Articles Posted in Employment Contracts

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Earlier this week, the New Jersey Supreme Court ruled that private parties cannot agree to shorten the two year statute of limitations that applies to the New Jersey Law Against Discrimination (“LAD”).

Employment Application Cannot Waive Statute of LimitationsThe case was filed by Sergio Rodriguez.  When Mr. Rodriguez applied for a job as a Helper for Raymours Furniture Company (better known as Raymour & Flanigan), he signed a job application.  The application contained a provision requiring him to bring any legal claims relating to his employment within 6 months after the action that becomes the subject of the lawsuit, and waiving any statute of limitations to the contrary.

Ramours hired Mr. Rodriguez.  In April 2010, he injured his knee at work.  He filed a workers’ compensation claim and received benefits.  After undergoing knee surgery and physical therapy, he was cleared to return to work starting on September 14, 2010.  Mr. Rodriguez initially was on light duty for two weeks.  Raymours fired him on October 1, 2010, two days after he returned to full duty work.

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A New Jersey court recently ruled that a company can be liable for breach of contract, among other claims, when it withdraws a job offer after an employee resigns from his current job based on the new job.

The job offer was made by Onward Search, a staffing company, to an individual named John Kenny. In August 2014, Onward contacted Mr. Kenny to see if he was interested in freelance work for a company called Tandem Seven. Mr. Kenny, a “user experience architect,” indicated he was interested in working on an eight to twelve month project for Tandem at an hourly rate of at least $85 per hour. He subsequently had multiple job interviews with Tandem.

On Thursday, September 17, 2014, Justin Court, a representative of Onward Search, asked Mr. Kenny whether he could accept a job offer on Mr. Kenny’s behalf if Tandem made him an offer. Mr. Kenny told Mr. Court he could do so as long as “everything we discussed was still in place.” They confirmed that Mr. Kenny agreed to a rate of $85 per hour and needed to give his current employer two weeks’ notice of his resignation.

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A recent ruling by New Jersey’s Appellate Division makes it clear that, in some circumstances, an employee can enforce an employment contract even if the individual who entered into it on behalf of the company did not have the authority to do so.

The case was filed by four individuals, Arkadiusz Lukaszewski, Dariusz Gocal, Tadeusz Ogrodnik, and Ryszard Klysinski.  They each worked for Jasticon, Inc. as bricklayers.  They claim another employee, Piotr Zablocki, promised them “they would be given long-term employment” with Jasticon for “at least 18 months.”  They also claim Mr. Zablocki assured them they would work on “big projects” in New Jersey and that they “would never run out of work.”

Nonetheless, the company fired them after less than a year.  They subsequently filed a lawsuit in which they asserted numerous claims, including breach of an 18-month employment contract.

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A recent New Jersey Appellate Division ruling provides a good example of how dangerous it can be to compete with your current employer.

B&H Securities, Inc. designs, sells and maintains security monitoring systems. In spring 2007, three of its employees, Michael Poisler, Marc Palladino and Duane Pinkney, decided to start a competing business, Advanced Integration Security. At the time, Mr. Pinkney was B&H’s IT manager, Mr. Poisler was its sales manager, and Mr. Palladino was one of its salesmen.

A “Confidentiality Clause” in B&H’s employee handbook states that after leaving their job, B&H employees cannot contact the company’s customers. When he was hired by B&H, Mr. Pinkney signed a document agreeing to abide by this clause for 48 months after leaving the company. The company did not require Mr. Palladino or Mr. Poisler to sign any such agreement.

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A recent case, Kaplan v. Greenpoint Global, provides a good example of several claims an employee might be able to bring if an employer fails to live up to the promises it made.

On December 1, 2010, Leslie Kaplan began working for Greenpoint Global as its Director of Legal Services. Greenpoint is a company that outsources legal services to businesses, law firms and individuals.

Before accepting the job, Ms. Kaplan told Greenpoint’s Chief Executive Officer, Jacklyn Karceski, that her most recent salary exceeded $200,000 and she was seeking similar compensation from Greenpoint. Ms. Karceski indicated that her goal was realistic. Ms. Kaplan also told the company’s founder, Sanjay Sharma, that her salary needed to “start with a two.” Mr. Sharma responded “No problem.” According to Ms. Kaplan, she relied on these assurances by Greenpoint and declined pursuing an opportunity to return to her former job. Despite its promises, Greenpoint actually paid Ms. Kaplan at the rate of $80,000 per year.

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Earlier this month, in Temple-Inland, Inc. v. Kenneth Dee, New Jersey’s Appellate Division ruled that a company could be liable for failing to inform an employee about a change to its commission plan until after the change went into effect. The case also addresses numerous other issues in a complex dispute between the company and its former employee.

Sales people working on electronic tabletKenneth Dee worked as a salesperson for Temple-Inland, Inc. for fourteen years. Temple-Inland paid Mr. Dee a base salary plus commissions. The company eventually changed how it was calculating commissions. It apparently substantially reduced Mr. Dee’s commissions in comparison to his peers because he had been receiving extraordinarily high commissions from his best customer, Church & Dwight.

Mr. Dee complained about his reduced commissions. According to Mr. Dee, the Regional Vice President of Sales and Marketing indicated the company would address this by performing an audit. Mr. Dee further claims that although the audit revealed he was being underpaid, the company did nothing to remedy the situation.

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New Jersey’s Appellate Division recently ruled that employers can enforce agreements that shorten the statute of limitations for employees to bring claims against them.

Employment ApplicationSergio Rodriguez applied for a job as a helper at Raymour & Flanigan in August 2007. Mr. Rodriguez was born in Argentina and speaks limited English. He filled out a job application, which was in English, with help from a friend. The application included a provision that if Mr. Rodriguez was hired he would have only six months to file a lawsuit after any employment-related claim arose. It also expressly waived any statute of limitations to the contrary, and his right to a jury trial. Mr. Rodriguez signed and submitted the employment application. Raymour & Flanigan hired him the following month.

In 2010 Mr. Rodriguez injured his knee at work. He took a medical leave, had surgery and returned to work on light-duty in September 2010. By September 28, 2010 he was working without restrictions.

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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.

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