New Jersey Employment Lawyer Blog

U.S. Supreme Court Rules FLSA Forbids Retaliation Against Employees Who Make Oral Complaints

April 1, 2011 | by Jonathan I. Nirenberg

On March 22, 2011, the United States Supreme Court ruled that the Fair Labor Standards Act of 1938 (“FLSA”) prohibits employers from retaliating against employees who make oral complaints about violations of the FLSA. The FLSA is a federal law that sets minimum wages, maximum hours, and overtime pay requirements. It includes an anti-retaliation provision which forbids employers from firing or otherwise discriminating against employees because they “filed any complaint” under the FLSA.

The case, Kasten v. Saint-Gobain Performance Plastics Corp., involves Kevin Kasten’s lawsuit against his former employer, Saint-Gobain Performance Plastics Corporation. Mr. Kasten claimed Saint-Gobain fired him in retaliation for his verbal objections to the company’s violation of the FLSA. Specifically, he repeatedly told his supervisor, several human resources representatives, and other Saint-Gobain officials that the company was violating the law by locating its time clocks in a place where employees could not get credit for the time they spent putting on and taking off their protective gear. In a separate lawsuit, Mr. Kasten proved that Saint-Gobain violated the FLSA because it was required to pay its employees for the time they spent “donning and doffing” their protective gear.

The Supreme Court found that Mr. Kasten is entitled to try to prove his retaliation case because “filing any complaint” under the FLSA can include making a verbal complaint to your employer. The Court noted that the word “filed” has different meanings in different contexts. Sometimes it implies something in writing, but in other contexts it can include verbal statements. It then considered that when Congress passed the FLSA, it recognized enforcement of the law was likely to depend on “information and complaints received from employees seeking to vindicate rights claimed to have been denied,” and that the anti-retaliation provision was intended to encourage employee to come forward by preventing employers from silencing them through “fear of economic retaliation.” Accordingly, the Court concluded that Congress did not intend to limit the FLSA’s anti-retaliation protection to written complaints, since that would make it more difficult for illiterate, less educated, and overworked workers to complain. It also explained that limiting complaints to written complaints would prevent Government agencies from using hotlines, interviews, and other verbal complaint methods, and would discourage employees from using informal workplace grievance procedures.

However, the Supreme Court also recognized that it would not be fair to employers if the FLSA’s anti-retaliation provision applied when the employer did not have fair notice that the employee made a complaint that could subject the company to a retaliation claim. It therefore ruled that an oral complaint must have enough formality that the employer either understood or reasonably should have understood that the complaint was a business concern. In other words, a complaint is “filed” when a reasonable person would have understood that the employee put the employer on notice that he was asserting a right under the FLSA.

New York Federal Court Requires Early Mediation in Most Employment Discrimination Cases

March 24, 2011 | by Jonathan I. Nirenberg

In January, the United States District Court for the Southern District of New York (“SDNY”) began requiring early mediation in all employment discrimination cases other than cases brought under the Fair Labor Standards Act (“FLSA”). Mediation is a form of Alternative Dispute Resolution (“ADR”) in which a lawyer, retired judge, or other trained mediator tries to help the parties settle their case.

Mediation offers the parties to a lawsuit a way to resolve their cases before they spend too much time, money, or mental energy trying to prove their cases. A study has shown that Settling Is Better Than Going to Trial for both employers and employees. As a result, it makes perfect sense that the SDNY would require early mediation in employment discrimination cases, which often can be very time consuming, costly, and emotional for everyone involved.

The SDNY is a federal court which is located in downtown Manhattan, White Plains and Middletown, New York. It covers the Bronx, New York, Westchester Rockland, Putnam, Orange, Dutchess, and Sullivan Counties. The SDNY’s mediation program is free, since the mediators donate their time.

Like the SDNY, New Jersey’s state courts require early mediation in most employment law cases. However, currently the United States District Court for the District of New Jersey (“DNJ”) does not require mediation in every employment discrimination case, but instead leaves it up to individual judges to decide if and when to send the parties to mediation.

