New Jersey Employment Lawyer Blog
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The Third Circuit Court of Appeals recently reinstated an employee’s class action overtime pay lawsuit under Fair Labor Standards Act (FLSA) and the New Jersey Wage and Hour Law (NJWHL).  In doing so it recognized successor companies can be liable for their predecessors’ overtime violations, and individual owners and supervisors can be held personally liable under both of those laws.

Real estate concept - business-man signs contract behind househoPatricia Thompson was hired by Security Atlantic Mortgage Company as a mortgage underwriter in June 2009.  Security Atlantic quickly assigned her to provide training at a related company, Real Estate Mortgage Network (REMN).  In February 2010, Security Atlantic stopped doing business and Ms. Thompson began working directly for REMN.  Otherwise, her job and the business remained essentially the same.

Ms. Thompson claims Security Atlantic and REMN both failed to pay her and other mortgage underwriters time-and-a-half when they worked more than 40 hours per week, in violation of both the FLSA and the NJWHL.  Specifically, she alleges mortgage underwriters worked through lunch and at home to complete their assignments on time, but were not paid overtime because the companies misclassified them as exempt employees.

Ms. Thompson sued Security Atlantic, REMN, and two co-owners of Security Atlantic, Samuel Lamparello and Noel Chapman.  However, the United States District Court for the District of New Jersey dismissed the entire case. 

In Thompson v. Real Estate Mortgage Network the Third Circuit reversed, ruling Ms. Thompson’s allegations could support finding that Security Atlantic and REMN were her joint employers.  Joint employment is when two or more companies “exert significant control” over the same employee.  I discussed the test to determine whether a company is a joint employer in a previous article, Third Circuit Holds Parent Company Not Responsible For Wholly-Owned Subsidiary’s Overtime Violations.

In reaching this conclusion, the court relied on Ms. Thompson’s claim that Security Atlantic hired her but an REMN trained her; Security Atlantic called REMN its “sister company;” and virtually every employee of Security Atlantic seamlessly became an employee of REMN in June 2010.  However, it cautioned that additional evidence ultimately might establish that Security Atlantic and REMN were too independent to be considered joint employers.

The Third Circuit also concluded the allegations could support finding REMN liable for REMN’s overtime violations as Security Atlantic’s successor in interest.  Under federal law, the factors to determine successor liability are (1) the continuity between the workforce and business operations of the two companies, (2) whether the successor had notice of the predecessor’s legal obligations, and (3) the predecessor’s ability to pay its legal obligation.  It found support for the first factor since Ms. Thompson claims after February 2010 REMN operated the same as Security Atlantic had in the past.  It found support for the second factor since most of REMN’s former management worked for Security Atlantic, making it likely they were aware of any past overtime violations.  Likewise, it found support for the third factor since REMN is apparently defunct, suggesting it would be unable to pay any damages awarded to Ms. Thompson.

Finally, the Third Circuit reversed the District Court’s decision to dismiss the two individual defendants, Mr. Lamparello and Mr. Chapman, from the case.  It explained that a company’s owner, officer or supervisor can be personally liable as a joint employer under the FLSA if he or she had (1) supervisory authority over the employee and (2) some responsibility for the alleged violation.  Since Ms. Thompson alleges Mr. Lamparello and Mr. Chapman are co-owners of REMN, run the company’s day-to-day operations and make decisions about hiring, firing and compensation, they potentially could be personally liable for the alleged overtime violations.


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The Americans with Disabilities Act (ADA) is a federal law that prohibits employers from discriminating against employees because they are disabled.  It defines a “disability” as a physical or psychological impairment that substantially limits a major life activity.  As a result, not every impairment is a disability.  In contrast, the New Jersey Law Against Discrimination (LAD), the New York Human Rights Law (NYHRL) and the New York City Human Rights Law (NYCHRL) all have significantly broader definitions of the term “disability” including relatively minor mental and physical impairments.

in officeLate last month, the Second Circuit Court of Appeals recognized that an impairment that prohibits an employee for sitting for too long can be a disability even under the ADA.  The employee, Carmen Parada, worked for Banco Industrial de Venezuela, C.A.  Approximately six months after she started working for the bank, Ms. Parada fell and hurt her back.  As a result, she no longer is able to sit for a prolonged period.  According to one of her medical reports, she is able to sit for only 15 minutes before she has to stand.

