October 7, 2014

Dunkin' Donuts Sued for Failure to Pay Overtime to its "Assistant Managers"

A class action lawsuit has been commenced in Pennsylvania against Dunkin' Donuts based on its failure to pay overtime to its "assistant manager" employees. According to the lawsuit, the assistant managers, who work more than 50 hours per week, perform such "non-exempt" duties such as baking, serving, cashiering, and cleaning. Thus, according to the lawsuit, these employees are entitled to overtime pay. Further, the employees allege that Dunkin' Donut falsified their time records so that they would only reflect a 50 hour work week, although they frequently worked up to 60 hours per week. Considering the number of hours worked by these assistant managers, they made less money per hour than their staff.

These types of business practices are not only illegal but unfair to competing businesses who adhere to the minimum wage and overtime laws. Moreover, these types of practices hurt the economy overall by reducing the spending power of working class employee-consumers who contribute greatly to the economic activity of our country.

If your employer calls you an "assistant manager" but requires you to cook, clean, serve and cashier as part of your duties, without any overtime compensation, you should seek legal advice on whether you may be entitled to overtime. As the "lead plaintiff" in a class action lawsuit, you are entitled to extra monies if the lawsuit is successfully resolved.

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October 2, 2014

NJ Minimum Wage Set to Increase in January 2015

New Jersey's minimum wage will increase by 13 cents in January 2015, from $8.25 to $8.38. The minimum wage in our State is indexed to keep pace with inflation, thanks to a constitutional amendment which passed overwhelmingly in November of 2013. While many consumer and labor advocates maintain that the minimum wage still cannot support a working family, they are thankful that the wage is set to rise each year. Business advocates, on the other hand, predict that indexing the minimum wage will cost 31,000 jobs over ten years, and disproportionately affect small business owners.

We support efforts to increase the minimum wage to a level that can support working families. The dire predictions of some in the business community have not come true in the past, nor are they likely to come true in the future.

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October 1, 2014

Paid Sick Leave Gains Steam in New Jersey

Four more New Jersey's cities, Paterson, East Orange, Passaic, and Irvington, have adopted paid sick leave ordinances similar to the one which was passed in Jersey City late last year. These laws make it mandatory for employers with more than 10 employees to pay employees for up to five sick days per year. The state legislature is currently considering a bill which would extend paid sick leave to employers state-wide.

Proponents of the bill point to the fact that there are 1.2 million New Jerseyans who currently do not get paid if they take a sick day, which results in a big hit to our economy. At the same time, studies have shown there is no significant downside to employers, a large majority of whom have reported no negative consequences to their profits.

This kind of common-sense legislation will benefit New Jersey's working families and employers and we wholeheartedly support it.

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April 17, 2013

NJ Legislature Introduces Bill to Limit Non-Compete Agreements

New Jersey State Assemblymen Peter J. Barnes, III, Joseph V. Egan and Wayne P. Deangelo recently introduced a bill in the New Jersey State Assembly which limits the enforceability of certain post-employment restrictive provisions in employment contracts if the individual who is subject to these restrictions is eligible for unemployment compensation in the state. The bill provides that if an unemployed individual is found to be eligible to receive unemployment compensation benefits, that individual shall not be held bound by any covenant, contract or agreement not to compete, not to disclose or not to solicit.

The rationale behind the bill is to make it easier for a terminated employee to become re-employed. Although it is unclear if the Governor will ultimately sign the bill into law, there appears to be support within the state Assembly and Senate.

The bill, as written, only applies to agreements entered into after the date of the law’s enactment. Therefore, we expect to see more employers requiring that their employees sign these restrictive covenants in the near term in order to avoid potential coverage under the law. Employers may also design these contracts to provide for severance in the form of salary continuation pay so that the former employee may not be deemed eligible for unemployment during the term of the non- compete/non-solicitation.

