New Jersey Employment Lawyer Blog

A well-known Los Angeles employment law firm, Martin & Martin, is being sued by the California State Labor Commission after allegedly firing a receptionist because she had to report for jury duty. The lawsuit claims that the firm took retaliatory actions against the employee by unlawfully terminating her from her job.

In 2009, the California Department of Industrial Relations directed the law firm to reinstate the receptionist and reimburse her for lost pay. The law firm subsequently appealed that decision and lost. To date the firm has failed to comply with the directives of the California Department of Industrial Relations, igniting a new law suit against the firm.

The lawsuit comes as unfortunate news since those most knowledgeable of employment law should be guardians of employee rights, not violators of them.

The Appellate Division of the Superior Court of New Jersey recently ruled that an employee who blows the whistle on illegal or unethical employer conduct does not qualify as a "whistleblower" if her part of her job duties is to monitor such conduct.

The case, White v. Starbucks Corp, et. al., involved a former Starbucks District Manager, Kari White, who started working for Starbucks in 2006. White claimed she was fired for whistleblowing about various workplace activities that violated the law and company policy. Some of these activities include reporting missing store merchandise, unsanitary conditions at the Newark branch, alcohol consumption by employees while on the job, after-hours sex parties, employees emailing pornographic images, and complaining about the Westfield branch’s tables and chairs not leaving enough space for a wheelchair. White alleged that Starbucks forced her to resign from her position in March 2007 after she complained about these activities. Starbucks argued that White was terminated due to her aggressive managerial style.

White sued Starbucks Corp. under CEPA, the law which prevents employers from taking retaliatory action against employees who report unethical workplace activities. CEPA serves two major public policy objectives: 1) protecting and encouraging employees to report illegal and unethical workplace activities and 2) discouraging public and private sector employees from engaging in such conduct.

The Court dismissed White’s CEPA claim by relying heavily on an earlier case which held that an employee may not bring a claim under CEPA if they are engaging in acts which are already a part of their job duties.

Here, White’s job duties as a District Manager required that she “regularly and customarily exercise discretion in managing the overall operation of the stores within her district including overseeing the district's store management workforce, making management staffing decisions, ensuring district-wide customer satisfaction and product quality, and managing safety and security within the district.” The Court stated that it was White’s job to communicate with her superiors about any violations occurring at the stores she oversaw, and ensure that these violations were addressed and corrected. Therefore, the Court concluded that CEPA is inapplicable in White’s case.

The New Jersey Supreme Court has been asked to review the Appellate Division’s decision. If the State Supreme Court is to further affirm the notion that employees cannot bring a CEPA claim if whistleblowing activities are already a part of their job duties, the policy implications can be far reaching and possibly even thwart the objectives of CEPA. Limiting the scope of CEPA as the Court has clearly done in White v. Starbucks Corp., et. al., does not serve as a deterrent against employers taking retaliatory action against employees trying to do the right thing in the workplace. Further, employers could strategically word job duties to include vague and broad language that would bar employees from later bringing a CEPA claim. We hope the NJ Supreme Court will overturn this decision and keep the policy objectives of CEPA intact.

The U.S. Supreme Court has issued a troubling decision which affirms the validity of a judicially-created exception to the nation’s employment discrimination laws. In upholding and expanding the so-called “ministerial exception,” the Court rendered an entire class of employees, i.e., ministers or other religious leaders, ineligible for protection from employment discrimination. Moreover, the Court broadly interpreted the term “minister” to include religious school teachers who are ordained in their faith but not working in the role of minister of a congregation.