Ms. Parada asked the bank for an ergonomic chair which she believed would have allowed her to perform her job.  The bank did not respond to her requests so she asked again, this time offering to pay for the chair herself.  When she still did not receive any response she told the bank she could not continue to perform her job without a new chair.  When the bank’s Operations Manager finally told Ms. Parada he would discuss her request when he returned from a business trip she complained to the Compliance Officer and requested a leave of absence.  Ultimately, the bank fired Ms. Parada, claiming she failed to provide sufficient documentation to prove she was disabled and needed a medical leave, and declaring it considered her to have abandoned her job. 

Ms. Parada sued, claiming the bank committed disability discrimination in violation of the ADA, the NYHRL and the NYCHRL.  However, the District Court dismissed her ADA claim, ruling she was not disabled under it based on an earlier case, Colwell v. Suffolk County Police Department.  That case found a police officer who was unable to sit or stand for “too long” was not disabled for purposes of the ADA.

On appeal, the Second Circuit reversed.  It distinguished Colwell by explaining the employee in that case was too vague about his physical limitations.  It ruled that employees do not have to prove they are completely unable to sit to establish they are disabled with respect to the major life activity of sitting.  Rather, the relevant question is whether the employee is substantially impaired in his or her ability to sit in comparison to the average person.

The court further explained that the ADA requires employers and courts to make that determination on a case-by-case basis.  As a result, it would be improper to set a bright-line rule that only employees who are unable to sit at all are substantially impaired with respect to sitting.  In doing so it recognized that, under the right circumstances, even an employee who merely cannot sit for an extended period time could be disabled under the ADA.

Applying that law, in Parada v. Banco Industrial de Venezuela, C.A., the Second Circuit reversed the District Court’s order dismissing the case.  It instructed the lower court to analyze Ms. Parada’s impairments to determine whether her back injury meets the ADA’s definition of a disability.

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There are many ways to prove a retaliation claim.  Often, a key factor is the closeness in time between when the employee blows the whistle and when the employer takes an adverse employment action against her, such as firing or demoting her.  In most situations timing alone is not enough to prove retaliation. However, timing alone can be enough if it is “unusually suggestive” of retaliation.

There is no clear answer to how little time can be considered “unusually suggestive.”  But in a recent case the United States District Court for the District of New Jersey ruled a jury can find retaliation because the employer fired the employee eight days after her last protected activity.

Retaliation in the workplace and the Fair Labor Standards ActZalinskie v. Rosner Law Offices, P.C., Linda Zalinskie claims her employer, Rosner Law Offices, P.C., fired her because she complained about violations of the Fair Labor Standards Act (FLSA).  In contrast, the firm claims it spoke to Ms. Zalinskie about problems with her job performance and attitude nearly a year before she made these complaints, moved her into a new position at the time, and ultimately fired her because her performance and attitude did not improve.

In early September 2011, Ms. Zalinskie called the New Jersey Department of Labor (NJDOL) twice because the firm was giving her compensatory time off when she worked overtime instead of paying her time-and-a-half. She also submitted a written complaint to the NJDOL on September 4, 2011.

On September 19, Ms. Zalinskie called the NJDOL again because the law firm had docked her pay when she arrived to work 6 minutes late.  The following day she met with her supervisor and the firm’s office manager.  During the meeting, she complained about the firm docking her pay even though she was a salaried employee.  When asked why she believed this was unlawful, Ms. Zalinskie indicated she leaned it from the NJDOL.  The next day, the firm’s office manager asked Ms. Zalinskie to provide proof the firm had violated the law.

On September 23, 2011, an investigator from the NJDOL made an unannounced visit to the firm, claiming he was conducting a random audit.  Six days later, on September 29, 2011, the firm fired Ms. Zalinskie.  The firm says it decided to fire Ms. Zalinskie on September 21, 2012, the day on which it asked her to prove it was unlawful to dock her pay, but decided to wait to implement its decision.  Of course, the firm also claims it fired Ms. Zalinskie for poor performance rather than because of her complaints about violations of the FLSA.  In fact, it denies learning Ms. Zalinskie filed a complaint with the NJDOL until after it fired her.

