Severe Misconduct Disqualification Eliminated from NJ Unemployment

Severe Misconduct Disqualification Eliminated from NJ Unemployment

I am pleased to report that the New Jersey legislature has finally repealed the extraordinarily unfair and misapplied severe misconduct disqualification standard in the State’s unemployment statute. Governor Christie and his lieutenants had concocted, in 2008, this additional mode of disqualifying applicants as a revenue raising, budget balancing tactic.

Governor Murphy signed this bill on August 24, 2018 and it takes effect immediately.  The new law corrects many unworkable and unfair provisions of the unemployment statute, such as:

  • There are no longer three tiers of misconduct disqualification (“simple”, “severe” and “gross”);
  • There will now be only two tiers of misconduct (“misconduct” and “gross misconduct”);
  • The misconduct disqualification will be shortened from 8 weeks to 6 weeks;
  • The only total disqualification will be for “gross misconduct,” which requires the commission of an act that rises to the level of a crime;
  • It includes a more cogent definition of “misconduct.” The bill provides that “Misconduct” means conduct which is improper, intentional, connected with the individual’s work, within the individual’s control, not a good faith error of judgment or discretion, and is either a deliberate refusal, without good cause, to comply with the employer’s lawful and reasonable rules made known to the employee or a deliberate disregard of standards of behavior the employer has a reasonable right to expect, including reasonable safety standards and reasonable standards for a workplace free of drug and substance abuse.” and
  • The employer has the burden of proof to demonstrate “misconduct.” Prior to a determination by the Department of misconduct, the employer must provide written documentation demonstrating that the employee’s actions constitute misconduct or gross misconduct.

I am particularly pleased to see the revisions regarding the burden of proof necessary to establish misconduct.  I have represented many employees who were wrongfully denied the receipt of critical unemployment benefits based on their own testimony when the employer failed to appear.  Moreover, the Department will not be able to rule against the claimant employee without adequate written documentation from the employer.

Should you have any questions regarding the above changes in the NJ State Unemployment statute, please contact a knowledgeable New Jersey employment lawyer.

Practice Tips for a Successful Workplace Investigation

Practice Tips for a Successful Workplace Investigation
Former Uber engineer Susan Fowler Rigetti’s story of sexual harassment and the company’s inadequate response to her multiple complaints, highlight how important it is for a company to have an effective action plan in dealing with these sensitive issues.

The following is some practice pointers on what a company should do (and not do) when it receives an employee complaint of discrimination/harassment or other misconduct by another employee:

  1. Understand the complaint

Before taking action, it’s important to understand what the employee is complaining about. The company must know who is involved, what is alleged to have happened, as well as when, where and, if possible, why it occurred. The company should try to understand what the complainant is seeking without making any promises or assurances regarding how it will resolve the complaint.

  1. Should the company investigate?

Investigations can involve a significant allocation of time and financial resources so before a company conducts an internal or private outside investigation into a complaint, it should consider whether it is appropriate for an investigation to be undertaken or whether there is a better option for resolving the complaint – such as mediation of an interpersonal disagreement between colleagues.

  1. Review policies and procedures

Many employers have policies and procedures enacted that provide guidance or structure about how a workplace complaint should be handled or an investigation conducted. Therefore, once a complaint is received, the company should review its policies and procedures to ensure it is in compliance.

  1. Appointing an investigator

 The decision of whether to appoint an investigator or not should be made on a case-by-case basis. Although, it is less expensive to designate an internal investigator, there are times when a company should hire an outside investigator. The outside investigator is perceived as more neutral and may have greater expertise in conducting investigations and drafting investigation reports. Many companies hire an experienced attorney to serve as an outside investigator since the attorney is skilled at interviewing witnesses, making credibility assessments and writing effective reports.

  1. Keep the lines of communication open

If the employer undertakes an investigation into the complaint, it should take care to keep the lines of communication open with all of the involved parties. By actively managing expectations, the company can minimize some of the stress that is often associated with an investigation.

