NEW JERSEY EMPLOYMENT LAWYER BLOG
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The New Jersey Assembly is set to vote on a bill, already approved by the Senate, which would require public entities to purchase products made in the U.S. of A.  Supporters of the bill, which include U.S. companies and labor unions, say that the bill will create jobs and stimulate the State’s efforts to recover from the Great Recession.  They point to the recent purchase by the Port Authority of $1.2 billion worth of steel for the Bayonne Bridge from an Italian company as an example where this bill could have done some good.  Supporters also note that there is a “multiplier effect” when taxpayer dollars are spent on U.S. made products for large investment, infrastructure-type projects.  Opponents of the measure, which include several business groups, claim that the bill is unfair to foreign companies who invest and have employees in New Jersey but make their goods overseas.

The Buy America bill would only apply to contracts sufficiently large that they must be put out to bid.  It would require government agencies to buy only products of which at least 50 percent of the cost comes from components “mined, produced or manufactured” in the U.S.  There are exceptions in certain scenarios, such as if the cost of the U.S.-produced product is more than 20 percent higher than a foreign item, or if the U.S.-made product is not available in sufficient quantity.  Certain classes of goods, such as electronics and computers, are exempt altogether.

As small business owners who represent small and medium-size businesses, we support the call to economic patriotism embodied in this bill.  Requiring public contracts to be fulfilled with U.S. made goods may well be the spark this economy needs.

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The recent U.S. Supreme Court decision in Integrity Staffing Solutions v. Busk is a blow to hourly employees nationwide.

The employees at issue in Integrity Staffing were employed to retrieve products and package them for delivery to Amazon customers.  These employees claimed that they were entitled to be paid for the time spent undergoing security screenings before leaving the warehouse each day.  They estimated that these screenings took about 25 minutes each day, or about 2 + hours per week.

The Court analyzed this case under the Portal-to-Portal Act, which exempts employers from paying employees for activities that are preliminary and postliminary to the “principal activity or activities.”  It found that the screenings were not the employees’ “principal activities” because Integrity Staffing had not hired them to undergo security screenings.  Moreover, it found that the screenings were not “integral and indispensable” to the employees’ work as warehouse workers because they could perform their jobs, retrieving packages, without the screenings.  The Court rejected the test used by the Ninth Circuit – whether an employer “required” a particular activity – in determining whether such activity was compensable under the federal wage and hour laws. The Court stated that that standard would be too broad and would run contrary to the intent of the Portal-to-Portal Act.

This decision is clearly a significant victory for employers, who now have clear guidance that in the vast majority of cases, the time an employee spends undergoing security screening is not compensable under federal law.  But employers should still proceed carefully – particularly if their screenings result in employees waiting significant amounts of time.  The Court alluded to the fact that requiring employees to wait a significant amount of time for security screening could trigger union demands to be paid for such time.

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The Third Circuit Court of Appeals, in Khazin v. TD Ameritrade Holding Corp., No. 14-1689, December 8, 2014, recently upheld the dismissal of a whistleblower claim brought by a former employee of TD Ameritrade, because his claim was barred by an arbitration agreement.  The employee was responsible for performing due diligence on financial products offered by the company.   When he discovered that one product was priced in an unlawful manner, he reported it to his supervisor.  She instructed him to analyze the “revenue impact” of pricing the product properly.  He did so, finding that fixing the product would save customers $2,000,000 but cost the company $1,150,000.  The supervisor then told him to not correct the problem.  Thereafter, the supervisor and the Company found a pretextual reason to terminate his employment.

The employee brought a claim under the whistleblower section of the Dodd-Frank Act.  The employer answered that these claims were barred by the employee’s agreement to arbitrate.  The trial court agreed and dismissed the claim.  On appeal, the Third Circuit agreed with the lower court.  Although the Dodd-Frank whistleblower statute contains an “anti-arbitration provision,” the court found that this provision did not apply to this particular employee’s whistleblower claim.  Thus, the plaintiff’s only remedy is to submit his claim to arbitration.

Arbitration is not an ideal forum for whistleblower and discrimination claims.  Besides the fact that there is no jury to hear the case properly, there is no record of the proceedings or any appeal if a mistake is made.  In our view, lawsuits which seek to vindicate a social good, such as eradicating discrimination or corporate corruption, should be exempted from arbitration.  These cases are too important to be kept in the dark.

