New Jersey Employment Lawyer Blog
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New Jersey’s Appellate Division recently recognized the significance of the “blue wall of silence” to a whistleblower case involving a New Jersey police officer.

The plaintiff, identified as “T.D.,” is a police officer in the Tinton Falls Police Department. In 2008, one of T.D.’s fellow officers reported to the Monmouth County Prosecutor’s Office that a police sergeant had installed a device called a diverter at his home so his personal water use would not be recorded. Instead of investigating the sergeant, the Police Department began an Internal Affairs (“IA”) investigation to determine who had contacted the prosecutor, and then brought disciplinary charges against that officer. When T.D. learned about this he objected to the Department’s decision to discipline the officer who complained, but not to even investigate the sergeant’s apparent crime.

Police Officer whistleblowerIn March 2009, T.D.’s sergeant asked to meet with him outside a local dumpsite, where he told T.D. he should have warned him about the prosecutor’s investigation. T.D. indicated he believed doing so would have unlawfully interfered with the prosecutor’s criminal investigation. During the meeting, the sergeant also made disparaging comments about the officer who initially reported the water diverter, and told T.D. that “everyone should watch their backs.”

After this meeting, T.D. asked his union’s lawyer to send a letter to the prosecutor’s office about the sergeant’s warnings. T.D. subsequently submitted a formal statement to the prosecutor.

T.D. alleges he experienced retaliation because of his objections. For instance, he was removed him from the K–9 unit in January 2010 and denied a promotion in December 2010. The Department failed to promote him again approximately 5 months after he filed his lawsuit. It subsequently assigned him to patrol the local mall, which is considered a “punishment post.”

The trial court granted Tinton Falls’ motion for summary judgment. It concluded T.D. did not engage in any whistleblowing conduct protected by New Jersey’s Conscientious Employee Protection Act (“CEPA”). It found CEPA  protects only employees who object about the employer’s illegal activities, and T.D. merely objected about a sergeant diverting water at his home.

In an unpublished opinion, T.D. v. Borough of Tinton Falls, the Appellate Division reversed. It noted that, at least under certain circumstances, CEPA prohibits employers from retaliating against employees because they object about a coworker’s illegal activity. The court concluded that T.D.’s objection about his sergeant’s statement that he should have tipped him off about the prosecutor’s investigation is protected by CEPA.

The Court found it significant that instead of investigating the sergeant’s criminal conduct, the Department improperly used an IA investigation to learn who made the report to the prosecutor; brought disciplinary charges against that officer; and referred to officers who spoke to the prosecutor about the sergeant’s conduct as “rats.” It concluded that this evidence reinforces the inference that the Department did not tolerate employees who failed “to keep quiet about illicit conduct engaged in by fellow officers,” or who failed to warn fellow officers about legal proceedings against them.

The Court also ruled that T.D.’s objection about the fact that Tinton Falls was aware of the sergeant’s crime, but failed to investigate it because he is a member of the Police Department, is protected by CEPA. Specifically, it found that objection falls within CEPA’s protection for employees who provide information to a public body that is investigating a violation of law by their employers. In doing so, the Court recognized that T.D.’s objection implicates the “blue wall” of silence, referring to the fact that police officers often are reluctant to incriminate their fellow officers. As the Court explained, “[p]olice officers take an oath to uphold the law and their position ‘require[s] a high level of honesty, integrity, sensitivity, and fairness in dealing with members of the public, knowledge of the law, and a pattern and exhibition of law-abiding conduct.’” Accordingly, the Court remanded the case to the trial court.

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In my previous article, Employer Must Provide Job Description So Employee Can Assess Need for Reasonable Accommodation, I discussed a case which addresses an employee’s right to a reasonable accommodation for a disability. The same case also demonstrates the power of direct evidence of discrimination.

Judge Ruling in Disability Discrimination CaseDirect evidence is evidence that directly reflects the employer’s discriminatory motive. For example, it can include a statement by the employer that it fired the employee for a discriminatory reason.

