ALERT: New Jersey Raising Minimum Wage!

Thomas J. Szymanski

New Jersey’s minimum wage will increase by 25 cents, from $8.60 to $8.85 per hour, effective January 1, 2019. For non-exempt employees making the minimum wage, employers will be required to pay an overtime rate of $13.28 for every hour worked over 40 in a work week, to comply with the State’s minimum wage requirements.

Employers should be aware that one of Governor Phil Murphy’s top legislative priorities is to increase the minimum wage to $15 per hour. Although the Legislature passed a $15-an-hour minimum wage bill in 2016, which was vetoed by then-Governor Chris Christie, neither Governor Murphy nor the Legislature has communicated a path forward to get another bill on the table.

As wage payment violations carry significant penalties in New Jersey, you should contact a member of Blank Rome’s labor & employment practice group if you have any questions about compliance with New Jersey’s minimum wage increase or any other wage and hour issues.

Update on New Jersey Paid Sick Leave Act

Mark Blondman

In an earlier Blank Rome Workplace post, we provided a preview of the New Jersey Paid Sick Leave Act. The Act goes into effect on October 29, 2018. Last week, the Department of Labor and Workplace Development, the state agency responsible for interpreting the Act, published a “Notice of Employee Rights” under the Act and a copy of that Notice/Poster is available here. The Notice must be posted by employers in conspicuous locations in every worksite in New Jersey and must be distributed to all New Jersey employees by November 29 and at the time of hiring for all new employees hired after October 29.

The Act imposes significant obligations on employers in New Jersey. You can contact a member of Blank Rome’s labor & employment practice group if you have any questions about what needs to be in your policies.

New Jersey Supreme Court Voids Waiver of Third-Party Liability in Employment Contracts

Michael A. Rowe

In Vitale v. Schering-Plough Corp., A-20-16 (Dec. 11, 2017), the New Jersey Supreme Court ruled that an employment contract that limits a worker’s right to sue a third party after an injury is unenforceable because it contravenes public policy.

Allied Barton Security Services (“Allied”) hired Plaintiff as a security guard. As a condition of employment, Allied required Plaintiff to sign an agreement entitled “Worker’s Comp Disclaimer” (the “Disclaimer”). Under the Disclaimer, Plaintiff released all rights he may have had against “any customer…of Allied Security to which [Plaintiff] may be assigned, arising from or related to injuries which are covered under the Workers’ Compensation statutes.” Continue reading “New Jersey Supreme Court Voids Waiver of Third-Party Liability in Employment Contracts”

Panel Creates Split in Appellate Division over 2015 Amendment to New Jersey’s Unemployment Compensation Law

Jaret N. Gronczewski

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”

Single Racial Slur May Be Sufficient to Establish Workplace Harassment

Mark Blondman and Joel Michel

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.

Takeaways:

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.

For more information, please contact Mark Blondman, Joel Michel, or a member of Blank Rome’s Labor and Employment group.

Seventh Circuit Is First to Hold that Title VII Protects against Sexual Orientation Discrimination

Blank Rome LLP

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.

This blog was originally by Blank Rome’s Labor and Employment group. Click here to read the alert online. 

Employer Cannot Be Liable for Interfering with Non-Compete It Doesn’t Know Exists, Third Circuit Holds

Ethan Simon

simonRestrictive 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.,[1] 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”