  1. Weighing and Assessing the Evidence

 Assessing conflicting evidence provided by investigation participants is a daunting task for many investigators. In addition to interviewing witnesses, the interviewer should review emails, file notes and other relevant documents or recordings. To the extent there is conflicting testimony given by witnesses, the investigator should make a credibility assessment in weighing the evidence. Sometimes a finding cannot be made and the investigation should properly be labeled as “inconclusive.”

  1. Take action

Once an investigation is concluded, a company should ensure that it promptly communicates the finding of the investigation to the parties involved. Where the investigation findings are likely to result in disciplinary action for an employee, the company will need to ensure that the employee is afforded procedural fairness throughout the disciplinary process. Even when an investigation has been inconclusive, there are still steps that could be taken, such as trainings on appropriate workplace behavior.

  1. Reassess

After the investigation is concluded, the company should review its policies, procedures, practices and on-going employee trainings to see whether its overall process in handling these sensitive employee complaints can be improved upon and whether an outside professional can assist with this process.

Rina Traub, of Traub Law in Princeton & East Brunswick, NJ,  is an experienced counselor and advocate for New Jersey’s executives, professionals and business owners.
Ms. Traub also counsels businesses on employment matters, including legal compliance, handbooks, and employer/employee relations.  For Workplace Investigations, Contact her at (609) 951-2204.

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Third Circuit Rules Workers Age 50+ Can Be Considered Subgroup in Testing for Discrimination

Third Circuit Rules Workers Age 50+ Can Be Considered Subgroup in Testing for DiscriminationThird Circuit Rules Workers Age 50+ Can Be Considered Subgroup in Testing for Discrimination

New Jersey’s Third Circuit recently held in Karlo v. Pittsburgh Glass Works, LLC, No. 15-3435, 2017 WL 83385 (3d Cir. Jan. 10, 2017), that workers in their 50s may be recognized as a “subgroup” of employees protected by the Age Discrimination in Employment Act (“ADEA”) if an employer’s policies inadvertently disfavor them relative to their co-workers who are over age 40 and, therefore also protected employees under this law.

The plaintiffs in Karlo were all over age 50 and had worked in defendant’s Manufacturing Technology division until they were terminated in 2009 as part of a reduction in force. Plaintiffs then brought a collective action under the ADEA, asserting disparate treatment, disparate impact, and retaliation as to two of the plaintiffs. The district court granted the employer’s motion for summary judgment on the disparate impact claim, holding that a disparate impact claim for the “fifty-and-older” subgroup relative to their younger yet age-protected co-workers was not permitted under the ADEA because the law does not permit subgroup claims. The court also found that plaintiffs lacked evidence to support their claim.

The Third Circuit reversed the district court’s ruling on summary judgment and held that the plaintiffs could pursue their claims. According to the court in Karlo, plaintiffs are permitted to use subgroup comparisons and similar evidence to demonstrate the significantly disproportionate adverse impact necessary for a disparate impact claim under the ADEA. The appeals court emphasized that the ADEA prohibits age discrimination as a whole, not just discrimination against employees ages 40-and-over. Thus, the court found that the plaintiffs are permitted to bring claims alleging that they were treated less favorably than their younger counterparts, even where their younger co-workers included employees within the ADEA’s protected class.

This decision represents a departure on this issue from several other circuit courts that have previously not allowed such “subgroup” claims. The United States Supreme Court may need to resolve this split. As always, we will update this blog should the Court consider this issue in the future.