Ordinarily, at a trial the employee has the ultimate burden to prove that a discriminatory factor such as age, race, gender or disability made a difference in the employer’s decision to fire her. However, if the employee can present direct evidence of discrimination, then the employer has the burden to prove it did not discriminate against her.

As I previously discussed, Bertolotti v. Autozone, Inc. involves Penelope Bertolotti, a Regional Human Resources Manager for AutoZone, Inc. Ms. Bertolotti requested a medical leave for her disability, gastroparesis. As a result of her medical condition Ms. Bertolotti took two weeks’ off in October 2012, returned to work for a week, and then requested an additional month off. Her doctor subsequently extended her return to work date to February 1, 2013.

In the meantime, on December 12, 2012, AutoZone sent Ms. Bertolotti a letter which indicates that her leave of absence was not covered by the Family Medical Leave Act. The same letter stated that AutoZone was replacing her, but would “attempt to place [her] in an available position” when she is ready to return to work.

In his opinion, the judge found this letter is direct evidence of disability discrimination. He explained that, based on the letter “a reasonable jury could find that Defendants’ decision to remove [Ms. Bertolotti] from her position as Regional HR Manager was motivated by [her] inability to return to work because of her medical condition.”

Accordingly, the Court ruled that at a trial Ms. Bertolotti will not have to prove AutoZone fired her because of her disability. Rather, AutoZone will have to prove its decision to replace her was legally justified. More specifically, AutoZone will have to prove Ms. Bertolotti’s disability prevented her from adequately performing her job duties, thereby justifying its decision to fire her.

The United States District Court for the District of New Jersey explained that when a jury decides whether AutoZone reasonable believed Ms. Bertolotti’s disability prevented her from performing her job, the relevant question is what AutoZone knew and expected at the time it decided to remove her from her job, not what it subsequently learned. In other words, AutoZone violated the law unless, when it made the decision to replace her in December 2012, it had a reasonable belief that she would be unable to perform her job duties by February 1, 2013. In making that determination it is irrelevant whether, in hindsight, Ms. Bertolotti actually would have been able to return to work in February, or at any subsequent date, since that could not possibly have been something AutoZone considered when it made the decision to replace her.

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A recent case out of the District of New Jersey provides a good example both of an employee’s right to a reasonable accommodation for her disability, and the employer’s obligations once an employee requests one.

Penelope Bertolotti worked for AutoZone, Inc. in its human resources department. Ms. Bertolotti suffers from a disability, gastroparesis, an incurable disease that impacts her ability to digest food and beverages. As a result, she wears a pacemaker to help with her digestion.

In October 2012, Ms. Bertolotti took a two week medical leave due to her illness. She returned to work for approximately one week, but then needed to go out on another medical leave.

By February 1, 2013, Ms. Bertolotti still was unable to return to work. On February 7, she asked to extend her medical leave through March 28. At the time, her doctor indicated she had several permanent medical restrictions, including that she could be near a battery charging station or a theft detector like the ones at the front of AutoZone Stores, and could not engage in “excessive or repetitive bending, twisting or stretching.”

Employee working at autoparts storeIn an email, Ms. Bertolotti asked her supervisor if the company would accommodate her medical restrictions. She also asked what type of positions AutoZone would consider for when she was cleared to return to work, so her doctor could evaluate her ability to return. In response, her supervisor indicated he could not discuss her new job duties until her doctor cleared her to return to work. This left Ms. Bertolotti and AutoZone at a stalemate, with Ms. Bertolotti wanting to know her job duties so her doctor could evaluate if and when she could return to work, and AutoZone wanting to know when she could return to work so it could assess what jobs would be available.

By November 2013, Ms. Bertolotti’s doctor still had not cleared her to return to work. Since she had been out of work for a year, AutoZone administratively terminated her employment.

Ms. Bertolotti sued. Among her claims, she alleged AutoZone failed to accommodate her disability in violation of the New Jersey Law Against Discrimination (“LAD”).

