrett in Roseland, New Jersey. “In addition, the arbitrator ordered UHC to treat our client like all other active providers under the Plan. Specifically, UHC was enjoined from telling patients that our client is not accepting patients or would be removed from the Plan,” according to Adler.

Testimony during the hearing confirmed that the appeal panels UHC hand-selects to review its decisions terminating health care providers simply rubber-stamp UHC’s actions without considering whether there is any legitimate basis for the terminations and non-renewals. “This opens the door for all health care providers who are being removed by UHC to prove that they were denied a fair procedure and must be reinstated,” Adler stated. Mohamed Nabulsi, the Chair of Mandelbaum Barrett’s Health Care Group, and Adler, Co-Chair of the Firm’s Litigation Department, are handling the case.

Category: Arbitration, Employment Litigation

Supreme Court to Decide LGBTQ Rights

November 13, 2019

On October 8, 2019, the United States Supreme Court heard arguments concerning whether Title VII of the Civil Rights Act, which includes, among other things, discrimination based upon sex, also covers discrimination based on gender identity and sexual orientation. These cases raise the most important issues for the LGBTQ community since the Supreme Court legalized gay marriage in 2015.

The first case, R.G.& G.R. Harris Funeral Homes, Inc. v. EEOC, concerns an employee who was fired because her employer allegedly disapproved that she is transgender. The other cases, Altitude Express, Inc. v. Zarda, and Bostock v. Clayton County, involve gay men who allege they were fired because of their sexual orientation. A decision against these workers could affect not just employment but healthcare, housing and education. Until now, plaintiffs have argued that these types of cases were a form of sex stereotypes and come within Title VII. However, that statute generally deals with sex discrimination, how one sex is treated as compared to the other. In the transgender case, the Trump administration is asking the Supreme Court to find that employers can discriminate based on sex stereotypes as long as they treat both sexes the same.

While these important cases could have a tremendous impact on LGBTQ workers’ rights, they will not have much impact in New Jersey considering the comparable state statute, the New Jersey Law Against Discrimination, already protects workers based upon their gender identity or expression, and affectional or sexual orientation.

Category: Discrimination

Employers Need To Protect Themselves From Expected Next Wave Of Employment Claims

September 30, 2019

While not a new issue, the next wave of employment claims will likely be led by state and federal departments of labor pursuing claims against employers for misclassifying as independent contractors workers who meet the test for being employees.

By classifying employees as independent contractors employers are able to avoid paying various benefits to these workers, ignore the minimum wage and overtime laws, deprive them of state and federal Family Leave laws and social security, and avoid unemployment claims. Misclassification denies states and the federal government many millions of dollars in revenues each year.  States and the federal government have attempted to crack down on these abuses in the past, but now, with so much revenue at stake, their efforts are likely to take hold to many employers’ financial detriment.

What distinguishes an independent contractor from an employee?  Courts and the government had looked at whether the workers’ services are an integral part of the business, the permanency of the parties’ relationship, the contractor’s investment in facilities and equipment, the degree of control exercised over the worker, whether the worker has an opportunity for profits and losses, whether the worker exercises judgement and initiative and whether the party providing the services does so through an independent business organization or operation.  New Jersey now applies the ABC test.  For an employer to establish that a worker is an independent contractor it must satisfy all three prongs, namely (A) that the worker is free from control or direction from the employer, (B) that the worker is providing a service outside the usual course of the employer’s business or is performing that work outside of all places of that business and (C) that the individual is customarily engaged in an independent trade, occupation or business.

In 2017 legislation was proposed entitled the Payroll Fraud Prevention Act.  It was to amend the Fair Labor Standards Act (“FLSA”) and make it unlawful for any person to (1) discharge or discriminate against any employee who files a complaint with respect to his or her employment classification or (2) wrongfully classify employees as non-employees.  The legislation sought to impose double the amount of liquidated damages already provided for under the FLSA.  The legislation was never passed.  However, shortly after New Jersey Governor Murphy took office he created a task force on the subject, which issued a report and recommendations in July of this year.  The report recommends legislative action to increase fines for misclassification, assess employers the costs of any investigation and hold business owners personally liable.  The New Jersey Department of Labor (“NJDOL”) also entered into a Memorandum of Understanding with the United States Department of Labor (“USDOL”) to work together to go after employers who misclassify their workforce.

There has also been a steady increase in civil litigation dealing with worker misclassification.  These suits often are brought as class actions and the damages can be large.  Damages can include the failure to pay overtime, employment tax contributions (for example, social security contributions) and unemployment.  Employers should have experienced counsel review their relationship with contractors and review any written agreements that may be in place, prior to getting the proverbial knock on the door by the NJDOL or the USDOL.

Category: Wage & Hour, Employee Benefits

Employers Face Exposure Under New FLSA Overtime Rule

September 26, 2019

This past Tuesday, the U.S. Department of Labor (“DOL”) issued its final rule updating the commonly referred to “white collar” exemptions to the Fair Labor Standard Act’s (“FLSA”) overtime requirements. These updates include a long-anticipated second attempt at raising the “standard salary level” threshold for the exemptions. A similar increase was published in 2016, however, it was ultimately invalidated by a District Court in Texas. Now, three years later, the DOL is issuing a broader final rule with four key provisions that will require employers to take immediate action to have their current workforce assessed for possible reclassification.

The “standard salary level” provision previously mentioned raises the threshold weekly salary from $455 (or $23,660 per year) to $684 (or $35,568 per year). In other words, for a worker to qualify for the existing “Executive, Administrative, or Professional Employee” (“EAPE”) exemption, they must receive a weekly salary no less than $684. Similarly, a second provision adjusts the annual compensation requirement to classify employees as exempt as “Highly Compensated Employees” (“HCE”). Now, in addition to satisfying the traditional HCE test, employees must receive a total annual compensation of $107,432 (up from $100,000) to be exempt from the FLSA’s overtime requirements.

Of note, but likely less of a concern, the third provision supplants the new “standard salary level” for workers in the U.S. Territories and/or in the motion picture producing industry, who will instead be subject to “special salary levels” (e.g., $380/week for American Samoa; $455/week for Puerto Rico, Virgin Islands, Guam, and Northern Mariana Islands; and $1,043/week for motion picture industry workers).

Due to these significant changes, employers face legal exposure if they fail to reassess their employees’ status for the possibility of reclassification. Where a previously exempt employee no longer meets the thresholds, employers will need to weigh the costs and benefits of adjusting the employee’s weekly and annual compensation (which may be significant compared to the expected overtime worked by the employee). However, this is where the fourth and final key provision becomes critically important.   In recognition of “evolving pay practices,” the DOL will allow employers to consider “nondiscretionary bonuses and incentive payments” to satisfy up to ten (10%) percent of the standard salary level. Obviously, this may be the make-or-break factor in some reassessments.

These new provisions become effective on January 1, 2020. Employers are encouraged to take the next three months to assess their current workforce for possible reclassifications. As part of the process, employers would be wise to seek legal consultation to ensure that the non-salary requirements of the exemption are understood and well-established for each exempt employee, in order to avoid the costly results of misclassification under the FLSA.

Category: Wage & Hour

The FAIR Act

September 24, 2019

Last Friday, new legislation known as the Forced Arbitration Injustice Repeal Act (the FAIR Act), HR 1423, was passed in the US House of Representatives. There is also a companion Senate bill, S. 610. The new legislation is aimed at giving consumers, employees, patients and those whose civil rights allegedly were violated the right to file suit in Court by invalidating any pre-dispute arbitration agreement. The FAIR Act would amend the Federal Arbitration Act to prohibit any “pre-dispute arbitration agreement or pre-dispute joint-action (class action) waiver” for any employment, consumer, antitrust or civil rights dispute. This law would overturn United States Supreme Court decisions allowing such pre-dispute agreements, including Epic Systems Corp. v. Lewis, which allows pre-dispute class action waivers.

The new legislation would guaranty workers the right to go to court, which could have devastating impact on employers because it would expose them to public scrutiny and allow claims to be decided by juries rather than arbitrators. The new legislation would invalidate previously signed arbitration agreements if the dispute arises after the legislation becomes law. There is also similar legislation pending, including the Restoring Justice for Workers Act, which also would prohibit mandatory, pre-dispute arbitration in the employment context. These proposed laws must also be approved by the Republican controlled Senate, which is probably unlikely.

Category: Discrimination, Employment Litigation, Arbitration

New Jersey Strives to Become a National Leader in Advancing Employment Rights

August 27, 2019

This summer has been a very active regulatory period for employers in New Jersey. On July 1, 2019, the minimum wage was increased by $.50. Beginning with January 1, 2020, the minimum wage will increase each January 1st by $1.00 per hour until reaching $15.00 per hour in 2024. After 2024, the wage rate will continue to increase based on increases in the federal consumer price index for all urban wage earners and clerical workers.

In July, New Jersey passed another new law that prohibits employers from asking job applicants about past wages or salaries or screening applicants on the basis of wage history unless such information is voluntarily offered by the applicant. The law is intended to curb workplace discrimination and wage inequality for women and minorities.

On August 6, 2019, the Anti-Wage Theft bill was passed, creating one of the strongest wage protection laws in the country. Under this new law, employers who violate New Jersey’s wage and hour laws could be sued to recover back wages, treble damages and attorneys’ fees. The law aims to protect employees whose pay may not properly reflect all hours worked, minimum wage, overtime or other wage payments as required by law. The law also extends the timeframe for employees to file a claim from two years to six years.

Employers should understand that the law makes no distinction between documented and undocumented employees. Any attempt to avoid the minimum requirements of the wage & hour law will be punished without regard to the employee’s immigration law status. The law also holds employers and labor contractors jointly and severally liable for any violations, meaning an employer will be held liable for wage theft violations perpetrated by the labor contractor it hires. The law defines an employee as “any person suffered or permitted to work by an employer” thereby seeking that the law applies to every person working in the state.

Employees now have a rebuttable presumption in their favor if their employer fails to keep records of all hours worked in accordance who the New Jersey State Wage and Hour Laws. Additionally, an employer cannot escape liability from present or past employees by forming a new entity if the facts prove it to be a successor entity.

Business owners must become fully aware of these new employment requirements. It is important to confirm your employees’ classifications (i.e. exempt, non-exempt, independent contractor), ensure that complete records are being kept in accordance with state law requirements, update all Federal and State postings and employee notices and ensure that the company’s hiring practices, wage payment and sick leave policies are in full compliance.

With the passage of these laws, it is clear that New Jersey legislators are aiming to be leaders in advancing employee rights. Please speak to an Employment Lawyer at Mandelbaum Barrett to be sure that your company is now doing what these new laws require.

Category: Wage & Hour, Employment Litigation

New Jersey Bill A1094 Limits What Employers Can Ask Job Applicants About Past Wage Or Salary

August 9, 2019

On July 25th, New Jersey Bill A1094 was signed into law and will be effective on January 1, 2020. The new law prohibits employers from asking job applicants about past wages or salaries or to screen applicants based upon wage or salary history unless such information is voluntarily offered by the applicant. The law is intended to curb workplace discrimination and wage inequality for women and minorities. It is recognized that women make roughly $10,000 less per year than men. The act of acquiring knowledge of past wages has been found to taint the hiring process by perpetuating prior discrimination. Violations of the new law carry heavy consequences: $1,000 for a first violation, $5,000 for the second and $10,000 per violation after that. Such violations are also violations of the New Jersey Law Against Discrimination and expose employers to lawsuits.

How does this prohibition change the dynamic of the interview process for New Jersey employers? Employers must be cautious about the information that they request. Even oblique wage inquiries can be illegal. Questions on the application such as “applicant’s desired salary” or “applicant’s desired hourly rate” may seem to be directed at the employee’s desire but now might be found to be prohibited as pre-employment offer questions.