The case, Hosanna-Tabor Church v. Equal Employment Opportunity Commission, was brought by a former employee of the Evangelical Lutheran Church, Cheryl Perich, who alleged she was fired from her teaching position by the Church because she had pursued an employment discrimination action against it based on disability. The Church admitted that it terminated Ms. Perich in retaliation for her filing a charge of discrimination. However, it sought sanctuary under a judicially-created exception to employment discrimination laws called the “ministerial exception.” As Chief Justice Roberts explained, this exception is grounded in the First Amendment’s Free Exercise Clause. According to the Court’s reasoning, the Constitution's guarantee of freedom to exercise the religion of one’s choice confers on religious organizations the right to choose their leaders in any manner they want -- even in a discriminatory manner.

In arguing against the ministerial exception, Ms. Perich cited an earlier case where members of a church were denied unemployment benefits after it was discovered that they were fired for using peyote as part of a religious sacrament. In that case, the court determined that the Free Exercise Clause had not been violated because the right to exercise religion does not relieve an individual of his or her obligation to follow valid and neutral laws of general applicability. The Court in Ms. Perich’s case distinguished the earlier case by stating that smoking peyote implicated government regulation of an outward act while Ms. Perich’s case implicated an internal Church decision that affected the faith and mission of the Church itself.

This decision is troubling for many reasons. First, the “ministerial exception” may be interpreted even more broadly in the future, as this Court applied the exception to teachers like Ms. Perich, who only devoted a small part of her day to religious duties. Second, the Court fumbled in distinguishing what constitutes an "outward act" as opposed to an internal decision. A church’s decision to fire an employee for a discriminatory reason could easily be interpreted as implicating government regulation of an outward act, since acts of discrimination affect not only the individual affected but the public interest as well. Likewise, an employee smoking peyote for sacramental purposes can be interpreted as an internal personal decision and a matter of personal faith.

Ultimately, this decision narrows the rights of a large class of employees who work for religious institutions. Employees who want to advance within a religious school or church and obtain status as a “leader” or “minister” now do so at their own peril. They may be discriminated against without any legal repercussion whatsoever, as their employer can simply claim that the decision to harass, demote, or terminate the employee was an “internal church decision” protected by the First Amendment.

A jury, sitting in Federal District Court in the Southern District of New York, awarded Freddrick MacMillan, an African-American employee who worked for Millennium Broadway Hotel in Manhattan, $1,000,000 in punitive damages and $125,000 in compensatory damages in a discrimination law suit. Mr. MacMillan, who has been an employee of Millennium for over two decades, sued the hotel in Federal District Court alleging that he was forced to work in a racially hostile work environment.
Mr. MacMillan alleged in his lawsuit that he was the only African-American employee working in the hotel’s engineering department. He further alleged that other mechanics as well as supervisors frequently used inappropriate racial terms in his presence in order to upset and harass him. Mr. MacMillan claimed that co-workers referred to him as “boy” and one of them suspended a lynched voodoo doll hanging from a noose in a supervisor’s office. The doll remained on a bulletin board in the supervisor’s office until a union representative intervened. Millennium failed to discipline anyone in the investigation that followed.
Under federal law, Mr. MacMillan was required to demonstrate that his workplace was permeated with discriminatory intimidation, ridicule, or insult that was sufficiently severe or pervasive to alter the conditions of his employment, and create an abusive working environment.
The co-worker who displayed the voodoo doll and other co-workers who allegedly contributed to the hostile work environment have left the hotel since the law suit was filed. Mr. MacMillan has continued working as a mechanic for the engineering department at the Hotel.
The jury verdict in Mr. MacMillan’s favor and the subsequent award of compensatory and punitive damages comes as a caution to employers who fail to take proactive action in response to employee complaints regarding discriminatory harassment and hostile work environments. Not only is creating a hostile work environment in violation of federal law, but it can result in a significant monetary liability.

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.

A Camden coffee shop owner was sued after six female employees alleged that he sexually harassed them in the workplace. The coffee shop, located in downtown Camden, is modestly called “City Coffee” but, interestingly, provides other services. City Coffee also brews up DNA testing and tax preparations, which the owner runs out of his office in the back of the store.
Former employees of City Coffee alleged that the owner lured or followed them into areas of the store that could not be seen in the store surveillance camera in order to make advances. The complaint further alleged that the owner created such an intolerable work environment that many female employees quit.

