NEW JERSEY EMPLOYMENT LAWYER BLOG
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As reported today by CNN, United Airlines CEO Jeff Smisek received a severance package of over $36 million upon resigning from the company last September, amid a federal investigation into corruption involving the Port Authority of New York and New Jersey.  The severance package included a $4.9 million dollar payout, a $1.7 million bonus, $29 million in equity-based awards, lifetime flight and airport parking privileges, and life insurance and health benefits until he qualifies for Medicare.

Executive severance packages like the one described above have come under scrutiny by federal and state regulators, shareholders, labor unions, and consumers.  Not only do such excessive severance packages have the potential to be challenged in the courts, and cause public outcry, they are often ineffective in obtaining the highest-quality executives.  Indeed, as one corporate researcher noted, when a company guarantees its executives large severance packages even when they perform poorly (or, as in the case of Mr. Smisek, subject the company to a federal corruption probe), it may undermine the executives’ desire to build long-term value for shareholders.  “They don’t care if they are fired or not.”

In an era of high airline tickets prices, rising baggage and other fees, and smaller airplane seat sizes, United’s decision to honor this severance package is unsettling.  United’s Board of Directors has the right to force Mr. Smisek to repay roughly $10.1 million of his severance pay.  Doing so may alleviate some of the negative press regarding this issue going forward.

 

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On Monday, March 28, 2016, Mayor Bill de Blasio signed several bills amending the NYC Human Rights Law (“NYCHRL”). We are pleased because these amendments should ultimately provide employees more protection under the law.

The bills incorporate three NYC judicial decisions as appropriate examples of the liberal construction requirement of the NYCHRL. In Albunio v. City of New York, 17 N.Y.3d 472 (N.Y. 2011), the Court of Appeals held that it must construe the anti-retaliation provision of the NYCHRL broadly in favor of discrimination plaintiffs, to the extent that such construction was reasonable under the facts of a case. In Williams v. New York City Housing Authority, 61 A.D.3d 62 (1st Dep’t 2009), the Appellate Division held that a Plaintiff need not prove that harassment was severe or pervasive in order to prove a hostile work environment claim under the NYCHRL. Instead, the Plaintiff need only show that he or she has been treated less well than other employees of his or her protected class. The court noted that questions of severity and pervasiveness go only to consideration of the scope of permissible damages, and not to the question of underlying liability. The court noted that “petty slights or trivial inconveniences” would not result in liability. Finally, in Bennett v. Health Management Systems, 92 A.D.3d 29 (1st Dep’t 2011), the court clarified the burden shifting analysis set forth by the U.S. Supreme Court in McDonnell Douglas v. Green, 411 U.S. 792 (1973), especially in the summary judgment content, in order to “maximize the opportunities for discrimination to be exposed.”

One bill, Intro 818-A amends the administrative code in relation to the NYCHRL to provide attorneys’ fees, expert fees, and other costs in complaints brought before the New York City Human Rights Commission.

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In Delvecchio v. Township of Bridgewater, (A-24-14) (074936), the New Jersey Appellate Division ruled on April 28, 2016, that a Plaintiff may rely on the testimony of a treating physician who has not been designated as an expert witness, to establish the existence of a disability for a claim under the New Jersey Law Against Discrimination (“LAD”), N.J.S.A. 10:5-1 et. seq.  

Ms. Delvecchio worked as a police dispatcher for the Township of Bridgewater (“Township”) for more than 10 years. At that time, the Township maintained three shifts for police dispatchers, including a midnight shift, and required dispatchers to work each of the shifts on a rotating basis. In 2003, Ms. Delvecchio developed inflammatory bowel syndrome (“IBS”), and began treatment with Dr. Gary Ciambotti, a gastroenterologist. Dr. Ciambotti wrote to Ms. Delvecchio’s supervisors and stated that her symptoms were under control as long as she worked regular daytime hours, but would be exacerbated by an assignment to the midnight shift.

For three years, the Township did not require Ms. Delvecchio to work the night shift, but eventually it stated that it was no longer possible to assign her consistently to the daytime shift due to the burden that this imposed on other employees who covered the remaining shifts. In December 2007 the Township asked Ms. Delvecchio to resign. She refused, and accepted another position within the Township as a records clerk, but at a lower salary. On September 26, 2009 the Township terminated Ms. Delvecchio’s employment for neglect of duty and chronic/excessive absenteeism. Ms. Delvecchio sued, claiming that the Township fired her instead of providing her a reasonable accommodation for her disability, in violation of the LAD.

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New York lawmakers announced on March 31, 2016 that they reached a budget agreement to raise New York City’s minimum wage to $15 an hour by the end of 2018 for employers with at least eleven employees. The minimum wage will also rise in the rest of New York State but at a slower pace.

For workers in New York City employed by business with at least 11 employees, the minimum wage would rise to $11 at the end of 2016, $13 at the end of 2017, and $15 on December 31, 2018. For workers in New York City employed by businesses with 10 or less employees, the minimum wage would rise to $10.50 at the end of 2016, $12 at the end of 2017, $13.50 at the end of 2018, and $15 on December 31, 2019.

The minimum wage increases are expected to affect approximately 2.3 million workers statewide. We are hopeful that this legislation will be a win-win for both workers and businesses – more money in workers’ pockets and ultimately more money flowing into the economy!