Based on these facts, the court concluded there is enough evidence for a jury to find the firm fired Ms. Zalinskie because of her complaints to the NJDOL.  It found her termination was “almost contemporaneous” with her complaints to the NJDOL and the NJDOL’s audit of the firm because she was terminated “less than a month after she filed a written complaint with the NJDOL, eight days after she told [her boss] at the September 21, 2011 meeting that the source of her wage allegations was the NJDOL, and six days after” the NJDOL investigator audited the firm.  In contrast, although the firm could have fired her for poor performance for nearly a year, it did not decide to do so until shortly after she complained to the DOL.  Accordingly, the judge denied the firm’s motion for summary judgment, thereby giving Ms. Zalinskie a chance to try to prove her case to a jury.

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Earlier this month, the United States Court of Appeals for the Second Circuit issued an unpublished summary order which reinstates an employee’s sexual harassment claim that had been dismissed.  However, in a separate published opinion issued on the same day the court upheld the dismissal of Ms. Castagna’s related tort claims because she did not file her lawsuit until after the statute of limitations had expired.

Boss shouting at assistantPatricia Castagna worked for Majestic Kitchens, Inc., as its receptionist.  She alleges Bill Luceno, who is the owner of the company and was Ms. Castagna’s supervisor, harassed her because of her sex in violation of Title VII of the Civil Rights Act of 1964 and the New York State Human Rights Law (“NYSHRL”).  Prior to the appeal, the trial court had dismissed those claims because Ms. Castagna admitted Mr. Luceno treated virtually all of the company’s employees poorly.

In support of her sexual harassment claims, Ms. Castagna claims Mr. Luceno physically threatened her and two other female employees with physical violence, but never physically threatened any male employees.  For example, she claims that on one occasion he screamed and cursed before he shoved her computer monitor toward her, which caused her to fear for her safety. Although she acknowledges Mr. Luceno’s had outbursts toward both male and female employees of Majestic, she claims the most extreme outbursts were directed toward women, and that during some of his outbursts he referred to women as “bitch[es].”

In reversing the trial court, the Second Circuit explained that threats of physical violence can be very strong evidence to support a hostile work environment claim.  It also indicated the fact that Mr. Luceno only threatened women supported an inference that he was targeting them because of their gender.  It ultimately found all of the evidence, considered together, would permit a reasonable jury to conclude that Ms. Castagna’s workplace was hostile and abusive because of her gender.  Accordingly, the court issued a summary order which reversed the trial court’s ruling that had granted summary judgment to Majestic.

The appellate court also reinstated Ms. Castagna’s constructive discharge claim, and asked the trial court to consider it on its merits.  The lower court had dismissed that claim on the basis that there is a higher standard to prove a constructive discharge than to prove an harassment claim, and it had found there was not enough evidence to support an harassment claim.  But since the Second Circuit disagreed and found there is enough evidence to support a hostile work environment claim, it instructed the trial court to determine whether there also is enough evidence to support a constructive discharge claim.

However, in a separate opinion the Second Circuit upheld the dismissal of Ms. Castagna’s claims of intentional infliction of emotional distress, assault, and battery because she filed them after the one year statute of limitations had expired.  It ruled that even though Ms. Castagna filed a charge of discrimination with the United States Equal Employment Opportunity Commission (“EEOC”) within 300 days after the harassment occurred, and her tort claims are based on the same facts as her harassment claim, filing with the EEOC does not toll the one year statute of limitations on other claims.  Rather, if Ms. Castagna wanted to pursue her tort claims she needed to file a lawsuit within one year after the relevant events occurred instead of waiting until the EEOC finished its investigation into her harassment claim.  Accordingly, in a formal published opinion in Castagna v. Luceno, the court affirmed the trial court’s order dismissing Ms. Castagna’s tort claims.

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Earlier this month, the United States Supreme Court ruled that the whistleblower protection of the Sarbanes-Oxley Act applies not only to employees of publicly traded companies, but also to employees of privately held companies who perform work for the publicly traded company as contractors or subcontractors.

Corporate Tax FraudThe Sarbanes Oxley Act is a 2002 law that was passed in 2002 in response to the collapse of Enron Corporation.  It includes an anti-retaliation provision that prohibits public companies, as well as their employees and agents from firing, harassing, demoting, suspending, or otherwise discriminating against employees who blow the whistle on certain activities prohibited by the Act.

The case, Lawson v. FMR LLC, involves the Fidelity family of mutual funds, which has no employees of its own.  The whistleblowers were Jonathan M. Zang and Jackie Hosang Lawson, both of whom were employed by different subsidiaries of the same parent company, FMR LLC.  Their employers are private companies that manage and advise the Fidelity family of mutual funds.