The issues surrounding most post-termination agreements are complicated. We suggest that both the executives required to sign these agreements, as well as the companies who would like to enforce these agreements, consult a reputable employment law attorney to determine if the contract is reasonable and enforceable.

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March 25, 2013

NJ Court Issues Good Decision for the Unemployed

The New Jersey Appellate Division, in the case of Silver v. Board of Review, has ruled that in order for the Department of Labor to reach a finding of “severe misconduct,” which effectively disqualifies a claimant from eligibility for unemployment compensation benefits, it must find intentional, deliberate misconduct. Practitioners who represent workers in unemployment appeals have been anxiously awaiting this bright line standard. Prior to this, the Appeal Tribunal had been randomly and unjustifiably disqualifying workers from unemployment compensation benefits under this “severe misconduct” provision.

The severe misconduct category was added to New Jersey’s unemployment compensation law in 2010 and was intended to be an intermediate form of misconduct, requiring greater culpability than simple misconduct, but less than gross misconduct. The statute provides some examples of “severe misconduct” but does not define this term. Needless to say, this ambiguity has led to inconsistent and unfair denials of benefits to employees whose conduct could not reasonably be deemed to be severe. The misinterpretation of this new standard by the Department of Labor has had devastating effects. So many claimants were disqualified from benefits that the waiting time for an appeal before the Appeal Tribunal increased from three weeks to six months. Workers were completely denied due process when their benefits were denied without good cause, since they were not afforded a fair hearing for more than six months. This destroyed the entire purpose of having unemployment as a safety net. Some workers have had no choice but to declare bankruptcy while waiting to find out if they would be eligible for unemployment benefits.

In the Silver case, the claimant was a full-time teacher at the Middlesex County Youth Facility. The Facility had a rule limiting and accounting for the distribution of pens to students in order to avoid their use as a weapon. Over Ms. Silver’s nine years of employment at the Facility, she had been written up for six previous incidents of student theft. On the last day of her employment, she had handed pens out to each student and thought she had accounted for all of the pens at the end of class. Shortly after dismissing the students she realized that one pen was missing and she immediately reported the potential security breach. The Facility then terminated Ms. Silver for this “infraction.”

Ms. Silver applied for unemployment benefits, and was denied all benefits due to a finding of severe misconduct.

In its decision, the court emphasized that in order to be “severe misconduct”, an employee’s actions must at least rise to the established definition of “misconduct” under the statute. “Misconduct” requires an employee’s actions to be “intentional, deliberate, and malicious.” Therefore, simple negligence or absenteeism beyond the employee’s control can never be “severe misconduct” because it does not satisfy the definition of the lower tier “misconduct.”

There is currently before the New Jersey Senate a bill that I have written about in a previous blog post, which more clearly and fairly defines the tiers of disqualification for unemployment compensation benefits. Until this bill becomes law, the Appellate Division has provided a clear set of guidelines for future unemployment claims.

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July 31, 2012

Top Ten Ways to Maximize Your Unemployment Insurance Benefits

Siegler & Traub, LLC has recently published a white paper entitled "Top Ten Ways to Maximize Your Unemployment Insurance Benefits." Readers of this blog and visitors to our website can download this white paper for free.

The paper describes several ways that employees can improve their chances of being awarded unemployment insurance benefits. Some are obvious, such as "do not resign voluntarily." Some are not so obvious, including what to say and what not to say to the Department of Labor at the initial fact-finding teleconference.

If you are recently laid off or terminated from your job, or considering whether or not to resign, take a few minutes to read up on this important subject.

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January 30, 2012

Employees Told Not To Gamble on Job Security at New Casino

Revel Casino, soon opening in Atlantic City, has announced an unusual policy of setting term limits on certain employees. The Casino will be setting term limits of four to six years on front line employees, which includes employees who would have face time and/or interact with guests in any way such as dealers, waiters, or bellhops. The Casino comments that the policy will ensure that highly professional staff will be attracted to work for them.

