In a recent employment discrimination case, Cuevas v. Wentworth Group, the NJ Supreme Court upheld the jury’s award of emotional distress damages to the Plaintiffs, Ramon and Jeffrey Cuevas, two brothers who suffered derogatory and humiliating racial remarks and discrimination at work. The brothers are Hispanic. Wentworth fired the brothers shortly after Jeffrey complained about the harassment.

At the trial court level, the jury awarded over $1 million in lost wages, $800,000 in emotional distress damages and $52,500 in punitive damages to Ramon. It awarded Jeffrey $150,000 in lost wages, $600,000 in emotional distress damages and $32,500 in punitive damages. Both the trial court and the Appellate Division denied defendants’ request for a remittitur (reduction) of the emotional distress damages.

On certification, the New Jersey Supreme Court upheld the jury’s emotional distress damages award to the Cuevas brothers. The Court held that a judge should not rely on personal knowledge of other verdicts or comparative-verdict methodology when deciding a remittitur motion to reduce a damage award because each case is unique. Moreover, the Court held that a judge should only consider the record itself, in order to maintain the deferential standard of review of a jury’s award of damages.

The New Jersey Appellate Division recently held that a written warning, if part of a system of progressive discipline, may constitute an adverse employment action under the New Jersey Law Against Discrimination (“NJLAD”), which in turn could mean an employer could be held liable for discriminatory or retaliatory actions.

In Prager v. Joyce Honda, Inc., No. A-3691-14T3, ____N.J. Super _____ (App. Div. August 22, 2016), Plaintiff was a former receptionist who was inappropriately touched by a long-standing, valued customer of the Joyce Honda car dealership. Plaintiff filed a municipal court complaint against the customer. Plaintiff claimed that she thereafter became isolated by her coworkers and, about a week after she filed the report, received two written warnings for leaving early without permission. When management presented Plaintiff with the written warnings, she became upset, stating that the warnings were false and issued in retaliation for pressing charges against the customer. The Plaintiff claimed that she had left early many times before without incident and that her high level of anxiety was causing her to throw up before work. In response, management offered to rescind the warnings and suggested that if work was making her feel sick; it would be in her best interest to resign. Plaintiff resigned the next day.

Plaintiff then filed a lawsuit against Joyce Honda, claiming retaliation under the NJLAD. The trial court dismissed, holding that Plaintiff’s municipal court complaint against the customer was not protected activity under the NJLAD. On appeal the Appellate Division affirmed on different, but notable grounds. The Appellate Division found that the Plaintiff’s municipal court complaint was protected activity. Nevertheless, her retaliation claim failed because she could not demonstrate that the two written warnings constituted an adverse employment action. The court used an objective standard to evaluate whether the warnings were an adverse employment action: whether a reasonable person could have found them to be materially adverse. It noted the analysis was case specific, and explained that a written warning could be deemed a materially adverse employment action, such as in the case where a formal system of progressive discipline exists and is enforced. In the Prager case the Appellate Division ruled that the written warnings Plaintiff received were not an adverse employment action since it was not certain that Plaintiff would receive future discipline (Plaintiff resigned the next day and the employer offered to rescind the warnings).

The Second Circuit in Vasquez v. Empress Ambulance Service, Inc., recently adopted the “cat’s paw” theory of liability under Title VII and found that the retaliatory intent of a low-level, non-supervisory employee may be ascribed to an employer where “the employer’s own negligence gives effect to the employee’s retaliatory animus and causes the victim to suffer an adverse employment decision.”

The Plaintiff in this case was an emergency medical technician. She reported to her supervisors that a fellow EMT had sexually harassed her. The harasser suspected that the Plaintiff had complained about his behavior and, in retaliation, manipulated a series of text messages and photos to make it appear as if it was in fact Plaintiff who was soliciting a sexual relationship with him, and presented the altered evidence to the Employer during its investigation.

The Employer then concluded that Plaintiff was having an inappropriate sexual relationship with the co-worker and terminated her. Plaintiff informed the Employer that the co-worker was lying to cover up his own indiscretions and offered to show the Employer her unaltered cell phone messages. The Employer declined to review Plaintiff’s cell phone and further refused to show her the “racy self-taken photo” that the co-worker claimed Plaintiff had sent him. Apparently, this photo was obscured and Plaintiff’s face could not be identified.