AutoZone eventually filed a motion for summary judgment, seeking to dismiss her claims. With respect to Ms. Bertolotti’s failure to accommodate claim, in Bertolotti v. Autozone, Inc. the Court found the company failed to meet its obligation to “engage the employee in the interactive process of finding accommodations” that would have permitted her to perform her job. Rather, the company refused to even identify potential jobs for her until her doctor cleared her to return to work. The Court ruled that the company was required to engage in the interactive process before Ms. Bertolotti was cleared to return to work.

The Court further explained that although AutoZone failed to engage in the interactive process, to prevail on her claim Ms. Bertolotti still needs to identify a reasonable accommodation that would have allowed her to return to work. The Court recognized that Ms. Bertolotti had told her supervisor that, as an accommodation for the restriction that prohibited her from passing the theft detection device at the main entrance to AutoZone’s stores, she could have entered through the fire exit or delivery entrances.

Further, the judge recognized a jury could conclude that Ms. Bertolotti would have been able to return to work by March 28. Ms. Bertolotti claims she could have returned by then, but AutoZone refused to provide her job duties, which made it impossible for her doctor to confirm she could have perform her job despite her medical restrictions. In contrast, the company argues it could not identify a job for her until it knew when she was able to return to work. The Court concluded that a jury eventually will need to resolve this factual dispute.

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The United States Department of Labor recently released a formal Interpretation explaining how to determine whether a worker is an employee or an independent contractor under Fair Labor Standards Act (“FLSA”). The FLSA is a federal law which sets minimum wage and overtime pay requirements.

Determining if worker is employee or independent contractorThe Interpretation was written by David Weil, the Administrator of the DOL’s Wage and Hour Division. He explains that an increasing number of employers are misclassifying employees as independent contractors. As a result, many workers are unfairly denied minimum wage, overtime pay, unemployment insurance and other benefits.

As Mr. Weil indicates, the FLSA defines “employer” extremely broadly. It includes anyone the employer “suffers” or “permits” to work for it. Accordingly, “most workers are employees under the FLSA.”

As the Interpretation recognizes, to determine whether someone is an employee or a contractor under the FLSA, a court should look at the “economic realities” of their relationship. The ultimate question is the extent to which the worker has “economic dependence” on the employer. In making this assessment, courts should consider the following six factors:

1.   The extent to which the work performed is an integral part of the employer’s business

The more important the job is to the employer’s business, the more likely the worker is an employee.

2.  The extent the worker’s opportunity for profit or loss depends on his/her managerial skill

In contrast to employees, independent contractors typically are able to earn more money by, for example, hiring their own workers, purchasing equipment and materials, advertising, and completing projects more quickly. As a result, unlike employees, contractors often risk losing money on projects and assignments.

3.  The relative investments of the employer and the worker

Independent contractors typically make significantly greater financial investments into their businesses, such as purchasing equipment and tools, than employees. But even individuals who make substantial investments toward their work are not necessarily contractors, especially if the employer invests even more toward their work.

4.  Whether the work performed requires special skills and initiative

An individual who does not have any special skills generally is not an independent contractor. However, individuals such as electricians, carpenters and construction workers who do have such skills are independent contractors only if they operate independently from the employer’s business.

5.  The permanency of the relationship

The fact that a job is expected to be permanent or last indefinitely suggests the worker is an employee, since working for the same employer for a prolonged period ordinarily is inconsistent with independence. However, the fact that a job is short-term or temporary does not necessarily indicate the worker is an independent contractor.

6. The degree of control exercised or retained by the employer

To be independent contractors, individuals must have actual control over “meaningful aspects” of the work they are performing. But, for instance, the mere fact that employees who work from home may have the right to set their own hours and may not have anyone directly supervising their job performance generally is not enough to make them independent contractors.

