New Jersey Employment Lawyer Blog

New Jersey's Appellate Division recently ruled that when a company does not follow through with the plan it used to justify firing an employee, such as its plan for a reorganization or reduction in force, that failure can be enough for a jury to conclude that the decision to fire the employee was discriminatory.

In Abraham v. American International Group, Inc., Lisbi Abraham sued American International Group (AIG) claiming the company fired him because of his race and national origin, in violation of the New Jersey Law Against Discrimination (LAD). Mr. Abraham is a United States citizen of Indian descent. His was AIG's Chief Technology Officer (CTO) for the company's Domestic Brokerage and Information Services Groups. The LAD prohibits companies from firing employees based on their race or national origin.

In October 2005, AIG issued a report which concluded that it should eliminate 13 of its 20 CTO positions. In May 2006, AIG fired Mr. Abraham. AIG claimed it fired him because it was restructuring the Information Services Group to eliminate duplication and redundancy of job functions.

The Appellate Division explained that one way a plaintiff can prove discrimination is by offering evidence that discredits the employer's explanation for its actions. It ruled that Mr. Abraham had evidence to discredit AIG's claim that it fired him as part of a job restructuring. In particular, although several other people temporarily took over Mr. Abraham's job duties after he was fired, none of his functions were permanently transferred to other employees. Since there is evidence that Mr. Abraham's job never was merged into another job, as AIG claimed it intended to do when it justified firing Mr. Abraham, the Appellate Division ruled that a jury could conclude that AIG fired him because of his race or national origin.

The Appellate Division was careful to recognize that courts should not act as "super-personnel departments," or second-guess employment decisions such as job restructuring. However, it also recognized that companies can violate the LAD in many "subtle and nuanced ways," that there is rarely "smoking gun" evidence to prove discrimination, and that often there are not even any overt acts of discrimination. The court concluded that, after a trial, a jury could find that AIG discriminated against Mr. Abraham because of his race or national origin, or it could find that AIG's decision to fire him was legitimate. It therefore sent his case back for a trial.

Continue reading "Employer's Failure to Follow Job Restructuring Plan Could Prove Discrimination" »

Often, companies offer money or other benefits to employees who they have laid off or fired, as part of a severance agreement or separation package. Most severance agreements require you to waive your employment law rights before you can receive those benefits. In a recent case, Gregory v. Derry Township School District, the Court of Appeals for the Third Circuit ruled that an employee waived her right to bring a discrimination claim against her employer because she signed a Separation Agreement and General Release, even though she only had 15 minutes to review it before she signed it.

The Third Circuit is the federal appellate court that handles appeals from the District of New Jersey. It ruled that when deciding whether an employee had waived his legal rights, a Court should look at the totality of the circumstances including:

1. How clear and specific the language of the release is;
   
2. The employee's education and business experience;
   
3. How much time the employee had to consider the release before signing it;
   
4. Whether the employee knew or should have known his legal rights when he signed the release;
   
5. Whether the employee was encouraged to or actually received advice from a lawyer;
   
6. Whether the employee had an opportunity to negotiate the terms of the separation agreement; and
   
7. Whether the employee received any additional benefits for signing the release.

Applying those factors, the court found that public school teacher Rhauni Gregory could not bring a race discrimination claim against her former employer because the Separation Agreement and General Release she signed included a waiver of all claims arising out of her employment. Ms. Gregory claimed she was forced to resign from her job after her supervisor gave her unfavorable performance evaluations and placed her on an oppressive "intensive assistance track" because she is African-American. However, the Third Circuit found Ms. Gregory had waived the right to bring her national origin discrimination claim because she signed a valid release. It found that the release Ms. Gregory signed was valid even though she signed it within 15 minutes after it was provided to her.

In reaching that conclusion, the court considered the fact that Ms. Gregory's union representative had negotiated the terms of the resignation with the school district. It also considered the fact that, under the separation agreement Ms. Gregory is entitled to receive medical benefits for herself and her family through the end of the year, and a positive job reference letter. She would not have been entitled to either of those benefits if she had not signed the separation agreement.

The Third Circuit's opinion in Gregory is unpublished, meaning it is not a binding legal precedent. However, it is an excellent example of why it can be critical to have an experienced employment lawyer review your severance agreement before you sign it. If you have been offered a severance package from your employer in New Jersey or New York, you should consider meeting with an employment attorney before you sign away important employment law rights.