Mr. Zang and Ms. Lawson claim they experienced retaliation after they reported fraud committed by the mutual funds.  Specifically, Mr. Zang claims he was fired and Ms. Lawson claims she experienced a series of adverse employment actions that eventually caused her to resign (a constructive discharge).

In determining whether Mr. Zang and Ms. Lawson are protected by the Sarbanes-Oxley Act, the Supreme Court focused on the relevant language of the anti-retaliation provision, which prohibits any publicly traded company or any “officer, employee, contractor, subcontractor, or agent of such company” from retaliating against an employee who provides information or otherwise assists in certain investigations into possible violations of the Act.  The Court concluded that the plain meaning of this provision prohibits contractors and subcontractors from retaliating against their own employees, rather than merely prohibiting them from retaliating against employees of publicly traded companies.  It supported this interpretation on the basis that normally contractors and subcontractors can only terminate, demote or suspend employees of their own company, rather than employees of the publicly traded companies which they manage.

The Supreme Court further supported its ruling based on the fact that the collapse of Enron involved fraud by its private accounting firm, Arthur Andersen.  The Act was passed in part because employees of Arthur Andersen who reported the fraud experienced retaliation, including demotions and terminations as a result.  The court reasoned that if the whistleblower provisions only protected employees of publicly trades companies, then it would not protect employee of companies like Arthur Anderson who blow the whistle on fraud committed by a public traded company for which they work.  This would thwart the Act’s express purpose of “protect[ing] investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws.”

Accordingly, the Court held that the Sarbanes-Oxley Act’s whistleblower protection applies to individuals who work for publicly traded companies through privately held companies such as law firms, accounting firms and investment companies.  It therefore ruled that Mr. Zang and Ms. Lawson can proceed with their cases.

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The City of Newark recently enacted an ordinance requiring certain employers to provide paid sick leave to their employees.  Newark is now the second city in New Jersey to pass a paid sick leave law.  As discussed in a previous article, effective January 24, 2014, Jersey City Law Requires Employers to Provide Paid Sick Leave.

To Whom Does the Law Apply?

The Ordinance applies to most employees who work in Newark for at least 80 hours per year.  However, it does not apply to the federal, state or local government, or to employees of any school district or Board of Education, including Rutgers University.

How Much Time Off Are Employees Entitled to Take?

Sick Female Employee Taking Paid Time Off From WorkCovered employees are entitled to accrue at least of one hour of paid sick time for every 30 hours they actually work.  Companies are required to provide up to 40 hours of paid sick time per year to any employees who are child care workers, home health care workers, or food service workers.  For other employees, companies with 10 or more employees are required to provide employees up to 40 hours of paid sick time per calendar year, and companies with fewer than 10 employees are required to provide up to 24 hours of paid sick time per year.

Employers must either allow employees to carry over a minimum of four hours of unpaid sick leave to the following calendar year, or pay employees for their unused sick time.  However, employers are not required to permit employees to use more than 40 hours of paid sick time during any given year.

For What Purposes Can Employees Use Their Paid Sick Time?

Employers must permit employees to use the paid sick time they earn for a variety of reasons including but not limited to:

  1. Their employee’s own (a) physical or mental illness, injury or health condition; (b) diagnosis with a physical or mental illness, injury or health condition; or (c) preventive medical care; and
  2. For the employee to care for a family member’s (a) mental or physical illness, injury, or health condition; (b) medical diagnosis of a mental or physical illness, injury, or health condition; or (c) preventive medical care.

The law defines “family member” very broadly to include (1) spouses, civil union partners and domestic partners; (2) natural children, adopted children, stepchildren and foster children of the employee and the employee’s spouse, civil union partner or domestic partner; (3) grandparent and grandparents of the employee’s spouse, civil union partner or domestic partner; (4) grandchildren; and (5) siblings.

What Are the Requirements to Take Time Off?

For emergencies, employers must permit employees to take time off as long as they provide as much advance notice as practical.  For any other unforeseeable sick time, employers can require employees to request the time off before the beginning of their scheduled shifts.  When the need for paid sick leave is foreseeable, employers can require employees to provide up to seven days advance notice.

After an employee uses sick leave three days in a row, the employer can require a doctor’s note showing the need for the time off was covered by the Ordinance.  However, the employer cannot require an explanation of the nature of the illness.