In a footnote, the Interpretation notes that the Family & Medical Leave Act (“FMLA”) expressly use the FLSA’s definition of “employ.” As a result, it concludes that the same test applies to determine whether an individual is an employee or an independent contractor under the FMLA. The FMLA is a federal law which, among other things, requires employers to allow qualified employees to take up to 12 weeks off from work for (1) their own serious health condition, (2) the serious health condition of their spouse, parent, or child, or (3) pregnancy, adoption, or to bond with a new child.

As I discussed in my article, New Jersey Supreme Court Broadens Definition of ‘Employee’ Under Wage and Hour Law, New Jersey has adopted an even broader definition of who is an employee under its state wage and hour laws.

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The New Jersey Employment Agencies Act requires employment agencies doing business in New Jersey to register and obtain licenses from the New Jersey Division of Consumer Affairs. Agencies that fail to do so cannot file lawsuits seeking to collect fees or commissions that are owed to them, or to enforce employment agreements with the individuals who work for them. For instance, an unlicensed employment agency cannot sue to enforce a non-compete agreement.

Businesspeople Standing Outside Employment AgencyHowever, a recent case makes it clear that although both employment agencies and temporary help service firms must register with the state, only employment agencies have to obtain licenses.

The case involves Varuna Jothi Uppala, an Information Technology worker who was employed by Logic Planet. Logic Planet agreed to train Ms. Uppala and assign her to work for its clients on temporary assignments. Ms. Uppala was an employee of Logic Planet, which agreed to pay her a salary of $60,000 per year and to provide her health insurance and other benefits.

When Logic Planet hired Ms. Uppala, she signed an employment contract with it. That agreement includes a non-compete clause that prohibits Ms. Uppala from working directly for Logic Planet’s clients for a specified period. It also includes a liquidated damages provisions that requires Ms. Uppala to pay back $15,000 if she terminates her employment before her contract expires.

Despite this agreement, Ms. Uppala quit her job with Logic Planet and began to work directly for one of the company’s clients. She claimed she did so because Logic Planet failed to provide her any significant training, did not place her on projects as it had promised, and did not pay her agreed-upon salary.

Logic Planet sued Ms. Uppala, alleging among other claims that she (1) breached her employment contract, (2) interfered with Logic Planet’s contractual relationship with its end-client, and (3) breached her duty of loyalty to it. In response, Ms. Uppala asked the trial court to dismiss the claims against her based on the New Jersey Employment Agencies Act.

The trial judge explained that the New Jersey Employment Agencies Act requires employment agencies to obtain a license from the Division of Consumer Affairs. However, it ruled that “temporary help service firms” only need to register with the state, but do not need to obtain licenses.

Under the statute, an “employment agency” is an individual or business that attempts to find jobs for individuals who are seeking work. In contrast, a “temporary help service firm” hires individuals who it then assigns to work for its clients. The key difference is whether the individual is employed directly by the end-client, as with an employment agency, or is employed by the agency but performs work for the client, as with a temporary help service firm.

In Logic Planet Inc. v. Uppala, a published trial court opinion, the judge ruled that Logic Planet is a temporary help service firm since Mr. Uppala was its employee and received her compensation and benefits directly from it. Accordingly, it concluded that Logic Planet is not an employment agency, and although it is required to register with the state, it is not required to obtain a license. It further recognized that Logic Planet is registered with the Department of Consumer Affairs as a temporary help service. Accordingly, it denied Ms. Uppala’s motion to dismiss.

The takeaway from this case for employees is that if you worked for an employment agency or a temporary agency, your former employer may not be able to enforce your non-compete agreement or other employment contract if it was not properly registered or licensed with the state.


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The New Jersey Appellate Division Court recently considered the standard for discharging an employee based on a “perceived disability,” and in so doing reversed a grant of summary judgment to the defendant. In Grande v. Saint Clare’s Health System, the Court applied the standard established in 1998 in Jansen v. Food Circus Supermarkets, Inc., which provides that in evaluating whether an employee can remain in a position despite having a disability, the standard is “whether the handicapped person can do his or her work without posing a serious threat of injury to the health and safety of himself or herself or other employees.”  This “requires the employer to conclude with a reasonable degree of certainty that the handicap would probably cause such an injury” before it can fire an employee.  According to the Court, in determining whether the employee “poses a materially enhanced risk of serious injury . . . [p]robability, not mere possibility, is key.”

