NEW JERSEY EMPLOYMENT LAWYER BLOG
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On May 9, 2016, the Equal Employment Opportunity Commission (“EEOC”) released new guidance on what is a reasonable accommodation under the Americans with Disabilities Act (“ADA”). The guidance makes clear that employers must not only provide employees with disabilities access to leave as an accommodation on the same basis as similarly situated employees without disabilities, but may be required to modify its policies to provide leave for a disability even where the employer does not offer leave to other employees. The guidance also addresses common issues for employers including analyzing undue hardship, requests for “indefinite” leave, maximum leave policies, and return to work issues. The guidance is a welcome relief for both employees and employers since it clears up some previous ambiguities in the law’s application.

The guidance states that if an employee requests leave related to a disability and the leave falls within the employer’s existing leave policy, the employer should treat the employee making the request the same as an employee who requests leave for reasons unrelated to a disability. For example, if an employer provides sick leave as well as annual leave that may be used for any purpose, an employer may not require an employee to designate leave as sick time simply because it is being used for a purpose related to a disability, because doing so would deny the employee use of annual leave due to his or her disability.

Further, the guidance provides that an employer must consider unpaid leave as a possible reasonable accommodation even when:

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A recent case from the United States Court of Appeals for the Eighth Circuit makes clear that an employer will lose its contractual right to arbitration if it proceeds in litigation for eight months.  In Messing v. North Central Distributing Inc., the plaintiff, a former Vice President, brought a breach of contract and wrongful termination claim against his former employer.  The company actively engaged in defending the case in the litigation, including filing an answer with 24 affirmative defenses, removing the case to federal court, attending discovery conferences and setting discovery schedules, filing a venue transfer motion, and agreeing to a trial date.  Eight months into the litigation, the employer sought to compel arbitration under the Vice President’s employment contract.  The District Court denied the employer’s motion to compel arbitration, reasoning that the company had waived its right to arbitrate since 1) it knew of the existing right to arbitration, and 2) it had prejudiced the employee by acting inconsistently with that right.
On appeal, the Eighth Circuit upheld the lower court’s ruling, stating that the employer had failed to do “all it could reasonably have been expected to do” to assert its right to arbitration earlier.  Indeed, the employer’s answer did not plead the arbitration clause in its affirmative defenses, nor mention it at the pretrial scheduling conference, nor raise the issue in its motion to transfer venue.  Moreover, the Court credited the lower court’s finding that the employer’s actions had caused the employee prejudice, in that he had been forced to expend considerable time and money litigating the matter in federal court.
While there is a long line of cases which favor arbitration as an alternative way to resolve disputes between parties, employers and employees alike should be aware that a contractual right to arbitrate claims must be asserted in a timely way by the party seeking arbitration.  This “use it or lose it” principle is sometimes an effective way to defeat an otherwise unassailable arbitration provision.
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As reported yesterday in the Cherry Hill Courier-Post, pizza company Domino’s is being sued in a proposed class-action lawsuit by delivery persons in South Jersey who claim they are not being paid the required minimum wage.  The plaintiffs contend that Domino’s does not properly reimburse the drivers for the full cost of using their personal vehicles to deliver Domino’s products to consumers.  The federal business mileage reimbursement rate has averaged about 55 cents per mile over the last few years.  By contrast, the lawsuit claims, the Domino’s drivers have only received about 90 cents per delivery, which equates to about 18 cents per mile for a typical pizza delivery trip.  This has resulted in a wage reduction of approximately $3.60 per hour, making the typical hourly wage for a Domino’s driver to be less than $5 — far less than the federal or New Jersey state minimum wages.  The lawsuit also asserts that drivers are compelled to purchase their own Domino’s jackets for $25, which further reduces their hourly wage.

Domino’s pay practices have drawn fire in other states as well.  New York has brought several cases against the pizza chain, garnering settlements of almost $450,000 on behalf of workers who were allegedly underpaid.  One year later, 29 different New York Domino’s locations paid $970,000 in settlements for the exact same claim, according to website Grubstreet.

It goes without saying that a global company such as Domino’s, with literally billions of dollars of sales per year, has the means to ensure that its employees are paid properly and in accordance with the law.  Whether Domino’s has the will to do so remains to be seen.  The negative publicity generated by cases such as this one and others may be the push Domino’s needs to decide to treat its employees better.  There is clearly more than enough “dough” to go around.

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The U.S. District Court in New Jersey, in Smith et al. v. Merck & Co., Inc., 3:13-cv-02970 (D.N.J.), recently issued a ruling that paves the way for thousands of women across the United States to join a lawsuit alleging gender discrimination against Merck & Co., a large pharmaceutical company.

Judge Shipp conditionally certified a class of current and former female sales representatives. He ruled that “[t]he information submitted by Plaintiffs shows that the sales representatives had similar responsibilities; that named plaintiffs were paid less than some allegedly similarly situated males; and that compensation decisions, although based in part on input from some direct managers, were finalized by a central, common office.” The Judge also based his decision to allow the lawsuit to go forward as a collective action on statistical evidence submitted by Plaintiffs that demonstrated that female sales representatives earned on average 1.4% less per year than male sales representatives in the same roles.

In addition to challenging unequal, centralized pay decisions in their lawsuit against the pharmaceutical giant, the Plaintiffs also allege that Merck systematically discriminates against female sales representatives, and pregnant women in particular, in promotions and other terms and conditions of employment.

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As reported by NJ.com, Governor Chris Christie has vetoed SB 992, a bill which sought to bar gender-based pay discrimination.  A full text of the proposed legislation may be read here.  The bill would have amended the New Jersey Law Against Discrimination by adding language prohibiting an employer from paying one gender less than the other for “substantially similar” work.  Employers would be permitted to pay workers of different sexes doing similar jobs in an unequal manner only if they could demonstrate that the unequal treatment was justified based on factors such as training, education, experience, or job performance.  The bill also contained a triple damages provision for employees who won cases brought under the law, and a transparency provision mandating that businesses who contract with the State file equal pay information to ensure compliance with the statute.

Governor Christie, in his veto message, criticized the law as “depart[ing] significantly from well-established law” and stated that the law would make New Jersey “very business unfriendly.”  The bill’s main sponsor, Sen. Loretta Weinberg (D-Bergen), has signaled that she may attempt a veto override, in that the bill passed by decisive margins in both houses — 28-4 in the Senate and 54-14-6 in the Assembly.

Pay equity is an important issue to New Jersey’s professional workforce.  There is no question that women and men should be paid the same for the same or similar work.  There is also no question that this bill would have helped New Jersey to achieve its goal of eradicating discrimination from the workplace.

 

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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.