The term limit policy has been met with some criticism. One employment lawyer from Philadelphia points out that the policy may be a way for the Casino to age discriminate in a low profile manner as the policy allows the casino to regularly clear out older employees.

This is yet another example of employers taking advantage of a tough job market. Atlantic City casinos have recently let go many employees who will not be deterred from applying to Revel despite the term limits. They reason that a job with term limits is better than no job at all. The Casino is expecting to bring in 2.4 billion in revenue and provide 5,000 full time jobs. Many hope that the Casino helps revive Atlantic City which has been struggling to maintain jobs.

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November 10, 2011

Zynga Demands that Employees Give Back Unvested Shares of Stock

When Zynga, the social network game developer known for addictive games such as Farmville, Cityville, and Mafia Wars, initially started, they attracted talented employees with company stock in lieu of a higher salary. Last year, while Zynga prepared for an initial public offering, the company realized that too much stock had been given out to earlier employees. As a result, Zynga executives decided to give some employees an ultimatum—either give back unvested stock or lose their job.

In deciding which employees were required to give back stock, Zynga evaluated whose contributions did not justify a potential cash “windfall” from the unvested stocks when the company went public. Unsurprisingly, the few employees asked to give back unvested stock were not happy. Some employees have decided to fight back with the assistance of lawyers and may be trying to settle the issue. It is unclear what specific agreement Zynga had with its employees when the company first started. Veteran employees of Zynga may now be regretting not negotiating a higher salary with Zynga instead of agreeing to the stock options. On the other hand, Zynga is well within its rights to fire employees they do not believe are performing well, in which case the employees would lose the unvested stocks anyway.

When employers do not give out high salaries and offer other types of incentives instead (such as stock options), employees should be mindful that while stock options may be lucrative for successful startup companies, they come with a risk. Lawyers and executives in Silicon Valley comment that taking back unvested stock from employees of internet startups is not a common practice, however they believe the practice has potential to become widespread.

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August 20, 2011

Hospital Executive Collects Large Severance Package Before Employer Declares Bankruptcy

Weeks before Hoboken University Hospital filed for bankruptcy, records show that the City gave former Chief Executive Officer of the hospital a severance package which included $600,000 in pay and one year of medical benefits.

The Hospital, which is owned by the City of Hoboken, is about to be sold to a group who runs the Bayonne Medical Center. The Hospital has been in significant financial trouble and has a debt of approximately fifty million, which it states it cannot pay. Of this debt, 1.9 million is bills and 1.45 million is owed to employees’ pension and health funds. A union leader stated that the employees of the hospital almost lost their health insurance after the hospital failed to meet insurance payments.

City and union leaders are appalled at the severance package and believe the hospital’s priories are not in order. Beth Mason, a city councilwoman, stated that it is a disgrace that a golden parachute was given out while nurses were not getting paid.

Meanwhile, the Hoboken Municipal Hospital Authority stated that the CEO met all of the conditions under his contract before being terminated and therefore is entitled to the severance package.

Whether the severance package given to this executive was warranted or not is a complex issue and dependent on several factors. Severance agreements can be complicated and should be negotiated by an experienced employment attorney.

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July 25, 2011

Bank Sues Executives Over Non-Compete Clause

Capital One Financial Corporation is suing former North Fork Bank executives, John Kanas and John Bohlsen, for the alleged breach of the non-compete agreements they signed with Capital One as part of Capital One’s purchase of North Fork in 2006. At issue in this case is a non-compete clause in the separation agreements the executives signed in mid-2007. The agreements stated that the two were prohibited from competing with Capital One as directors, stockholders, investors, employees, or in any other capacity in New York, New Jersey and Connecticut through August 2012. The executives had personally received more than $100 million each as part of the Capital One/North Fork merger and as compensation for agreeing to the non-compete.

