A New Jersey Appellate Division panel—in Blake v. Board of Review, Dep’t of Labor, No. A-2940-15T3—held that a 2015 amendment to New Jersey’s Unemployment Compensation Law (“UCL”) does not authorize unemployment benefits to an employee who accepts a job offer from another employer but has that offer rescinded prior to commencing the new employment. The opinion, which was approved for publication on September 28, 2017, conflicts with another Appellate Division panel that came to the opposite conclusion just one month prior in McClain v. Board of Review, Dep’t of Labor, No. A-4319-15 (approved for publication on August 29, 2017). Both panels believed that the amendment’s plain language supported their respective interpretations. Continue reading “Panel Creates Split in Appellate Division over 2015 Amendment to New Jersey’s Unemployment Compensation Law”
The Third Circuit Court of Appeals recently held that a single isolated use of a racial slur may be sufficient to establish unlawful workplace harassment.
Background and Analysis:
On July 14, 2017, a three-judge panel of the U.S. Court of Appeals for the Third Circuit ruled that a single racial slur may be sufficient to state a claim for unlawful workplace harassment.
In Castleberry v. STI Group, the plaintiffs—two African American general laborers working on a pipeline project—alleged that they were subjected to a hostile work environment when they were told by a supervisor that they would be fired if they “[n-word]-rigged” a fence that they had been instructed to remove. Defendants argued there was no precedent for a finding that a single racial epithet could be enough to create a hostile work environment. Judge Thomas Ambro, writing for the panel, rejected the defendants’ position, holding that the United States Supreme Court’s adoption of the “severe or pervasive” standard in harassment claims suggested that a “supervisor’s single use of a racial slur could be adequately ‘severe’ and sufficient to state a claim” for harassment.
The Third Circuit’s ruling clarified case law within the circuit (covering Delaware, New Jersey, and Pennsylvania) that has been somewhat in conflict for decades. Between 2001 and 2012, district courts within the circuit have used a number of different standards for determining whether a plaintiff has adequately pled workplace harassment. Some used the “severe or pervasive” standard, at least three used the “pervasive and regular” standard, and at least one case used the “severe and pervasive” standard. In its decision, the Court in Castleberry made clear that the proper standard for evaluating hostile work environment cases is whether the conduct is “severe or pervasive.”
In reversing the U.S. District Court for the Middle District of Pennsylvania’s dismissal of the plaintiffs’ claims, the Court held that the racially charged slur used in the presence of non-African American coworkers, coupled with threats of termination, could constitute sufficiently severe conduct that could result in the creation of a hostile work environment.
The Castleberry decision reminds employers that even a single isolated incident, such as a repugnant comment, can result in legal liability for discrimination or harassment. Employers should take affirmative steps to train employees, especially management personnel, that slurs and epithets based on any protected category (for example, race and/or color) are not appropriate in the workplace.
Employers should do the following:
- Clearly communicate through employee handbook policies that discrimination and harassment will not be tolerated, and ensure that all employees receive a copy of the handbook and sign an acknowledgement.
- Immediately and thoroughly investigate any complaints of discrimination (including harassment) and implement prompt remedial measures, which are designed to correct any prior issues and prevent similar conduct from occurring in the future.
- Periodically train all supervisors and employees regarding discrimination and harassment recognition and prevention.
In a landmark decision yesterday, the United States Court of Appeals for the Seventh Circuit became the first federal circuit court in the nation to hold that discrimination based on sexual orientation is prohibited under federal law.
Specifically, in its April 4, 2017 decision, the Court found that Title VII of the Civil Rights Act of 1964 prohibits job discrimination based on sexual orientation. Hively v. Ivy Tech Community College, No. 15-1720. In Hively, the plaintiff, an open lesbian, is an adjunct professor who is suing her employer, Ivy Tech Community College, alleging that she was repeatedly passed over for promotions due to her sexual orientation. In reaching its decision, the Seventh Circuit reasoned that sexual orientation discrimination is, in essence, indistinguishable from sex discrimination and thus prohibited under Title VII.
The Seventh Circuit ruling comes after a rare en banc hearing of all 11 judges reviewing a three-judge panel decision from its own court, which, despite expressing strong reservations, held that Title VII did not protect against sexual orientation discrimination, even though gay marriage is now legal. The Court’s en banc decision reversed this prior ruling by an 8-3 vote.
