Top Five States for Employment Law Claims

According to employment practices liability insurer Hiscox, California, Illinois, Alabama, Mississippi, and the District of Columbia are the top five riskiest places in the country for employee lawsuits. Employers in these states face a larger than average chance of being sued for employment law violations.

Hiscox states that “[a]ccording to the study, on average, a U.S.-based business with at least 10 employees has a 12.5 percent chance of having an employment liability charge filed against it.” Businesses with over 100 employees can expect to defend an employment related claim at least once every three years. Lower risk states for employment litigation include West Virginia, Massachusetts, Michigan, Kentucky and Washington.

The statistics used for this study included only federally-filed claims and discrimination charges brought before the Equal Employment Opportunity Commission. Data on state law claims, such as claims brought pursuant to New Jersey’s Law Against Discrimination, is not routinely collected. Suffice it to say that New Jersey employers, of any size, should have adequate personnel policies, training, and regular compliance audits to minimize the risk of being sued by an employee.

Whistleblower Protection Extended to Post-Employment Activity

The U.S. District Court for New Jersey extended whistle-blower anti-retaliation protections to a brokerage firm employee who reported alleged misconduct internally but did not report it to federal regulators until after his dismissal, according to Bloomberg Law.

The employee sued his former employer, TD Ameritrade, claiming that the company “violated the Dodd-Frank Wall Street Reform and Consumer Protection Act by wrongfully terminating him for complaining to management about alleged securities law violations,” said the article. The employee, who was an investment oversight officer, reported to a supervisor that one of Ameritrade’s offerings was not in compliance with securities regulations. The supervisor told the employee not to make corrective changes and later fired him after he pressed the issue further. The employee only contacted the SEC to expose the situation after Ameritrade fired him.

The defendants moved to dismiss the case, saying that the was not a whistle-blower because he did not blow the whistle until after he was fired. The Court disagreed, holding that “internal reporting of potential violations is sufficient to qualify as a whistle-blower under the Dodd-Frank Act’s anti-retaliation provision.”

Whistleblower protection is afforded under various federal and state laws. If your employer is engaging in conduct which you believe may be unlawful, unethical, or against public policy, contact an employment lawyer to discuss how to best handle the situation.

Court Finds Facebook Post a Breach of Confidentiality Agreement

KEEP IT QUIET MEANS KEEP IT QUIET

We frequently advise clients to be mindful of what they post on social media, particularly when they are involved in litigation with a current or former employer. Unfortunately, Mr. Patrick Snay learned this lesson the hard way, when his daughter’s Facebook status update cost him the $80,000 settlement he obtained in an age-discrimination lawsuit.

Mr. Snay, 69, a former headmaster at Gulliver Preparatory School in Miami, sued his former employer for age discrimination when the school did not renew his contract. The parties settled the matter and entered into a settlement agreement where Gulliver agreed to pay Mr. Snay $80,000. The agreement contained a standard confidentiality clause, requiring that Snay and the school keep the terms and existence of the agreement private.

However, Snay’s daughter, Dana, a college student in Boston, couldn’t resist bragging about the case on Facebook. “Mama and Papa Snay won the case against Gulliver,” she wrote. “Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.”

Dana apparently had about 1,200 Facebook friends, many of whom are current and former Gulliver students, and news of the post made its way back to the school’s lawyers, who told the Snays they’d violated the deal. Mr. Snay won a Circuit Court ruling to enforce the deal, but a Third District Court of Appeal Judge just overturned that decision. “Snay violated the agreement by doing exactly what he had promised not to do,” the Judge wrote in her decision. “His daughter then did precisely what the confidentiality agreement was designed to prevent.”

Although Snay can appeal this decision to the Florida Supreme Court, the lesson here is quite simple: When involved in legal proceedings, don’t disclose anything on social media. It is not worth it.

NJ Expands Job Protection For Pregnant Employees

We are pleased to report that, on January 21, 2014, Governor Christie signed into law an amendment to the New Jersey Law Against Discrimination (“NJLAD”) that adds pregnancy as a protected classification. The amendment, which became effective immediately, defines “pregnancy” as childbirth, or medical conditions related to pregnancy or childbirth, including recovery from childbirth.