After Kanas and Bohlsen left Capital One, they were members of a group of investors that purchased BankUnited, which operates in Florida. Clearly their involvement with BankUnited was not impermissible under their non-compete agreement with Capital One. The problem in this case arose when BankUnited signed an agreement to purchase Herald National Bank, a bank with offices in New York. Capital One claims, in their lawsuit, that the executives are violating their non-compete agreements by seeking to enter the New York market in direct competition with Capital One.

Mr. Kanas has issued a public statement re-asserting BankUnited’s planned acquisition of Herald Bank and that the acquisition will not cause him or Mr. Bohlsen to be in breach with their non-compete obligations with Capital One.

The issues in this case, as with most cases involving post-termination non-compete restrictions are complicated. We suggest that both the executives required to sign these agreements, as well as the companies who would like to enforce these agreements, consult a reputable employment law attorney to determine if the contract is reasonable and enforceable.

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March 16, 2011

Indian Shipworkers Allege Company Lured them to U.S. Under False Pretenses

Last month, attorneys on behalf of a group of Indian workers asked for for class-action status in a federal lawsuit that describes the workers as victims of "human trafficking" and organized crime. According to the Houston Chronicle, a group of employers, immigration lawyers and labor recruiters based in India, New Orleans, Texas and Mississippi conspired to deceive and exploit workers in a multinational scam.

Skilled Indian shipbuilders were recruited to work in the U.S. with the promise of obtaining legal permanent residency -- green cards. However, when they arrived in the U.S., the shipbuilding company, Signal International, required them to live in pre-fab cabins at company-run "man camps" for which they were forced to pay "rent" of $1,050 a month. According to two of the workers, the man camps felt like "jail." Workers were allegedly subjected to routine searches (alcohol was prohibited), guests were turned away, and guards referred to them by number rather than by name.

In court documents, attorneys for Signal argued that the company was misled by labor recruiters and an immigration lawyer. Signal has allegedly demanded refunds and severed ties with one consulting firm after learning of recruiters' false promises and inflated visa charges. Other parties in the federal lawsuit — an Indian recruiter, a New Orleans immigration lawyer and others — also denied or deflected blame for the situation.

Here in central New Jersey, we have a large community of hard-working men and women from India and other Asian countries. Unfortunately, there are companies both here and abroad who take advantage of them. If you are an immigrant who believes that your rights are being violated at work, please seek out the counsel of an employment attorney who has experience handling immigration-related employment disputes.

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December 9, 2010

Software Company that Violated H1-B Visa Law is Fined and Punished

Peri Software Solutions, Inc., a Newark-based computer consulting company, has agreed to pay more than $765,00 in back wages and penalties to workers for violating provisions of the Immigration and Nationality Act, the U.S. Labor Department announced today. The company was investigated by the Department of Labor for alleged violations of the H1-B visa program -- a program that allows qualified foreign-born workers to take employment in the United States so long as they are paid the same as American workers. The Labor Department alleged that Peri Software had improperly compensated its H1-B employees and not displayed the appropriate documentation in its offices.

According to the Labor Department, the company will pay nearly $640,000 in back wages and interest for 67 employees under this program. The company must also pay nearly $127,000 in penalties for failing to provide notice of the filing of labor condition applications in the offices where the employees worked. Peri Software is also prohibited from participating in the H-1B program for one year.

This firm has handled dozens of similar cases on behalf of H1-B workers. The modus operandi of companies like Peri Software is to recruit overseas workers with promises of great pay and job stability. Then, when the employee leaves his homeland and moves to the United States, he finds out that the pay is much less and the job stability is zero. At that point, however, the employee has already signed an onerous contract which greatly restricts his ability to find new employment. When the employee moves to a new job, the company files a lawsuit against him. These practices are despicable and I am very glad that the Department of Labor has come through with a big win. Hopefully, other New Jersey consulting firms take notice and begin to bring their practices in line with the law.