Appellate Court Reduces $10 Million Punitive Damages Award For Age Discrimination to $2,465,000

March 22, 2011 | by Jonathan I. Nirenberg

Earlier this month, New Jersey’s Appellate Division reduced a punitive damages award in an age discrimination case in which the jury had awarded $10 million, to slightly less than $2.5 million. Punitive damages are awarded to punish a defendant when its actions are especially egregious.

The Evidence of Age Discrimination

Nicholas Saffos worked for Avaya, Inc. and its predecessors, AT&T and Lucent Technologies, for more than 20 years. In 2002, Avaya hired M. Foster Werner, Jr., as the head of Mr. Saffos’ department. Mr. Saffos quickly noticed that Mr. Werner was firing employees who were over 40 years old, and replacing them with younger workers. He also noticed that Mr. Werner was favoring the younger employees in his department.

In 2003, Mr. Werner suddenly began criticizing Mr. Saffos’ job performance and examining his work, even though he had received positive performance reviews in the past. In August 2003, Mr. Werner placed Mr. Saffos on a Performance Improvement Plan (“PIP”). Avaya fired him 30 days later. At the time, Mr. Saffos was 49 years old. Avaya hired a 33-year-old to replace him. Mr. Saffoshas other evidence of age discrimination, including the fact that the average age of an employee in the department decreased by 10 years during the first two years that Mr. Werner was in charge.

The Jury Award

After a trial, a jury found in Mr. Saffos’ favor and awarded him $250,000 for emotional distress, $325,500 for past lost wages (“back pay”), $167,500 for future lost wages (“front pay”), and $10 million on punitive damages. However, the trial judge reduced the punitive damages to a little over $3.7 million, which was five times the other damages the jury had awarded because he believed the jury’s award was unreasonably high. Both sides appealed.

The Appellate Court Reduced the Punitive Damages Award

On appeal, in Saffos v. Avaya Inc., the Appellate Division reduced the punitive damages even further. It stated that although courts are not required to limit punitive damages to 5 times the actual damages, the trial judge acted properly when he used that as a guideline to find the punitive damages award was disproportionate to the harm Mr. Saffos experienced and disproportionate to the damages he recovered.

However, it ruled that emotional distress damages often include a punitive element, and the $250,000 the jury awarded to Mr. Saffos for emotional distress already included a punitive element since Mr. Saffos did not suffer any physical harm as a result of the emotional distress, and he did not need any psychiatric treatment. As a result, it concluded that the emotional distress damages should not have be included when calculating the punitive damages as 5 times the jury’s award. The Appellate Division therefore reduced the punitive damages award to just under $2.5 million, which is 5 times the economic damages the jury awarded.

New Jersey Appellate Division Reinstates Retaliation Claim Against Department of Corrections

March 11, 2011 | by Jonathan I. Nirenberg

On February 28, 2011, New Jersey’s Appellate Division issued an unpublished opinion ruling that a jury should decide whether the New Jersey Department of Corrections (“DOC”) retaliated against one of its employees, Bienvenido Montalvo.

Mr. Montalvo Filed a National Origin Discrimination Complaint With the EEOC

Mr. Montalvo worked for DOC as a senior corrections officer at Northern State Prison (“NSP”). On October 5, 2004,he filed a complaint with the United States Equal Employment Opportunity Commission (“EEOC”) in Newark, New Jersey. He claimed several superior officers harassed and retaliated against him because of his national origin, Hispanic/Puerto Rican. The EEOC sent Mr. Montalvo’s Charge of Discrimination to DOC in Trenton on October 7. It is unclear exactly when NSP received a copy of Mr. Montalvo’s Notice of Charge of Discrimination, but the evidence seems to indicate that DOC received it sometime in October 2004.DOC Unfairly Disciplined Mr. Montalvo After He Complained About Discrimination

On November 4, 2004, Mr. Montalvo received a notice of disciplinary action charging him with conduct unbecoming and other sufficient causes for allegedly assaulting a prisoner on October 28. DOC suspended him without pay pending a hearing, and told him he was subject to potentially being fired. However, after a hearing in December 2004, the charges against Mr. Montalvo were dismissed because DOC failed to present any evidence to support them. Mr. Montalvo was then reinstated to his job with full back pay.