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New Jersey Court Enforces Non Compete Clauses Contained in a “Clickwrap” Agreement

New Jersey Court Enforces Non Compete Clauses Contained in a “Clickwrap” AgreementNew Jersey Court Enforces Non Compete Clauses Contained in a “Clickwrap” Agreement

In a recent New Jersey federal case, ADP LLC v. Lynch, 3d Cir. (Ambro, U.S.C.J.), the Third Circuit declined to lift an injunction prohibiting two former employees of ADP from soliciting its clients on behalf of a competitor. The injunction partially enforced non-compete agreements that Jordan Lynch and John Halpin agreed to online in what is commonly referred to as a “clickwrap” agreement. A clickwrap agreement is a type of contract in which a user must agree to terms and conditions prior to using the product or service. These are commonly used in the software or technology industry. It is interesting to see a court confirm its enforceability in the employment context.

Messrs. Lynch and Halpin each participated in ADP’s stock award plan for five consecutive years. To participate, they had to click on an electronic box to acknowledge that they had read related documents. Those documents included restrictive covenants which state that the employee cannot (1) solicit certain clients and prospective clients of ADP for one year after they stopped working for the company; (2) disclose any of ADP’s confidential information; or (3) use ADP’s confidential information regarding the identity of the company’s current, past or prospective clients. Mr. Lynch also signed a separate agreement, containing similar restrictions.

The employees resigned their sales positions at ADP and joined its direct competitor, Ultimate Software Group (“USG”). ADP sued Mr. Halpin and Mr. Lynch, asserting that they had violated their restrictive covenants. It also sought a preliminary injunction to prohibit them from working for USG and from soliciting ADP’s clients. Mr. Halpin and Mr. Lynch claimed that they never actually read or agreed to the restrictive covenants and therefore, the court should decline to enforce them as written.

The District Court, on June 30, 2016, granted a partial injunction, ruling that the employees had clicked on the box indicating that they read the documents related to the stock award plan and therefore they could not claim they did not actually read those documents. The Court further ruled that even though the two employees merely acknowledged that they had read the documents (and did not indicate specifically that they agreed to the terms), they were bound by the restrictions since the documents themselves make it clear that they were agreeing to them.

The Court issued a partial injunction ordering the employees not to solicit any of ADP’s current customers or any of its prospective customers who they learned about while they were working for ADP. Moreover, it enjoined them from using any of ADP’s confidential or proprietary information.

It is important to note that the Court did not prohibit Mr. Lynch or Halpin from working for USG at this preliminary injunction stage, stating that this would be too “severe” a restriction at this early phase of litigation. The Third Circuit panel affirmed the issuance of the preliminary injunction.

New Jersey Employees:  Contact Traub Law (609) 951-2204 for representation in employment related claims and disputes.

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Ambiguous Jury Waiver in Employment Agreement Unenforceable in Whistleblower Case

Ambiguous Jury Waiver in Employment Agreement Unenforceable in Whistleblower Case

Ambiguous Jury Waiver in Employment Agreement Unenforceable in Whistleblower CaseIn Noren v. Heartland Payment Systems, Inc., Docket No. A-2651-13T3, __N.J. Super. __ (Feb. 6, 2017), the New Jersey Appellate Division held that a provision in an employment agreement which provided that the employee “irrevocably waive[s] any right to trial by jury in any suit, action or proceeding under, in connection with or to enforce this Agreement” was unenforceable as to a former employee’s statutory employment claims.

Following his termination of employment, Noren sued his former employer alleging a violation of the Conscientious Employee Protection Act (“CEPA”), New Jersey’s employment whistleblower law. The lower court denied Noren’s demand for a jury trial based on the jury-waiver provision in his employment agreement and dismissed Plaintiff’s complaint after a lengthy bench trial. Plaintiff appealed, challenging the application of the jury waiver provision to his CEPA claim.

On appeal, the court focused upon the fact that CEPA and the New Jersey Law Against Discrimination (“NJLAD”) expressly guarantee a right to a jury trial. Given the statutorily guaranteed right, the Appellate Court determined that in order for the waiver to be effective it must “clearly explain (1) what right is being surrendered and (2) the nature of the claims covered by the waiver.” The court found that the jury waiver at issue was unenforceable because it did not make any “reference to statutory claims and did not define the scope of the claims as including all claims relating to Noren’s employment.”