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August 15, 2010

New Bill Extends Labor Protections and Benefits to Home-Care Workers

Last month, Representative Linda Sanchez (D-CA) introduced legislation to Congress that would extend the federal minimum wage and overtime protections of the Fair Labor Standards Act (FLSA) to most home care workers. The Direct Care Workforce Empowerment Act of 2010 also outlines improvements in both federal and state reporting and oversight, and creates a grant program to encourage states to provide better recruitment and training programs for direct care workers.

Home care workers are currently exempt from overtime under federal law. Home care workers fill a critical need by enabling people to remain in their homes instead of moving into nursing homes. Services include a combination of life assistance (daily chores such as cooking, laundry, errands and companionship) and medical assistance (medication reminders, pain management, wound care and physical therapy).

Our nation is ill-prepared to meet the health and social needs of older adults and their families. According to one source,“by 2030, one in five Americans will be age 65 or older -- 75 percent of whom will have at least one chronic condition, with 20 percent having five or more chronic conditions." The field of home health care assistance is expected to expand every year. It is unfair to continue to deprive home health care workers the same basic work protections that are afforded to high-school students working in fast food.

If you are a home health care worker and feel like your employer is not following the new guidelines, which are expected to be enacted later in the year, a qualified New Jersey employment attorney can provide you information as to what your options are for your particular situation.

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July 7, 2010

Do I Qualify for Unemployment Insurance Under the New Guidelines?

Recent changes to the New Jersey Unemployment Compensation Act have made it easier for employers and the State to deny benefits to unemployed workers. The new law expands the range of events which can lead to an employee being disqualified from receiving benefits, and lengthens the amount of time for which a worker will be disqualified.

The significant change is in the definition of "misconduct." There are now three types of "misconduct" -- simple, severe and gross. "Simple misconduct" includes things like insubordination and excessive lateness or absences, with no written warnings issued. "Severe misconduct" includes use of drugs/alcohol on the job, repeated violations of a company rule, repeated lateness or absences after receiving a written warning, or destruction/theft of company property. "Gross misconduct" is any conduct which would be a crime under the New Jersey penal code, such as embezzlement, grand theft, or bribery.

According to the Dept. of Labor and Workforce Development, employees fired for simple misconduct will be disqualified from receiving benefits for eight (8) weeks. Severe misconduct merits an indefinite disqualification unless the employee finds a new job, earns six times his weekly benefit rate, stays in the job for at least four weeks, and then loses his job again. Employees found to have committed gross misconduct cannot receive benefits at all, unless and until they return to work for at least eight (8) weeks, earn ten (10) times their weekly benefit rate, and become unemployed through no fault of their own.

These changes are projected to save New Jersey $150 to $175 million annually.

My office is seeing more and more people who are being denied unemployment benefits. In many cases, these benefits are being denied unfairly. If you have been denied unemployment insurance, it is imperative that you contact a knowledgeable attorney to handle your appeal.

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March 22, 2010

Can a Company Fire an Employee for Taking Company Records that Help the Employee's Discrimination Case?

Can a company fire an employee for taking company records that help the employee's discrimination case? This is the question posed by the case of Quinlan v. Curtiss-Wright Corp., A-51-09, which was argued before the New Jersey Supreme Court on March 9, 2010. As reported in the New Jersey Law Journal, the Court is likely to answer this question in the affirmative. If it does, New Jersey employers will get a powerful new weapon to use against employees who may have taken confidential records during their employment.

The plaintiff in the Quinlan case is a Human Resources professional who felt that her employer was discriminating against her on the basis of gender. She secretly copied about 1800 pages worth of confidential company records. She then retained a lawyer and gave the records to him. Her lawyer filed a lawsuit and returned the records to the employer during the course of the litigation. When the employer found out about the records, it fired the plaintiff. The plaintiff then added a claim for retaliation to her gender discrimination complaint.

A jury found in favor of the plaintiff on her retaliation claim, but the verdict was overturned on appeal. The Appellate Division held that the plaintiff should not be permitted to benefit from her "theft" of confidential documentation.