The Trial Court Dismissed Mr. Montalvo’s Retaliation Claim

Mr. Montalvo sued DOC and six of its employees alleging national origin discrimination and retaliation in violation of the New Jersey Law Against Discrimination (“LAD”), among other claims. However, the trial court dismissed his retaliation claim, finding he did not have enough evidence to support it.

The Appellate Division Reinstated Mr. Montalvo’s Retaliation Claim

Security Guard.jpg The Appellate Division disagreed, and instead ruled that Mr. Montalvo is entitled to a trial. It concluded that he suffered an “adverse employment action” because a reasonable employee might not file a discrimination claim if he knew his employer would respond by falsely accusing him of committing an assault, suspending him without pay, and forcing him to defend himself at a disciplinary hearing. It further found it is possible for a jury to find from the evidence that DOC knew about Mr. Montalvo’s EEOC complaint when it disciplined him. The Court concluded that a reasonable jury could believe the discipline was retaliatory, based on evidence including the fact that (1) DOC suspended him less than a month after he filed his Charge of Discrimination with the EEOC; (2) the officers who brought the disciplinary charges against him told him he had a target on his back and they wanted to fire him in October 2004; and (3) DOC sought to discipline him despite a videotape and several reports from the day of the alleged assault which confirmed he had done nothing wrong. Accordingly, the Appellate Division sent Mr. Montalvo’s case back to the trial court for a jury trial.

U.S. Supreme Court Adopts “Cat’s Paw” Discrimination Theory

March 2, 2011 | by Jonathan I. Nirenberg

Yesterday, the United Supreme Court decided an important employment law case. Specifically, in Staub v. Proctor Hospital, the Supreme Court ruled that companies can be held liable for an adverse employment decision, even if the employee who actually made the decision did not discriminate, when another supervisor’s discriminatory actions or beliefs influenced the decision. As the Supreme Court explained, cases in which a supervisor uses a discriminatory factor to influence someone else to discipline or fire an employee are commonly referred to as “cat’s paw” cases. Staub is similar to Kwiatkowski v. Merrill Lynch, an April 2008 decision in which the New Jersey Appellate Division adopted the cat’s paw theory under the New Jersey Law Against Discrimination (“LAD”).

Staub involves an employee, Vincent Staub, who worked for Proctor Hospital as an angiography technician. Proctor fired Mr. Staub, who was a member of the United States Army Reserve, in April 2004. Mr. Staub brought a wrongful termination lawsuit under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), a federal law that prohibits military status discrimination against members of the United States Armed Forces. After a trial, a jury found in Mr. Staub’s favor, concluding that his military status was a factor in Proctor’s decision to fire him. The jury awarded Mr. Staub $57,640 in damages.

Mr. Staub did not claim that the employee who made the decision to fire him, Proctor’s Vice President of Human Resources, Linda Buck, had any animosity toward him because he was a member of the Army Reserves. Rather, he claimed his immediate supervisor, Janice Mulally, and Ms. Mullally’s supervisor, Michael Korenchuck, were hostile toward him because of his military obligations, and influenced Ms. Buck’s decision to fire him. Specifically, Mr. Staub claims that when Ms. Buck decided to fire him, she relied on a discriminatory “Corrective Action” disciplinary warning that Ms. Mulally and Mr. Korenchuk placed in his personnel record in an attempt to get him fired. The Supreme Court ruled that these facts were enough for a jury to hold Proctor liable for discriminating against Mr. Staub in violation of USERRA.

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.