The court noted that while it is preferable for a waiver of rights provision to explicitly provide that the employee is waiving his or her statutorily guaranteed rights, it is possible that a waiver provision would be enforceable without such a specific reference so long as the language is clear, unambiguous and sufficiently broad. The court relied upon its earlier decision in Martindale v. Sandvik, Inc., 173 N.J. 76 (2002), which upheld a mandatory arbitration provision which provided for a waiver of any action or proceeding relating to an individual’s employment, or the termination thereof.

In light of the Noren decision, any jury waiver provision should be reviewed by an attorney to determine whether its language is unambiguous and therefore enforceable.

Employer’s Failure to Use Employee’s New Name Does Not Amount to National Origin Discrimination

Judge Kevin McNulty of the U.S. District Court for the District of New Jersey dismissed a pro se action that plaintiff Erwin LeJon-Twin El, who changed his name upon joining the Moorish Science Temple of America, brought against his employer Impax Laboratories alleging several claims of discrimination based on his national origin.

In October 2014 Mr. LeJon-Twin El announced his new name to his employer. The employer agreed to use the new name whenever possible but would still use his birth name for federal I-9 and payroll tax purposes. The employer agreed to use the new name whenever it was legally changed.

In April 2016, LeJon-Twin El sued Impax, claiming the company discriminated against him based on his national origin. The Court held that an employer’s making out a paycheck to a worker under his birth name, rather than a new name that was not formally changed through appropriate government channels, was not a discriminatory act. Moreover, the Court found that plaintiff, who was still being paid with no diminution in pay, responsibilities or benefits, had not suffered an adverse employment action.

NJ Supreme Court holds State Police Did not Waive Immunity in ADA Case

The NJ Supreme Court recently ruled that the New Jersey State Police’s failure to assert a sovereign immunity defense during its trial on an Americans with Disabilities Act claim does not constitute a waiver of sovereign immunity.

This case was brought by Brian Royster, a state trooper who suffered from ulcerative colitis. His condition required that he have immediate access to a bathroom while on the job. After returning from medical leave for treatment of his condition, his department assigned him to conduct surveillance from a car. He repeatedly asked to be moved to an assignment that offered access to a restroom, but he remained on the surveillance assignment for seven months.

Royster filed suit against the state police, asserting, among other claims, that it failed to make reasonable accommodation for his medical condition in violation of the ADA and the NJLAD, and for retaliation under the ADA, NJLAD, and the New Jersey Conscientious Employee Protection Act (“CEPA”). The state trial court dismissed several claims, leaving only the CEPA retaliation and the ADA failure-to-accommodate claim for trial. The jury awarded the employee $500,000 in damages on the ADA claim.

The state then moved for judgment notwithstanding the verdict (“JNOV”), asserting for the first time that the trial court lacked subject matter jurisdiction over the ADA claim because the police, as a state actor, had sovereign immunity. The employee countered that it was unfair to allow the police to raise a sovereign immunity defense after the jury’s verdict, and asked the trial court to retroactively convert the remaining ADA claim to an NJLAD claim since the claims and arguments under both statutes were identical. The trial court denied the employee’s request, and also denied the state police’s motion for JNOV, holding that the state police were estopped from asserting lack of jurisdiction after waiting over seven years and the completion of trial. The state police appealed and the Appellate Division reversed, holding that because the state’s sovereign immunity extended to the state police, the sovereign immunity defense could be raised at any time, and the police had not waived sovereign immunity through its litigation conduct. The Supreme Court then granted the employee’s petition for certification, and considered whether the state police were entitled to sovereign immunity on Royster’s ADA claim, and whether it had waived that immunity.

