New Jersey Employment Lawyer Blog

New Jersey Court Finds Employer Waived Right to Enforce Arbitration Agreement

March 29, 2012 | by Jonathan I. Nirenberg

Earlier today, New Jersey’s Appellate Division ruled in favor of one of my clients, Karen Cole, holding that her former employer waived its right to enforce her arbitration agreement because it waited too long to raise it as a defense. As a result, her case can proceed to a jury trial instead of having her claims decided in arbitration.

Ms. Cole, a nurse anesthetist, worked at Jersey City Medical Center through her employer, Liberty Anesthesia Associates, LLC. In 2007, Jersey City revoked her hospital privileges. Liberty fired Ms. Cole shortly thereafter. Ms. Cole has evidence that Jersey City’s decision to revoke her privileges, and Liberty’s decision to fire her, were due to the fact that she has a disability, Ehlers Danlos Syndrome, and because she objected to illegal practices at the hospital. Accordingly, she sued Jersey City for disability discrimination in violation of the New Jersey Law Against Discrimination (LAD), and retaliation in violation of New Jersey’s whistleblower law, the Conscientious Employee Protection Act (CEPA). She later named Liberty as a defendant, alleging it discriminated and retaliated against her when it fired her.

Liberty was a defendant in Ms. Cole’s case for 20 months, and actively participated in the litigation during that period. However, it did not raise arbitration as a defense until three days before the trial. Liberty claims it waited so long because Ms. Cole did not have an arbitration agreement with Jersey City, and it believed it made more sense to keep the entire case together in court. However, after Ms. Cole settled her claims against Jersey City a few weeks before the scheduled trial, Liberty decided to enforce the arbitration agreement. Liberty filed its motion to compel arbitration only 3 days before the scheduled trial date.

The trial judge found that Ms. Cole was required to bring her case against Liberty in arbitration, and dismissed her case from court. But the Appellate Division reversed. In Cole v. Jersey City Medical Center, it ruled that Liberty waived its right to enforce Ms. Cole’s arbitration agreement by intentionally waiting until the eve of trial before it raised it as a defense. It concluded that Liberty could have sought to require Ms. Cole’s to arbitrate her claims against it earlier, but chose not to do so for strategic reasons. It also found that Ms. Cole was prejudiced by Liberty’s delay, since she had to spend time preparing for a jury trial, which is much more time consuming than preparing for arbitration. As a result, it ruled that Liberty waived its right to require Ms. Cole to have her case decided in arbitration, and that Ms. Cole is entitled to a jury trial. The Appellate Division’s opinion was approved for publication, meaning it is a binding legal precedent.

FMLA Could Protect Employee Who Took Medical Leave for More Than 12 Weeks

March 14, 2012 | by Jonathan I. Nirenberg

The Family & Medical Leave Act of 1993 (FMLA) is a federal employment law that, among other things, permits covered employees to take up to 12 weeks off per year because of a serious health condition. Employers are required to inform their employees about their rights under the FMLA within 5 days after they request time off for a leave that is covered by the FMLA. For example, an employer must tell an employee that she is guaranteed the right to return to her job if she returns from her medical leave within 12 weeks.

Earlier this year, in Antone v. Nobel Learning Communities, Inc., Judge Joseph E. Irenas of the United States District Court for the District of New Jersey recognized that an employer can violate the FLMA if it fires an employee because she failed to return to work from an FMLA leave within 12 weeks if:

The employer did not tell the employee when her FMLA leave expired, and
The employee would have returned to work within 12 weeks if the employer had provided her the proper information.

The plaintiff in that case, Karen Antone, had numerous health issues including Cellulitis, low cranal spinal fluid, chronic headaches and migraines, and complications from vascular surgery. On May 28, 2009, she requested a leave of absence so she could receive medical treatment. When she filled out an FMLA certification form, Ms. Antone’s physician indicated that she expected to return to work on August 28, 2009. However, August 28, 2009 was 12 weeks and 8 days after Ms. Antone started her FMLA leave.

