New Jersey Employment Lawyer Blog

Third Circuit Reverses Decision Preventing Class Action Arbitration

February 24, 2011 | by Jonathan I. Nirenberg

On February 9, 2011, the United States Court of Appeals for the Third Circuit ruled that an arbitrator, rather than a judge, must decide whether an arbitration agreement allows the parties to have a class action arbitration. As a result, it reversed the District of New Jersey’s decision which had ruled that the case must proceed to arbitration as individual claims, rather than as a class action.

I represent the plaintiffs in the case, Jose Ivan Vilches, Francis Sheehan, Jr., and Jack Costeria. They each worked for the Travelers Companies, Inc., and related companies as appraisers in New Jersey. They filed a lawsuit on behalf of themselves and other appraisers who worked for Travelers, seeking damages for unpaid overtime pay under the Fair Labor Standards Act (FLSA) and the New Jersey Wage & Hour Law (NJWHL).

Gavel On Lawbook.jpg When they began working for Travelers, Mr. Vilches, Mr. Sheehan and Mr. Costeria each signed agreements which require them to pursue their legal claims against Travelers through arbitration. Those agreements do not say, one way or the other, whether they can bring a class action in arbitration. Travelers later modified its arbitration policy to say that employees cannot bring class action cases. However, Mr. Vilches, Mr. Sheehan and Mr. Costeria never agreed to that new policy.

Last year, the District of New Jersey granted Travelers’ motion to compel arbitration. The court also ruled that the plaintiffs were bound by the arbitration policy which prohibited them from bringing a class action.

But on appeal, in an unpublished opinion in Vilches v. Travelers Companies, Inc., the Third Circuit Court of Appeals ruled that the District Court should not have decided whether the arbitration agreement the plaintiffs agreed prohibited them from bringing a class action wage and hour case. Rather, since the question involves interpreting the arbitration agreement they signed when they were hired to determine whether that agreement permits class action arbitration, the Third Circuit concluded that the arbitrator rather than a judge must answer that question. As a result, the Third Circuit reversed the lower court’s ruling, and referred the case to arbitration to decide whether the case can proceed as a class action.

Jury To Decide If Employer Must Pay Punitive Damages in Sexual Harassment Case

February 16, 2011 | by Jonathan I. Nirenberg

On February 8, 2011, New Jersey’s Appellate Division ruled that an employee is entitled have a jury decide whether to award punitive damages against her former employer. Prior to the appeal, a jury had awarded the plaintiff, Judith Rusak, $80,108.80 in wages she lost because she experienced sexual harassment and retaliation at work. However, the trial judge did not let the jury decide whether to award punitive damages against Ms. Rusak’s employer, Ryan Automotive.

Punitive damages are intended to punish a defendant for violating the law. As the Appellate Division explained, punitive damages are available against an employer under the New Jersey Law Against Discrimination (LAD) only if the company’s upper management either actually participated in or was willfully indifferent to the discrimination, harassment, or retaliation, and the conduct was “especially egregious.” An employer’s actions are “especially egregious” if it engaged in an evil-minded act with a willful and wanton disregard for the employee’s legal rights.

Applying that law, the court in Rusak v. Ryan Automotive, LLC concluded that a jury could find the sexual harassment Ms. Rusak experienced was especially egregious. Specifically, the court ruled that a jury should decide whether Ms. Rusak is entitled to punitive damages based on sexual harassment and retaliation that included supervisors telling Ms. Rusak sexually explicit stories about executives having sex with other executives’ wives; leaving graphic pictures of female genitalia on her desk and sending copies of them to her by e-mail; sending pornography to her at work; calling her a “dumb . . . stupid blonde;” insulting and making crude comments about her; yelling and screaming at her; telling her not to come back to work; taking away her telephone and computer; removing her name from a list of employees eligible for annual awards; telling her she was going to be fired; and other similar abusive behavior.