In this case, the plaintiff, Marianne Grande, worked as a nurse for the defendant employer, St. Clare’s Health System, for approximately ten years. During her last three years of employment, she suffered three injuries at work, two injuries to her shoulder and one to her back.  Following her back injury, she took family and medical leave followed by personal leave.  While on leave, the plaintiff’s physician cleared her to return to work full time without any restrictions.  Despite such clearance, the defendant required her to participate in a “functional capacity evaluation test,” to assess her ability to, for example, lift certain objects and move in certain ways.  In her role as a nurse, she worked with stroke victims and sometimes was required to move patients.

Hospital sued for disability discriminationWhen the evaluation was completed, it provided for some restrictions.  At this time, the plaintiff’s doctor allowed her to return to work in accordance with the restrictions set forth in the hospital’s evaluation.  That same day, however, the hospital discharged the plaintiff indicating it could not accommodate her disability given the restrictions set forth in the evaluation. Approximately one month after her discharge, the plaintiff’s doctor cleared her to return to work, again without restrictions.  Notwithstanding such clearance, the hospital declined to rehire her.

In reaching its decision, the Court highlighted a number of facts.  For instance, it considered that the criteria applied in the evaluation differed from the plaintiff’s actual job description. For example, there were different lifting requirements assessed in the evaluation as compared with her job description. The Court also noted that the plaintiff’s doctor cleared her to return to work approximately a month after her discharge.

In reversing the lower court’s grant of summary judgment in this disability discrimination case, the Court focused on a statement in the evaluation that the final decision regarding the plaintiff’s ability to return to work was to be deferred to her treating physician. The Court found that such disclaimer raised a sufficient question as to whether the hospital had a reasonable degree of certainty that the plaintiff could not perform the essential functions of her work as a nurse without posing a serious threat of injury to herself, her co-workers or her patients. The Court held that it was for the jury to consider the value of the evaluation conducted on behalf of the hospital and the opinion of the plaintiff’s physician.

In a dissenting opinion, Justice Ashrafi focused on the fact that the plaintiff had been injured at work several times in a three-year period.  The dissent argued that given the history of the plaintiff’s work-related injuries, the Court should not be permitted to second-guess the hospital’s decision and its concerns about employee and patient safety.

As this was a 2-1 decision, whether there will be further appeal to the New Jersey Supreme Court remains to be seen.

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Employee taking company's money for himselfOne important employment law principle is that employees owe a duty of loyalty to their employers. This generally means they cannot act contrary to the interest of their current employer. The New Jersey Supreme Court recently explained that an employee who breaches this duty can be required to pay back the salary he received while he was disloyal, even if the breach did not cause the employer any damage. The concept of requiring an employee to pay back his salary based on his misconduct is called “equitable disgorgement.”

Bruce Kaye owned and managed three separate timeshare businesses in New Jersey, Flagship Resort Development Corporation, Atlantic Palace Development, LLC and La Sammana Ventures, LLC. His employee, Alan Rosefielde, is an attorney who served as the Chief Operating Officer and General Counsel for two of those businesses. Mr. Rosefielde’s salary was $500,000 per year.

The trial court ruled that Mr. Rosefielde violated his duty of loyalty to his employers. For example, when he formed a new business to manage the timeshare properties owned by one of Mr. Kaye’s businesses, Mr. Rosefielde gave himself a larger percentage ownership in the new business than he and Mr. Kaye had agreed. Mr. Rosefielde also falsely claimed another new business he formed would manage sales only for one of Mr. Kaye’s businesses, but tricked Mr. Kaye into signing documents authorizing the new company to manage sales for companies all over the world. Mr. Rosefielde’s other misconduct included receiving reimbursement for $4,000 of personal expenses by falsely claiming they were business expenses, directing someone to forge the signatures of defaulting timeshare unit owners who could not be located to transfer their ownership without foreclosure proceedings, and making misrepresentations to an insurance company to provide health insurance to independent contractors working for Mr. Kaye’s businesses.