On appeal to the New Jersey Supreme Court, the plaintiff's attorney argued that Ms. Quinlan was acting in good faith when she took the documents, and that she should not be penalized for doing what she thought was the right thing. The Court seemed to disagree, indicating that it would encourage "employee theft" if Ms. Quinlan were permitted to win her retaliation claim under these circumstances.

I would advise any New Jersey employees to consult with a knowledgeable and experienced employment attorney before undertaking any kind of "investigation" or "evidence gathering" on their own. New Jersey is an "at will" employment state and you do not want to give your employer a legitimate excuse to fire you. If you have a good discrimination claim, your lawyer will obtain the documentation you need to win the case by using the proper legal processes.

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March 1, 2010

H1-B Program Abused by NJ Consulting Company

The U.S. Department of Labor is seeking $1.9 million for alleged abuses of the H1-B visa program by Peri Software Solutions, Inc., a Newark, NJ consulting house. According to the DOL press release, Peri Software and its president, Sarib Perisamya, allegedly owe over $1.4 million in back wages to foreign workers.

The DOL's investigation found that the Newark company forced its H1-B employees to sign employment contracts, failed to pay the workers the required prevailing wage, and then sued the employees who left the company after their contracts were broken. The DOL assessed a $439,000 civil penalty against Peri Software "due to the willful nature of the violations." In addition to the civil penalty and back wage assessment, the company is facing a 2 year debarment from the H1 program.

I have seen many similar cases in my law practice. Consulting firms, many of whom are not properly registered as employment agencies, lure workers to the United States with promises of long-term employment and stability. When the workers arrive here, however, the employers require them to sign unfair and totally one-sided employment contracts. In some cases, workers are required to remain with the same company for 18 months or more. Then, when these employees are forced to quit due to unpaid bench time or other issues, the companies sue them.

If you are an H1-B employee who is being benched without pay, or otherwise not being paid properly, you may have legal recourse to get the money you are owed. You may also have grounds to terminate your contract. Before you move to your next employer, however, you should seek legal advice from a knowledgeable New Jersey employment attorney.

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January 20, 2010

Unemployment in NJ Hits 33-Year High

According to the New Jersey Department of Labor, employers in New Jersey continued to trim payrolls in December as the state’s unemployment rate climbed to a 33-year high of 10.1 percent. Overall the state lost approximately 2000 jobs in December. The largest job losses were in the manufacturing, construction, and financial services sectors. Some sectors, such as transportation, professional services, and information technology saw modest gains.

There is no question that many employees in New Jersey who are currently employed are at risk for downsizing in the near future. If you have been offered a severance package or will be offered one in the next few months, please consult with an experienced NJ employment lawyer to review your legal options.

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May 20, 2009

H1-B Employees Strike Back Against Xcel Solutions Corp.

I represent six former employees who have filed counterclaims against Xcel Solutions Corporation, a Matawan, New Jersey based consulting company, alleging that Xcel breached their employment contracts by failing to pay them wages, “bench pay,” bonuses, and other monies. The employees, who are computer professionals living and working in the United States pursuant to the H1-B visa program, were taken to court by Xcel after they resigned. Xcel has alleged, in the separately-filed lawsuits, entitled Xcel Solutions Corporation v. Tan (Docket No. MID-L-3604-08), Anaque (Docket No. MID-L-8372-08), Sebastian (Docket No. MID-L-4467-08), Wingpo (Docket No. MID-L-10300-08), Gayacao (Docket No. MID-L-3603-08), and Yap (Docket No. MID-L-7882-08), that the employees breached their employment contracts. According to the Counterclaims we filed on behalf of the six employees, however, Xcel violated the contracts first, by either failing to properly compensate for “bench” time, failing to pay wages when due, failing to pay promised bonuses, failing to pay overtime, and/or failing to reimburse for expenses. The employees are seeking dismissal of Xcel’s claims and payment of the monies they claim Xcel owes them.