Protection from Retaliation

The Ordinance prohibits retaliating against employees who properly exercise their rights under it.  This includes prohibiting employers from threatening, disciplining, firing, suspending, or taking other adverse actions against employee because they exercise their rights under it.

The statute goes into effect on May 29, 2014.  A copy of the full text is available on the City of Newark’s website.

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Retaliation Green Road Sign on Dramatic Blue Sky with Clouds.

To prevail in a retaliation lawsuit you have to prove your employer took an adverse action (such as demoting or firing you) because you engaged in a legally-protected activity. For example, if your employer fired you after you complained you were not being properly paid for working overtime you would have to prove there was a connection between your complaint and the company’s decision to fire you. This is called a “causal link.”

There are many different ways to prove a causal link in a retaliation case. Some of the most common ways include evidence your employer fired you quickly after you objected, a decision-maker was angry about your objection, or the company’s explanation for firing you is false. A recent New Jersey case, Goldsmid v. Lee Rain, Inc., finds another potential way to prove retaliation: Based on evidence the employer had someone ready to replace you very quickly after it fired you.

Craig Goldsmid worked for Lee Rain, Inc. in Vineland, New Jersey, most recently in the company’s warehouse. Although Lee Rain initially paid him by the hour, in early 2010 it began paying him a salary.

There was no dispute that Mr. Goldsmid was entitled to overtime pay when he worked more than 40 hours per week. However, there were at least 12 weeks in which Mr. Goldsmid worked overtime but was not compensated for it.

Although Mr. Goldsmid initially did not realize he was entitled to receive overtime pay, in February 2011 the company’s accountant provided him a factsheet from the United States Department of Labor that explains the Fair Labor Standards Act (FLSA)’s overtime requirements. Mr. Goldsmid provided copies of that document to some of his coworkers and his boss. In March 2011 he told one of the owners of the company he believed the company had decreased his pay when it started paying him a salary. Approximately three months later, Lee Rain fired Mr. Goldsmid, claiming he was disruptive and his job performance was poor. Mr. Goldsmid then filed a lawsuit claiming his employer failed to pay him overtime in violation of the FLSA, and retaliated against him in violation of the FLSA and New Jersey’s whistleblower law, the Conscientious Employee Protection Act (CEPA).

Lee Rain eventually filed a motion for summary judgment, asking the court to dismiss Mr. Goldsmid’s case. Among other things, the company argued there was not enough evidence to prove it fired Mr. Goldsmid because he objected about a violation of the FLSA, rather than because of his job performance.

Previous cases have recognized that when an employee attempts to rely solely on evidence of the timing between his legally protected objection and the company’s decision to fire him, he has to show the timing is so close that it is “unusually suggestive” of retaliation. Otherwise, timing alone is not enough to prove a retaliation claim.

The judge explained that the three months between Mr. Goldsmid’s complaint to his boss and the company’s decision to fire him was not “unusually suggestive” and therefore was insufficient to prove his case. However, she also noted that the company hired two new employees to work in its warehouse, and started their jobs on the day after Lee Rain fired Mr. Goldsmid. Although the company claimed it decided to hire those employees a month before it fired Mr. Goldsmid because it was getting ready for the busy summer season, the court ruled that a jury could find it really hired them to replace Mr. Goldsmid and delayed firing him until his replacements were ready to start their jobs. Based on that, the judge concluded a jury could find Lee Rain retaliated against Ms. Goldsmid in violation of the FLSA and CEPA. Accordingly, it denied the company’s motion for summary judgment.

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A case decided earlier this month addresses a question that periodically comes up in employment law cases: Will your former employer be able to obtain your personnel file from your current employer if you file an employment discrimination or retaliation lawsuit?

Can My Former Employer See My Current Employment Records As Part of

During an employment lawsuit, the employer and employee engage in a process called discovery. Discovery involves an exchange of information between the parties, including requests for documents, written questions called interrogatories, and oral questions at a deposition. In addition, either side has the right to issue subpoenas requiring non-parties to provide relevant documents and information. The purpose of discovery is to allow each side to gather evidence to support its case and evaluate the other side’s position.

Discovery is supposed to be broad. However, it has limits. For example, it only is supposed to be used to try to learn something relevant about your case, and not to harass or punish the other side. Unfortunately, there often are disagreements about whether a discovery request is being used for a proper purpose. The question of whether your former employer is entitled to obtain copies of records from your current employer is one such issue that can arise during an employment law case.