Prior to this amendment, the NJLAD prohibited discrimination based on gender and disability but did not specifically include pregnancy as a protected class or require reasonable accommodation for pregnant employees if the pregnant employee’s condition did not qualify as a disability under federal or state law. New Jersey now joins several other states, including New York, in prohibiting discrimination against pregnant workers and requiring employers to provide pregnant employees with reasonable accommodations.

The amendment offers the following examples of reasonable accommodation that an employer may be required to provide to employees for “needs related to the pregnancy”:

• Bathroom breaks;
• Breaks for increased water intake;
• Periodic rest;
• Assistance with manual labor;
• Job restructuring or modified work schedules; and
• Temporary transfers to less strenuous or hazardous work.

The employer is obligated to provide accommodations when the employee, based on the advice of her physician, requests the accommodations, unless the employer can demonstrate that providing the accommodation would be an undue hardship on the business operations of the employer. The Amendment does not increase an employee’s rights to paid or unpaid leave in connection with the pregnancy.

Employers with operations in New Jersey should update employee handbooks and policies covering reasonable accommodations and should train managers and human resources personnel on the effect of this new amendment.

Any pregnant employee who encounters resistance or retaliation from her employer for requesting an accommodation because of pregnancy should consult a reputable employment attorney.

US Supreme Court Narrows Definition of “Supervisor” for Discrimination Claims

In the recent decision Vance v. Ball State, the United States Supreme Court has made it more difficult for workers to sue their employers for workplace discrimination. The Court’s 5-4 decision narrowed the definition of the term “supervisor” for purposes of discrimination law.

For the last fifteen years or so, employers have been liable for the conduct of their supervisory employees when the supervisors engage in specific, tangible acts of discrimination. During this time, there has been a lot of litigation over the proper definition of the term “supervisor.” Some courts have employed a broader definition, some a narrower one.

The EEOC — the federal agency charged with enforcing the anti-discrimination laws — has published guidance which adopts a broader definition. According to the agency, supervisors are employees who exercise “significant direction over another’s daily work.”

This definition is now out the window. According to the Vance case, the law of the land is now that “supervisors” are only those management-level employees who “are empowered” to take “tangible employment actions” against lower-level employees, “such as” having the authority to hire and fire.

The conservative majority of the Supreme Court handed a victory to employers in this case. It will now be much harder for victims of discrimination in the workplace to hold their employers accountable for actions of supervisory employees. The purpose of these anti-discrimination laws, i.e., to end discrimination in employment, has been undermined.

Credit History Discrimination

There is a bill before the New York City Council that, if passed into law, would prohibit employers from using credit histories in hiring except in the very few cases where credit checks are required by law. This bill would be the strongest such law in the country.

Many employers used credit checks to screen job applicants, even though research has shown that people with damaged credit are not automatically poor job risks. Moreover, the credit agencies that compile and sell records on about 200 million American make mistakes and these erroneous reports could shut people out of the job market.

The New York City Council had a hearing on this issue recently in which a 30 year military veteran who had been deployed in Iraq testified that he had been turned down for a job as an airport passenger screener with the Transportation Security Administration because of a mistake on his credit report. By the time he got the mistake resolved, he said, the job had been filled. One might ask, even if this gentleman’s credit report was correct, how does an inferior credit rating disqualify him from screening passengers? By using credit histories, employers have created a disadvantaged class that could be permanently locked out of the economy.

New Jersey has a similarly minded bill pending in its legislature. This bill prohibits an employer from requiring a credit check on a current or prospective employee as a condition of employment, unless the employer is required to do so by law, or is a bona fide occupation requirement of a particular position. It also prohibits retaliation against an employee or prospective employee who asserts his or her rights under the bill.

If you believe you have been the victim of credit history discrimination consult a reputable employment law attorney to determine your rights.

NJ Legislature Introduces Bill to Limit Non-Compete Agreements

New Jersey State Assemblymen Peter J. Barnes, III, Joseph V. Egan and Wayne P. Deangelo recently introduced a bill in the New Jersey State Assembly which limits the enforceability of certain post-employment restrictive provisions in employment contracts if the individual who is subject to these restrictions is eligible for unemployment compensation in the state. The bill provides that if an unemployed individual is found to be eligible to receive unemployment compensation benefits, that individual shall not be held bound by any covenant, contract or agreement not to compete, not to disclose or not to solicit.

