New Jersey Employment Lawyer Blog

Backlash Against Non-Disparagement Clauses

June 15, 2016 | by Jonathan I. Nirenberg

It has become extremely common, if not standard practice, for employers to include non-disparagement clauses in settlement agreements and severance packages they offer to their former employees. These provisions prohibit employees from saying anything negative about their former employers. They are extremely broad, since they prohibit true but negative statements and opinions. In addition, they typically prohibit employees from saying anything negative not just about the company itself, but also about its current and previous owners, directors, officers, employees, subsidiaries and parent companies.

The unfortunate reality is that many employees who sign severance agreements either have not read the entire agreement or do not understand or appreciate many of its provisions. Even individuals who realize they are being asked not to say anything negative about their former employers generally have no choice but to agree if they want the severance pay and other benefits that have been offered to them. Of course, for someone who has recently lost his or her job it can be difficult to reject a severance offer over something like a non-disparagement clause. As a result, employees regularly agree not to disparage their former employers.

A recent article in the New York Time, Laid-Off Americans, Required to Zip Lips on Way Out, Grow Bolder, indicates that there is a growing backlash against non-disparagement clauses. For example, it indicates that several prominent Democrat and Republican members of Congress have questioned the widespread use and misuse of non-disparagement agreements.

Supreme Court Clarifies Deadline to File Constructive Discharge Claims

June 8, 2016 | by Jonathan I. Nirenberg

The United States Supreme Court recently ruled that in constructive discharge cases the 45-day deadline for federal employees to contact the United States Equal Employment Opportunity Commission (“EEOC”) begins on the day the employee resigned. A constructive discharge occurs when an employee resigns after the “working conditions become so intolerable that a reasonable person in the employee’s position would have felt compelled to resign.”

Title VII is a federal law that prohibits employers from discriminating based on race, color, religion, sex and national origin. It also prohibits employers from retaliating against employees because they complained about one of those forms of discrimination.

One of the requirements for a federal employee to bring a claim under Title VII is that he has to contact an EEOC counselor within 45 days after the “matter alleged to be discriminatory.” Notably, for employees who work for private companies or the state or local government in New York or New Jersey there is a longer 300 day deadline to file a Title VII claims with the EEOC. Likewise, there is a 2 year statute of limitations to file claims under the New Jersey Law Against Discrimination and a three year statute of limitation under the New York State Human Rights Law.

Employee Can Be Fired For False Affidavit Supporting Discrimination Claim

May 5, 2016 | by Jonathan I. Nirenberg

A recent decision from New Jersey’s Appellate Division recognizes that the anti-retaliation provisions of the Americans with Disabilities Act (“ADA”) and Title VII of the Civil Rights Act of 1964 (“Title VII”) do not protect an employee who submits a false affidavit in support of a coworkers’ discrimination claim.

Ariel Gonzalez, worked as a Detective for the Waterfront Commission of New York Harbor. In June 2012, he signed an affidavit in support of the Commission’s former assistant general counsel, Kimberly Zick, in connection with Ms. Zick’s discrimination lawsuit against the Commission under the ADA and the Rehabilitation Act of 1973. Ms. Zick’s case was dismissed in October 2012 because her allegations did not support her claims.

Shortly after Ms. Zick’s case was dismissed, the Commission began to investigate Det. Gonzalez regarding statements in his affidavit. When the Commission interviewed Det. Gonzalez he again swore under oath that the statements in his affidavit were truthful. The Commission then suspended Det. Gonzalez and brought disciplinary charges against him seeking to terminate his employment.

First Amendment Protects Speech Perceived to be Protected Political Activity

April 28, 2016 | by Jonathan I. Nirenberg

Earlier this week, the United States Supreme Court ruled that the First Amendment prohibits the government from demoting an employee because it incorrectly believed the employee had engaged in Constitutionally-protected political speech.

The case involves Jeffrey Heffernan, a police officer who worked for the City of Paterson, New Jersey. In 2005, Lawrence Spagnola was running for mayor against incumbent Mayor Jose Torres. Mayor Torres had appointed the Patterson Police Chief, James Wittig, tore his position.

At the request of his mother, Mr. Heffernan picked up a large sign supporting Mr. Spagnola for mayor that his mother wanted to put on her front lawn. Other members of the Paterson Police Department saw Mr. Heffernan holding the sign while he was talking to members of Mr. Spagnola’s campaign staff.

Independent Sales Representatives May Be Entitled to Quadruple Damages

April 27, 2016 | by Jonathan I. Nirenberg

A less-known New Jersey statute provides protection to independent commissioned salespeople after their contracts terminate. That law, the New Jersey Sales Representatives’ Rights Act, entitles independent contractors who work as sales representatives to be paid all commissions and any other compensation they earned within 30 days after their contracts terminated or 30 days after their commissions were due, whichever is later. This requirement applies irrespective of the reason why the contract terminated, including if the sales representative resigned, was terminated without cause, or was terminated with cause.

The statute, which originally was passed in 1990, defines a “sales representative” to be “an independent sales company or other person” who is compensated at least in part by commissions. It makes it clear its protection applies only to independent contractors, and does not apply to employees.