In Boykins v. Inventiv Commercial Services, Michelle Boykins alleges that her former employer, Inventiv Commercial Services, wrongfully terminated her because of her race in violation of the New Jersey Law Against Discrimination (LAD) and federal law. After Ms. Boykins stopped working for Inventiv she started working for New Jersey Transit. Inventiv learned that Ms. Boykins filed a charge of discrimination against New Jersey Transit with the United States Equal Employment Opportunity Commission (EEOC). Ms. Boykins provided Inventiv a copy of her EEOC claim and other related documents. Inventiv then attempted to obtain Ms. Boykins’s entire personnel filed from New Jersey Transit.

Inventiv claimed these records were relevant to various issues in the case including how much Ms. Boykins is earning from New Jersey Transit since those earnings would offset any economic damages caused by Inventiv’s alleged race discrimination. Ms. Boykins asserted that her personnel records are private. Inventiv argued that it could overcome her workplace privacy concerns because her discrimination claim against New Jersey Transit is similar to her claim against it.

United States Magistrate Judge Douglas Arpert ruled that Inventiv is not entitled to obtain Ms. Boykins’s personnel file from New Jersey Transit. He recognized that employees have a legitimate privacy concern with respect to their personnel files. While he noted that Ms. Boykins’s pending EEOC case against New Jersey Transit might have provided a basis for Inventiv to obtain those records, it already has those documents. He also found Inventiv’s s request was overly broad since it sought Ms. Boyknis’s entire personnel file, rather than particular items that might be relevant to her lawsuit.

It is important to understand that this ruling was very fact-sensitive. The judge might have required New Jersey Transit to provide some records if, for example, Ms. Boykins had not already provided the relevant EEOC records or if she did not supply adequate evidence regarding her salary and benefits at her new job. However, the case recognizes that employees do have a privacy interest in their personnel records and there should be limits on when your former employer is entitled to obtain them from your current employer.

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New Jersey Court Finds Protection for Whistleblower Who Objected as Part of Job Last week, New Jersey’s Appellate Division revisited the question of whether an employee who blows the whistle about an activity related to his job duties can be protected by New Jersey’s Conscientious Employee Protection Act (CEPA). This time, the court concluded the employee can proceed with his claim even though he blew the whistle about an issue related to his job. There is a split in legal authority over this issue. As I discussed in a previous article, New Jersey’s Whistleblower Law Protects “Watchdog” Employees Whose Jobs Require Them to Report Violations of Law, last September another panel of the Appellate Division ruled an employee whose job is focused on corporate safety or compliance issues is protected by CEPA only if he (1) “pursued and exhausted all internal means of securing compliance” or (2) “refused to participate in the objectionable conduct.” In contrast, several previous cases have ruled that employees who object about violations of the law in the course of performing their jobs are not protected by CEPA. The latest case to address this issue is Dukin v. Mount Olive Township Board of Education. Robert Dukin worked for the Mount Olive Township Board of Education as an auto-mechanic. In early January 2010, he told his supervisor about a number of safety concerns about a particular school bus. The next time Mr. Dukin was at work, he saw a bus driver preparing to drive the unsafe bus. After confirming the bus had not been repaired, Mr. Dukin told the bus driver not to drive it. He then reported this to the New Jersey Motor Vehicle Commission’s on-site inspector, who directed Mount Olive to take the bus out of service. Shortly thereafter, Mr. Dukin’s boss ordered him to repair the bus using a bumper-jack. Mr. Dunkin refused because he believed doing so was unsafe because the bus was on uneven ground. His boss then ordered him to go home. At home, Mr. Dukin filed a complaint with New Jersey’s Office of Public Employees Occupational Safety and Health department (PEOSH), which eventually found multiple safety violations. When the Superintendent learned what had happened he fired Mr. Dukin, only to rescind his termination five minutes later. Mount Olive subsequently scheduled a hearing to discuss Mr. Dukin’s employment. Prior to the meeting, Mount Olive offered Mr. Dukin the option of being paid for the final five months of his employment contract if he resigned and waived his legal claims against the school district. Mr. Dukin rejected this offer. Mount Olive permitted Mr. Dukin to finish out the school year, but did not renew his contract for the following year. Mr. Dukin then filed a retaliation lawsuit under CEPA. The Appellate Division found Mr. Dukin is protected by CEPA. It distinguished its previous rulings regarding employees who object in the course of performing their job duties, explaining that unlike Mr. Dukin each of those cases involves an employee whose “central job description was to assess and analyze risk for” their employer. In other words, it establishes a different standard for (1) employees whose jobs focus on safety or compliance, who either have limited or no protection under CEPA; and (2) all other employees, who are protected by CEPA whether or not their objections relate to their job duties. The Appellate Division also found Mr. Dukin has enough evidence to prove retaliation. This includes the fact that his supervisor previously told the mechanics he would “bury” them if they ever went over his head, the timing and circumstances of Mount Olive’s disciplinary actions toward him, and the fact that the school district changed its justification for firing him from budgetary concerns to poor performance. Accordingly, the court concluded that a jury should determine whether Mount Olive retaliated against Mr. Dukin in violation of CEPA. The Dukin opinion is unpublished, so it is not a binding precedent. However, it is a reminder that this question is in a state of flux that will remain until the New Jersey Supreme Court finally answers this question.