Employers may consider salary history in determining salary, benefits, and other compensation, and may verify an applicant’s salary history, if the applicant voluntarily, without employer prompting or coercion, provides salary history. Employers may also, after making an offer of employment which includes an explanation of the overall compensation package to the applicant, request the applicant to provide a written authorization to confirm salary history. However, the applicant may refuse to provide such information without adverse consequence.

Questions regarding wages, salaries, or benefits must be deferred until after the offer of employment has been accepted. These prohibitions do not apply to applications for internal transfer or promotion or knowledge obtained from prior employment with that employer. The prohibition also does not apply to employers acting pursuant to any federal law or regulation expressly requiring disclosure or verification of salary history for employment purposes. Employers may verify disclosures of non-salary information when conducting a background check provided the employer stipulates that salary information is not to be disclosed. Where the application is for a position involving incentive or commission plans, an applicant’s previous experience with incentive and commission plans and the terms and conditions of those plans may be solicited, provided there is no disclosure of the applicant’s prior earnings.

Business owners should now begin preparations for 2020 compliance by reviewing their hiring process, including application forms and questions to be asked during a job interview. This would be an excellent opportunity to critically review the hiring process and to weed out all illegal inquiries that may have remained due to inertia or other forms of inaction. Asking the wrong things, including past wage history, is dangerous and can be costly.

Category: Equal Pay Act, Wage & Hour, Discrimination

NJ Supreme Court Set to Tackle Arbitration Agreements in the Digital Age

August 1, 2019

The New Jersey Supreme Court recently granted certification in Skuse v. Pfizer, Inc., 457 N.J. Super. 539 (App. Div. 2019), an Appellate Division case that addresses the appropriate manner in which employers should seek an employee’s agreement to arbitrate, when consent is sought through electronic means, such as online modules. The Court’s view on this issue will shed light on how employers can achieve legally enforceable arbitration agreements through the use of digital techniques.

examined two issues: (1) the enforceability of an arbitration agreement that was transmitted to employees through a mandatory online “training module”; and (2) whether an employee who did not acknowledge his/her agreement to be bound by the arbitration agreement was nevertheless bound by “default” because she continued to work for the company for more than sixty days after receiving the arbitration agreement. On the second issue, the Skuse panel expressly acknowledged that it was diverging from the view taken by a sister panel in a previous published case, Jaworski v. Ernst & Young U.S. LLP, 441 N.J. Super. 464 (App. Div. 2015), which was almost certainly a critical factor in the Supreme Court’s decision to grant certification.

In Skuse, Pfizer presented its mandatory arbitration policy to thousands of employees as part of a four-slide “training module” or “activity” or “course” sent via mass email.  The email in turn linked to the company’s computer-based training portal. In a separate email, Pfizer provided a link to frequently asked questions concerning the arbitration policy which included questions such as “Do I have to agree to this?” and “Can I change any parts of the terms of the Arbitration Agreement?” The first slide stated that employment was conditioned on the parties’ agreement to resolve certain disputes through arbitration; that the agreement was contained in the Mutual Arbitration and Class Waiver Agreement that would be available to review and print of the following slide; that it was important the employee be aware of the terms of same; and that the employee would be asked to acknowledge receipt of the agreement. The second slide provided employees with access to a “resource” link to the full text of the policy. On the third slide of the module, employees were asked to “acknowledge” the policy by clicking a box or electronic button. Further, this slide expressly stated that continuing to work for the company for more than sixty days would constitute agreement to the policy. The final slide of the module thanked employees for reviewing the arbitration agreement and provided an email address where they could direct any questions.

Three months after being terminated from Pfizer for her failure to receive a yellow fever vaccination, employee Amy Skuse filed a Complaint against Pfizer alleging violation of the New Jersey Law Against Discrimination, N.J.S.A. 10:5-41 to 49, based on religious discrimination and failure to provide reasonable accommodation for her religious beliefs against receiving injections containing animal protein. In response to the Complaint, Pfizer filed a motion to dismiss the action and to compel Skuse to submit the claims to binding arbitration pursuant to the arbitration agreement Skuse admittedly “acknowledged.”

The trial court granted Pfizer’s motion. In reversing the trial court’s decision, the Appellate Division held that Pfizer’s procedure was inadequate to substantiate Skuse’s knowing and unmistakable assent to arbitrate any claims. In so holding, the court re-emphasized the Supreme Court’s holding in Leodori v. CIGNA Corp., 175 N.J. 293 (2003), which requires explicit, affirmative, and unmistakable assent to arbitration.

Importantly, in its decision, the Appellate Division provided guidance as to best practices for seeking an employee’s legally binding assent to arbitration policies transmitted through electronic means. The following represents a summary of these best practices:

  1. A company’s binding arbitration agreement should be conveyed in a manner that emphasizes the “legal significance and necessary mutuality of contractual process.” Pfizer’s conveyance of its arbitration agreement through a “training module” or “training activity” failed in this respect. To this end, the Appellate Division clearly stated: “obtaining an employee’s binding waiver of his or her legal rights is not a training exercise.”

  2. An arbitration policy must be “presented in a fashion that produces an employee’s agreement and not just his or her awareness or understanding.” Stated differently, an employee’s mere receipt or acknowledgement of the company’s arbitration policy is not enough to make it enforceable against him. The employee must voluntarily agree to the policy. Thus, the acknowledgment “click box” on the third slide of Pfizer’s training module critically failed to extract Skuse’s “explicit, affirmative agreement.”

  3. The material terms of an arbitration agreement cannot be inconsistent or vague.  With regards to Pfizer’s training module, the Appellate Court found that although the Company intended for the employee’s click of the acknowledgment box to substitute for a physical signature and thus represent an agreement to the policy, the term “acknowledge” near the click button was made vague by language in the opening slide explaining that the employee would be asked at the end of the presentation to “acknowledge receipt” of the agreement, without mentioning the employee’s need to also convey his assent to the terms of the policy. Further, the court found that the final slide of the module merely thanked the employee for “reviewing” the document. Finally, Pfizer referred to the entire process as a “training activity,” thus further confusing whether the employee was engaging in an agreement and waiver of rights. 

  4. If an employer wishes to obtain an employee’s knowing and voluntary consent to an arbitration agreement by electronic means, the employee’s click of a button or electronic signature must be “tethered to and spotlighted with a clear and proximate direction that, by clicking the button, the employee is knowingly agreeing to waive his or her legal rights” to access the courts and have a trial. To this end, although the words “agree” and “agreement” appeared several times on the slides in Pfizer’s module and also within the linked policy, the use of these words outside of the click button was deemed insufficient to satisfy the requirements of Leodori.

  5. To comply with the tenets of Leodori, the Appellate Court suggested that in order to seek an employee’s legally binding response to an arbitration agreement, a “click box” could read as follows: “Click here to convey your agreement to the terms of the binding arbitration policy and your waiver of your right to sue.” Indeed, the panel also noted that Pfizer could use a touch screen or other electronic method for employees to supply their signatures.

Turning to the second issue, the Appellate Division rejected Pfizer’s “consent by default” provision on the third slide of the PowerPoint, as likewise not in compliance with Leodori. The 60-day “deemer” provision was a unilateral attempt to bypass the Leodori requirements, effectively deeming employees who remain employed for 60 days to have agreed to arbitration. The panel could not square its sister-panel’s holding to the contrary in Jaworski with the tenets of Leodori. Indeed, the panel observed that such a “deemer” provision would render the clicking process in the training module meaningless after the passage of 60 days.

The Supreme Court’s decision in this matter promises to deliver to employers the requirements for obtaining employees’ agreement to arbitrate in the digital age, while simultaneously resolving an appellate split concerning “deemer” provisions. We anxiously await our Supreme Court’s comment and decision as to these guideposts.

Category: Arbitration, Employment Litigation

More On Equal Pay

July 30, 2019

We recently blogged about changes in the law concerning equal pay for women. See, U.S. Soccer Team Sues for Equal Pay, March 11, 2019. This included advice concerning steps to take by employers to ensure compliance with the law. See, The Importance of Engaging in a Pay Equity Study, February 4, 2019.

Last Wednesday, four Democratic senators, including Dianne Feinstein (CA), Amy Klobuchar (MN) and Kirsten Gillibrand (NY), proposed a bill known as the Even Playing Field Act to require equal pay regardless of sex for members of United States national sports teams. Finding that the U.S. Women’s national soccer team has outperformed men on the field and generated slightly more revenue than the men’s national team, the women were paid just 38 cents for every dollar paid to their male counterparts. The pay disparity is not unique to soccer. In 2017, the U.S. Women’s Hockey Team threatened to boycott competition if they did not receive a pay raise from its governing body.

In 2016, the U.S. Senate unanimously passed a resolution calling for the U.S. Soccer Federation to immediately eliminate gender pay inequality, but the pay gap persisted thereafter. Based upon the recent success of the USWNT at the World Cup, it appears that their equal pay goal (no pun intended) now will finally find “the back of the net”.

Category: Equal Pay Act

The Reports of Arbitration Agreements' Death Have Been Greatly Exaggerated

July 29, 2019

Mark Twain, upon learning his obituary was mistakenly published, wrote that the reports of his death are greatly exaggerated. The same can be said about arbitration agreements.

In 2018, New York passed a statute to deal with the “scourge of sexual harassment.” Codified as CPLR Sec. 7515, the law prohibits contracts that require “the parties to submit to mandatory arbitration to resolve any allegation or claim of an unlawful discriminatory practice of sexual harassment.” In 2019, the New York Legislature passed a bill to expand this prohibition to agreements that require arbitration of all discrimination claims.

As predicted, the ban on arbitration is now under attack based upon the Federal Arbitration Act (“FAA”). Just a few weeks ago, federal Judge Denise Cote in Latif v. Morgan Stanley & Co., LLC, No. 1:18-cv-11528 (S.D.N.Y. June 26, 2019), rejected Plaintiff’s argument that New York law voids an arbitration agreement. In reliance upon Supreme Court precedence, Judge Cote held that state laws prohibiting the use of arbitration to resolve particular disputes are preempted by the FAA.

The take-away: New York employers should continue to require employees to arbitrate harassment and discrimination claims. Having employees sign arbitration agreements serves two purposes. First, it may result in employees believing they have no choice but to file their claims in arbitration. Second, if employees try to assert their claims in court, defense counsel relying on recent precedence, can argue that the FAA preempts New York state law. Accordingly, employers should not be so quick to give up on arbitration agreements. Their death has greatly been exaggerated.

Category: Harassment, Arbitration

New York's Employment Arbitration Ban is Pre-empted by Federal Law. Why New York Employers Need an "Undo" Button.

July 12, 2019

On June 26, 2019, United States District Court Judge Denise Cote, Southern District of New York, held in Latif v. Morgan Stanley & Co., LLC, et al., No. 1:18-cv-11528 (S.D.N.Y. June 26, 2019), that New York’s ban on mandatory arbitration agreements of employment-related sexual harassment claims is preempted by the Federal Arbitration Act (“FAA”)

As previously reported in our blog in the wake of the #MeToo movement, New York enacted “sweeping legislation” to “deal with the scourge of sexual harassment”, including C.P.L.R. §7515, titled “Mandatory arbitration clauses; prohibited,” effective July 11, 2018.

As of July 11, 2018, the new law (1) prohibited contracts that require arbitration of sexual harassment claims and (2) rendered such clauses in then-existing contracts “null and void” except, in both instances, “where inconsistent with federal law.” The “exception” for “federal law” was a reference to the FAA, which the United States Supreme Court has routinely held, pre-empts State laws that limit arbitration.

In Latif, the arbitration agreement provided for final and binding arbitration” of any “statutory discrimination, harassment and retaliation claims.” Plaintiff Mahmoud Latif signed the agreement, alleged he was subjected to sexual harassment and ultimately terminated in retaliation for complaining about it. Latif filed suit and relied on CPLR § 7515 in opposition to Morgan Stanley’s motion to compel arbitration.