The statute further indicates that sales representatives also are entitled to receive commissions on goods that were ordered on or before the last day of the salesperson’s contract, even if the principal (meaning the business or individual who they worked for) did not accept, receive or pay for the goods until after the salesperson’s contract terminated. The principal must pay the salesperson for any such post-termination commissions within 30 days after the payment would have been due under the contract if it had remained in effect.

Are Stock “Clawback” Provisions Unenforceable Penalties?

April 7, 2016 | by Jonathan I. Nirenberg

Many executives and other high-level employees receive stock options, restricted stock units (RSUs) and other forms of deferred compensation as part of their compensation packages. Often, the employers who issue these forms of equity to their employees include non-compete agreements and other restrictive covenants in the stock agreements. These provisions frequently include “clawback” provisions that require the employee to return the value of the equity they received if they violate the terms of one of the restrictive covenants.

However, these provisions may not be enforceable under either New Jersey or New York law. In both states, the law is clear that penalty provisions in contracts are not enforceable. But a contract can contain a liquidated damages provision, meaning an agreement in advance about the amount of damages when the parties expect it will be difficult to prove the actual damages caused by a breach.

As the New Jersey Supreme Court explained in a 1994 case, Wasserman’s Inc. v. Township of Middletown, a liquidated damages provision must be a “reasonable forecast of the provable injury resulting from breach” of contract at the time the contract was written. In other words, the agreed-upon amount of damages has to be a fair estimate of what the actual damages are likely to be. If it is not, then “the clause will be unenforceable as a penalty and the non-breaching party will be limited to conventional damage measures,” meaning it will have to prove its actual damages. While Wasserman’s itself does not involve a clawback provision, in an 2011 unpublished opinion, Schiavi v. AT&T Corp., the New Jersey Appellate Division recognized that the same principles apply to stock clawback clauses.

Elizabeth is Tenth New Jersey Town to Require Paid Family Leave

March 29, 2016 | by Jonathan I. Nirenberg

Earlier this month, the City of Elizabeth became the tenth New Jersey municipality to require employers to provide a minimum amount of paid sick leave time off from work.

Elizabeth, which is in Union County, joins Newark, Montclair, Bloomfield, East Orange and Irvington in Essex County, Jersey City in Hudson County, Passaic and Paterson in Passaic County and Trenton in Mercer County in entitling employees to paid sick leave time off from work.

The Elizabeth ordinance is similar to each of the other 9 ordinances. With some exceptions, they generally require employers with at least 10 employees to provide at least 80 hours of paid sick time per year. In contrast, employers with fewer than 10 employees are only required to provide employees 24 hours of paid sick leave each year.

Court Rejects Testimony of Undisclosed Witnesses in Religious Accommodation Lawsuit

March 16, 2016 | by Jonathan I. Nirenberg

A recent ruling by the United States District Court for the District of New Jersey underscores the importance of disclosing potential witnesses to your opposing party during the discovery process of a lawsuit.

The case was filed by Matthew Webster, an individual whom Dollar General hired to be its store manager in a new location in Sicklerville, New Jersey. Mr. Webster is a Seventh Day Adventist. He asked Dollar General to allow him not to work on Saturday because his religious beliefs prevent him from doing so. The employer denied his request claiming it would have imposed an undue burden on its ability to operate the Sicklerville store. Among other things, Dollar General contends that doing so would leave the store without sufficient and capable leadership on the “busiest sales day” of the week and would require other key personnel to work longer and more frequent shifts.

Ultimately, Dollar General fired Mr. Webster because he would not work on Saturdays. Mr. Webster sued, alleging Dollar General and two of its employees, Bob Miller and Vince Triboletti, denied him a reasonable accommodation for his religious beliefs and otherwise discriminated against him because of his religion in violation of the New Jersey Law Against Discrimination (“LAD”).

Rabner Baumgart Ben-Asher & Nirenberg, P.C.

February 29, 2016 | by Jonathan I. Nirenberg

On behalf of all of my partners, I am pleased to announce that our law firm has changed its name from Rabner Baumgart Ben-Asher & Nirenberg, P.C. to:

Rabner Baumgart Ben-Asher & Nirenberg, P.C.

I am honored that the firm has chosen to include me in its name. We will continue to concentrate in the representation of employees, executives and entrepreneurs in employment law matters.

Hispanic is a “Race” Under Federal Anti-Discrimination Laws

February 23, 2016 | by Jonathan I. Nirenberg

Earlier this month, the United States Court of Appeals for the Second Circuit recently recognized that “Hispanic” is a race for purposes of two federal anti-discrimination laws.

The case involved Police Lieutenant Christopher Barrella, a white Italian-American. Lt. Barrella works for the Village of Freeport, New York. When there was a vacancy for chief of police, Lt. Barrella and 5 other lieutenants took the relevant civil service test. Although Lt. Barrella scored highest on the test, Mayor Andrew Hardwick chose to promote another candidate, Lieutenant Miguel Bermudez.

Lt. Barrella sued Freeport and Mayor Hardwick, claiming they discriminated against him because of his race (non-Hispanic) in violation of the New York State Human Rights Law (“NYSHRL”) and two federal laws, Title VII of the Civil Rights Act of 1964 and 42 U.S.C. § 1981. He claims Mayor Hardwick, who is African American, promoted Lt. Bermudez, who was born in Cuba, because he is Hispanic.