New Jersey Employment Lawyer Blog

Earlier today, New Jersey's Appellate Division ruled in favor of one of my clients, Karen Cole, holding that her former employer waived its right to enforce her arbitration agreement because it waited too long to raise it as a defense. As a result, her case can proceed to a jury trial instead of having her claims decided in arbitration.

Ms. Cole, a nurse anesthetist, worked at Jersey City Medical Center through her employer, Liberty Anesthesia Associates, LLC. In 2007, Jersey City revoked her hospital privileges. Liberty fired Ms. Cole shortly thereafter. Ms. Cole has evidence that Jersey City's decision to revoke her privileges, and Liberty's decision to fire her, were due to the fact that she has a disability, Ehlers Danlos Syndrome, and because she objected to illegal practices at the hospital. Accordingly, she sued Jersey City for disability discrimination in violation of the New Jersey Law Against Discrimination (LAD), and retaliation in violation of New Jersey's whistleblower law, the Conscientious Employee Protection Act (CEPA). She later named Liberty as a defendant, alleging it discriminated and retaliated against her when it fired her.

Liberty was a defendant in Ms. Cole's case for 20 months, and actively participated in the litigation during that period. However, it did not raise arbitration as a defense until three days before the trial. Liberty claims it waited so long because Ms. Cole did not have an arbitration agreement with Jersey City, and it believed it made more sense to keep the entire case together in court. However, after Ms. Cole settled her claims against Jersey City a few weeks before the scheduled trial, Liberty decided to enforce the arbitration agreement. Liberty filed its motion to compel arbitration only 3 days before the scheduled trial date.

The trial judge found that Ms. Cole was required to bring her case against Liberty in arbitration, and dismissed her case from court. But the Appellate Division reversed. In Cole v. Jersey City Medical Center, it ruled that Liberty waived its right to enforce Ms. Cole's arbitration agreement by intentionally waiting until the eve of trial before it raised it as a defense. It concluded that Liberty could have sought to require Ms. Cole's to arbitrate her claims against it earlier, but chose not to do so for strategic reasons. It also found that Ms. Cole was prejudiced by Liberty's delay, since she had to spend time preparing for a jury trial, which is much more time consuming than preparing for arbitration. As a result, it ruled that Liberty waived its right to require Ms. Cole to have her case decided in arbitration, and that Ms. Cole is entitled to a jury trial. The Appellate Division's opinion was approved for publication, meaning it is a binding legal precedent.

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The Family & Medical Leave Act of 1993 (FMLA) is a federal employment law that, among other things, permits covered employees to take up to 12 weeks off per year because of a serious health condition. Employers are required to inform their employees about their rights under the FMLA within 5 days after they request time off for a leave that is covered by the FMLA. For example, an employer must tell an employee that she is guaranteed the right to return to her job if she returns from her medical leave within 12 weeks.

Earlier this year, in Antone v. Nobel Learning Communities, Inc., Judge Joseph E. Irenas of the United States District Court for the District of New Jersey recognized that an employer can violate the FLMA if it fires an employee because she failed to return to work from an FMLA leave within 12 weeks if:

1. The employer did not tell the employee when her FMLA leave expired, and


2. The employee would have returned to work within 12 weeks if the employer had provided her the proper information.

The plaintiff in that case, Karen Antone, had numerous health issues including Cellulitis, low cranal spinal fluid, chronic headaches and migraines, and complications from vascular surgery. On May 28, 2009, she requested a leave of absence so she could receive medical treatment. When she filled out an FMLA certification form, Ms. Antone's physician indicated that she expected to return to work on August 28, 2009. However, August 28, 2009 was 12 weeks and 8 days after Ms. Antone started her FMLA leave.

Nobody at Nobel told Ms. Antone that the FMLA only guaranteed her right to return to her job for 12 weeks, or that she had to return to work by August 20 to be guaranteed her job back under the FMLA. Rather, the company waited until late August, and then fired Ms. Antone because her doctor had not cleared her to return to work by August 20.