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A McDonald’s employee was told to “take it easy like my grandmother and retire,” according to a case currently pending before a federal district court in Pennsylvania.  She was apparently working more slowly than McDonald’s wanted, so they fired her due to her “poor health and age.”  The employee sued under the ADA, ADEA, and Pennsylvania Human Relations Act (PHRA), alleging age and disability discrimination.  The evidence in the case includes the fact that McDonald’s had a “hit list” of older workers who it was about to terminate.  The employee’s request to include this evidence at the trial was granted over McDonald’s objection.  The court found that trial testimony by a witness regarding the hit list (in which the employee’s name was included) would not be hearsay.  The “hit list” was also deemed an “admission” under the Rules of Evidence.

We will continue to monitor this interesting case.  In the meantime, if your boss tells you it’s time to retire . . . tell him it’s time for you to call an employment lawyer.

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A federal court in NY has recently granted partial summary judgment to the plaintiffs in a class action lawsuit involving more than 2000 exotic dancers.  The dancers alleged that their employers misclassified them as independent contractors in order to avoid paying them the minimum wage.  These dancers were not paid any salary for working at the employer’s strip club; instead, they earned “performance fees” and tips from customers.  However, the court found that the club exercised a considerable amount of control over the dancers, who did not require any special skills or experience to perform their job duties.  Under this “economic realities” test, the dancers were employees, not independent contractors.  Based on that finding, the club’s failure to pay them the required minimum wage violated state and federal law.

The employer argued that it should get an offset on the amounts owed, based on the monies that the dancers collected personally from the patrons.  However, the court ruled that no offset was available, in part, because directing customers to pay employees their minimum wage would interfere with the goals of the wage and hour laws and fail to ensure that proper payroll deductions were made.

The court found that at least $10.8 million in back wages were owed.  The court has scheduled a trial to determine if the dancers are owed another $8 million, plus liquidated damages.

The takeaway from this case is that businesses who employ “artists” (broadly defined) cannot simply call them independent contractors but treat them as employees.  There are a number of tests to determine whether an individual is an independent contractor or an employee, and these tests are complicated.  If you run a business that employs independent contractors, or if you are currently being classified as an independent contractor by your employer, you may want to consult an employment attorney who can advise you as to your rights and obligations.

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The New Jersey Department of Labor has settled a lawsuit that claimed applicants for unemployment benefits have been wrongfully denied counsel and other due process rights. As part of the Consent Order that lays out the terms of the settlement, the Department agrees to address its procedures for telephone hearings and other proceedings.

Each claim for unemployment has three possible stages where notifications are sent out: (1) a notification of the initial fact-finding interview; (2) notice of a hearing before an appeal tribunal, which is sent out if the claimant challenges the initial eligibility finding; and (3) notice of hearing before the Board of Review, which is the next and final step in the internal process before the matter goes to an appellate court.

The class action lawsuit claimed that notices sent at the first and third stages of the above process lack any notification that the claimant has a right to counsel. The lawsuit pleadings claimed that, even worse, claims examiners routinely instructed claimants that they do not have the right to counsel, and affirmatively prevented them for doing so. This is quite troubling, given that attorneys ensure that the rights of claimants are protected and instruct their clients on what they can legally accomplish.

As part of the settlement, the Department agreed, among other measures, to update its’ written notifications and direct claims examiners to advise claimants of their rights, particularly the right to be represented by an attorney or non-lawyer. The Department also agreed to circulate an administrative directive to the examiners, who will be required to read a statement outlining what role attorneys may play in the hearing, including the ability to make objections, provide documentary evidence or offer a closing statement. Moreover, where the ex-employee and the employer are both attending the hearing, the examiner must advise of the attorney’s right to ask questions of the other side, according to the directive.

It’s about time that the Department cleans up its unemployment benefits procedure. As a practitioner who regularly represents claimants before the Department, I have personally witnessed the widespread violations of people’s rights, at a time when they are unemployed and the most vulnerable. Hopefully, these hard fought for changes will vastly improve the system.

