Articles Posted in Employment Contracts

Earlier this year, the New Jersey Supreme Court recognized that an employee who quits a job to accept another job offer, only to have the new employer withdraw its offer, may be able to recover “reliance damages.”  In other words, he might be able to recover damages based on the salary and benefits he gave up at his previous job.

Jed Goldfarb is an investment advisor.  From 2009 to 2013, he worked as a research analyst with Monness, Crespi, Hardt & Co., Inc.  During that period, he was paid entirely based on commissions, and earned between $308,000 and $466,000 per year.

Legal claim based on rescinded job offerIn March 2013, Mr. Goldfarb received an oral job offer from David Solimine to manage Mr. Solimine’s family’s substantial investment portfolio.  According to Mr. Goldfarb, the offer included a base salary of $250,000 to $275,000, plus commissions.  Mr. Goldfarb accepted Mr. Solimine’s offer, and quit his job with Monness, Crespi, Hardt & Co. so he could work for him.

New Jersey’s Appellate Division has recognized that, although a client has the absolute right to fire its in-house counsel, the lawyer is entitled to damages if the employer fired him without cause, in breach of an employment contract.

Lawyer signing employment agreementKirk Nelson worked as in-house counsel for the Elizabeth Board of Education.  He had a three-year employment agreement to server as board counsel.  Pursuant to the contract, Mr. Nelson was entitled to a salary of $175,000 per year, with two-and-a-half percent annual increases.

Under his contract, the Board could not fire Mr. Nelson during the three-year term without cause.  It defined cause as:

As I have said before, it is a widely view that individuals are much better off having their employment law disputes resolved in court rather than in arbitration.  Fortunately, a recent decision by the New Jersey Appellate Division helps make it more difficult for employers to force employment law cases into arbitration.

Eleison Pharmaceuticals, LLC hired Forrest Anthony as its Vice President and Chief Medical Officer.  They entered into a three year employment contract, pursuant to which Mr. Anthony would receive a $250,000 annual base salary plus bonuses.  The contract requires the parties to use a “phased dispute resolution process” for any disputes arising out of the agreement.  The final step of the dispute resolution process is binding arbitration.

Employment contact contains arbitration clauseMr. Anthony eventually filed a lawsuit against Eleison in which he alleged that the company owes him over $263,000 in unpaid salary.  Among his claims, he asserted that the company violated the New Jersey Wage Payment Act because it (1) did not pay him at least once per month; (2) did not pay him at least minimum wage; (3) did not pay him time-and-a-half when he worked more than 40 hours per week; and (4) did not pay him all wages he was owed when his employment relationship terminated.  In addition, he alleged the company breached his employment contract by failing to pay his full salary.

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.

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.

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.

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.

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.

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.

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.