New Jersey Employment Lawyer Blog

Articles Posted in Employment Contracts

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In an important employment law decision, on June 8, 2011, New Jersey’s Appellate Division ruled that an employee can enforce her employer’s promise that she would have a job when she returned from her maternity leave. The Court reached that conclusion even though the company, Telcordia Technologies, Inc., included a clear disclaimer in both its Code of Business Ethics and the employee’s job application which stated that she is an employee-at-will who can be fired “at any time, with or without grounds, just cause or reason and without giving prior notice.”

In Lapidoth v. Telcordia Technologies, Inc., employee Sara Lapidoth asked her employer for a six-month maternity leave from her position as a manager on a product called ARIS, for the birth of her tenth child. The letter Telcordia sent her granting her leave also guaranteed that the company would reinstate her to the same job or a comparable one if she returned to work within 12 months. Ms. Lapidoth later asked Telcordia to extend her leave by 6 months, for a total of a one-year maternity leave. Telcordia granted her request through another letter that promised to reinstate her at the end of her leave.

Pregnancy Discrimination.jpgHowever, before Ms. Lapidoth was ready to return from her maternity leave, Telcordia decided to eliminate one of its two ARIS manager positions. The company decided to lay off Ms. Lapidoth because the only other ARIS manager had slightly better performance ratings. Since the company did not have any appropriate job openings, it fired Ms. Lapidoth.

The Appellate Division ruled that Ms. Lapidoth’s maternity leave was not protected by the Family and Medical Leave Act (FMLA) or the New Jersey Family Leave Act (NJFLA) because she took off more than 12 weeks. Both the FMLA and the NJFLA require employers to give qualified employees up to 12 weeks off for the birth of a child.

However, the Court ruled that the letters Telcordia sent to Ms. Lapidoth could be enforceable employment contracts that guaranteed her a job when she was ready to return from her maternity leave. It found that, even though the company’s Code of Business Ethics and Ms. Lapidoth’s employment application said she was an employee-at-will, and indicated that nothing else could create any contractual rights between her and the company, the letters granting her maternity leave seemed to contradict those statements. The Court also stated that, although the letters said the company did not have to reinstate Ms. Lapidoth if it had to eliminate her job, that was not necessarily a defense because the company decided it had to eliminate one of two ARIS manager positions, but not necessarily Ms. Lapidoth’s position. The Court also noted that Telcordia reinstated Ms. Lapidoth after each of her nine previous maternity leaves. Based on the circumstances, the Appellate Division concluded that a jury could find the letters guaranteeing Ms. Ladipodth a job at the end of her maternity leave created an enforceable employment contract.

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Many companies require employees to sign arbitration agreements as a condition of getting hired or keeping their jobs. Arbitration agreements are often included in employment contracts, but they also can be in separate agreements. Arbitration is when a case is decided by one or more professional arbitrators, rather than by a judge and jury. Arbitration is often referred to as “binding arbitration” because there is a very limited right to appeal from an arbitrator’s decision, meaning that normally the arbitrator’s decision is final. While arbitration certainly is not the end of the world, for a variety of reasons most employment lawyers in New Jersey and New York who represent employees (myself included) would much prefer a jury trial. As a result, it is important to understand whether your arbitration agreement is enforceable.

To determine whether an arbitration agreement is enforceable under New Jersey law, the first question is whether you entered into the agreement “knowingly” and “voluntarily.” Unfortunately, those terms are not necessarily interpreted the way you might think. Rather, it boils down to whether you understood or should have understood that you were waiving your right to a jury trial. It does not necessarily mean you actually read or understood the rights you were signing away.

Sign Contract.jpg There are many other factors judges consider when determining whether an arbitration agreement is enforceable. Usually, the most important factor is how clearly the agreement states the employee is giving up his right to a jury trial. But other factors can include the employee’s level of education and business experience, how much time the employee had to review the arbitration agreement before he signed it, how much input (if any) the employee had in negotiating the terms of the arbitration agreement, whether the employee was represented by a lawyer before he signed the arbitration agreement, and whether the employee received something extra in exchange for signing the arbitration agreement.

Even if an arbitration agreement appears to be enforceable, an employee might have a legal defense that would prevent the employer from enforcing it and sending the case to arbitration. For example, an arbitration agreement is not enforceable if the employee can prove it was the result of fraud, or if the employer waived its right to enforce the agreement. Another more complicated defense to an arbitration agreement is when the agreement is what lawyers call an “unconscionable contract of adhesion,” which basically means it is extremely favorable to one party (the employer), the other party (the employee) had little or no ability to negotiate its terms, and it would be extremely unfair for a court to enforce it.

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The New Jersey Law Against Discrimination (LAD) prohibits employers from discriminating against employees on the basis of age. Among other things, it prohibits employers from firing, refusing to hire or requiring an employee to retire because of their age.

However, the LAD expressly does not prohibit employers from refusing to hire or promote a person over 70 years old. As a result, someone who is not hired or promoted because they are over seventy years old does not have an age discrimination claim under the LAD.

On April 23, 2009, in Nini v. Mercer County Community College, the New Jersey Appellate Division ruled that this over-seventy exception does not apply to a company’s failure to renew an employment contract. In other words, a company violates the LAD if it decides not to renew an employment contract of an individual who is over 70 years old based on the employee’s age.

The case involves Rose Nini, who worked as an executive assistant for Mercer County Community College (MCCC) from 1979 to June 30, 2005. She worked pursuant to a series of renewable employment contracts. In June 2005, MCCC chose not to renew her contract for an additional three years term. At the time, Ms. Nini was 73 years old.