The Supreme Court held that it could not nullify sovereign immunity for federal claims under the ADA, regardless of the state’s delay in raising the defense. The state police were an arm of the state, and because the state legislature had not consented to be sued under the ADA, the police enjoyed sovereign immunity from the ADA claim. Nor did the state police waive sovereign immunity through its litigation conduct. Although a state that is involuntarily brought into litigation in state court can waive its immunity by removing the case to federal court, New Jersey courts have never declared that the state may waive its immunity from suit in state court through litigation conduct. The Court also found that the state police could not be estopped from raising its sovereign immunity defense, because it never misrepresented its status as a state actor, nor affirmatively represented that it planned to waive immunity simply by defending the claims against it.

The Court found that the employee’s NJLAD claim for failure to accommodate, under which the state police did not have sovereign immunity, was improperly dismissed. The trial court had found that a prima facie case under the two statutes were identical, yet separated the two claims when the state police moved for a directed verdict. The trial court then applied CEPA’s waiver provision to both the NJLAD retaliation and failure to accommodate claims. However, the CEPA waiver provision applied only to those causes of action requiring a finding of retaliatory conduct that would be actionable under CEPA. The CEPA waiver did not apply to the NJLAD claim, which was premised on different facts.

The NJLAD failure-to-accommodate claim was identical to the ADA claim. Because there was sufficient evidence to support Royster’s ADA claim, the Court found that the NJLAD claim should have survived the directed verdict motion. Although the employee had acquiesced to dismissal of the NJLAD claim, which was not precluded by sovereign immunity, the court could not ignore that the dismissal was mistaken. The state police’s belated assertion of sovereign immunity was not made in bad faith, but the interests of justice required reinstatement of the NJLAD failure to accommodate claim. Because the jury awarded $500,000 for the ADA failure to accommodate claim, the court found that it would have given the same award for the parallel NJLAD claim had it not been dismissed, and so it remanded to the trial court to mold the jury’s ADA award into an NJLAD award.

This case is surprising in that the court allowed a defendant to assert a sovereign immunity defense after the jury returned a verdict. We are pleased that that the Court found a way to uphold the jury’s verdict by fairly molding the verdict. Justice appears to have been served!

Court Upholds Firing of Muslim Prison Guard Who Wore Muslim Headscarf

Despite the finding of a prima facie case of race discrimination, a New Jersey appeals court has upheld the firing of a Muslim corrections officer who refused to remove her headscarf on the job.

Linda Tisby began working at the Camden County Correctional Facility in 2002 but became a Muslim in 2015 and one day reported to work wearing the khimar, or headscarf. She refused to remove it, was sent home and recommended for disciplinary charges. After continuing to report to work wearing the khimar, the Correctional Facility dismissed Tisby on May 11, 2015.

Tisby filed two separate suits against Camden County and the Camden County Correctional Facility. The first, filed on June 12, 2015, sought damages under the NJ Law Against Discrimination (“NJLAD”) and alleged that the jail had permitted other women to work with head coverings, including Muslim women and those undergoing chemotherapy. A month later, she filed a second suit, seeking reinstatement and back pay and asserting violations of the NJLAD.

The trial court dismissed the second complaint on August 7, 2015, finding that the jail would face an undue hardship if it accommodated Tisby’s request to wear the headscarf. That is, the scarf could be used to choke someone or to smuggle contraband into the jail. Additionally, the scarf undermined the facility’s goal of presenting a unified, neutral and unbiased force to the public and inmates. A different judge dismissed the first complaint was on August 21, 2015, based on the entire-controversy doctrine (all related claims to a particular controversy should be presented in one forum).

On appeal, the court applied the burden-shifting methodology from the 1973 U.S. Supreme Court ruling in McDonnell Douglas v. Green. The panel found that the plaintiff established a prima facie case of discrimination and the defendant articulated a legitimate, nondiscriminatory reason for its action. The court did not find that the employer’s reasons were pretextural. Ultimately, the appeals court found that the right of Ms. Tisby to wear Muslim headgear at work in a correctional facility was outweighed by safety concerns and any accommodation to Ms. Tisby in this context would impose a hardship on defendants.