Minor League Yankees Play Hardball with Mascot’s Overtime Pay

February 10, 2011 | by Jonathan I. Nirenberg

Last Wednesday, a mascot who worked for the Scranton/Wilkes-Barre Yankees minor league team filed a federal lawsuit claiming the team violated the Fair Labor Standards Act (“FLSA”) and state law because it failed to pay him for his overtime hours. Specifically, Brian Bonnor’s lawsuit alleges the team improperly designated him as a “manager” to avoid paying him time-and-a-half when he worked more than 40 hours in a week.

Specifically, Mr. Bonnor, who was laid off by the New York Yankees’ AAA affiliate in January, alleges he was paid a salary of $22,000 per year to dress up as the team’s mascot, Champ, and make appearances at games and other events. However, his lawsuit claims he had no supervisory or managerial job duties. He also claims he sometimes worked 80-hour weeks, but the team never paid him for his overtime. The team denies it violated the law.

The FLSA is a federal wage and hour law. It requires employers to pay most employees time-and-a-half for their overtime hours unless they fall into specifically defined categories, including certain “executive,” “administrative,” and “professional” employees. Companies that violate the FLSA can be required to pay the employee not only for their unpaid overtime, but if the violation is “willful” they also can be required to pay double damages (called “liquidated damages”). An employee who wins a case under the FLSA also can recover his attorney’s fees and litigation costs.

How Binding is My Binding Arbitration Agreement?

February 4, 2011 | by Jonathan I. Nirenberg

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.

Jury Must Decide Whether Anti-Harassment Policy Protects Employer From Sexual Harassment Claim

January 28, 2011 | by Jonathan I. Nirenberg

The Sexual Harassment
Last week, the New Jersey Appellate Division clarified what a company must prove before its anti-harassment policy can protect it from a sexual harassment claim. The case, Allen v. Adecco, involves Jessica Allen, an employee who worked for the University of Medicine & Dentistry of New Jersey (UMDNJ) through an employment firm, Adecco. According to Ms. Allen, her supervisor, Jacques Coles, sexually harassed her. For example, she says Mr. Coles made sexual comments to her, commented about her clothes, asked about her dates, told her he wanted to date her, described her lips and breasts, described how he thought she would act during a sexual encounter, described a sexual fantasy involving her, used graphic and vulgar language, touched her back, thighs and buttocks, pulled her undergarment, brushed against her, called her “sexy,” and referred to himself as her “future husband.”

Sexual Harassment 1.jpg Ms. Allen’s Objections to the Harassment
Ms. Allen also says she objected to Mr. Coles’ harassment. In response, he claimed she wanted him, and liked what he was doing. When Ms. Allen told Mr. Coles she was going to report the harassment, he told her that nobody would believe her and she would lose her job if she reported him. Based on those threats, Ms. Allen did not report Mr. Coles’ sexual harassment for more than a month.

Within hours after Ms. Allan finally filed a complaint about the sexual harassment, UMDNJ transferred Mr. Coles to another position in the same building. However, Mr. Coles continued to harass her and began to retaliate. UMDNJ eventually transferred Ms. Allen to a new position in another building, and the harassment stopped.

UMDNJ’s Anti-Harassment Policy
The trial court dismissed Ms. Allen’s case, finding that because UMDNJ had an anti-harassment policy and stopped the harassment soon after Ms. Allen complained, the company was not legally responsible. However, the New Jersey Appellate Division disagreed, and instead ruled that a jury should decide whether UMDNJ’s anti-harassment policy was “effective” and “active.” Under New Jersey law, only effective and active anti-harassment policies provides a company with a complete defense to sexual harassment committed by one of its supervisors.

According to the Appellate Division’s decision, an anti-harassment is “effective” and “active” only if it:

Is published or provided to employees;
Requires anti-harassment training;
Is completely committed to intolerance of harassment;
Is effective in prohibiting harassment;
Includes formal and informal complaint structures;
Has an effective and practical grievance process;
Includes ways for the employer to confirm the policy and complaint procedures are working properly; and
Workers, supervisors, and managers are trained how to recognize and prevent unlawful harassment.