My clients are good, hardworking people who have come to the U.S. to work and build a future for themselves and their families. I admire them for their courage in fighting these lawsuits and striking back against Xcel to recover the monies they feel they are owed.

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April 17, 2009

New Jersey Sheds Another 17,000 Jobs in March

Unemployment rates in New Jersey continued to rise in March, according to a recent press release from the Department of Labor. March was the 14th consecutive month of job losses in the State. The biggest losses occurred in the leisure and hospitality, professional and business services, manufacturing, and trade, transportation and utilities sectors.

Personally, I don't need another press release from the State telling me how awful things are out there right now. I hear it every day from the good people who contact me for help. Unfortunately, it appears that many employers are using "the economy" as an excuse to get rid of employees they don't like. And a few of those employers don't like people who are the wrong color, age, religion, or who come from the wrong countries. If you have been terminated recently, give some thought to the reason why your employer chose you instead of your coworker. If you need further advice on this subject, don't hesitate to contact a competent NJ employment lawyer, and please do not sign anything until you have a lawyer look at it.

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March 22, 2009

Don't Email Your Lawyer from Your Work Computer

A recent case from the New Jersey Superior Court should make any employee who has ever used a work computer to send or receive email from an attorney a little nervous. In Stengart v. Loving Care Ag. Inc., No. BER-L-858-08 (Feb. 5, 2009), the Court held that the attorney-client privilege did not apply to emails between an employee/plaintiff and her lawyer which were accessed on the employee's work computer -- despite the fact that the emails were accessed through a personal, password-protected email account. The Court thus permitted the company to use the employee's emails to and from her attorney to defend against her discrimination claims.

As reported by the law firm of Buchanan Ingersoll & Rooney, the Court based its decision on the fact that the employer had a published electronic communication policy which "adequately warned employees that there [was] no reasonable expectation of privacy" with respect to any emails generated or viewed on company issued computers, and the fact that the employee was aware of the policy.

This decision reminds us that any time you contact your lawyer from your work computer, you run the risk of exposing the communication to your employer or other third parties. This situation is particularly dangerous for employees who are engaged in litigation with their current employers, although it applies to everyone. If you must communicate with your lawyer during the work day, the most prudent thing to do is to step outside the office and make a telephone call. Save the emails for when you get home from work.

January 5, 2009

2008 A Good Year for Employment Law Plaintiffs in New Jersey

2008 turned out to be a very good year for employment law plaintiffs who tried their cases in New Jersey courts. Indeed, as published in the New Jersey Law Journal's "New Jersey Legal Almanac 2008," there were six verdicts of more than $1,000,000 awarded by New Jersey juries to employment law plaintiffs, including two verdicts of more than $10,000,000. These verdicts should help make our State's employers think twice before engaging in any type of illegal discrimination or whistleblower retaliation toward their employees in 2009 and beyond.

We should keep these large verdicts in perspective, however. Statewide, there were 120 verdicts or settlements over $1,000,000 in 2008, so the percentage of employment law plaintiffs receiving seven-figure awards is relatively low. Also keep in mind that thousands of employment law cases are resolved by verdict or settlement in New Jersey each year, so the percentage of employment cases which result in large monetary awards is actually quite small.

Nonetheless, each plaintiff's victory in the field of employment law is a step forward in my and my colleagues' ongoing battle to eradicate discrimination and retaliation from the workplaces of this State. I heartily congratulate the dedicated plaintiff's employment lawyers who furthered our cause in 2008.

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April 21, 2008

$10.5 Million Verdict in NJ Breach of Employment Contract Case

On Friday, April 18, 2008, a New Jersey jury awarded Alfred West $10.5 million in a breach of employment contract claim. Mr. West, a telecommunications entrepreneur, entered into an informally written employment agreement with IDT Corporation. The agreement obligated him to work for IDT for five years in exchange for compensation totaling over $2.5 million per year. IDT failed to pay according to the agreement, and the lawsuit ensued. IDT argued that the agreement was merely "an agreement to agree" and not a binding contract. However, the Court and jury disagreed, finding that all of the elements of a contract were present.