Judge Cote relied on AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), in which the United State Supreme Court held that “[w]hen state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by the FAA.” As such, Judge Cote held, C.P.L.R. § 7515 is “inconsistent with the FAA” because it specifically prohibited arbitration of sexual harassment claims.”

In a footnote Judge Cote noted that the New York’s June 19, 2019 Bill, amendment of Section 7515, “to encompass mandatory arbitration of claims of discrimination generally, rather than specifically of sexual harassment,” ban would be preempted for similar reasons.

It is highly unlikely that Latif will be appealed, and even if it were, even less likely it will be reversed. As such, FAA-covered employers may rely on mandatory arbitration provisions to resolve sexual harassment claims.

Category: Harassment, Employment Litigation

New York's New Paid Time Off to Vote Election Law

June 17, 2019

Remember the long lines at polling sites last midterm? New York State has mitigated one obstacle to exercising the right to vote – unavoidably impacting employers.

On April 1, 2019, New York amended Election Law §3-110, effective immediately, and now requires employers to permit employees to “take off so much working time as will enable him or her to vote at any election”, including up to three-hours of paid leave.

What are the rules?

Although the law limits the paid portion of “voting leave” to three hours, it is silent on whether any portion of the leave may be charged against an employee’s general paid time off (“PTO”) bank.

Other rules include:

  1. Employees must provide at least two (2) days advance notice and be registered to vote. (The law is silent on whether written, advance notice is required, or whether an employer may require proof of voter registration).

  2. The time off must be taken “at the beginning or end” of the employee’s “working shift, as the employer may designate,” unless the employer and employee “otherwise mutually agree.”

  3. As under the prior version of §3-110, at least “ten working days before every election,” employers must post notice of the law in a “conspicuous place” until “the close of the polls on election day.”

The current posting requirement is available here.

Category: Wage & Hour

May New York Employers Require Job Applicants to Submit to Marijuana Testing?

May 23, 2019

The answer in New York City is, in most instances, “NO,” and that’s new.

Recently, NYC banned pre-employment marijuana and THC testing.

On May 10, 2019, New York City enacted Int. 1445-A, which makes it unlawful for employers, labor organizations, employment agencies (and their agents) to require a prospective employee to submit to testing for marijuana or tetrahydrocannabinols (“THC,” the active ingredient in marijuana) as a condition of employment, with limited exceptions. The bill became law after Mayor de Blasio took no action on it for thirty (30) days.

When does this new law go into effect?

The law becomes effective May 10, 2020, and amends Section 8-102 of the New York City Code by prohibiting such pre-employment testing as an “unlawful discriminatory practice.”

Are there any limitations?

Notably, the law is limited to “pre-employment drug testing” and does not address testing of current employees and a condition of continued employment.

The law also includes several “safety-related” exceptions, which pre-employment testing for positions in law enforcement, positions that require OSHA training to work on constructions sites, or a commercial driver’s license, and any position that involves the supervision or care of children, medical patients or “vulnerable person” (as defined under New York Social Services Law §488). Other exceptions are intended to avoid testing that may be required by a collective bargaining agreement, federal law, or a federal contract or grant.

What should employers do?

Employers should stay tuned -- the New York City Commission on Human Rights is required to promulgate rules to facilitate the implementation of this law.

Category: Discrimination, Employment Litigation

Will You Still Need Me When I'm Sixty-Five?

May 20, 2019

Over fifty years ago on their Sgt. Pepper album the Beatles sang about turning sixty-four. But executives should be asking companies: “[w]ill you still need me, will you still feed me when I’m sixty-[five]?”

You may be aware that there are no age parameters under the New Jersey Law Against Discrimination. See N.J.S.A. 10:5-1 et seq. (“NJLAD”). You can sue if you suffered an adverse employment action because you were considered too old (regardless of age) or even too young for a job. Bergen Commercial Bank v. Sisler, 157 N.J. 188 (1999). The one exception under the NJLAD is with regard to job applicants who are at least age 70. Employers may refuse to hire them, but cannot refuse to renew their contracts based upon their age. In Nini v. Mercer County Community College, 202 N.J. 98 (2010), the New Jersey Supreme Court held that the NJLAD protects those workers over seventy (70) who have a pre-existing relationship with the employer from being pushed out of the workforce based on age.

Under the 1967 Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. §623 and §631(a), the upper limit for bringing a federal age discrimination claim was age 65. In 1978 the cap was moved to age 70 and in the 1986 amendments to the ADEA the upper limit age cap was totally removed, enabling a Plaintiff to bring an ADEA claim no matter how old they are. For example, an eighty (80) year old can pursue an age discrimination claim if the plaintiff can establish that he or she was still qualified for the job but was denied it due to his or her age. However, these are two exceptions where an employee lawfully can be fired because of his or her age.

One exception is where an employer can establish that age is a bona fide occupational qualification (“BFOQ”). For example, the Federal Aviation Administration used to have an Age 60 Rule which barred individuals who reached their sixtieth birthday from serving as pilots or copilots on commercial flights because their age allegedly caused them to no longer be qualified to fly. An EEOC regulation sets forth what an employer must prove to establish that age is a BFOQ: That (1) the age limit is reasonably necessary to the essence of the business and either (2) that all or substantially all individuals are excluded from the job involved are in fact disqualified, or (3) that some of the individuals so excluded poses a disqualifying trait that cannot be ascertained except by reference to age. If the employer’s objective in asserting a BFOQ is the goal of public safety, the employer must prove that the challenged practice does indeed effectuate that goal and that there is no acceptable alternative which would better advance it or equally advance it with less discriminatory impact. 29 C.F.R. §1625.6(b)(2006).

The other, lesser known, exception to the age discrimination law applies to executives. At age 65 or older, companies are permitted to fire executives to make room for younger employees to run their businesses. Does this law make sense today? As we age, it is more likely that we consider age 65 to be the new 55, but whether the ADEA needs to be amended to increase the age from 65 to 70 or some other age when companies can force executives to retire is a debate for another day.

29 C.F.R. §1625.12 permits the compulsory retirement of any employee who is 65 and who, for the two year period immediately before retirement, is employed in a bona fide executive (as defined in one of the white collar exemptions to the overtime laws) or higher policymaking position, but only if the employee is entitled to an immediate, nonforfeitable annual retirement benefit of at least $44,000. Alternatively, a company can offer a position of lesser status or a part-time job (but if the employee accepts a position of lesser status or a part-time position, he or she cannot be treated any less favorably, on account of age, than any similarly situated younger employee).

Management-side attorneys who draft executive contracts should make note that companies lose the ability to let an executive age 65 or older go if the executive’s retirement benefit is forfeitable. For example, if a pension, profit-sharing, savings or deferred compensation plan provides for the cessation of payments to a retiree if the executive engages in litigation with the company or goes to work for a competitor, the exemption from the ADEA for a bona fide executive is lost.

Do executives lose their touch at 65? As baby-boomers get older they probably don’t think so. Experience outweighs any slowing down. On the other hand, companies are entitled to set long range plans and have executives young enough to see them through. Therefore, even executives who ran their companies for many years, and steered them down “The Long and Winding Road,” are subject to being terminated even if the company’s decision is based upon their age.

Category: Discrimination

Lights Out: Class Arbitrations Prohibited by Ambiguous Arbitration Agreements

April 25, 2019

On April 24, 2019, the United States Supreme Court decided Lamps Plus, Inc. v. Varela, No. 17-988, in which it held (by a 5-4 vote) that, under the Federal Arbitration Act (FAA), parties have not agreed to class arbitration where the arbitration clause at issue is ambiguous about the availability of such arbitration. There, a Lamps Plus employee sued the company on behalf of a putative class of employees after a data breach exposed approximately 1,300 employees’ tax information, but the employee had signed an arbitration agreement at the outset of his employment. The agreement stated that all disputes arising out of the employment relationship would be resolved by arbitration and provided that the claims would be resolved in accordance with the rules of the arbitral forum.

Reversing both the district court’s order compelling class arbitration and the Ninth Circuit’s affirmance, the Supreme Court, relying on one of its prior decisions in 2010, reasoned that ambiguity—like silence—in an arbitration agreement regarding class arbitration is insufficient to infer that the parties affirmatively agreed to such arbitration. The Court also rested heavily on what it deemed the fundamental differences between class and individual arbitrations, only the latter of which the Court claimed was envisioned by the FAA. Class arbitration, the Court proffered, does not allow for “lower costs, greater efficiency and speed, and the ability to choose expert adjudicators to resolve specialized disputes.” The Court also eschewed the lower courts’ reliance on the contra proferentem doctrine (ambiguity in a contract construed against the drafter), which it called a “doctrine of last resort,” reasoning that its use by the lower courts was inconsistent with the fundamental rule that arbitration is a matter of consent.

In dissent, Justice Ginsburg pilloried the majority for “how treacherously the Court has strayed from the principle that arbitration is a matter of consent, not coercion.” Observing the current state of arbitration and its present uses, her dissent called for urgent action by Congress to “correct the Court’s elevation of the FAA over the rights of employees and consumers to act in concert. In a separate dissent, Justice Kagan believed that resort to the neutral state contract law principle of contra preferendum—a neutral interpretive principle utilized by all 50 states—was appropriate and required if the arbitration agreement was ambiguous. Justice Kagan chided the majority for disregarding the parties’ actual arbitration agreement.

The Lamps Plus decision is important because it signals that arbitration agreements that are ambiguous as to the availability of class arbitration will be construed as prohibiting the same. Indeed, Lamps Plus (and the Court’s prior decision in Stolt-Nielsen regarding an arbitration clause completely “silent” as to class arbitration) raises an interesting question: is there even a need for an affirmative class arbitration waiver? While in the abstract, perhaps the answer is “no,” the safer and less expensive answer for employers and other companies seeking to preclude class arbitration (and class actions) is “yes.” Dissents notwithstanding, Lamps Plus is yet another win for companies in the Roberts’ Court.

Category: Arbitration, Employment Litigation

Groundbreaking Employment Legislation in New Jersey Precludes Arbitration and Confidentiality

March 26, 2019

On March 18, 2019 groundbreaking employment legislation was enacted in New Jersey. While it is only a few paragraphs long, it makes three significant changes to the employment law landscape in the Garden State.

First, Senate Bill No. 121 bars provisions in an employment agreement that waive any substantive or procedural right or remedy relating to a claim of discrimination, retaliation or harassment (although it does not apply to union employees covered by a collective bargaining agreement (“CBA”)).

Second, the law bars any prospective waiver of rights or remedies under the New Jersey Law Against Discrimination, N.J.S.A. 10-5-1 et seq. (the “NJLAD”) or any other statute or case law.

Third, the law precludes confidentiality of any settlement involving a claim of discrimination, retaliation or harassment.

What does this mean for New Jersey employers? Most importantly, this law appears to run head-on into employers’ efforts over the past ten years and even longer to force these types of claims into arbitration. Since 1990 the NJLAD has provided for a trial by jury, NJLAD 10:5-13. Therefore, requiring employees to sign arbitration agreements for future claims would violate this new legislation because it would cause an employee to waive a substantive right or remedy under the NJLAD. Although it is too early to tell, the Federal Arbitration Act (“FAA”), however, may override this portion of the legislation.

Other provisions in an employment agreement that limit or waive substantive or procedural rights or remedies also are barred. For example, an agreement cannot forbid employees from filing charges of discrimination or retaliation with an administrative agency, such as the New Jersey Division on Civil Rights (“NJDCR”) or the U.S. Equal Employment Opportunity Commission (“EEOC”) and can’t require an employee to waive the right to punitive damages or legal fees if successful.