The Appellate Division concluded that a jury needed to decide whether UMDNJ’s anti-harassment policy met these requirements. As a result, it sent the case back for a trial at which a jury can decide whether UMDNJ is liable for Mr. Coles sexually harassing Ms. Allen.

New Jersey Court Reinstates Employee’s Failure to Accommodate Religious Belief Claim

January 26, 2011 | by Jonathan I. Nirenberg

The New Jersey Law Against Discrimination requires employers to provide reasonable accommodations to allow employees to observe their sincerely held religious practices and observances, unless the company cannot accommodate the employee without causing an undue hardship to its business. Last month, New Jersey’s Appellate Division reversed a trial court’s decision which had dismissed a religious discrimination lawsuit in which the employee, Gabriel Sepulveda, claimed his employer failed to reasonably accommodate his belief that Sunday should be a day of rest.

Mr. Sepulveda is a born-again Christian. When Borne Holding Co. suddenly required its employees to work on Sundays, Mr. Sepulveda refused to do so because working on Sunday conflicts with his religious beliefs. Borne fired him as a result. It did so without ever engaging in the required “interactive process,” meaning no one at the company spoke to Mr. Sepulveda to determine whether there was another way to accommodate his religious belief, such as by having him work overtime on weekdays or Saturdays instead of Sundays.

Prior to the appeal, the trial court dismissed Mr. Sepulveda’s case because it found his religious belief was not “sincerely held.” It relied on the fact that after Borne fired him, Mr. Sepulveda worked at two other companies where he worked on Sunday evenings. However, Mr. Sepulveda explained that since his Sabbath ended at sundown, those jobs did not conflict with his religious beliefs. He also claimed that he had to accept those jobs because he was desperate to find work.

In an unpublished opinion, Sepulveda v. Borne Holding Co., Inc., the Appellate Division found the trial court should not have dismissed Mr. Sepulveda’s case. Rather, the Court concluded that a jury should decide whether Mr. Sepulveda had a “sincere” religious belief that prohibited him from working on Sundays. Accordingly, it sent Mr. Sepulveda’s case back to the trial court to give him a chance to try to prove his case.

New Rights For New York Hotel and Restaurant Employees

January 12, 2011 | by Jonathan I. Nirenberg

Starting on January 1, 2011, New York employees in the Hotel and Restaurant Industries have new rights and legal protections under New York’s Hospitality Wage Order. While there are numerous changes to the law, the following describes some of the more noteworthy changes.

Changes to Minimum Wage
The new law makes it clear that tipped employees must receive at least $7.25 per hour between salary and tips, and reduces the maximum tip credit for food service workers from $2.60 per hour to $2.25 per hour. It also sets new minimum base wages (before tips) for service employees and chambermaids in resort hotels.

Employees Must Be Paid By the Hour
Under the Wage Order, employers in the Hotel and Restaurant Industries now are required to pay non-exempt employees by the hour, rather than based on salaries, weekly rates, day rates, or piece rates. This requirement does not apply to commissioned salespeople.

Stricter Regulations of Tips
Employers and employees in the Hotel and Restaurant Industries are allowed to share and pool tips, meaning combine all of the tips received before redistributing them to employees. However, employers must give employees advance written notice of their tip sharing and tip pooling policies. Employers who use tip pooling or sharing also must keep records of all of the tips they receive, and all of the tips they distribute to their employees. In addition, employers also must treat any special fee for a banquet, special function or package deal as a tip unless they clearly inform customers that the fee is not a gratuity and will not be distributed to employees.

New Requirements For Employee Meal Breaks
When an employee in the Hotel and Restaurant Industries has a work shift that is long enough that he or she is legally entitled to a meal break, the employer must either allow employees to bring their own food, or offer employees a meal at a cost of no more than $2.50, which is the legally required meal credit. Under a separate law, New York State Labor Law Section 162, most employees in New York who work more than a six hour shift that starts before 11 am and ends after 2 pm are entitled to take at least a half hour lunch period between 11 am and 2 pm.

Effective Date
Although the law went into effect on January 1, 2011, employers have until February 28 to make changes to their payroll and bookkeeping systems. However, by the first regular payday after March 1, 2011 employers must pay employees based on the new rules retroactively to January 1, 2011.