After Mr. Kaye discovered many of these transgressions he fired Mr. Rosefielde and filed a lawsuit against him.

After a trial, the court found Mr. Rosefielde had committed legal malpractice and fraud. It ordered him to pay $4,000 in damages and over $800,000 in attorney’s fees and costs. It also required him to give up his ownership interests in Mr. Kaye’s businesses. The court further ruled that Mr. Rosefielde had breached his duty of loyalty, finding “[i]t is difficult to imagine the commission by a corporate officer of more egregious conduct.” Nonetheless, it did not grant equitable disgorgement because Mr. Rosefielde’s breach of the duty of loyalty did not cause any actual damages to Mr. Kaye’s businesses.

The Appellate Division reversed portions of the trial court’s ruling, but affirmed the decision denying disgorgement. However, in Kaye v. Rosefielde the New Jersey Supreme Court reversed. It held that the remedy of equitable disgorgement can be available even if the business did not suffer any economic loss as a result of the employee’s disloyalty. But the Court made it clear that disgorgement can apply only to compensation the employee received during pay periods in which he was violating the duty of loyalty.

 The Supreme Court indicated that “[w]hen an employee abuses his or her position and breaches the duty of loyalty, he or she fails to meet the employer’s expectation of loyalty in the performance of the job duties for which he or she is paid.” It explained this is true irrespective of whether the employee’s breach of the duty of loyalty caused any economic loss. It concluded that, in determining whether disgorgement should apply, a court should consider, among other things:

  1. The employee’s level of responsibility with the company;
  2. The employee’s compensation;
  3. The number of times the employee acted disloyally;
  4. The extent to which the disloyal acts placed the business in jeopardy; and
  5. The degree to which the employee planned out his disloyalty.

The Supreme Court therefore sent the case back to the trial court to apply this new test to determine whether disgorgement is an appropriate remedy for Mr. Rosefielde’s behavior.

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A recent decision from the New Jersey Appellate Division holds that the Borgata Casino Hotel & Spa’s did not violate the New Jersey Law Against Discrimination (“LAD”) by requiring certain employees not to gain too much weight.

The Marina District Development Company, LLC, better known as the Borgata Casino Hotel & Spa, has a program called “Borgata Babes.” Under it, the Atlantic City Casino hires attractive men and women to work wearing costumes. The Casino says that being a Borgata Babe requires a “certain appearance to portray a certain image to the public.” It compares the job with being a professional cheerleaders or model.

Casion allegedly discriminates against womenFor instance, the Casino requires female Borgata Babes to have a “natural hourglass shape.” It also prohibits Borgata Babes from increasing their weight by more than 7% over their weight when they were hired, with exceptions for medical reasons and pregnancy. Its policy is to suspend employees who exceed this requirement to give them opportunity to lose weight, and to fire them if they fail to do so.

Twenty-one women sued the Borgata, claiming the Casino engaged in gender discrimination against them in violation of the LAD. They claim the weight policy is a form of illegal gender stereotyping and sexual harassment that violates the LAD. They also argue the Casino disproportionately applied its policy to women.

The lower court found the policy was a permissible “appearance standard,” and not unlawful discrimination. Accordingly, it dismissed the case. The women appealed.

Last month, in Schiavo v. Marina District Development Company, LLC, the Appellate Division recognized that the LAD permits employers to impose reasonable workplace appearance, grooming and dress standards. It concluded that the policy prohibiting weight gains of more than 7% is such a standard. It noted that the Borgata’s policy itself does not discriminate based on gender since it applies to both men and women. The court was careful to make it clear its decision was based largely on the fact that the employer is a casino, noting the “entertainment nature of the casino” is something that “distinguishes it from a restaurant or tavern.”