There also may be a bigger issue lurking here. Section 1b. of the law provides that no right or remedy under any employment statute or case law can be prospectively waived. Does this suggest that section 1a. -- which provides that an “employment contract” cannot waive any rights or remedies relating to a claim of discrimination, retaliation or harassment -- bars releases of previously asserted employment claims? This may require the DCR to approve proposed settlement agreements before such claims can be waived. The term “employment contract” is not defined in the law. However, section 2a. refers to both “employment contracts” and “settlement agreements” and, therefore, the likely interpretation of 1a. is that employees or former employees can release NJLAD and other employment claims in settlement agreements without DCR or EEOC approval.

As a result of the “Metoo Movement”, the legislation forbids confidentiality. The driving force behind this provision is to protect employees from harassment, retaliation and discrimination caused by someone who acted similarly in the past that they otherwise would not have known about due to confidentiality clauses. How will this impact litigation? Many employers only settle in order to avoid bad publicity. Will this legislation force more cases to trial? The legislation tries to protect employers to a limited extent. It provides that should an employee reveal sufficient details of the claim so that the employer is reasonably identifiable, the employer will not be bound to any non-disclosure provision. Does that go far enough? Why should an employer be put on the defensive and have to explain why it settled if a plaintiff’s claims were frivolous and settled by the employer solely to avoid the time and money defending such specious claims?

Finally, the law takes effect immediately and applies to all contracts and agreements entered into, renewed, modified or amended on or after the effective date. We, therefore, suggest that all employers have their employee manuals and employment agreements reviewed prior to any amendments or renewals of those agreements.

Category: Employment Litigation, Discrimination, Harassment

1099 vs. W2

March 25, 2019

The New Jersey Department of Labor and the New Jersey Division of Consumer Affairs have reminded employers that under N.J.S.A. 43:21-1 et seq., the New Jersey Unemployment Compensation Law (NJUCL), if a service is performed for remuneration or under any contract of hire, written or oral, express or implied, it is considered to be covered employment, unless the potential employer is able to establish the following with regard to the service at issue and the individual providing that service:

(A) Such individual has been and will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact; and
(B) Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and
(C) Such individual is customarily engaged in an independently established trade, occupation, profession or business.

N.J.S.A. 43:21-19(i)(6).

This statutory criteria, commonly referred to as the "ABC test", is written in the conjunctive. Therefore, where a putative employer fails to meet any one of the three criteria listed above with regard to an individual who has performed a service for remuneration, that individual is considered to be an employee and the service performed is considered to be employment subject to the requirements of the NJUCL; in particular, subject to N.J.S.A. 43:21-7, which requires an employer to make contributions to the unemployment compensation fund and the State disability benefits fund with respect to its employees.

In the event that the State determines an “Independent Contractor” is really an employee, the employer will be responsible for payroll taxes and unemployment contributions for the misclassified employee. If the employer maintains any benefit plans such as 401(K) or medical, the misclassified employee may have retroactive claims for benefits.

If you are contacted by the New Jersey Department of Labor or the United States Department of Labor, the attorneys at Mandelbaum Barrett are happy to be of assistance and have extensive experience in dealing with these examinations.

Category: Employee Benefits

New York City's New Lactation Law Took Effect March 17, 2019

March 25, 2019

Effective March 17, 2019, employers with four or more employees in New York City must provide employees with break time and a private place to express milk. Like with other protected classes, employers can refuse to make these accommodations if they impose an undue hardship.

Under New York City law, employers must notify employees about the new law in a detailed, written policy. The New York City Commission on Human Rights has posted three sample policies on its website. Companies needing help drafting a lactation policy should contact counsel.

New Jersey already has a law similar to that recently enacted in New York City. In 2018, New Jersey amended the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq., to include breastfeeding as a protected class. Under New Jersey law, employers, regardless of size, must provide reasonable break time, a private place to sit other than a toilet stall, with an electrical outlet for a breast pumping machine, a lockable door and a reasonably clean space.

Category: Discrimination

U.S. Women's Soccer Team Sues for Equal Pay

March 11, 2019

We have written a number of times in this blog about recent changes in New Jersey to the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq. (“NJLAD”) relating to equal pay. See our blog from November 21, 2018 concerning the passage of the Diane B. Allen Equal Pay Act amending the NJLAD. See also our February 4, 2019 article on conducting Pay Equity Studies. We also predicted in other publications that lawsuits involving gender equality in terms of pay and working conditions would become more prevalent. Our prediction was prescient.

On March 8, 2019 the U.S. Women’s Soccer Team filed a class action lawsuit in federal court in California under the federal Equal Pay Act (“EPA”) and under Title VII of the Civil Rights Act of 1964 for gender discrimination. It follows a wage discrimination charge of discrimination filed with the United States Equal Employment Opportunity Commission (“EEOC”) in 2016 by five of the U.S. players. In February, the EEOC issued the players a right-to-sue letter.

In the lawsuit, the women complain about unequal pay and disparate treatment from the US Men’s Team in terms of travel arrangements and being required to play on turf fields. This suit is on the heels of a number of suits filed by the US Women’s Hockey Team and Norway’s women’s team‘s successful suit to be paid equally to its men’s counterpart.

The US women allege better results and higher TV ratings than the US Men’s team. However, there are some complicating factors at play here. The US Women’s Team and the US Men’s Team have different collective bargaining agreements. While the men receive higher game bonuses, they are paid only if they make the team, while the women receive guaranteed salaries supplemented by smaller match bonuses. Additionally, FIFA (soccer’s world governing body) pays men’s teams significantly more than women’s teams. In any event, stay tuned. We expect other, similar suits alleging discrimination in pay and working conditions.

Category: Equal Pay Act, Discrimination

USDOL Issues Notice Of Proposed Rulemaking Concerning Changes to the Overtime Law

March 11, 2019

The federal Fair Labor Standards Act (“FLSA”) requires employers to pay at least minimum wage for all hours worked and overtime at one and one-half times employees’ regular hourly rates of pay for all hours over forty (40) in a workweek. However, Section 13(a)(1) of the FLSA provides an exemption from both the minimum wage and overtime for employees employed in bona fide executive, administrative, professional (the “white collar exemptions”) and outside sales positions. Sections 13(a)(1) and 13(a)(17) also exempts certain computer employees. Certain “Highly Compensated Employees” earning $100,000 or more per year also are deemed exempt.

On March 7, 2019, the United States Department of Labor (“USDOL”) issued a Notice of Proposed Rulemaking (“NPRM”) that would make more than one million more workers eligible for overtime pay. Previously, employees coming under the white collar exemptions also needed to earn $455/week ($23,660/year) to be exempt. The NPRM proposes increasing the amount to $679/week ($35,308), which would result in employers needing to pay more employees overtime. The proposal does not call for automatically updating of the salary threshold. In addition, the USDOL proposal would raise the bar for Highly Compensated Employees from $100,000 to $147,414. Finally, for the first time, it is proposed that employers be allowed to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to ten percent (10%) of the standard salary level.

The federal and state wage and hour laws are some of the most misunderstood and misapplied employment statutes. If your Company has questions concerning any employee’s eligibility for overtime or whether your workers are independent contractors or employees, we are here to help.

Category: Wage & Hour

Two Year Statute of Limitations on NJLAD Claims Run From First Day After Plaintiff Comes Off Payroll

February 12, 2019

In a recent unreported decision of the New Jersey Appellate Division, the Court reaffirmed that the two year statute of limitations for claims under the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq. (“NJLAD”), begins to run from the first day after a plaintiff comes off payroll.

In Turner-Barnes v. Camden County College, N.J. Super. App. Div. L-2623-17 (Jan. 31, 2019) Plaintiff was terminated by letter, dated January 23, 2015, but it indicated she would remain on the payroll through June 30, 2015. Plaintiff filed her age and race discrimination complaint on June 29, 2017.

NJLAD is subject to a two year statute of limitations under N.J.S.A. 2A:14-2(a) which means that an adverse employment action must have occurred within two years of filing suit. In Alderiso v. Medical Center of Ocean County, 167 N.J. 191 (2001), a whistleblower suit under the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 et seq. (“CEPA”), our Supreme Court held the controlling date for limitations purposes is not the date the employee receives notice of termination but the date on which pay ends, i.e., the first full day of unemployment. For clarity, the Supreme Court noted that “… the date of discharge for limitations purposes does not include any subsequent date on which severance, health or other … extended benefits are paid.” Id. at 199-200. Accordingly, in Turner-Barnes, the Appellate Division reversed the trial Court and held that Plaintiff’s Complaint was timely filed. As with CEPA claims, suits under the NJLAD must be brought within two years from the date of discharge, even if a Plaintiff receives severance thereafter.

Category: Discrimination

The Importance of Engaging in a Pay Equity Study

February 4, 2019

Background on the Need for a Pay Equity Study
The recent passage of the Diane B. Allen Equal Pay Act (the “Act”) amended the New Jersey Law Against Discrimination (“LAD”) to strengthen protections against employment discrimination and to promote equal pay for women and employees in other protected categories. The Act became effective on July 1, 2018. Being proactive under these new strict protections is of the utmost importance. As such, If you are a New Jersey employer, we urge you to engage in a “pay equity study.” The goal of which would be to develop an understanding of the Company’s current pay structures, and to either explain differences in pay among comparable employees or to correct pay differences that cannot be justified. Mandelbaum Barrett's employment law attorneys stand ready to assist in this capacity.

It is now an unlawful employment practice under the LAD for an employer to pay any employee who is a member of a protected class less than the rate paid to other employees not members of that protected class for “substantially similar work when viewed as a composite of skill, effort and responsibility.” The Act does much more than just advocating gender pay equity. It expands equal pay on the basis of membership in the protected classes of the LAD, to include race, creed, color, national origin, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy or breastfeeding, sex, gender identity or expression, disability or atypical hereditary cellular or blood trait of any individual, or liability for service in the armed forces.

Limited Exceptions
There are very limited exceptions where an employer may pay a different rate of compensation to members of the protected class, including where a pay differential is due to seniority or a merit system. In all pay discrepancies, the employer must demonstrate each of the following:

  1. That the differential is based on one or more legitimate, bona fide factors other than the characteristics of members of the protected class, such as training, education or experience, or the quantity or quality of production;
  2. That the factor or factors are not, and do not perpetuate differential in compensation, based on sex or any other characteristic of members of a protected class;
  3. That each of the factors is applied reasonably;
  4. That one or more of the factors account for the entire wage differential; and
  5. That the factors are job-related with respect to the position in question and based on a legitimate business necessity.

What Exactly is Unlawful?
The Act provides that an unlawful employment practice occurs each time pay practices discriminate against an employee, and the employee can seek back pay for up to six (6) years. In this way the Act substantially lengthens the statute of limitations for claims based on pay equity to beyond the LAD’s normal, two (2) year statute of limitations.

If an employer is found guilty of violating the equal pay practices required by the Act, a judge or jury can award treble damages for the violation. Treble damages are also available to an employee who proves that the employer retaliated against her/him for requesting, discussing, or disclosing to (i) any other employee or former employee of the employer, (ii) a lawyer from whom the employee seeks legal advice, or (iii) any government agency, information regarding employee compensation/pay practices. Likewise, treble damages are available to an employee or prospective employee who is asked by the employer to sign a waiver regarding discussing or disclosing pay practices or rates.

A successful claimant will also be entitled to attorneys’ fees in a practice called “fee shifting.”

For all of these reasons, it is necessary to carefully review Company hiring and compensation practices to insure there is pay equity for employees who perform “substantially similar work” –the so-called pay equity study.

Advantages of a Pay Equity Study
A pay equity study will help your company reduce its potential liability by addressing three questions:

  • Which pay differences are at issue?
  • Whose pay should be compared?
  • What are the factors that explain differences in pay?
Specific and complete answers to the last question are critical. Absent being able to provide valid justifications and cogent explanations, your Company is potentially at great risk. The key challenge in finding these answers comes with the realization that the Company’s historic pay decisions were made one at a time, over an extended period of time and depended upon a variety of factors specific to the time at which they were made. Ultimately, the Company must able to explain and justify the cumulative results of all past pay decisions; a potentially difficult task.