The case highlights the important fact that a legally binding employment contract does not have to be a "boilerplate" legal document. In fact, employment contracts which are written on a napkin, sketched on a blackboard, or even discussed and agreed upon orally, can be legally enforceable, so long as the elements of a contract are present.

I will say, however, that such contracts are harder to enforce and are more likely to lead to litigagtion. I have represented several New Jersey executives in similar matters. These individuals came to me after their contracts were breached, not before. While I have been able to achieve very good results in my contract cases, my clients would have saved a lot of money, time, and aggravation had they consulted me before they signed their agreements. It is very important that both employer and employee fully understand their rights and obligations at the outset of the employment relationship. If the parties have a mutual understanding of the terms of the agreement, and have signed a well-drafted contract, litigation can sometimes be avoided.

I congratulate Mr. West and his excellent attorneys for the sizable verdict. I would expect, however, that Mr. West would have preferred to have been paid his money as an employee, rather than having to go through the extraordinary expense, in both money and time, of a lawsuit.


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April 17, 2008

Woolrich Laying Off Workers in PA

Another day, another round of layoffs for the region's workforce. This time its Woolrich, the oldest clothing company and woolen mill in the United States. The Company announced on Tuesday that it is laying off close to 50 garment workers in its Jersey Shore, PA plant due to a drop in demand for its products. It will be offering severance packages to the affected employees who cannot be placed elsewhere in the company.

Employers are not required to give severance pay to their employees. Then why do they do it? There are two main reasons, and neither of them is altruistic. One, they want to give employees a reason to stick around until the plant closes. If an employee quits before the layoff, he or she will generally not be eligible for severance pay. Two, the employers want the employees who are laid off to sign away their right to sue for any and all claims they may have. Once those packages are signed, the employer can breathe a big sigh of relief. It can't be sued by its former employees, for any reason.

Any employee who is offered a severance package should run, not walk, to an attorney who specializes in employment law. Your cousin's friend's brother who handled your house closing or your dog bite case won't do. If you do not work in New Jersey and would like to find a knowledgeable, competent employment attorney, contact my office for a referral or check out the National Employment Lawyers Association at http://www.nela.org. To all of the affected workers at the Woolrich plant, we send our sympathy and wishes for a better future.

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April 7, 2008

Using Leverage to Get More Severance Pay

When you receive a severance package from your employer, don’t immediately assume that it’s non-negotiable. You may have more leverage than you know. A skilled and knowledgeable employment attorney can identify where you have leverage and use it to get you more severance pay.

The first and most important thing you need to know is that you already have some leverage to begin with. When your employer offers you a severance package, they are, in essence, asking you to sell away some of your most valuable rights. And believe me, your employer is very motivated to buy this “property” from you. Why are they so motivated? Because if your employer can get you to sign that piece of paper, they can forget about you. You can’t sue them, ever, for anything they did or did not do from the beginning of time to the moment you sign the package. Most of the time, you can’t even complain about them publicly. Some times, they restrict you from working down the street for a competitor. Your right to sue, your vow of silence, your right to compete – the rights you are “selling” have a value. Your employer sets the “buy” price when it puts that severance package in front of you. Before you “sell” your rights away in a severance package, consult an employment lawyer and find out whether the “buy” price your employer is offering is fair.

I’ve had to turn away many potential clients because they didn’t understand the concept of leverage and went ahead and signed their severance package without consulting an attorney. Never, ever, sign something you don’t fully understand. Do the research, find a decent employment attorney, and spend the money for a comprehensive severance package review. Even employees without much leverage in the legal sense can have leverage in other areas, which I will save for a later post.

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