Nobody at Nobel told Ms. Antone that the FMLA only guaranteed her right to return to her job for 12 weeks, or that she had to return to work by August 20 to be guaranteed her job back under the FMLA. Rather, the company waited until late August, and then fired Ms. Antone because her doctor had not cleared her to return to work by August 20.

Ms. Antone then filed a lawsuit alleging that Nobel had interfered with her rights under the FMLA by failing to reinstate her to her job at the end of her FMLA leave. The company sought to dismiss her case, arguing that Ms. Antone was not protected by the FMLA because she took more than 12 weeks off. But Judge Irenes denied the motion based on the fact that Ms. Antone alleges she would have returned to work by August 20 if she had known that was her deadline, and that the last 8 days of her medical leave were just a precaution. In fact, her doctor indicated that he would have cleared her to return to work on August 20 if he had known she was entitled to take only 12 weeks off.

Novartis Settles Class Action Overtime Lawsuit for $99 Million

March 6, 2012 | by Jonathan I. Nirenberg

Earlier this year, Novartis Pharmaceuticals Corporation agreed to a $99 million settlement of a class action overtime lawsuit brought by its sales representatives. The settlement is still subject to final approval by a judge. A final hearing to approve the settlement is scheduled for May 31, 2012. Novartis, an affiliate of Swiss drug maker Novartis AG, has its headquarters in East Hanover, New Jersey.

The overtime lawsuit against Novartis was filed in 2006 in a federal court in Manhattan. More than 7,000 current and former sales representatives joined the class action. They claim Novartis failed to pay them overtime, in violation of the Fair Labor Standard Act (FLSA). The FLSA is a federal law that requires companies to pay nonexempt employees time-and-a-half when they work more than 40 hours in a week.

Novartis settled the case before the United States Supreme Court could rule whether pharmaceutical companies are required to pay overtime to their salespeople in another similar lawsuit. Specifically, Christopher v. GlaxoSmithKline is an overtime lawsuit against GlaxoSmithKline which is currently on the Supreme Court’s 2012 docket. The outcome of that case is likely to decide whether salespeople working for pharmaceutical companies are entitled to be paid time-and-a-half when they work overtime. The oral argument in Christopher is scheduled for April 16, 2012.

Companies often refuse to pay their employees overtime, either because they are unaware of the requirement, or because they do not realize the employee is entitled to it. But most employees, including both hourly and salaried employees, are entitled to overtime pay when they work more than 40 hours per week.

New Jersey Judge Refuses to Seal Settlement Agreement in Overtime Lawsuit

March 1, 2012 | by Jonathan I. Nirenberg

Earlier this year, a New Jersey Judge refused to file the terms of a settlement agreement in an overtime lawsuit under seal. Specifically, Judge Jose L. Linares of the United States District Court for the District of New Jersey ruled the employer had not overcome the strong presumption of public access to the terms of settlements in cases under the Fair Labor Standards Act (“FLSA”). The FLSA is a federal wage and hour law that requires employers to pay most “nonexempt” employees time-and-a-half when they work more than 40 hours in a work week.

The case, Brumley v. Camin Cargo Control, Inc., involved three separate collective action lawsuits against Camin Cargo Control, Inc. Between the three cases, 112 employees alleged Camin failed to properly pay them overtime wages in violation of the FLSA. Five of those employees also claimed the company retaliated against them in violation of the FLSA.

Last year, the parties agreed to settle the case for $3.9 million dollars, or an average of nearly $35,000 per plaintiff. As is typical in employment law cases, the Settlement Agreement included a confidentiality provision that required the parties to keep the terms of the settlement private. But since the FLSA required a judge to approve the settlement, the parties had to submit the Settlement Agreement to the Court for its approval. As a result, the employer filed a motion requesting permission to file the Settlement Agreement under seal.