Most companies keep a close eye on some of their pay decisions, such as the grant of merit raises and the starting pay of their positions. Unfortunately, tracking individual decisions are not enough. Although the Act refers specifically to pay decisions, in many cases the inability to reach into the past for data means that differences in existing levels of pay likely will be used to support a prima facie discrimination claim. The Act and other such laws refer directly to equal pay for the same work. Thus, how employees are paid today—not just the pay decisions of yesterday or yesteryear—must be examined and understood fully.

How the Process Works
The pay equity review process begins with comparing the pay of employees who are “similarly situated.” But individuals who are comparable today were not always thus. Given that pay today equals pay at hire plus all subsequent changes in pay, including those that emanate from promotion or transfer, employees that today perform similar work, in the not-so-distant past, may have worked in different jobs, different grades, different units, different locations or even different companies. Knowing this history may lead to better understanding, but this alone will do nothing to protect the Company from sustainable claims.

Differences in knowledge, skill, ability, effort or responsibility provide a legitimate basis for differences in pay among employees doing the same work. However, there are few, if any, direct measures of these factors available, and pay equity studies typically rely on the “usual suspects” to explain pay differences. These include:
  • Responsibility for people.
  • Knowledge.
  • Communication skills.
  • Physical demands.
  • Emotional demands.
  • Mental skills.
  • Initiative.
  • Length of time in job or grade.
  • Part-time status.
  • Physical/geographic location.
  • Company service time.
  • Education.
  • Prior experience (as measured by age or time between leaving school and hire).

Ultimately, Employers will need in-depth information to effectively explain and defend pay differences. Information that can be collected and analyzed through a pay equity study and maintained at the ready include:

  • Work activities: collect information about each job’s actual work activities and responsibilities; this may also include how, why and when the workers perform such activities.
  • Human Behavior: this can include the degree of perception exercised by the employee and other human behaviors such as communicating, judgment and writing and speaking skills.
  • Skilled (or not) use of Machines, Tools, Equipment and Other Work Aids: this could factor in computer use and literacy, knowledge dealt with or applied and services rendered.
  • Job Context: should include such considerations as physical working conditions, work schedule and social factors.
  • Human Requirements: this could include job-related knowledge or skills, education, training and/or work experience, and required personal attributes such as aptitude, physical characteristics, personality and interests.

Two caveats: first, the above factors must be dealt with as objectively as possible and, if capable of measurement, must not be tainted by cognitive bias; second, the law specifically does not permit the perpetuation of past discrimination. Thus, basing a hiring pay offer on previous pay, where such previous pay could be tainted, would only propel discrimination into the future. Employees must be placed into the pay scale in a manner that is rational and disciplined.

Ultimately, the adoption and maintenance of job descriptions is an integral part of a transparent, fair pay system. Having accurate job descriptions makes it much easier to evaluate and grade different jobs – and ensure that employees doing equal work receive equal pay. Job descriptions should follow job evaluation scheme factors. This will make jobs easier to evaluate and help avoid aspects of jobs more commonly performed by women being omitted or undervalued in the evaluation process, compared to those of jobs more commonly carried out by men. To the extent that current job descriptions exist, they should be reviewed as part of the preliminary review.

In addition to job descriptions, the second part of this comprehensive analysis involves the development of Salary Guides for all identified positions. One of the required Affirmative Action Plan reports, the Workforce Analysis, requests that the Company sort the jobs in each Department by wage or salary. Salary Guides are used by many businesses to help managers manage the compensation of new employees and to establish appropriate pay increases for existing employees while maintaining equity among the jobs in the company. Salary Guides provide a structure and logic for fairly compensating employees and managing the Company’s payroll costs.

Mandelbaum Barrett’s Employment Law Practice can provide assistance and advice and help companies conduct this important survey. Involvement of legal counsel will provide you with necessary expertise and the protection of attorney-client privilege. If engaged, we would be prepared to work with one or more Company executives to review personnel information and compensation data. While it is clear that this process is no easy task; to do nothing (our usual default option) can lead to some very serious consequences. If you wish to learn more or to engage in this process, please contact Gary S. Young at

Category: Equal Pay Act

The Gender Expression Non-Discrimination Act

January 16, 2019

After a sixteen year battle, New York state legislators passed a bill this week to specifically outlaw gender identity and gender expression discrimination. The Gender Expression Non-Discrimination Act (“GENDA”) adds gender identity and expression as protected classes in employment, housing and public accommodations. Governor Andrew Cuomo has indicated he will sign the bill into law.

GENDA will give those working in New York State similar protection to that already provided in New York City by adding these protected categories to New York State’s anti-discrimination laws. Should you have any questions concerning this, or any other labor or employment topic, contact Steven Adler.

Category: Discrimination

Tis the Season to be Careful, Fa-la-la-la-la, la-la-la-la

December 7, 2018

Company holiday parties are often great for camaraderie and employee morale but are fraught with danger, whether it be harassment, religious discrimination or drinking and driving.

We don’t want to be accused of being the Grinch that stole Christmas. We are all in favor of holiday parties, so long as they are done right. Here are our top ten (10) tips:

  1. Remind employees in advance of the Company's anti-harassment policy;

  2. No mistletoe;

  3. Limit alcohol;

    1. Consider no alcohol or using drink tickets

    2. Designate a member of management to monitor employees

    3. Have rides home available or remind employees to consider Uber/Lyft, etc.

    4. Consider day-time parties

  4. No slow dancing;

  5. No unsupervised speeches or skits;

  6. Avoid religious symbols and religious music;

  7. If during off hours, do not require attendance or there may be exposure to wage and hour claims;

  8. If exchanging gifts, instruct employees as to what is appropriate and no gag-gifts;

  9. When selecting a menu, make sure it is inclusive to accommodate religious needs, i.e. Kosher meals; and

  10. If all else fails, promptly investigate any claims!

Category: Harassment

NJ Department of Labor Publishes FAQs to Clarify Paid Sick Leave Law

November 29, 2018

The New Jersey Department of Labor and Workforce Development ("DOL") has published a list of Frequently Asked Questions ("FAQs") intended to address various unanswered (and unclear) questions regarding the new Sick Leave Law.

The FAQs are available at:

The DOL's mandatory workplace poster is available at:

Naturally, if you have any questions regarding your obligations or rights under the Sick Leave Law, or other employment-related laws, please do not hesitate to contact any member of the Firm's Employment Law Group.

Category: Paid Sick Leave

Employment Law Intersects with Commercial Litigation

November 27, 2018

The Labor and Employment Law Group at Mandelbaum Barrett, PC prides itself on being able to handle difficult employment litigation cases that also involve commercial disputes. These days, more and more cases straddle employment and other areas of the law. One such case, Metro Commercial Management Services, Inc. v. Istendal, was just decided by the New Jersey Appellate Division on November 19, 2018.

In Metro Commercial an at-will employee brought a minority shareholder oppression claim pursuant to N.J.S.A. 14A:12-7(1)(c), which provides that an action may be brought:

[where] the directors or those in control have acted fraudulently or illegally, mismanaged the corporation or abused their authority as officers or directors or have acted oppressively or unfairly toward one or more minority shareholders in their capacities as shareholders, directors, officers, or employees.

Oppression in the context of an oppressed minority shareholder action, however, does not require illegality or fraud by majority shareholders. Brenner v. Berkowitz, 134 N.J. 488, 506 (1993); “Oppression has been defined as frustrating a shareholder’s reasonable expectations.” Id. Often in these cases, the minority shareholder, as in Metro Commercial, is also a terminated employee and argues that the majority interfered with his reasonable expectation of continued employment by firing him, causing him lost wages and other benefits.

The Appellate Division in Metro Commercial indicated that termination of a minority shareholder’s employment may constitute oppression because a person who acquires a minority share in a closely-held corporation often does so “but for the assurance of employment in the business in a managerial position,” citing Muellenberg v. Bikon Corp., 143 N.J. 168, 181 (1996). Such a person has a reasonable expectation that they will enjoy “the security of long-term employment and the prospect of financial return in the form of salary,” and will have “a voice in the operation and management of the business and the formulation of its plans for future development.” Id. Where these expectations are frustrated by majority shareholders, a court may find that oppression occurred.

In Metro Commercial, the Appellate Division noted that there was no case law in New Jersey that addresses whether an at-will employee’s status is relevant when analyzing whether an employee has a reasonable expectation of continued employment. In Metro Commercial, the Appellate Court affirmed the trial Judge’s finding that the former employee and minority shareholder could not have a reasonable expectation of continued employment where the shareholder agreement provided that “[e]ach [s]hareholder acknowledges that []he is an ‘employee-at-will’ and this can be terminated by the corporation at any time for any reason …” The Appellate Division’s decision is not surprising. However, one wonders how the Appellate Court would have ruled had the minority shareholder been an at-will employee without any form of written agreement. It appears likely that the holding would have been different because the Appellate Division, commenting on the case law from other jurisdictions relied upon by the minority shareholder, stated that in those other matters “there were no written employment agreements …” The Metro Commercial case, thus leaves the door open for minority shareholders to bring wrongful termination claims under the Minority Oppression statute in circumstances where they are employed at-will without any form of written agreement.

The take-away from the Metro Commercial decision is that corporations awarding minority shareholder interests to employees should do so only if there is a provision in the shareholders’ agreement or separate employment agreement making it clear that the corporation may terminate the minority shareholder’s employment with or without cause. It would also be helpful to include a provision confirming that, as an at-will employee, the minority shareholder has no reasonable expectation of continued employment.

Category: Employment Litigation

The Holiday Season and Accommodating Religious Beliefs

November 27, 2018

As we are now in the middle of the holiday season, it is worth noting a recent, interesting decision concerning an employer’s obligation to accommodate an employee’s religious beliefs. In Miller v. The Port of Authority, 15-cv-6370 (KM)(MAH), the District Court rejected a worker’s suit that the Port Authority of New York and New Jersey (the “Port Authority”) failed to accommodate his religious beliefs that precluded him from working on the Sabbath.

There are two types of religious discrimination, a disparate treatment claim (where an employee claims he is being treated differently because of his religion) and a claim for a failure to accommodate. In Miller, plaintiff argued the latter, that his request for an accommodation was rejected by his employer. In contrast, the employer argued that it offered various options to Miller, including the option to swap shifts with other employees, or that he could use vacation, personal excused time or compensatory time for religious purposes. The Port Authority also argued that exempting Miller from work on the Sabbath, without first offering that option to more senior employees, would have violated the governing collective bargaining agreement’s (“CBA’s”) seniority provision. The Hon. Kevin McNulty held that the religious accommodation offered by the Port Authority was reasonable and that the blanket exemption proposed by plaintiff would have imposed more than a de minimis hardship. Therefore, the employer was not required to accept it, and granted summary judgment in favor of defendant.

Judge McNulty’s decision is interesting for a number of reasons. First, it notes that “the standard imposed on employers for a religious accommodation is not as demanding as the accommodation of a disability required under the Americans with Disabilities Act.” As noted above, the Court held that an accommodation would impose an “undue hardship” if it would impose more than a de minimis burden on the employer. “Such a burden may take the form of economic costs, but may also include non-economic costs, such as damage to employee morale or compromise of a CBA …” Second, the decision confirms that an employer’s accommodation proposal simply must be “reasonable.” It is not required to totally eliminate any conflict and an employer is not required to accommodate the religious practices of an employee in exactly the way the employee would like. Third, while noting that the Third Circuit Court of Appeals hasn’t endorsed the approach, Judge McNulty held that an employer could offer a combination of accommodations, and found that what the Port Authority offered was reasonable.

