New Jersey Employment Lawyer Blog

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.

Each Discriminatory Paycheck is Separate Violation of New Jersey Law Against Discrimination

December 2, 2010 | by Jonathan I. Nirenberg

Last week, the New Jersey Supreme Court ruled that each day an employee is paid a lower salary based on a past unlawful discriminatory decision is a separate violation of the New Jersey Law Against Discrimination (LAD). As a result, three tenured Seton Hall University professors can proceed with their age and gender discrimination lawsuit, even though (1) the alleged discriminatory decision was made more than two years before they filed the lawsuit, and (2) the LAD has a two-year statute of limitations.

Specifically, in Alexander v. Seton Hall University, three female professors who are over 60 years old sued Seton Hall and certain school officials. They claim they were paid less than their younger male colleagues. They largely based their claims on the University’s 2004-2005 annual report, which shows that Seton Hall pays higher salaries to younger male faculty members than older female faculty members.

However, the trial court dismissed the case, ruling that since the allegedly discriminatory decision was made more than two years before the employees sued, their case was barred by the statute of limitations. That decision was affirmed by New Jersey’s Appellate Division. Both courts relied on the United States Supreme Court’s 2007 decision in Ledbetter v. Goodyear Tire & Rubber Co., which ruled that the statute of limitations for claims of discriminatory wages under federal law begins when the employer makes the discriminatory decision.

EEOC Sues Port Authority of NY & NJ for Sex and Age Discrimination

November 26, 2010 | by Jonathan I. Nirenberg

The United States Equal Employment Opportunity Commission (EEOC) recently sued the Port Authority of NY & NJ, claiming the Port Authority violated the Equal Pay Act (“EPA”) by paying non-supervisory female lawyers less than their male counterparts. The EPA is a federal law that prohibits employers from considering gender as a basis for paying employees different wages for the same work. The lawsuit also alleges that the Port Authority violated the Age Discrimination in Employment Act (“ADEA”) by firing older attorneys and replacing them with younger attorneys. The ADEA is a federal law that prohibits age discrimination in employment.

According to the EEOC’s press release, the Port Authority paid male attorneys more than female attorneys for work requiring the same skill, effort and responsibility. The EEOC claims the gender pay disparity occurred regardless of the attorney’s job assignment, years of service, or date of admission to the bar.

The allegations stem from the Port Authority’s decision to fire two female attorneys over the age of 40 as part of a purported “reduction in force.” Earlier this year, the EEOC attempted to reach an amicable settlement with the Port Authority, but those efforts failed. It then filed the lawsuit in the United States District Court for the Southern District of New York.

As Louis Graziano, the attorney handling the case for the EEOC, stated:

Achieving a work force that embodies equal pay for equal work and eliminates sex-based pay discrimination has been the objective of federal law for nearly 50 years. This lawsuit makes it clear that the unfortunate reality – that at some workplaces women still earn less than men, even though they are performing the same work and have the same qualifications – continues to plague the workplace and will not be tolerated.

Civil Service Employee’s Failure to Appeal Discipline Does Not Bar Retaliation Case

November 19, 2010 | by Jonathan I. Nirenberg

On November 10, 2010, New Jersey’s Appellate Division ruled that a civil service employee can bring a lawsuit alleging that discipline against him was retaliatory even if he did not appeal a Civil Service Commission decision upholding the discipline. In Racanelli v. County of Passaic, James Racanelli sued the County of Passaic, the Passaic County Sheriff’s Department, Passaic County’s Sheriff, and various other employees. He alleges they harassed him and otherwise retaliated against him in violation of New Jersey’s Conscientious Employee Protection Act (“CEPA”) because he reported numerous unlawful and inappropriate actions within the Sheriff’s Department. For example, he claims they transferred him to work at the county jail even though he was not trained to work there, and fired him in retaliation for his objections.

Mr. Racanelli appealed the County’s decision to fire him to the Civil Service Commission (“CSC”). The CSC handles administrative appeals of major discipline brought against permanent civil service employees. In this case, the CSC upheld Passaic County’s decision to fire Mr. Racanelli. Mr. Racanelli chose not to appeal that decision to the Appellate Division. Instead, he brought a separate retaliation lawsuit under CEPA. However, the trial court ruled that because Mr. Racanelli did not appeal the CSC’s decision upholding the discipline to the Appellate Division, he could not pursue a whistleblower case.

The trial court also found Mr. Racanelli’s claims were barred because he did not file a notice of claim under New Jersey’s Tort Claims Act. The Tort Claims Act requires that an individual with a personal injury claim against the state, a county, or a municipality must submit a formal notice of claim to the public entity. Failure to file a notice of claim within six months after the injury is generally a bar to bringing a lawsuit against a public entity.

On appeal, New Jersey’s Appellate Division disagreed with both of the lower court’s rulings. It held that an employee can sue under CEPA even if he did not appeal a Civil Service Commission decision upholding the discipline against him because an employee has “the discretion to pursue his retaliation claim in a judicial forum rather than in the administrative process.” This is similar to the decision in Winters v. North Hudson Regional Fire & Rescue, which ruled that a municipal employee can prove retaliation even if the Civil Service Commission upheld the discipline against him. But unlike Winters, the decision in Racanelli is published, meaning it is a binding legal precedent.

The Appellate Division also ruled that the notice of claim requirement of the Tort Claims Act does not apply to CEPA cases. New Jersey Courts have long recognized that, since the Tort Claims Act does not apply to intentional claims, it does not apply to cases under the New Jersey Law Against Discrimination, the anti-retaliation provisions of the Workers’ Compensation Act, and other civil rights claims. The Appellate Division applied the same reasoning to conclude that the notice of claim requirement does not apply to CEPA case.