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As reported in The Pennsylvania Record, a recently filed complaint alleges that Lafayette College terminated an in-house health inspector just days after he took pictures of unsanitary conditions in the college kitchen.  The employee was responsible, among other things, for monitoring and auditing the College’s food safety practices in accordance with FDA regulations.  After a change in the food services management company, the College’s food safety practices became deficient, according to the plaintiff.  The unsanitary conditions included “dirty coolers, uncovered, unlabeled and undated food, raw products stored above cooked products, onions stored on the floor, rotting fruit and more.”  The employee photographed the kitchen and storage areas on September 1, 2013 and sent the pictures to his supervisors the same day.  The College suspended his employment five days later, and then terminated him after another five days.  The College alleges that it terminated the whistleblower because he shared the pictures with third parties, a charge that the employee denies.

This case is interesting in that the defendant employer does not seem to contest the fact that it fired the plaintiff because of his whistleblowing activities.  Rather, the employer is arguing that the plaintiff blew the whistle to the wrong people.  In our view, this is not much of a defense.  Whistleblowers frequently report their employer’s wrongdoing to third parties; in fact, some employers have argued that “internal whistleblowing” does not trigger whistleblower protection at all.  We will monitor this interesting case and report any new developments.

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In a recent decision of the New Jersey Superior Court, Appellate Division, the court reversed a grant of summary judgment in favor of the employer, PSE&G.  The employee, a female manager in her forties, had made numerous complaints of a “glass ceiling” (my words) at PSE&G to her supervisors and Human Resources over a number of years.  According to the decision, the employee alleged that her supervisor finally had enough of her complaints and began “investigating” her for violations of the company’s expense reimbursement policy.  PSE&G then fired the employee based on its finding that she had, it alleged, violated the policy in certain respects.  The employer filed a motion for summary judgment, arguing that the termination was proper.  The employee argued that the investigation and firing were pretextual; in other words, that these actions were retaliatory and false.  The trial judge agreed with the employer, and the case was dismissed.

The appellate court reversed this decision and reinstated the complaint.  The court noted that the employee had provided evidence that at least one male peer had also “misused” his company expense accounts, without repercussion.  The company argued that this male peer had permission to do so, and that the female employee did not.  However, since questions of fact like this can only be decided by a jury, and not by a judge, the appellate court ruled in favor of the employee.

The takeaway from this case is that discrimination and retaliation claims can rise and fall upon one crucial detail.  If you have experienced discrimination or retaliation at work, you need a smart employment attorney who can identify these crucial facts and use them to their advantage.

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Add Trenton and Montclair to the growing list of New Jersey municipalities who have passed legislation to offer paid sick leave to employees.  Last night, voters in these two cities chose to adopt local earned sick time laws.  As reported in The Jersey Tomato Press, an additional 20,000 New Jerseyans will now be able to earn paid sick time when illness strikes them or their families.  The victory at the polls was the result of a coordinated effort led by New Jersey Working Families, New Jersey Citizen Action, the New Jersey Time to Care Coalition, New Jersey Communities United, BlueWave NJ, SEIU 32BJ, and CWA District 1.  It certainly appears that momentum is building for the passage of a statewide paid sick leave bill, which passed out of committee last month.  We support paid sick leave legislation, as being beneficial for both workers and their employers, who can expect reduced employee turn-over, higher morale, and healthier and safer workplaces.

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The federal court in Colorado recently approved a $2.3 million settlement of a wage and hour claim brought by managers at the variety store chain Family Dollar.  The managers had alleged that the chain misclassified them as “exempt” employees, thereby shortchanging them of their overtime pay.  The chain disputed the allegations but agreed to the hefty settlement.  This case highlights the ongoing business practice of many retailers who, to save money on hourly employees, compel their “managers” to do the work of the employees they are supposed to be supervising, including cashiering, stocking, setting up displays, and cleaning.  Under many state laws, as well as the federal Fair Labor Standards Act, managers who spend a large portion of their work days doing hourly work need to be compensated with overtime pay.  We have seen this phenomenon going on for years in the retail and restaurant industries.  We are glad there are a few brave managers out there who will fight for their justly earned overtime pay.  If your employer classifies you as “exempt” from the overtime pay laws but requires you to do a substantial amount of hourly work, please contact an experienced employment law firm like Siegler & Traub to review your legal rights.  You may be entitled to overtime pay.