Category: Discrimination

Equal Pay Act Compliance

November 21, 2018

Without question, the most aggressive and wide-ranging Equal Pay Act in the country was enacted this past year by the New Jersey Legislature. It is wide-ranging because it applies not only to pay disparity based on sex, but also based on an employee’s race, age, religion, disability, or any other classification of employees who are protected from discrimination in employment by the New Jersey Law Against Discrimination (“NJLAD”). There are more than a dozen such classifications.

It is the most aggressive Equal Pay Act because it goes far beyond the concept of “equal pay for equal work.” An employer must pay an employee, who is in any one of these protected classifications, equal to any employee who is not so-protected, if the work the two employees perform is “substantially similar,” that is, nearly equivalent or approximately the same work. This also applies to equality in terms of other benefits, such as health insurance.

Compliance with the Act effectively requires that the employer conduct an analysis of its entire workforce, and on an ongoing basis, as new employees are hired and/or changes are made in the workforce.

The Act provides truly draconian penalties, in terms of treble damages and the employer having to pay the employee’s attorneys’ fees.

The Labor and Employment Law Department has been assisting a number of its clients, along with Human Resource consultants we have retained, to perform the detailed workforce audits required to comply with this Act.

Category: Equal Pay Act

Time To Review Your Company's Personnel Policy

November 14, 2018

As the weather gets colder and the days shorter, the end of the year can’t be too far away. Now is a good time to start reviewing your Company’s personnel policies so that your house can be in order to start the new year.

Here are a few questions for your HR team to answer to determine whether you need outside counsel to review your personnel policies and practices:
  1. When was the last time your Employee Manual was reviewed? There have been a number of significant changes in the law that might impact your policies.
  2. Does your Company’s sick leave policy comply with NJ’s paid sick leave law? The new law took effect October 29th.
  3. Has the Company reviewed its pay policies? There were significant changes this year in New Jersey concerning equal pay. In just the past few days Hewlett Packard was hit with a gender pay gap lawsuit.
  4. Do you have a workforce in New York state? If so, has your Company provided them with mandatory sexual harassment prevention training? Has your Company issued a compliant policy? This law became effective October 9th and applies to all employers. It requires annual training. New Jersey also requires training of managers and staff members.
  5. Does your Company require employees to arbitrate disputes? When was the last time your arbitration policy was reviewed? There have been some significant changes in this area. Both Google and Facebook recently announced that they will not require employees to arbitrate sexual harassment claims.
  6. Does your Company require releases when severance is paid? Do the agreements require confidentiality? If so, it might interfere with the Company being able to deduct the severance payments as a business expense.
The Labor & Employment Law Group at the Firm is available to answer any questions you may have or help bring your Company into compliance.

Category: Employee Benefits

The Uniformed Services Employment and Reemployment Rights Act

November 13, 2018

We hope you enjoyed Veterans Day yesterday but we should honor our military every day throughout the year. In that regard, we want to remind employers of their legal obligations to those in the military, including those in active or reserve military status.

The Uniformed Services Employment and Reemployment Rights Act (“USERRA”) was signed into law by President Bill Clinton in 1994 to protect the civilian employment of active and reserve military personnel called into active and reserve military duty. Its main purpose is to eliminate employment discrimination by employers, regardless of size, because of an employee’s military status. USERRA ensures that persons who serve or have served in the Armed Forces, Reserves, National Guard or other uniformed services (1) are not disadvantaged in their civil careers because of their service; (2) are promptly reemployed in their civil jobs upon return from duty; and (3) are not discriminated against based upon past, present or future military service. It, therefore, provides protection for both active military service and veterans.

The New Jersey Law Against Discrimination (“NJLAD”) also protects those in the military by making service in the military a protected class. Just last year the NJLAD was amended to broaden the protection for those in the military by prohibiting discrimination in the context of, among other things, housing and loans. It also requires that contractors and subcontractors on state projects guarantee equal employment opportunities to all veterans.

So let’s honor our military throughout the year by treating them right, as required by USERRA and the NJLAD.

NJ Paid Sick Leave Policy

October 9, 2018

Every employer in New Jersey, regardless of size, needs a written Paid Sick Leave policy in place and distributed to employees no later than October 29, 2018. Please contact us if you need assistance drafting this policy or updating your other personnel policies.

Whether as stand-alone policies or those accumulated in an employee manual, the following are the types of policies which must, or at the very least should, be in writing in NJ:

  1. Paid Sick Leave policy;
  2. Anti-harassment policy;
  3. Equal Employment Opportunity policy (recommended);
  4. Vacation policy;
  5. Equal Pay Act policy;
  6. Whistleblower (CEPA) policy;
  7. Family and Medical Leave Act/NJ Family Leave Act policy (for employers with at least 50 employees);
  8. Confidentiality, Non-Solicitation and Non-Compete policy; and Arbitration policy.
Now is a great time to update your company’s policies so that they can be rolled out to your employees in 2019.

Category: Paid Sick Leave

Diane B. Allen Equal Pay Act: A Compliance Nightmare

October 8, 2018

The Diane B. Allen Equal Pay Act (“the Act”) is unique from other employment anti-discrimination laws in New Jersey which creates a compliance nightmare for employers. It is important to understand the four main differences of the Act and the challenges they bring.

First, the Act is not an equal pay for equal work law. It is actually an equal compensation for substantially similar work law. Employees, who are in those categories protected from employment discrimination under the New Jersey Law Against Discrimination (“NJLAD”), must receive not only equal pay, but also equal employment benefits, (i. e., insurances, retirement plans, paid time off, severance pay, etc.), when these protected employees perform substantially similar work as employees who are not protected by the NJLAD. This comparison must be made based on a composite considerations of skill, effort and responsibility.

“Similar work” is not the same as equal work. Similar work means almost or nearly the same work. And “substantially” means in most respects but not in all. Consequently, if an employee, who is in a category protected by the NJLAD, performs almost the same work in most respects as an employee who is not in a protected category, then this protected employee must receive equal salary and all other benefits of employment.

Deciding what equal work is appears to be an easy task by comparison to this type of analysis which an employer must perform to ensure compliance with the Act.

Secondly, the Act is not an anti-discrimination law for women in the workforce. It was initially proposed as such but, as ultimately enacted, it applies to all approximately 14 categories of employees who are protected against employment discrimination by the NJLAD. (Just some of these protected categories include, in addition to women, race, color, national origin, age, religion, disability, family and marital status, veterans status, and sexual orientation, among others.) This means that an employer with any degree of diversity in its employees must analyze its entire workforce to ensure compliance with the Act.

Third, the Act does not appear to require that the employer have any intent to discriminate. Apparently, for an employer to have violated the Act, an employee need only prove that he/she is a member of a protected category under the NJLAD; that the employee performed substantially similar work as another employee who is not in a protected category; and that this protected employee received less compensation, in salary and/or in any benefits of employment, as the employee not in a protected category.

Admittedly, an employer can raise three defenses: that the differential in compensation is due to a seniority system, a merit system, or some legitimate, bona fide and job-related difference(s) in characteristics between the employees in the protected categories and those that are not so protected. For example, inequality in compensation does not violate the Act if it is directly and wholly the result of job-related differences in training, education, experience or the quantity and quality of production. Obviously in many situations these differences will be subjective; difficult to measure; will require extensive supporting documentation developed over time; and the burden will be on the employer to prove them.

Fourth, the most distinctive and troublesome aspect of the Act is what actions employers must take to comply with it. For most employment discrimination laws an employer need only adopt a personal policy to implement the law, and then follow the policy wherever situations arise to which the law applies. But with the Act, an employer needs to implement and maintain, on an on-going basis, a comprehensive compliance plan.

The plan necessitates a comparative evaluation of the education, training, knowledge/skills and experience of each employee and their individual productivity; an analysis of the duties, tasks and responsibilities of each position in the workforce; then a determination of which employees in which positions are performing substantially similar work. Once these substantially similar employees are identified, then the final step, undoubtedly the easiest, is to determine if the salary and other benefits of these employees are equal as between protected and non-protected categories of employees under the NJLAD. (The employer cannot reduce the compensation of the higher paid substantially similar employee; but must raise the compensation of the lower paid employee).

Such an in-depth analysis of an entire workforce is a monumental task for an employer, even with a fully staffed HR Department. We appreciate the even greater difficulty for an employer with far less HR resources. Nevertheless, the need for compliance is of paramount importance because of the severe penalties for a failure to do so. These include trebel damages (i.e., the employee receives three dollars for each dollar of equal compensation which the employee did not receive in violation of the Act), and the employer having to pay the employees attorneys’ fees.

In addition, the Act provides a six (6) year statute of limitations, and allows an employee to potentially claim damages for even a longer period of time in the past under the “discovery rule.” This rule means that the six (6) year statute of limitations only begins to run after the employee discovers that he/she was not paid equally. Finally, a separate violation of the statute occurs each time the employer issues a paycheck which is less than equal pay for substantially similar work.

The “bottom line” is that, while implementing a compliance plan for the Act may be a nightmare, failure to comply could be a real life horror show for any employer.

Category: Discrimination

New York's #MeToo Moment

September 5, 2018

In what may seem to some a matter of political expediency, and to others a long-overdue effort to eradicate workplace sexual harassment, New York Governor Andrew Cuomo and New York Mayor Bill de Blasio appear to be competing for the “#MeToo Movement Championship.” Whatever their motivations, they have signed into law sweeping legislation that affects all New York employers.

Click here to read more.

Category: Harassment

Secretly Recording Work Chats: Not Cut and Dried

August 31, 2018

Billy Joel wrote in his song “Shades of Grey” that what was “perfectly clear with the vision of youth” is not quite so clear anymore. “Black and white is how it should be, but shades of grey are the colors I see.” This holds true with regard to secretly tape recording at work, too.

In the past, employment lawyers told employers they should strictly prohibit employees from secretly recording anything at work. There were a number of reasons for this advice. First and foremost, audio or video recording could result in the misappropriation of an employer’s trade secrets. In fact, for trade secret protection, a company must show that it took reasonable steps to protect that information and, therefore, a written policy is important. Second, fear among supervisors that they are being surreptitiously recorded could lead them to mistrust certain employees, which is not conducive to a healthy work environment.

But times have changed somewhat. From the #MeToo movement, we now know that harassment and even sexual assault have been rampant in certain industries. If employees are allowed to secretly record at work, would the likelihood of harassment be reduced? It could, but probably not. However, it would make it easier to prosecute such a claim against the harasser — and also the employer. This is why the harassment claims of Gretchen Carlson against Roger Ailes supposedly settled so quickly. It also is why we were able to recover millions of dollars to resolve whistleblower claims of a senior executive against the CEO of a major brokerage firm. This type of proof is powerful, because harassment cases often are “he said-she said” situations with no other witnesses. Juries also often expect to hear this type of evidence because they know how easy it is to obtain.

Recordings also allow employees to fend off false accusations by others at work. Recent examples include Omarosa Manigault Newman, the former White House communications director, who allegedly has audio and video recordings of President Donald Trump, and attorney Michael Cohen, who secretly tape recorded discussions he had with his client, Trump. On rare occasions, secretly taping at work can also be harmful to an employee’s case. Years ago, we defended a Berkshire Hathaway company in a gender discrimination and sexual harassment lawsuit involving an employee who had about 10 hours of recordings. The people recorded said nothing inappropriate and we were able to make good use of the plaintiff’s numerous admissions on those tapes to tear apart her case.

The National Labor Relations Board also has held that blanketly denying employees, whether unionized or not, the right to secretly tape record could violate their right to engage in concerted activity regarding their conditions of employment. The NLRB held that photographs and recordings, as well as the posting them on social media, are protected by Sec. 7 of the National Labor Relations Act if “employees are acting in concert for their mutual aid and protection and no overriding employer interest is present.” For example, employees should be allowed to document unsafe equipment or hazardous working conditions. As a result, employers should have their policies reviewed to make sure they explain the business justification for the restrictions on recordings and to confirm that they don’t ban all recordings.