The Court further explained that it would be unlawful for the Casino to disproportionately apply this policy against women. For example, it would be discriminatory if it rarely reweighed men and did not suspend or fire men who gained significant weight. However, it found no admissible evidence to support such a claim.

In addition, the Court rejected the employees’ gender stereotyping claim. It acknowledged that the Borgata’s costume and physical fitness requirements impose “what many would label an ‘archaic stereotype’ of male and female physiques.” But it explained that such stereotypes are legally actionable only if they are “accompanied by a burden on one sex over the other or are otherwise used to interfere with employment opportunities of the discriminated group.” It found no evidence to support either of these requirements.

However, the appellate court found some of the 21 women had evidence to support a hostile workplace claim based on their gender. This includes:

  • Women who were repeatedly weighed or disciplined for gaining weight even though they had documented medical conditions that caused their weight gain;
  • Women whose supervisors accused them of falsely claiming they were pregnant, supposedly either to avoid being weighed or to avoid being disciplined for gaining weight. In fact, one supervisor allegedly told the Borgata Babes: “Don’t anybody get pregnant. I don’t want to hear anything about anybody’s family or kids”; and
  • Evidence that some of the women complained to their supervisors about sexual harassment by customers and coworkers which the Borgata failed to address.

The Court recognized this harassment was targeted solely at women, and “reflects a pattern of discriminatory comments toward women suffering medical conditions or returning from maternity leave.” It concluded that the evidence could support a finding of harassment because of gender. Accordingly, it reinstated the gender harassment claims.

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The Third Circuit Court of Appeals recently ruled that when an employee submits a deficient medical certification in support of a request to take time off pursuant to the Family Medical Leave Act (“FMLA”), the employer has to give the employee an opportunity to correct the deficiencies before it can deny the request. The Third Circuit is the federal appellate court which handles appeals stemming from New Jersey, Pennsylvania, Delaware and the Virgin Islands.

Businesswoman need medical leave from workDeborah Hansler worked for Lehigh Valley Health Network as a technical partner. In March 2013, she began experiencing medical symptoms including shortness of breath, nausea and vomiting. On March 13, she requested an intermittent FMLA leave and submitted her doctor’s supporting medical certification form. The certification indicated that she needed two days off per week for approximately a month. However, it did not identify her medical condition because her doctor had not yet diagnosed her.

Ms. Hansler took a total of 5 days off from work for medical reasons between March 13 and March 25, 2013. Lehigh Valley never asked Ms. Hansler or her doctor to explain why she needed this time off. Instead, on March 28, 2013, the company fired her for “excessive absences” including the five days she took off due to her medical condition. When Ms. Hansler reminded Lehigh Valley that she had requested time off pursuant to the FMLA, Lehigh Valley told her it had denied her request for a leave.

After Lehigh Valley fired her, Ms. Hansler received a letter dated March 26, 2013 indicating that the company denied her request for a medical leave because her “condition presently does not qualify as a serious health condition under the criteria set forth by the [FMLA].”

In early April, after she had been fired, Ms. Hansler’s doctor diagnosed her with diabetes and high blood pressure. According to Ms. Hansler, those medical conditions caused the symptoms that necessitated her time off from work in March.

Ms. Hansler sued Lehigh Valley, alleging it violated the FMLA by denying her a medical leave and by firing her because she requested one. The District Court dismissed her case, finding she was not protected by the FMLA because her medical certification did not establish that she had a “serious health condition” that would have entitled her to time off pursuant to the FMLA.

However, the Third Circuit Court of Appeals disagreed. In Hansler v. Lehigh Valley Hospital Network, it held that Lehigh Valley was required to give Ms. Hansler an opportunity to cure the deficiencies in her doctor’s certification before it could deny her request for a medical leave. It explained that the United States Department of Labor’s regulations require that, whenever an “employer does not have sufficient information about the reason for an employee’s use of leave, the employer should inquire further of the employee . . . to ascertain whether leave is potentially FMLA-qualifying.” The regulations also require employers to specify, in writing, what information they believe is missing from an employee’s FMLA medical certification. Lehigh Valley never sought any such information from Ms. Hansler.