According to Ms. Nini, she had substantial evidence of age discrimination. For example, during the nearly 25 years before MCCC told her it might not renew her contract, she never received a poor performance review. Her supervisor then made it clear that he thought she should not be working at her age, that other employees her age were considering retiring, and that he thought she should retire too. Several MCCC department heads also discussed “age and incompetence,” “dead wood,” and made jokes about getting rid of the “oldest employees.” Ms. Nini also heard that MCCC’s Human Relations Director said the college needed to “get rid of the old-timers” and “bring in new blood.”

In analyzing the LAD’s exception regarding the right not to hire or promote an employee over seventy years old, the Appellate Division stated that the nonrenewal of a contract is the equivalent of a termination, rather than a refusal to hire. Previous New Jersey cases have recognized there is little or no difference between failing to extend or renew an employment contract and a decision to fire an employee. Thus, the Court ruled that the over-seventy exception does not apply to a decision not to renew an employment contract, meaning it violates the LAD if an employer chooses not to renew the contract of an employee because she is over 70 years old. Accordingly, the Court sent the case back to the lower Court so Ms. Nini could further pursue her age discrimination case.

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In the United States, the vast majority of employees are employees at-will, meaning they can be fired for almost any reason, as long as the decision is not the result of unlawful discrimination, retaliation, a breach of an employment contract, or some other form of wrongful discharge. However, certain employees of public schools eventually gain much greater protection — the protection of tenure laws.

When most people think about tenure laws, they think of school teachers. In many states, including both New York and New Jersey, teachers attain tenure after they teach in the public school system for more than three years.

But at least under New Jersey law, in addition to teachers, secretarial and clerical employees working for public schools are eligible to attain tenure. The applicable tenure statute states that “[a]ny person holding any secretarial or clerical position or employment under a board of education of any school district” shall attain tenure after “a period of employment of three consecutive calendar years.”

Once an employee attains tenure, the board of education cannot fire him or her unless he or she engages in “neglect, misbehavior or other offense.” Moreover, a tenured employee can only be fired for “inefficiency, incapacity, unbecoming conduct, or other just cause, and then only after a hearing . . . after a written charge or charges.”

My law firm currently represents an individual, Bernard Sharkey, who was fired by the Washington Township Board of Education after he worked for it for more than three years. Mr. Sharkey sought to enforce his rights under the tenure laws.

Although Mr. Sharkey’s official job title was “financial officer,” he basically functioned as a bookkeeper. After an administrative hearing, the New Jersey Office of Administrative Law (OAL) issued an opinion concluding Mr. Sharkey’s job was tenure eligible because his job was clerical in nature. In doing so, the OAL adopted the definition of clerical from Webster’s Dictionary: “one employed to keep records or accounts or to perform general office work.”

The New Jersey Department of Education subsequently affirmed the OAL’s finding that Mr. Sharkey’s position was tenure eligible, but that he had attained tenure, finding he was, in fact, employed for more than three years. Accordingly, the Commissioner of Education ordered Washington Township to reinstate him.

In reaching its conclusion, the OAL relied on a previous decision of the New Jersey Appellate Division, Barnes v. Board of Education of Jersey City, 85 N.J. Super. 42, 45 (App. Div. 1964). Barnesrecognizes the term “clerical position,” as used in the tenure statute, must be given a broad interpretation because tenure statutes are intended to secure better public service by providing job security to covered public employees.

Several other administrative cases which follow Barnes use similar broad definitions of the term “clerical position.” For example, one such decision recognizes that two appropriate definitions are “an official responsible for correspondence, records, and accounts and vested with specified powers or authority” and “one employed to keep records or accounts or to perform general office work.” Another administrative opinion relied on two other similar dictionary definitions of the term clerk: “a person employed, as in an office, to keep records, accounts, files, handle correspondence, or the like,” and “a person who works in an office performing such tasks as keeping records and files.” In Sharkey, the OAL adopted the second of those two definitions.

The protection the tenure law provides to clerical employees in public schools is very important. It provides job security to tenured employees, which is a particularly valuable employment law right at any time, but even more so in our current economic climate. In doing so, it encourages well qualified individuals who might otherwise seek higher paying jobs in the private sector to work for the public schools.

Washington Township has appealed the Commissioner of Education’s decision in Sharkey.

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Imagine a company’s Vice President offered you a great new job. Better yet, he or she offered you a guaranteed written one year employment contract that provides a generous salary and benefits. You signed the contract and started the job, only to be told by someone in the human resources department that the Vice President who hired you did not have the authority to offer you an employment contract, the company has hired someone else for your job, and you are fired. Do you have a legal claim for the company breaching your employment contract?

The answer is not so simple. Generally, the law only holds a company responsible for contracts which are made by someone who actually has the authority to enter into that type of contract on the company’s behalf. For example, if an employee has the authority to hire employees, then the company ordinarily must honor the employment contacts he or she enters into on the company’s behalf. However, if an employee tries to enter into an agreement on behalf of the company without having the authority to do, then the company is generally not bound by that agreement.

But what about when an employee who does not actually have the authority to hire, but reasonably appears to have that authority? The law in many states, including New York and New Jersey, recognizes that companies sometimes should be bound when they allow people to reasonably believe that a corporation’s employee has more authority than he or she actually has. Under the doctrine of “apparent authority,” a company potentially can be held legally responsible when it allows others to reasonably believe that someone else had the authority to act on the company’s behalf. The law recognizes that often when a company’s representative has the apparent authority to act on the company’s behalf, the company should be legally bound by the representative’s actions. Accordingly, since you reasonably believed the Vice President had the authority to hire you, at least in some states you would at least have a good argument to enforce your employment contract based on the Vice President’s apparent authority to hire you.

It is important to note that the applicability of the doctrine of apparent authority is very fact specific, and that the law varies from state to state and from case to case. If you believe your employment law rights may have been violated, you should contact an experienced who can evaluate your case and help you to enforce your legal rights.

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