The NJ Appellate Division has ruled, once again that it will not require enforcement of an arbitration clause absent a showing that the clause constituted a clear waiver by the plaintiff of his or her right to a jury trial.

In Anthony v. Eleison Pharmaceuticals LLC, Docket No. A-932-15T4 (App. Div. July 18, 2016), a former executive filed a lawsuit against his former employer under the New Jersey Wage Payment Act, alleging that the company failed to pay him wages that were due to him following the termination of his employment. The lawsuit also included breach of contract claims. The employer filed a motion to dismiss the lawsuit and order arbitration pursuant to a clause in the employment agreement which stated, among other things, that “[t]he parties agree that should any dispute arise out of this Agreement, a phased dispute resolution process shall resolve the dispute,” ending in binding arbitration. The trial court granted the employer’s motion, stating that the arbitration clause constituted a valid waiver by the employee of his right to pursue his claims in a judicial forum.

The lower court’s ruling in Anthony was clearly in error. The New Jersey Supreme Court ruled in Atalese v. U.S. Legal Services Group LP, 219 N.J. 430 (2014), that NJ courts will not enforce arbitration clauses unless they contain explicit language informing the employee that he or she was giving up the right to go to court and have a jury trial. The arbitration clause at issue in Anthony clearly did not contain such language. Accordingly, the Appellate Division reversed the lower court and the case will proceed to trial.

We are pleased to write that the New Jersey Supreme Court ruled, last week, that the two-year statute of limitations for filing a discrimination claim under the NJ Law Against Discrimination (“LAD”) couldn’t be shortened by an employer seeking to insert a clause in an employment agreement or contract.

The case arose when Raymours Furniture Co., fired an employee, Sergio Rodriguez who had signed a job application which stated, in capital letters, that he agreed “that any claim or lawsuit relating to [his] service with Raymour & Flanigan must be filed no more than six moths after the date of the employment action that is the subject of the claim or lawsuit. I waive any statute of limitations to the contrary.” Mr. Rodriguez claimed that Raymour & Flanigan wrongfully terminated him on account of his disability and in retaliation for filing a workers’ compensation claim. He sued under the LAD nine months after he was fired. Both a trial judge and the Appellate Division ruled that the lawsuit was time-barred, even though New Jersey law allows a plaintiff two years to bring such an action.

The Supreme Court disagreed with the lower courts. The Court noted that the “contractual shortening of the LAD’s two-year limitations period for a private action is contrary to the public policy expressed in the LAD.” The Court noted the unequal bargaining power of the potential employer and employee. Clearly, mandating that the employee agree to a shorter statute of limitations in an employment application before they can be hired is, by definition a contract of adhesion. Although some employers may argue that two-years is too long of a time period to hold an employer responsible for defending an action for discrimination – where documents may have disappeared, key witnesses have left the company and the memories of decision-makers have faded – it is not for a private employer to alter a statutory limitation period by contract. We believe that this could only be done, after careful consideration by the legislature.

Uber Technologies Inc., no stranger to litigation brought by its drivers across the country, is now facing a possible class action in federal court in New Jersey. The suit accuses Uber of violating New Jersey wage and hour laws by failing to pay its drivers overtime for working more than 40 hours per week and failing to reimburse them for vehicle costs.

Jaswinder Singh, the named plaintiff in the complaint, a New Jersey resident, drove for Uber for more than one year and regularly exceeded 60 hours of work per week, yet, the lawsuit claims, was not paid an overtime premium of one and a half times his regular rate for the hours that exceeded 40 in a week. Moreover, the suit states that Singh was also required to bear expenses for his vehicle, gas, tolls, mobile phone and other expenses related to his employment, which is unlawful under the New Jersey Wage and Hour Law and the New Jersey Wage Payment Law.

Mr. Singh seeks to represent a class of individuals who worked as drivers for Uber as well as Uber X, a related company. The complaint filed in this lawsuit claims that, in accordance with the New Jersey wage statutes, Mr. Singh and the other drivers would be classified as “nonexempt” workers who would be entitled to be paid a premium rate for hours work beyond the normal 40-hour work week. Nonexempt workers are generally those who do not have the authority to hire and fire other employees, do not have the authority to schedule other employees, and do not perform work directly related to the management operations that involved the exercise of discretion or independent judgment over matters of significance.

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:

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.

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.

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.