Regardless of a company’s prohibition against recordings, recording no doubt still will take place, considering how easy it is to do these days from anyone’s phone. For this reason, in all harassment and discrimination litigation, it is important to inquire about the existence of this evidence. Keep in mind that improperly obtained evidence, such as a secret recording in a state that requires both parties’ consent, or a recording in violation of an employer’s policy, still can be admissible in a civil case. Unlike criminal cases, where an improper search and seizure by the government may lead to the discovery of other evidence that will be suppressed at trial based upon the “fruit of the poisonous tree” doctrine, that doctrine is inapplicable in civil cases in New Jersey. In other words, secretly recorded conversations are admissible at a civil trial even if improperly obtained.

Weighing all the pros and cons, it is still best for employers generally to preclude covert tape recording, but the policy should be tailored to the specific client especially where employers have valuable trade secrets. Employers should combat harassment using other tools, including anti-harassment training and strong policies.

In the past, black and white were easy to see, but now drafters of employee handbooks and policies need to also see various shades of grey.

The Times They Are a-Changin' for NJ Employers

August 8, 2018

Gather round employers, there’s a battle outside and it’s ragin’. The new employment laws will soon shake your windows and rattle your walls, for the times in New Jersey they are a-changin’.

Nobel laureate Bob Dylan was writing about different times, but his song “The Times They Are a-Changin’” surely applies to the state of employment law since New Jersey Governor Phil Murphy took office in January.

No New Jersey employment lawyer would argue with the general proposition that, for decades, our state has been far more liberal than most when it comes to protecting employees’ rights. While Governor Christie did his best to put a halt to that trend, since his first day in once our new governor has made it clear the direction he wants to travel. The train is now barreling down the tracks toward more employee rights.

Click here to read more

Class Action Liability Risks for Violations of ADA and New York Human Rights Laws

July 6, 2018

In January 2018, the federal government conformed its website accessibility requirements to the Web Content Accessibility Guidelines (WCAG), an international set of standards intended to make web content more accessible to users with perceptual or physical challenges. The WCAG addresses low vision, color perception, cognition, manual dexterity, screen reading technology, and other issues related to user abilities. The Department of Justice (DOJ) promised to do the same in the private sector by mid-year, but that initiative has been deferred.

As a consequence, there has been a surge of class action lawsuits alleging Americans with Disabilities Act (ADA) violations based on access to website information that the Courts have been addressing individually. The first federal court decision that a website violated the ADA was in early 2017. The decision was followed by 800 federal lawsuits that year alone, alleging ADA as well as state law civil rights violations. (New York led the way with more cases than any other state). Until a clear standard is set by Congress or the appropriate regulatory agency, web site ADA lawsuits will continue to increase.

The ADA prohibits discrimination on the basis of a disability “in places of public accommodations”.  As such, any business is potentially an ADA class action target. Class actions require only one named plaintiff (who brings suit individually and on behalf of those “similarly situated”), and one defendant (potentially, you). Whether you are a large or small business, brick and mortar, or web-based only, defending an ADA/Human Rights Law class action promises to be costly in two ways. Not only is there the risk of a potential damage award, the ADA is a “fee shifting statute.” As a result, a defendant must pay its own legal costs to defend the action and may be required to pay those of a successful plaintiff as well. These costs alone may run into the tens or hundreds of thousands of dollars.

Now, with the website accessibility lawsuit floodgate open, it imperative for businesses to ensure ADA compliance. The easiest and most economical approach is a website compliance audit and action-item checklist conducted by legal counsel experienced in ADA website accessibility issues. For instance, does your website include:

  • Visual Alternatives (pre-recorded text for audio, descriptors for images)
  • Sound alternatives (text descriptors for audio)
  • Color Contrasting (that meet the minimum ratios)
  • Key board navigation (i.e. function and/or tab key, not mouse-only options)
  • Adjustable font size (without content or acuity loss)
  • Semantic HTML (descriptive headings that identify the content that follows)

Many of these features are easy (and inexpensive) to implement once you (and your website consultant) know what is required. Please contact the firm’s cybersecurity practice attorneys Steven Teppler or Lauren Topelsohn to discuss our fixed fee consultation details.

New Jersey Sick Leave Law

June 13, 2018

New Jersey’s Sick Leave Law (the “Law”) takes effect on October 29, 2018. It establishes a uniform, state-wide law that pre-empts all municipal sick leave laws and prohibits the passage of similar, local laws.  

Who is Covered?
The Law applies to all NJ employees (full and part-time) and any business with NJ-based employees (regardless of size). The only exclusion are construction industry employees covered by a collective bargaining agreement, per diem healthcare workers, and public employees who already receive this benefit.

How is Time Accrued?
Employees accrue one (1) hour of paid sick leave for every thirty (30) hours worked, up to forty (40) hours (five days) in a benefit year. Alternatively, an employer may "frontload" the entire forty (40) hours on the first day of a benefit year (as well as implement a more generous program).

A “benefit year” is any 12 consecutive months designated by the employer. Once established, an employer may only change the “benefit year” by first notifying the NJ DOL.

Sick leave benefits begin to accrue for:

  • Current employees, who have not already accrued sick leave under an existing policy or law, on October 29, 2018 (the effective date of the Law).
  • Employees hired after October 29, 2018 on the first date of employment. New employees may be required to wait 120 days after hire before “using” earned sick leave.

Carry Over?
Employers must either (a) allow up to 40 hours to carry over from one benefit year to the next or (b) pay employees for that time. It is the employee’s choice which alternative to accept.

Existing Policy?
Employers may comply with the Law if they already offer employees paid sick leave or paid time off (“PTO”) that accrues at a rate equal to or greater than one (1) hour of leave per 30 hours worked, and the policy is otherwise consistent with the Law.

“Sick Leave” Uses?
Earned sick leave may be used for:

  • Diagnosis, care or treatment of, recovery from and/or preventative care for an employee's own, or his/her family member’s, mental or physical illness or injury.
  • Absence due to a public health emergency that caused the closure of the employee’s workplace or the school or childcare facility of the employee’s child, or that requires a member of the employee’s family to seek care.
  • Absence to obtain medical treatment, legal services or to relocate related to an employee's or his/her family member's status as a victim of domestic or sexual violence.
  • To attend any school conferences requested or required by school staff to discuss a child's health condition or disability.

“Family members” is broadly defined to include an employee’s child, spouse, domestic partner, civil union partner, parent (including adoptive, foster or step-parent, or legal guardian), sibling (including foster or adoptive siblings), grandparent or grandchild, and the parent, grandparent or sibling of the employee’s spouse, domestic partner or civil union partner. Indeed, an employee may also use their sick leave for the care of a non-related individual whose close association with the employee is the “equivalent” of a family relationship.

What May Employers Do?

  • Require up to seven (7) days advance notice if an absence is “foreseeable,” and limit the use of “foreseeable” sick leave to certain dates.
  • Request notice “as soon as practicable” if an absence is “unforeseeable,” and the employee is aware of this requirement.
  • Request documentation to substantiate sick leave, but only if an employee is absent for 3 or more consecutive days.

Employer Obligations?
Employers must:

  • Notify current employees of their rights under the Law (by posting and distributing a notice) and new employees at the time of hire.
  • Maintain records of hours worked, and used, earned sick leave for 5 years.  (Failure to do so will result in a rebuttable assumption that the employer failed to allow employees to accrue time)

Employers are subject to private claims, and the penalties and remedies contained in the New Jersey Wage and Hour Law, including fines and possible imprisonment.

Employers with NJ-based employees should review and adjust their current paid time off policies to ensure compliance with the New Jersey Sick Leave Law prior to October 29, 2018. 

Category: Paid Sick Leave

Supreme Court Curtails Employees' Right To File Class Actions

May 29, 2018

On May 21, 2018 the United States Supreme Court delivered another blow to employee rights. In Epic Systems v. Lewis, the Court issued a monumental decision protecting employers from class action lawsuits.

In Epic Systems, the Court upheld the right of employers, as a condition of employment, to require employees to arbitrate claims individually on a one-on-one basis rather than collectively or as a class. According to the Court, this can be accomplished simply by sending an e-mail to employees informing them if they don’t note their objection, they will be considered to have consented to arbitration on an individual basis. This decision effectively precludes workers from suing in court or filing for arbitration when their claims are small, such as when suing for an employer’s failure to pay minimum wages or overtime pay. According to Justice Ruth Bader Ginsburg in her dissent, “[t]he inevitable result of today’s decision will be the underenforcement of federal and state statutes designed to advance the well-being of vulnerable workers.”  Tip to Employers: Consider requiring employees to sign arbitration agreements or send an e-mail informing employees that, if they don’t object, they will be bound to arbitrate their dispute on an individual basis. 

It Is Time To Take Your Company's Temperature Concerning HR Compliance

May 29, 2018

How healthy is your Company? Does it comply with all of its obligations under ever-expanding employment laws? Considering all of the recent developments in New Jersey and New York employment law, now is an appropriate time to take your Company’s temperature.

If your Company has an employee manual, now is the time to update it especially considering that New Jersey and New York recently passed legislation dealing with paid sick leave which may impact your current sick leave policy.

As a result of the #Metoo movement, and as reported recently in this blog, there have been significant changes concerning having employees sign settlement agreements in sexual harassment cases or separation agreements containing non-disclosure/confidentiality provisions waiving these claims. Both New York and federal law have changed in this regard. It is, therefore, important to review any form releases your Company uses when terminating employees.

As also reported previously in this blog, the law also has changed concerning equal pay. In New Jersey, it will not only apply to women who are paid less than men but also all other protected classes in the New Jersey Law Against Discrimination. It is, therefore, important to take your Company’s temperature with regard to employee pay.

Lastly, based upon an executive order recently signed by Governor Murphy organizing a task force to review the issue of misclassification of workers, we expect a crackdown on employers who misclassify workers as independent contractors. Now is the time to review those relationships as well.

In summary, having experienced legal counsel help in taking your Company’s temperature now will enable your Company to avoid costly litigation not too far down the road.

Category: Employee Benefits

Notorious R.B.G. and Gender Equality

May 26, 2018

Today we are not blogging about a recent development in employment law.  Instead, we wish to call attention to an entertaining source to help non-lawyers understand how we arrived at the current state of the law concerning gender equality.

A must-see movie, regardless of your political persuasion, is the documentary R.B.G. which premiered at the 2018 Sundance Film Festival.  The movie starts off with a bang when the notorious Ruth Bader Ginsburg quotes abolitionist and women’s suffragist Sarah Grimke’, stating that she asks “…no favor for my sex.  All I ask of our brethren is that they take their feet off our necks.”

Ginsburg, the diminutive dynamo, was one of only nine women in a class of 500 at Harvard Law School and the first woman on the Harvard Law Review.  She accomplished this feat while caring for her ill husband and young child.  Ginsburg did for gender discrimination in the 1970’s what Thurgood Marshall accomplished for blacks during the civil rights movement in the 1960’s. 

The movie chronicles Ginsburg’s quest for equal protection for women, including the six cases she argued before the Supreme Court (five of which she won), including United States v. Virginia, in which the Supreme Court held that qualified women could not be denied admission to the all male Virginia Military Institute.  Ginsburg also trumpeted male gender equality by successfully arguing in Weinberger v. Wiesenfeld, 420 U.S. 636 (1975) that widowed fathers were entitled to the same benefits under the Social Security Act as widowed mothers.  More recently, Ginsburg has been a dissenter to many decisions rendered by our conservative Supreme Court, including in the Lilly Ledbetter equal pay case.  While the Supreme Court denied Ledbetter relief, Ginsburg’s dissent resulted in Congress creating new law effectively overruling the Supreme Court’s majority decision and making it easier for women to sue for previously unknown disparate pay.