New York Passes Wage Theft Protection Act

December 30, 2010 | by Jonathan I. Nirenberg

On December 13, 2010, New York State Governor David A. Paterson signed the Wage Theft Prevention Act (“WTPA”) into law. The WTPA is intended to help protect employees working in New York against violations of their wage and hour law rights.

The WTPA requires employers to provide information to employees about how they are being paid. For example, employers must notify employees, in writing, of:

Their rate and basis for their pay, such as whether they are paid by the hour, shift, day, week, salary, piece, commission, or otherwise;

“Discovery Rule” Can Extend Statute of Limitations Under New Jersey Law Against Discrimination

December 15, 2010 | by Jonathan I. Nirenberg

The statute of limitations under the New Jersey Law Against Discrimination (“LAD”) is two years. Ordinarily, that means you must file your lawsuit within two years after (1) a “discrete act” of discrimination such as being fired, demoted, or suspended, or (2) the last act of a pattern of harassment. But on December 10, 2010, the New Jersey Supreme Court ruled that an exception called the “discovery rule” can extend the LAD’s statute of limitations. The discovery rule applies when an employee is unaware that he suffered an injury, or unaware that someone else is at fault for causing his injury, until after the statute of limitations has expired.

The case, Henry v. New Jersey Department of Human Services, involves an African American employee, Lula Henry, who was hired for an entry-level nursing position with Trenton State Psychiatric Hospital in April 2004. Ms. Henry claims Trenton State did not place her in a more senior position because of her race, in violation of the LAD.

According to Ms. Henry, she first suspected she was the victim of race discrimination in 2004, but did not have any concrete evidence at the time. It was not until 2006 that she learned that (1) another black nurse had filed a race discrimination lawsuit against Trenton State, and (2) Trenton State had hired a Caucasian nurse with the same credentials as her for higher level job classification, which was inconsistent with Trenton State’s explanation for why it did not place her in a higher level position.

In July 2007, Ms. Henry filed a race discrimination lawsuit against the New Jersey Department of Human Services, its Acting Commissioner, Trenton State Psychiatric Hospital, and Trenton State’s Chief Executive Officer. The trial court dismissed her case based on the statute of limitations since she filed her case more than two years after the alleged discriminatory actions. On appeal, the New Jersey Appellate Division affirmed the dismissal of her case.

But the New Jersey Supreme Court disagreed. It found the fact that Trenton State gave Ms. Henry a non-discriminatory explanation for why it placed her in an entry-level position may have led her not to pursue the issue until she learned new information that caused her to believe Trenton State’s explanation was false. It found the circumstances could be enough that the LAD’s two year statute of limitations would not begin until Ms. Henry learned the new information that supported her suspicion that Trenton State had discriminated against her because of her race. As a result, it sent her case back to the trial court to conduct a hearing. At that hearing, Ms. Henry will try to prove she did not have a “reasonable suspicion” of race discrimination, and that a reasonable person in her position could not have discovered a basis for a discrimination claim through reasonable diligence. If she is able to prove this, then she will be able to proceed with her discrimination case even though she filed it more than two years after the alleged discrimination occurred.

Can You Be Fired For Giving Confidential Company Documents to Your Employment Lawyer?

December 10, 2010 | by Jonathan I. Nirenberg

As an employment lawyer, I am often asked whether an employee can take copies of documents from their job to help prove discrimination or retaliation. There is no simple answer to that question. Rather, as the New Jersey Supreme Court recognized last week in Quinlan v. Curtiss-Wright Corporation, the answer involves balancing the employee’s right to be free from discrimination and the employer’s obligation to protect confidential information.

In Quinlan, the New Jersey Supreme Court established 7 factors courts must consider when deciding whether an employee can sue for retaliation if he is fired for giving copies of confidential company documents to his employment lawyer. Those factors are:

1. How did the employee get the document? Documents obtained in the ordinary course of an employee’s job are more likely to be protected than documents obtained by rummaging through files or snooping in someone else’s office.