Hively is in line with the Equal Employment Opportunity Commission’s July 2015 administrative ruling (binding federal agencies, but not federal courts), which held that bias based on sexual orientation violates Title VII. In contrast, in March 2017, the Eleventh and Second Circuits issued decisions holding that Title VII does not prohibit discrimination on the basis of sexual orientation. Evans v Georgia Regional Hospital, No. 15-15234 (11th Cir. March 10, 2017); Christiansen v. Omnicom Group, Inc., No. 16-748 (2nd Cir. March 27, 2017). The United States Supreme Court has yet to weigh in on the issue. The Hively decision, however, now creates a circuit split on the issue of whether sexual orientation is entitled to protection under Title VII, which significantly increases the likelihood that the issue is presented to, and accepted by, the Supreme Court for a final decision.
We will continue to monitor the rapidly evolving expansion of protected characteristics under federal law. For now, as a compliance philosophy, the key takeaway for employers is to treat all employees consistently and with respect, as though everyone is protected under the law. Remember that, although protection against sexual orientation discrimination may still be in question under federal law, many states and localities across the country explicitly provide that protection for employees.
Restrictive covenants are common in many industries. Under New Jersey and Pennsylvania law, a defendant may be liable for tortious interference with a restrictive covenant only if it has actual knowledge of the contract with which it allegedly interferes. In Acclaim Systems, Inc. v. Infosys, Ltd., the Third Circuit reaffirmed this rule in the context of IT consulting non-competes and expressed its reluctance to recognize any exceptions.
In Acclaim Systems, Time Warner Cable (“TWC”) was looking to cut costs on its Sales Force Dot Com (“SFDC”) project by switching providers for certain IT services. When TWC switched from Acclaim to Infosys, TWC asked Infosys to consider retaining four individuals who were already working on SFDC on behalf of Acclaim. All of these individuals had non-competes with Acclaim that prohibited them from working on SFDC on behalf of Infosys. Continue reading “Employer Cannot Be Liable for Interfering with Non-Compete It Doesn’t Know Exists, Third Circuit Holds”
Our society is becoming increasingly paperless. As a result, our courts are constantly confronting factual scenarios that could not be contemplated ten years ago. In the latest example, the Third Circuit recently affirmed the enforceability of a non-compete agreement posted online. ADP, LLC v. Jordan Lynch, No. 16-3617 (3d Cir. Feb. 7, 2017).
ADP sought to enforce a non-compete agreement against two employees who had left to work for a direct competitor. The non-compete was for one year and prohibited the employees from soliciting current and prospective clients. The District Court enforced the non-solicitation clause but declined to enjoin the employees from working for the competitor. The employees appealed the injunction order claiming that the District Court erred because there was nothing to prove that they agreed to the contents of the non-compete, despite their affirmance that they read it. Continue reading “Third Circuit Enforces Non-Compete Agreement Posted on Internet”
The Third Circuit’s January 10, 2017 decision regarding an employer’s age-based liability under the Age Discrimination in Employment Act (“ADEA”) should serve as a call to action to employers to evaluate and review their policies to ensure that they do not inadvertently violate the ADEA by discriminating against individuals who are in “subgroups” over 40 years old.
Most employers know that the plain language of the ADEA protects “individuals who are at least 40 years of age,” and its disparate impact provision prohibits an employer from “adversely affect[ing an employee’s] status . . . because of such individual’s age.” But in Karlo v. Pittsburgh Glass Works, the Third Circuit made employers’ lives a little more complicated by holding that “‘subgroup’ disparate-impact claims are cognizable under the ADEA.” In other words, the Third Circuit held that under the ADEA, employees in a subgroup older than 40 years old—in Karlo, the subgroup of employees was 50-and-older—can bring disparate impact claims against their employer alleging that they were “disfavored relative to younger employees,” even if the younger employees were 40 years old or older. Continue reading “Third Circuit Recognizes “Subgroup” ADEA Disparate-Impact Claims”
Yesterday, Judge Mazzant of the United States District Court for the Eastern District of Texas granted a nationwide preliminary injunction blocking the Department of Labor’s (“DOL”) new regulation governing the Fair Labor Standards Act (“FLSA”) white collar exemptions. The rule, which would have more than doubled the minimum salary threshold for the white collar exemption from $455 per week (or $23,660 per year) to $913 per week (or $47,476 per year), was scheduled to become effective December 1, 2016.
Background and Analysis
In October, 21 states filed an emergency motion for a preliminary injunction to prevent the implementation of the new regulation. The states argued that the DOL exceeded its authority by making the salary threshold too high and by providing for automatic adjustments to the threshold every three years. Last month, the states’ case was consolidated with another lawsuit filed by the U.S. Chamber of Commerce and other business organizations, which raised similar objections to the rule. Continue reading “District Court Grants Injunctive Relief Blocking December 1 Implementation of New DOL Overtime Rule”