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As I discussed in a previous article, in 2010 New Jersey passed a law Prohibiting Companies From Saying Unemployed Job Candidates Need Not Apply. With limited exceptions, this relatively new anti-discrimination law prohibits employers from advertising that job applicants must have a current job to be eligible to be hired, interviewed or considered for a job opening. Earlier this month, a court upheld that law against a challenge from an employer who claimed the law violated its rights under the First Amendment.

Court Upholds New Jersey Law Prohibiting Job Ads Requiring Job Applicants Who Are Currently Employed.jpgThe case was initiated by a company, Crest Ultrasonics, and its Chief Executive Officer, J. Michael Goodson. They had advertised a job opening for the position of Service Manager in a newspaper. The advertisement stated that a job candidate “must be currently employed,” in violation of the unemployment insurance discrimination statute.

Two people complained to the New Jersey Department of Labor (“DOL”) about Crest’s job ad. The DOL investigated and subsequently fined Crest and Mr. Goodson a total of $1,000. Crest and Mr. Goodson challenged the fine, claiming it violated their right to free speech guaranteed by the First Amendment to the United States Constitution and the New Jersey Constitution. The Commissioner of the DOL upheld the fine. Crest and Mr. Goodson appealed.

On appeal, New Jersey’s Appellate Division explained that the First Amendment permits the government to limit commercial speech such as the advertisement at issue if (1) there is a substantial government purpose underlying the law and (2) the law directly advances that interest and is no more restrictive than necessary to advance that interest. The Court found this test was met and therefore concluded the law did not violate Crest or Mr. Goodwin’s right to free speech.

In reaching this conclusion, the Court recognized that the statute was passed during a nationwide recession that had a major impact on New Jersey’s economy, including unusually high levels of unemployment. It found the state has the legitimate interest in encouraging more unemployed job candidates to apply for jobs. It found the law was narrowly tailored to address this concern, particularly since it does not even prohibit employers making hiring decisions from discriminating based on the fact that an individual is not currently employed. At the same time, it found the law promotes the state’s interest by encouraging unemployed job candidates to apply for job openings, since “some currently unemployed applicants will stand out” and will be interviewed and hired by companies that otherwise might have told unemployed job applicants not to apply.

Accordingly, in New Jersey Department of Labor and Workforce Development v. Crest Ultrasonics the Court ruled the statute is narrowly tailored to advance the State’s substantial interest, and therefore does not violate the state or federal Constitution. In reaching its conclusion, the Court considered evidence that the longer an individual is unemployed, the more difficult it is for him or her to find a job. It explained that when employers are unwilling to hire unemployed job candidates, that makes it even more difficult for those individuals to return to the workforce. It also noted that Oregon, the District of Columbia and New York City have passed similar laws over the past several years, and Rhode Island is considering doing the same.

Although the Court upheld the law, it did not decide whether a $1,000 fine was appropriate under the circumstances. It noted that $1,000 is the maximum penalty for a first offense. However, when setting the amount of a penalty the DOL is supposed to consider (1) the seriousness of the violation; (2) the employer’s past history of violations; (3) the employer’s good faith; (4) the size of the employer; and (5) any other relevant factors. Since the Commissioner of the DOL apparently did not consider those factors, the Court sent the case back to the DOL to set the appropriate amount of the fine.

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