Ms. Antone then filed a lawsuit alleging that Nobel had interfered with her rights under the FMLA by failing to reinstate her to her job at the end of her FMLA leave. The company sought to dismiss her case, arguing that Ms. Antone was not protected by the FMLA because she took more than 12 weeks off. But Judge Irenes denied the motion based on the fact that Ms. Antone alleges she would have returned to work by August 20 if she had known that was her deadline, and that the last 8 days of her medical leave were just a precaution. In fact, her doctor indicated that he would have cleared her to return to work on August 20 if he had known she was entitled to take only 12 weeks off.

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Earlier this year, Novartis Pharmaceuticals Corporation agreed to a $99 million settlement of a class action overtime lawsuit brought by its sales representatives. The settlement is still subject to final approval by a judge. A final hearing to approve the settlement is scheduled for May 31, 2012. Novartis, an affiliate of Swiss drug maker Novartis AG, has its headquarters in East Hanover, New Jersey.

The overtime lawsuit against Novartis was filed in 2006 in a federal court in Manhattan. More than 7,000 current and former sales representatives joined the class action. They claim Novartis failed to pay them overtime, in violation of the Fair Labor Standard Act (FLSA). The FLSA is a federal law that requires companies to pay nonexempt employees time-and-a-half when they work more than 40 hours in a week.

Novartis settled the case before the United States Supreme Court could rule whether pharmaceutical companies are required to pay overtime to their salespeople in another similar lawsuit. Specifically, Christopher v. GlaxoSmithKline is an overtime lawsuit against GlaxoSmithKline which is currently on the Supreme Court's 2012 docket. The outcome of that case is likely to decide whether salespeople working for pharmaceutical companies are entitled to be paid time-and-a-half when they work overtime. The oral argument in Christopher is scheduled for April 16, 2012.

Companies often refuse to pay their employees overtime, either because they are unaware of the requirement, or because they do not realize the employee is entitled to it. But most employees, including both hourly and salaried employees, are entitled to overtime pay when they work more than 40 hours per week.

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Earlier this year, a New Jersey Judge refused to file the terms of a settlement agreement in an overtime lawsuit under seal. Specifically, Judge Jose L. Linares of the United States District Court for the District of New Jersey ruled the employer had not overcome the strong presumption of public access to the terms of settlements in cases under the Fair Labor Standards Act ("FLSA"). The FLSA is a federal wage and hour law that requires employers to pay most "nonexempt" employees time-and-a-half when they work more than 40 hours in a work week.

The case, Brumley v. Camin Cargo Control, Inc., involved three separate collective action lawsuits against Camin Cargo Control, Inc. Between the three cases, 112 employees alleged Camin failed to properly pay them overtime wages in violation of the FLSA. Five of those employees also claimed the company retaliated against them in violation of the FLSA.

Last year, the parties agreed to settle the case for $3.9 million dollars, or an average of nearly $35,000 per plaintiff. As is typical in employment law cases, the Settlement Agreement included a confidentiality provision that required the parties to keep the terms of the settlement private. But since the FLSA required a judge to approve the settlement, the parties had to submit the Settlement Agreement to the Court for its approval. As a result, the employer filed a motion requesting permission to file the Settlement Agreement under seal.

But Judge Linares denied the defendant's motion to file the Settlement Agreement under seal. He explained that settlements under the FLSA are different from most other settlements. First, the public has an interest in seeing the terms of the settlement agreement so they can understand the reasons why the judge approved or rejected it. Second, the FLSA does not merely protect the rights of the individuals who bring claims under it. It also protects the separate public interest in "assuring that employees wages are fair and thus do not endanger 'the national health and well-being.'" As a result, he ruled there is a strong presumption that settlement agreements in FLSA cases should be publically available. He concluded that Camin failed to sufficiently rebut this presumption, and therefore denied its motion to file the settlement agreement under seal. You can view the Settlement Agreement here.

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