But Judge Linares denied the defendant’s motion to file the Settlement Agreement under seal. He explained that settlements under the FLSA are different from most other settlements. First, the public has an interest in seeing the terms of the settlement agreement so they can understand the reasons why the judge approved or rejected it. Second, the FLSA does not merely protect the rights of the individuals who bring claims under it. It also protects the separate public interest in “assuring that employees wages are fair and thus do not endanger ‘the national health and well-being.'” As a result, he ruled there is a strong presumption that settlement agreements in FLSA cases should be publically available. He concluded that Camin failed to sufficiently rebut this presumption, and therefore denied its motion to file the settlement agreement under seal. You can view the Settlement Agreement here.

EEOC Explains When Employers Violate ADA By Requiring High School Diploma

February 22, 2012 | by Jonathan I. Nirenberg

Last week, the United States Equal Employment (EEOC) answered questions about when requiring a high school diploma violates the Americans with Disabilities Act. The EEOC provided this information because it created confusion last November when it issued an informal letter discussing how the ADA applies to standards for job qualifications.

Group of Graduates.jpg Specifically, in November 2011 the EEOC issued a letter which indicates that an employer would violate the ADA if it rejected a job candidate because he does not have a high school diploma if a disability prevented the job candidate from graduating from high school, unless the employer proves the diploma requirement “is job related and consistent with business necessity.” The letter also indicates that an employer would “not be able to make this showing, for example, if the functions in question can easily be performed by someone who does not have a diploma.” The EEOC received substantial backlash to its position, including many who claimed it had created a disincentive to graduate from high school.

The EEOC’s article last week clarifies that the ADA does not prohibit employers from requiring job applicants to have high school diplomas. Rather, under limited circumstances a company might have to allow a job candidate to show he is qualified for the job if a disability made prevented him from graduating from high school. For example, an individual who could not graduate from high school because of a disability might prove he is qualified for a job by showing his work experience in similar jobs.

The EEOC’s article also makes it clear that employers are not necessarily required to hire a job candidate who is disabled. Companies have the right to select the job candidate who is best qualified for the job.

What is still unclear is whether the employer or the employee has the burden of proof when a company rejects a job candidate whose disability prevented him from graduating from high school. The EEOC’s November letter indicates that employers must demonstrate that a high school diploma is necessary for the job. However, its February article indicates that the disabled employee has to prove he is qualified for the job even though he did not graduate from high school. It seems likely the EEOC originally intended to place the burden on the employer, but changed its mind in response to the backlash it received last November.

EEOC Recognizes Pregnancy Discrimination Remains Widespread

February 16, 2012 | by Jonathan I. Nirenberg

Yesterday, the United States Equal Employment Opportunity Commission (EEOC) issued a Press Release regarding pregnancy discrimination in the workplace. The EEOC is a federal agency that helps enforce laws prohibiting employment discrimination claims based on race, color, religion, sex, pregnancy, national origin, age, and disability, as well as related retaliation claims.

The EEOC’s Press Release recognizes that “employers should not make decisions based on stereotypes and presumptions about the competence” of pregnant employees. But even though the federal Pregnancy Discrimination Act was passed more than 30 years ago, and “most pregnant women want and need to work,” pregnancy discrimination continues to be a major problem in the workplace.

The EEOC indicates that women make up 47% of today’s workforce, and are either the primary or co-primary breadwinners in almost two out of every three families. As a result, in the words of the Senior Advisor for the National Partnership for Women & Families, Judith Lichtman, “women cannot afford to lose their jobs or income due to pregnancy or childbirth.”

The Press Release notes that in addition to pregnancy discrimination, both male and female caregivers experience significant discrimination in the workplace. It recognizes that these forms of employment discrimination are becoming bigger problems, and that parents are struggling to balance their obligations at work with their obligations to their families. As I discussed in a previous article, in 2009 the EEOC issued guidelines regarding Discrimination Against Caregivers. The EEOC’s Press Release promises to “vigorously enforce the anti-discrimination laws as they apply to pregnant women and caregivers.”