National Retailers Cease Using On-Call Shift Scheduling

In a positive development for workers, the New York Attorney General, Eric Schneiderman, announced that six major retailers have agreed to stop using on-call shift scheduling after an inquiry by a multistate coalition of attorneys general. On-call shifts involve employees required to call their employers a few hours before they are supposed to work, to see if they will be scheduled for work.

We have found that this arrangement is designed to provide the employer flexibility in case it’s labor needs increase or decrease. The problem for the worker is that he or she would presumably need to keep the day open, arrange for childcare, and forsake other opportunities without being compensated for their time. We are pleased that the companies, Aeropostale, Carter’s David’s Tea, Disney, PacSun and Zumiez, have voluntarily agreed to stop this unfair method of scheduling and eliminate a potential hardship for their employees.

Employer May be Held Liable for Retaliatory Intent of Low Level Employee

The Second Circuit in Vasquez v. Empress Ambulance Service, Inc., recently adopted the “cat’s paw” theory of liability under Title VII and found that the retaliatory intent of a low-level, non-supervisory employee may be ascribed to an employer where “the employer’s own negligence gives effect to the employee’s retaliatory animus and causes the victim to suffer an adverse employment decision.”

The Plaintiff in this case was an emergency medical technician. She reported to her supervisors that a fellow EMT had sexually harassed her. The harasser suspected that the Plaintiff had complained about his behavior and, in retaliation, manipulated a series of text messages and photos to make it appear as if it was in fact Plaintiff who was soliciting a sexual relationship with him, and presented the altered evidence to the Employer during its investigation.

The Employer then concluded that Plaintiff was having an inappropriate sexual relationship with the co-worker and terminated her. Plaintiff informed the Employer that the co-worker was lying to cover up his own indiscretions and offered to show the Employer her unaltered cell phone messages. The Employer declined to review Plaintiff’s cell phone and further refused to show her the “racy self-taken photo” that the co-worker claimed Plaintiff had sent him. Apparently, this photo was obscured and Plaintiff’s face could not be identified.

Plaintiff brought suit against the employer under Title VII of the Civil Rights Act and the New York State Human Rights Law, claiming that the Employer wrongfully terminated her in retaliation for her complaint of sexual harassment. The district court granted the Employer’s motion to dismiss the complaint on the theory that the co-worker’s retaliatory intent could not be attributed to the Employer and therefore the Employer could not have engaged in retaliation against Plaintiff.

The Second Circuit reversed on agency principles. As a result of the Employer’s negligent investigation of Plaintiff’s claims, the retaliatory intent of the low-level co-worker could be imputed to the Employer. The court adopted the “cat’s paw” theory in holding that even “absent evidence of illegitimate bias on the part of the ultimate decision maker, so long as the individual shown to have the impermissible bias played a meaningful role in the decision-making process.”

The court noted that the decision “should not be construed as holding an employer liable simply because it acts on information provided by a biased co-worker,” where such action is taken “non-negligently and in good faith.” Moreover, “an employer who negligently relies on a low-level employee’s false accusations in making an employment decision will not be liable under Title VII unless those false accusations themselves were the product of discriminatory or retaliatory intent.” The court seemed to be swayed by the egregious facts in this case – the Employer’s refusal to consider all evidence while conducting its investigation. The Employer had accorded the co-worker an “outsize role” in its own employment decision, which prompted the court to impute the employee’s animus to the Employer under a cat’s paw theory.

The theory of liability here could also be applied in a discrimination case. Employers are obligated to conduct a thorough investigation of an employee’s claims of harassment, discrimination and retaliation. It must take into account the potential biases and motivations of decision-makers and witnesses. Employers should document all aspects of an investigation and keep a clear record showing that all facts and potential motivations were considered when making a decision to discipline or discharge.