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We are pleased to report that the Appellate Division, in Morgan v. Raymours Furniture Company, Inc., rejected Defendant’s motion to compel mandatory arbitration.  In this case, the employer, Raymour, sought to compel arbitration based upon an arbitration policy contained in its employee handbook that was circulated electronically.  The handbook contained several disclaimers advising that nothing in the handbook could be enforced as a contract, and that none of the terms of the handbook could be enforced against the employer.

The Court emphatically rejected the Defendants’ claim that there was an enforceable arbitration agreement, and held that the same disclaimers that prevent a contract from forming against the Defendant also prevent a contract from forming against the Plaintiff.  Even more important, the Appellant Division ruled that a motion to compel arbitration is actually akin to a motion for an injunction, and that therefore the motion could be denied on purely equitable grounds.  This will permit Plaintiff employees to argue that motions to compel mandatory arbitration can be rejected based on grounds of fundamental unfairness.

Hopefully this decision will be upheld on appeal and Plaintiff employees will not be denied access to courts and juries on account of obscure arbitration clauses.

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We have negotiated many settlement agreements for claims brought under the New Jersey Law Against Discrimination (“LAD”), the Conscientious Employee Protection Act (“CEPA”), and various other New Jersey laws that have included a provision barring the settling employee from seeking future employment with the defendant employer.  Employers argue in favor of including these clauses in order to prevent future claims of retaliation in the event the employer does not agree to re-hire the employee.  Truth be told, most employees have no desire to work again for the offending employer, but these no re-hire provisions can become complicated when companies are sold and/or merged and the employee seeks future employment with the re-constituted employer.

A federal court in New York (see, Reyes v. Hip at Murray Street) recently refused to approve a proposed settlement for a lawsuit brought under the Fair Labor Standards Act because it contained such a no re-hire provision.  It will be interesting to see if there is more push back on these clauses in settlement agreements for a wider range of employment law claims.  Stay tuned!

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The New York Times reported today about a study recently undertaken by Rutgers and Syracuse universities.  Researchers sent resumes and cover letters on behalf of fictitious applicants for thousands of accounting jobs.  Disappointingly, they found that employers expressed interest in candidates who disclosed a disability about 26 percent less frequently than in candidates who did not.  This could explain the low national employment rate for persons with disabilities.

The researchers created two separate resumes: one for a highly qualified candidate with six years of experience, and one for a novice candidate about one year out of college.  For each resume, they composed three different cover letters: one for a candidate with no disability, one for a candidate who disclosed a spinal cord injury in the letter, and one for a candidate who disclosed having Asperger’s syndrome, a disorder that can make social interactions difficult.

Interestingly, employers had less interest in interviewing the experienced candidate that was disabled than the disabled candidate just out of school. Employers were about 34 percent less likely to show interest in an experienced disabled candidate, but only about 15 percent less likely to express interest in a disabled novice candidate.  The researchers speculated that the steeper drop-off in interested for experienced disabled candidates arose because more experienced workers represent a larger investment for employers, who must typically pay such workers higher salaries and assume the employment relationship will last longer.  Also, experienced workers are also more likely to interact with clients on a regular basis so employers may believe that hiring these workers are riskier.

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On September 15, 2015, Rina Traub, Esq. was featured on “Know Your Rights NJ” in a program discussing unemployment insurance.  This program, which is available for viewing here, is produced by Princeton Community Television.  Ms. Traub described New Jersey’s unemployment insurance program in detail, including the basics of qualifying for benefits and appealing adverse determinations from the Department of Labor.

If you have questions regarding your entitlement to unemployment insurance benefits, or have been denied benefits, contact a knowledgeable employment attorney to discuss your options.

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According to the U.S. Department of Labor (as reported in North Jersey.com), there is over $7,000,000 in back pay sitting unclaimed in their Philadelphia.  This money is being held on behalf of approximately 10,000 New Jersey workers.  The unclaimed money was collected over the past three years from employers who were investigated or prosecuted for wage and hour violations.  If you believe you are owed back pay from a U.S. DOL investigation or complaint, you can check the agency’s “Wages Owed Workers” site and type in your employer’s name and location, followed by your own last name and first initial.  Since the website’s launch in June, approximately $800,000 has been claimed.  But act fast.  If you don’t claim your money within three years, it will go the U.S. Treasury.

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The New Jersey Supreme Court issued an important decision this week which is being hailed as a great victory by plaintiff’s employment lawyers.  The issue before the Court was whether so-called “watchdog” employees were entitled to protection under the Conscientious Employee Protection Act, New Jersey’s whistleblower protection statute.  “Watchdog employees” are those whose regular job duties include blowing the whistle, such as an internal auditor, a quality assurance professional, or a retail store manager.  Under a previous decision of the Court, some employers successfully argued that such employees are not entitled to whistleblower protection — they were merely doing their job.  However, in the recent case of Lippmann v. Ethicon, the Court rejected that argument, reasoning that the nature of an employee’s position and job duties does not take away their whistleblower rights.

The Court’s decision upholds the legislative intent behind the whistleblower statute, which is to encourage as many employees as possible to report actions of their employer which are unsafe or illegal.  If your employer is engaging in conduct which you reasonably believe to be reportable or objectionable under the whistleblower law, you should consult with a knowledgeable employment attorney before taking action.