The #MeToo movement has resulted in the media refocusing on gender discrimination and harassment. The R.B.G. documentary does an excellent job of explaining how we arrived at the current state of the law and Ginsburg’s role in shaping gender equality.  

NYC's Earned Safe and Sick Time Act Takes Effect

May 16, 2018

On May 5, 2018, NYC’s Earned Safe and Sick Time Act (the “ESSTA”) went into effect. It amends NYC’s Earned Sick Time Act by (a) permitting an employee to use accrued “sick leave” for “safe leave” and (b) expanding the definition of “family member.”  Employers are required to provide notice to employees by June 4, 2018. 

Under the ESSTA, employees have the right to use leave for the medical care of themselves or a family member, as well as the right to seek assistance or take other safety measures if the employee or a family member is a victim or has been threatened with domestic violence, “unwanted sexual contact”, stalking or human trafficking.

“Safe leave” includes absences to:

  • Obtain services from a domestic violence shelter, rape crisis center or other similar program
  • Participate in safety planning, temporarily or permanently relocate for safety reasons or take other actions to increase the safety of the employee or family member
  • Meet with a civil attorney or other social service provider to obtain information and advice on, and prepare for or participate in, any criminal or civil proceeding, including but not limited to matters related to a family offense matter, sexual offense, stalking, human trafficking, custody, visitation, matrimonial issues, orders of protection, immigration, housing, discrimination in employment, housing or consumer credit
  • File a complaint or domestic incident report with law enforcement
  • Meet with a district attorney’s office
  • Enroll children in a new school; or
  • Take other actions necessary to maintain, improve, or restore the physical, psychological, or economic health or safety of the employee or family member or to protect those who associate or work with the employee. 

“Family member” is now defined as:

  • A spouse, domestic partner, parent, child, sibling, grandparent, grandchild, or the child or parent of the employee's spouse or domestic partner
  • Any other individual related by blood to the employee
  • Any other individual whose close association with the employee is the equivalent of a family relationship

Employers with five (5) or more employees must provide up to 40 hours of paid sick/safe leave; all other employers must provide up to 40 hours of unpaid sick/safe leave.

For more information, see:


Category: Paid Sick Leave

New York's Six New Sexual Harassment Prevention Laws

May 9, 2018

On April 12, 2018, Governor Cuomo signed New York’s latest budget that includes six laws reflecting the concerns of the Metoo# movement that employers need to know. 

Effective immediately: 

  • Businesses Must Protect Non-Employees from Sexual Harassment.  The law expands the sexual harassment protections under New York’s Human Rights Law to non-employees (independent contractors, vendors, and their employee) who perform services at an employer’s work place. 
  • Settlement/Judgment Involving Government Employees. Government officials and employees may not use public funds to resolve sexual harassment claims, and must reimburse any State or local agency that pays a judgment entered against a government as a result of the offending official or employee’s conduct. 

Effective July 11, 2018: 

  • Restrictions on Non-Disclosure Provisions for Sexual Harassment Claims. Use of such confidentiality clauses are enforceable only if: (1) they conform with the complainant’s preference; and (2) as with a release under Older Workers Benefit Act (OWBPA), the complainant has 21 days to review the agreement (which cannot be shortened), followed by a seven day revocation period. This law impacts all “General Releases” of employment claims that include a confidentiality provisions by requiring that such release “carve out” sexual harassment from the release of any claim under the New York Human Rights Law.
  • Mandatory arbitration, no more? New York’s Civil Practice Law and Rules, Article 75 will be amended to prohibit agreements that require the arbitration of disputes relating to sexual harassment, except “where inconsistent with federal law.” S7507-C, Part KK, Subpart B.  Since Federal law encourages arbitration under the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq., this provision may be pre-empted until (and unless) the United States Congress passes a corresponding prohibition. 

Effective October 9, 2018:
Mandatory Sexual Harassment Policy, Prevention Training and Complaint Procedure.  The New York State Department of Labor and Division of Human Rights are required to develop and publish a model sexual harassment prevention policy and a model sexual harassment prevention training program for use by employers.  All New York employers are required (a) to adopt the model policy and training program or, establish their own that equals or exceeds the minimum standards of the model policy and program; and (b) distribute the written policy and provide sexual harassment training to all employees at least annually.

  • The model sexual harassment prevention policy will:
    • Prohibit sexual harassment
    • Explain what sexual harassment is and provide examples 
    • State that sexual harassment constitutes employee misconduct 
    • Advise what remedies are available under federal, state and local law for victims of sexual harassment, and the available forums (administrative and judicial) for adjudicating such complaints
    • Include a model complaint form and standard investigative procedure;  and
    • Prohibit retaliation for making a sexual harassment complaint, or for testifying or assisting in any proceeding relating to such a claim
  • The model sexual prevention training will explain:
    • What sexual harassment is and provide examples 
    • Additional responsibilities of supervisors
    • Employee’s rights under State and federal laws governing sexual harassment, and available remedies and forums for adjudicating such complaints 

Effective January 1, 2019:
Government Contractors.  As part of the bidding process for State contracts, bids must include a statement certifying that the bidding entity has implemented a written policy addressing sexual harassment in the workplace and sexual harassment training to all of its employees. With respect to no-bid projects, the State has the discretion to request such certification. 


Category: Harassment

Executive Order to Review Worker Misclassification in NJ

May 7, 2018

On May 3rd Governor Phil Murphy continued his efforts to protect workers in New Jersey by signing an Executive Order establishing a Task Force on Employee Misclassification. The Executive Order estimates that misclassification of workers may deprive New Jersey of over $500 million annually in tax revenue and deprive workers of employment related benefits and protections.

Employers have a duty to withhold social security, Medicare and unemployment taxes from employees’ paychecks.  Failing to do so could result in significant liability, including penalties and interest. 

Courts in New Jersey now apply the ABC Test when deciding whether workers are independent contractors under the New Jersey Wage Payment Law and the Wage and Hour Law.  Employers must show each of the following:

  1. That the worker is free from the Company’s control in performing the services;
  2. That the worker performs those services outside the usual course of the Company’s business or outside the Company’s place of business; and
  3. That the worker is engaged in an independently established business.

Similarly, the Internal Revenue Service now uses an eleven factor test that is a refinement of its previous twenty (20) factor test.  Its test looks at the extent of behavioral and financial control over the worker as well as the type of relationship (including whether benefits are provided and the permanency of the relationship.)

The Take-away for Employers:  Promptly review your relationship with all consultants and workers you treat as independent contractors using these stringent tests.

Category: Wage & Hour

Governor Phil Murphy's first act as governor was to sign an executive order promoting equal pay for equal work by prohibiting state agencies from asking job applicants about their salary history

April 23, 2018

The Governor is now about to sign legislation amending the New Jersey Law Against Discrimination (“NJLAD”) that will ban employers from paying women and other employees in a protected category less for “substantially similar work.” Rather than a two year statute of limitations, like other types of discrimination, this amendment provides for a six year statute of limitations for these pay disparity claims.  It also calls for treble (triple) damages.  The law also provides that employers cannot preclude employees from discussing their compensation.  Finally, it precludes employers from requiring employees to agree to a shorter statute of limitations for any claims under the NJLAD or to waive any other protections provided by that law.  A copy of the Bill is attached here.

Category: Wage & Hour

Confidential Sexual Harassment Settlements No Longer Tax Deductible

April 22, 2018

The recently enacted Tax Cuts and Jobs Act (the “Act”) has had a tremendous impact on the settlement of sexual harassment cases. Section 13307 of the Act, found here, does away with a tax deduction for the settlement amount paid in a sexual harassment case if the settlement is confidential.  This new provision also precludes a tax deduction for attorneys’ fees if there is a requirement of confidentiality.  It seems that this also applies to a plaintiff’s own legal fees.  This tax change adds new variables to settling sexual harassment claims.  In the past, employers always insisted on confidentiality.  Time will tell whether this changes and whether this provision of the tax law will cause the amount paid to settle these claims to increase.  Plaintiffs will want more money for these claims in order to pay the extra tax liability while employers will want to pay less since they would no longer be able to deduct the settlement amount and their legal fees.

Category: Harassment

Stormy Daniels' gag order explained. Is it fair?

March 21, 2018

The Me Too and Time's Up movements rekindled the nation's collective awareness concerning sexual harassment and abuse which had all but disappeared since the Clarence Thomas Supreme Court confirmation hearings in 1991.

What contributed to this lack of discourse concerning the prevalence of sexual harassment in our society over the past 25 years? The use of nondisclosure agreements (NDAs) and confidentiality clauses in settlement agreements surely played a part -- as have mandatory arbitration agreements required by employers.

NDAs and confidentiality clauses are standard fare when parties settle sexual harassment and abuse cases.

In exchange for a settlement payment -- such as the $130,000 payment made on President Trump's behalf to Stormy Daniels -- the victim of harassment agrees not to discuss the claims made, or the terms, and sometimes even the existence, of the settlement.

These agreements usually also call for significant financial penalties should the plaintiff violate the confidentiality clause. For example, in the agreement at issue in the Trump-Daniels lawsuit, Daniels, whose legal name is Stephanie Clifford, is required to pay the president $1 million for each of her breaches of the confidentiality clause. Trump's lawyer claims she has violated the terms 20 times.

Is this agreement enforceable?

Probably not because the $1 million liquidated damage amount for each breach appears to be an unenforceable penalty rather than an estimation of likely damages should confidentiality be breached. For the same reason, it also isn't fair and most plaintiffs' attorneys would never allow a client to sign such a provision (unless their client is desperate for the money or the attorney believes the clause is unenforceable).

So far, however, this confidentiality clause has kept Daniels relatively quiet. Had there been no such provision, or if the court in the pending litigation refuses to uphold it, she undoubtedly will "tell all" of the sordid details in a book deal, which is likely to follow -- and, regardless, she may possibly do so on "60 Minutes" this weekend.

Meanwhile, as the porn star touted passing a polygraph test to prove she's not lying about her 2006-2007 tryst with Trump, another woman is suing to get out from under a 2016 confidentiality agreement so she can discuss her alleged affair with Trump. This week former Playboy Playmate of the Year, Karen McDougal, has filed suit in Los Angeles.

Confidentiality clauses serve useful purposes.

They protect the reputation of the alleged harasser when frivolous claims are brought. They also protect the plaintiff who does not want it known that she was subjected to sexual abuse or that she sued her employer. Finally, confidentiality clauses make it easier to settle cases because they protect the good will of the employer.

In fact, companies will pay more to a victim of harassment as hush money to avoid the impact of these types of allegations on their bottom-lines. Bad publicity from these cases can be devastating, as Harvey Weinstein's now bankrupt company recently learned.

On the other hand, as seen lately, confidentiality clauses enable harassers to continue their pattern of abuse and expose other unsuspecting victims to this same treatment. Weighing the advantages and disadvantages of these provisions, the time has come to limit the use of these "gag-orders" and Congress agrees.

Buried deep inside the new Tax Cuts and Jobs Act is a provision which disallows tax deductions for monies employers pay to harassment victims and for legal fees if the parties enter into a confidentiality agreement. In essence, since late December parties must choose between deductibility and confidentiality.

For now this seems to be a fair middle ground. It enables companies to protect themselves and alleged harassers against frivolous claims by insisting upon confidentiality while at the same time also providing victims with some leverage to insist upon no confidentiality.

Lawyers of course will find some work-arounds, whether through stronger clauses confirming that the settlement is not an admission of liability or requiring the victim to confirm in an agreement -- whether or not it is true -- that there simply was no harassment. The settlement value of harassment cases also might go down somewhat to make up for a company's loss of the tax deduction when it is insisting upon confidentiality.

Only time will tell whether this law goes far enough to expose harassers and deter their behavior in the first place.