Supervisors Can Be Held Liable Under Family & Medical Leave Act

February 13, 2012 | by Jonathan I. Nirenberg

Last week, the Third Circuit Court of Appeals< (the federal appellate court that covers New Jersey) ruled that supervisors can be held personally liable under the Family & Medical Leave Act of 1993 ("FMLA"). Employees who are covered by the FMLA have the right to take up to a total of 12 weeks off per year for their own serious health condition; for a serious health condition of their spouse, parent or child; for childbirth, adoption, or foster care; or to bond with a new child.

In Haybarger v. Lawrence County Adult Probation and Parole, the Third Circuit ruled that individuals who have sufficient control over an employee can be held personally liable if they violate the employee’s rights under the FMLA. The Court indicated that relevant factors a court should consider when determining whether an employee can be held personally liable under the FMLA include whether the individual (1) had the power to hire and fire the employee, (2) supervised and controlled the employee’s work, (3) set the employee’s compensation, or (4) maintained employment records for the employee. In addition to these factors, courts must consider any evidence that is relevant to determine the “economic realities” of the relationship between the employer and the employee. The Third Circuit also rule that this test applies to both public and private employers.

The plaintiff in the case, Debora Haybarger, worked as an office manager for Lawrence County Adult Probation and Parole. She frequently needed to take time off because of medical conditions including Type II diabetes, heart disease, and kidney problems. Her supervisor, William Mancino, made it clear he was unhappy that she was taking so much time off from work. He eventually placed Ms. Mancino on probation for six-months before he convinced his boss, Judge Dominick Motto, to fire her.

The District Court dismissed Ms. Haybarger’s claims against Mr. Mancino. It primarily relied on the fact that Mr. Mancino did not have the ultimate authority to fire Ms. Haybarger. But, applying its new test, the Third Circuit concluded that there is enough evidence for a jury to conclude that Mr. Mancino can be held personally liable under the FMLA. Among other things, it noted that he supervised Ms. Haybarger’s work, prepared her performance reviews, disciplined her, and influenced Judge Motto’s decision to fire her. Accordingly, it reversed the District Court’s decision so a jury can decide whether Mr. Mancino can be held personally liable for violating Ms. Haybarger’s rights under the FMLA.

New Jersey Supreme Court Reaffirms Lower Threshhold for Attorneys’ Fees Enhancements

February 3, 2012 | by Jonathan I. Nirenberg

Last week, in Walker v. Guiffre and Humphries v. Powder Mill Shopping Plaza, the New Jersey Supreme Court upheld the longstanding rule that a plaintiff can receive an enhanced attorney fee award under New Jersey laws that allow a prevailing plaintiff to recover his attorneys’ fees from the defendant. This applies to many New Jersey employment laws, including the New Jersey Law Against Discrimination (LAD), the Conscientious Employee Protection Act (CEPA), and the New Jersey Family Leave Act (FLA).

This right to a contingency fee enhancement dates back to Rendine v. Pantzer, a 1995 New Jersey Supreme Court case which discusses an employee’s right to recover his reasonable attorney’s fees if he wins a case under the LAD. After the court calculates the attorneys’ reasonable fee, it must determine whether and how much of an enhancement he should receive. The fee enhancement is intended to make up for the risk a lawyer takes when taking a case on a contingency fee basis. Contingency fee enhancements generally should range between five and fifty percent, and typically range between twenty and thirty-five percent. The maximum possible fee enhancement under New Jersey law is 100 percent, but such a high enhancement is available only in a “rare and exceptional case.”

In contrast, in April 2010, in Perdue v. Kenny A., the United States Supreme Court recognized that, under federal law, an attorney fee enhancement is permitted only in “rare” and “exceptional” circumstances. Fortunately, in Walker and Humphries the New Jersey Supreme Court decided not to follow Perdue, and instead continued to follow Rendine. As a result, employees who bring claims under New Jersey fee-shifting statutes such as the LAD, CEPA and the FLA are entitled to seek enhanced attorney fees. However, employees bringing claims under federal employment laws such as the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), and the Family & Medical Leave Act (FMLA), are rarely entitled to fee enhancements.