The rationale behind the bill is to make it easier for a terminated employee to become re-employed. Although it is unclear if the Governor will ultimately sign the bill into law, there appears to be support within the state Assembly and Senate.

The bill, as written, only applies to agreements entered into after the date of the law’s enactment. Therefore, we expect to see more employers requiring that their employees sign these restrictive covenants in the near term in order to avoid potential coverage under the law. Employers may also design these contracts to provide for severance in the form of salary continuation pay so that the former employee may not be deemed eligible for unemployment during the term of the non- compete/non-solicitation.

The issues surrounding most post-termination agreements are complicated. We suggest that both the executives required to sign these agreements, as well as the companies who would like to enforce these agreements, consult a reputable employment law attorney to determine if the contract is reasonable and enforceable.

Young Veterans Facing High Unemployment

According to CBS News, younger veterans who served in the years following the Sept. 11 attacks are having a harder time finding work than their civilian peers. The unemployment rate for veterans between 18 and 24 exceeded 20 percent last year and was also in double digits for those 25-34. CBS News reports that the unemployment rate for both age groups was higher than for their non-veteran peers and much higher than the national average.

This persistent problem has continued despite a wide range of private and public efforts to address the situation. For example, Congress has approved tax credits for companies that hire veterans and federal agencies have stepped up their preferential hiring of vets. In the private sector, companies such as Wal-Mart, General Electric and many others have announced programs designed to hire more veterans.

In the legal realm, it is unlawful for employers to discriminate against persons based on their status as a veteran. If you are a veteran who has had difficulty finding or keeping a job because of your military service, consider getting advice from a competent employment lawyer regarding your particular situation.

Do I Really Need an Employment Lawyer?

Some employees do a little Googling and think they are qualified to extract big settlements or severance packages from their employers without hiring an employment lawyer. Can it be done? Honestly, no, not really. Should it be attempted? Absolutely not. An employment lawyer is a specialist in handling employment law matters, just as a cardiac surgeon is a specialist in performing heart surgery. You wouldn’t perform heart surgery on yourself, would you?

This point is driven home by a recent decision of the Appellate Division of the New Jersey Superior Court. On May 1, 2012, the Appellate Division affirmed a lower court decision concluding that the plaintiff-employee failed to state a cognizable claim under the New Jersey Law Against Discrimination (LAD) and the Conscientious Employment Protection Act (CEPA), and had not established a cause of action for either LAD or CEPA. The employee represented himself in the case. The appellate court agreed with the trial court’s decision that the employee had not stated his claims correctly, nor provided enough evidence to sustain them.

If you believe you have a valid claim against your employer, seek the guidance and counsel of a lawyer who specializes in employment law matters. The employee mentioned above made simple mistakes which caused him to lose his case. Hiring an employment lawyer, while not guaranteeing him victory, would have at least given him a fighting chance.

U.S. Trustee Objects to Kodak Retention Bonuses

As reported in the Rochester Democrat and Chronicle, the U.S. Trustee is opposing efforts by Eastman Kodak Co. to spend up to $13.5 million on retention bonuses for a number of its executives.

On April 4, Kodak filed a motion seeking court approval to pay a total of $8.5 million in retention bonuses to 119 mid-level and upper-level executives and an additional $5 million to other employees as needed. The printing and imaging company argued that without those key employees, its operations “would be compromised, jeopardizing restructuring efforts and significantly reducing the likelihood that the debtors will emerge successfully from Chapter 11.” The U.S. Trustee argued that there aren’t enough guarantees that bonus money won’t go to insiders, like the Company’s CEO. The retention bonus proposal also raised the ire of a number of former Kodakers, who have been laid off and/or had their pension plans changed as a result of the bankruptcy.

It seems unfair that a company would seek to reward the very executives who drove it into bankruptcy, while cutting jobs and reducing the benefits of its rank-and-file employees. Unfortunately, this type of business practice appears to be the norm these days.