In further support of its ruling, the Third Circuit noted it is not uncommon for a doctor to need time to diagnose a medical condition. As a result, “the difference between a medical certification that supports [FMLA] leave and one that is deficient might be a matter of days.” Thus, even though Ms. Hansler’s doctor had not diagnosed her condition when she initially requested her leave, she presumably would have been able to provide that information if her employer had requested additional information.

Similarly, the Third Circuit ruled that the evidence could support a finding that Lehigh Valley fired Ms. Hansler in retaliation for requesting an FMLA leave. Accordingly, it reinstated that claim to give Ms. Hansler an opportunity to try to prove it.

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A recent decision from the District of New Jersey recognizes that employers are not entitled to compensatory damages from employee who breach their non-competition agreements unless the employer can prove it would have received the income but-for the violation.

The case involved Jose Munoz and Roberto Abreu, two former employees of Job Connection Services, Inc. (“JCS”). JSC provides employers with job placement and human resources support.

Mr. Munoz and Mr. Abreu each signed one year non-compete agreements with JSC when it hired them. Those agreements prohibited them from owning, operating, or joining a business that directly or indirectly competes with JSC within sixty mile of any JCS office.

After they stopped working for JCS, Mr. Munoz and Mr. Abreu formed a business, Right Hand Staffing Solutions, LLC. In June 2013, JCS sued Right Hand, Mr. Munoz and Mr. Abreu, claiming they violated their restrictive covenants. For example, JCS claimed Right Hand used its confidential customer lists to obtain business with one of its former customers, APC Postal Logistics.

Three months later, after a settlement conference, the parties entered into a consent order. Under the order, Mr. Munoz, Mr. Abreu and Right Hand agreed not to do business with a list of customers until after August 31, 2014. In exchange, JCS dismissed its lawsuit. Although the consent order had exceptions for some customers, including some employees who Right Hand had already placed at jobs, there were no such exceptions for APC.

In January 2015, JCS filed a motion alleging Mr. Munoz and Right Hand had solicited business from APC in violation of the consent order. In fact, Right Hand had billed APC for more than 28,000 hours of employee time between September 2013 and August 2014.

In response, Mr. Munoz and Right Hand claimed they were permitted to continue to do business with employees who they had placed at APC before the agreed to the consent order. In JobConnection Services, Inc., v. Munoz, the Court rejected this argument, concluding this purported exception “flies in the face of the plain terms of the agreement,” especially since there were similar exceptions for other companies but none for APC. Accordingly, it ruled that Mr. Munoz and Right Hand had violated the non-compete provision in the consent order.

Judge with gavel non-compete agreementHowever, the Court rejected JCS’s request for damages based on the net profits Right Hand received from APC. It explained that compensatory damages are intended “to put the injured party in as good a position as . . . if performance had been rendered.” But JCS did not prove it would have received this income if Right Hand had not violated the consent order. To the contrary, by the time the parties entered into the consent order APC already had stopped using JCS as a result of its “unsatisfactory experience with JCS.” Thus, JCS did not prove it lost any money as a result of the violation of the consent order.

The Court also ruled that JCS could not seek damages based on the original non-compete agreement Mr. Munoz signed with JCS since the company gave up its right to enforce that contract when it entered into the consent order. Accordingly, it did not award any compensatory damages to JCS.

Nonetheless, the court entered an injunction prohibiting Mr. Munoz or Right Hand from doing business with APC until after August 31, 2014. It explained that JCS bargained “for a chance at regaining APC as a customer without any interference from Defendants.” Accordingly, an injunction would protect JCS’s right to attempt to win back its business with APC without any competition from JCS.

Finally, the court awarded JCS attorneys’ fees and costs in an amount to be determined. It did so pursuant to a provision in the consent order which entitles the prevailing party to recover its reasonable attorneys’ fees and legal costs from the other party.

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