New Jersey Passes Trade Secrets Act

January 30, 2012 | by Jonathan I. Nirenberg

New Jersey law prohibits employees from disclosing or using certain confidential information that belong to their employers. Since many companies are sensitive about having their trade secrets used by their competitors, they frequently require employees to sign confidentiality and trade secret agreements prohibiting employees from using or disclosing their confidential information. Employees should be aware that earlier this month employers gained additional protection for their trade secrets when Governor Christopher Christie signed the New Jersey Trade Secrets Act into law.

What Does The New Jersey Trade Secrets Act Prohibit?

The New Jersey Trade Secrets Act prohibits individuals from misappropriating someone else’s trade secret. It defines “misappropriation” as (1) obtaining someone else’s trade secret from someone who you know or have reason to know obtained it improper means; or (2) disclosing or using someone else’s trade secret without their consent if you: (a) used improper means to learn it; or (b) knew or had reason to know it was obtained by improper means when you disclosed or used it; or (c) knew or had reason to know it was obtained by improper means before you materially change your position based on it. It defines a “trade secret” as information in any form that has actual or potential economic value because it is not generally known or knowable by others through a proper means, but only if the owner of the information uses reasonable efforts to keep it secret.

Religious Ministers Are Not Protected by Anti-Discrimination Laws

January 12, 2012 | by Jonathan I. Nirenberg

Yesterday, a unanimous United States Supreme Court ruled that ministerial employees of religious groups cannot bring employment discrimination claims against the religious groups for which they work. It ruled that those claims would violate the Establishment and Free Exercise Clauses of the First Amendment to the United States Constitution. Hosanna-Tabor Evangelical Lutheran Church and School v. Equal Employment Opportunity Commission.

The case involved Cheryl Perich, a teacher for the Hosanna-Tabor Evangelical Lutheran Church and School. Ms. Perich took time off because she had a disability, narcolepsy. When she tried to return to work, the Church fired her. The Church specifically stated that Ms. Perich’s threat to bring a discrimination lawsuit against it was one of the reasons it fired her.

Ms. Perich then filed a Charge of Discrimination with the United States Equal Opportunity Commission (EEOC). She claimed the Church had wrongfully terminated her employment, in violation of the Americans with Disabilities Act (ADA) by firing her because she has a disability, and in retaliation for her threat to bring a disability discrimination lawsuit. The EEOC eventually filed a lawsuit against the Church, alleging it fired Ms. Perich in violation of the ADA.

The Supreme Court ruled that the First Amendment requires a ministerial exception to federal and state anti-discrimination laws. Specifically, it held that “requiring a church to accept or retain an unwanted minister, or punishing a church for failing to do so . . . interferes with the internal governance of the church, depriving the church of control over the selection of those who will personify its beliefs.” It concluded this would violate the First Amendment’s Free Exercise Clause because it would be a government interference with an internal church decision that impacts the church’s faith and mission. As a result, the Supreme Court ruled that Ms. Perich cannot proceed with her lawsuit.

The Court did not define who is a “minister” protected by this exception. However, it found Ms. Perich was a “minister” even though she was a teacher. It based its conclusion on facts including, among other factors, that (1) the Church commissioner her as a minister, (2) she had substantial religious training and had to pass an oral examination before she could be commissioned as a minister, (3) she held herself out as a minister and received a special housing allowance and tax benefits as a result, (4) she was assigned to perform her job “according to the Word of God,” (5) her job duties required her to teach the “Word of God” and to lead her students in prayer three times a day, and (6) twice a year she lead a school-wide chapel service.

The Supreme Court noted that it was not deciding whether the ministerial exception bars other types of lawsuits against religious groups, such as lawsuits for breach of employment contracts or personal injury claims against religious employers.