A settlement reached in the amount of $75,000 the night before trial is now being contested by the owner, who claims he never agreed to it and did not sign it. Recently, a Superior Court Judge ruled that the settlement is binding and enforceable, and the owner be required to comply. In addition to the $75,000, $15,000 of which will be distributed to the employees involved, the settlement also required that the coffee shop owner provide employee training on workplace discrimination and put in place store policies against workplace discrimination. The State Attorney General’s Office believes that the owner will be appealing the decision.

There are two important things to note from this story. The first is that although the owner argues that he never signed anything, agreements do not always have to be signed in order to be enforceable in New Jersey. Second, employers in New Jersey, no matter the size, must have anti-discrimination and anti-harassment policies and should provide training on these issues, for their own protection and for the protection of their employees.

An Edison Township Police Officer, Joseph Kenney, recently obtained a settlement of $250,000 plus legal fees in a whistleblower lawsuit he filed after experiencing retaliation on the job.

Officer Kenney’s suit arose out of a fatal car accident in 2008. Officer Kenney alleged that his sergeant failed to assist him in pulling victims from an overturned car. The officer alleged that his sergeant made derogatory comments about the South Asian victims in the car, one of whom died. After Officer Kenney filed a complaint about the incident with the department, he was placed on a four day administrative leave and charged with insubordination.

On the fourth day of trial, the Township defendant agreed to pay Officer Kenney a substantial monetary settlement. The officer, who is a 27 year veteran of the police department, expressed satisfaction with the result, saying that he stood up for what he believed was right and received justice.

The actions taken against Officer Kenney after he filed the complaint about his sergeant implicated the Conscientious Employee Protection Act (CEPA), which is New Jersey’s whistleblower law. Under this law, an employer may not take retaliatory actions against an employee after they report illegal or unethical activities in the workplace. This law was implemented by the State to encourage employees to report inappropriate activities in the workplace without fearing that their jobs will be placed in jeopardy. If you are a whistleblower or are considering becoming one, seek the advice of an employment attorney who can advise you as to your rights.

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.

In June 2009, Passaic County Police Officer Joseph Rios, III, was suspended from duty without pay after he was caught on video beating an unarmed man on a street corner. The video, which has been shown on the internet and television, showed Officer Rios repeatedly striking the man with a nightstick and throwing him against the hood of a car. Recently, a Superior Court Judge acquitted Rios of police brutality charges and ordered he be reinstated as an active officer with back pay. Rios has applied for reinstatement and is discussing the issue of back pay with city officials.

When Rios was suspended on the brutality charges, he was earning $97,000 a year. At this point, two years later, he is entitled him to back pay of almost $200,000. During his suspension, Rios also received unemployment insurance benefits.

While there has been public opposition from City activists, the City of Passaic does not oppose reinstating Rios back to his position. However, the incident, which made national news, has been very costly for the City. Passaic is currently in a budget crisis and planning to lay off city employees. Last month layoff notices were sent to 25 municipal employees and 20 city firefighters. The $200,000 that Rios is entitled to receive in back pay will come straight from the city. Additionally, Passaic paid the victim of the incident $350,000 in settlement of a civil lawsuit.

It is clear why residents of Passaic would be upset over reinstating Officer Rios. The beating cost the city nearly half a million dollars, which during a budget crisis, could have been put towards much better use.

A lawsuit filed by J-M Manufacturing Co. against its former law firm, McDermott Will & Emery, has sparked a discussion on the rights and responsibilities of temporary contract attorneys. J-M hired McDermott a few years ago to assist in a whistleblower case and help respond to requests for documents. In their lawsuit, J-M alleges that McDermott used contract attorneys who negligently performed their duties.

Contract attorneys (or temp attorneys), who usually work by the hour, only get paid for hours worked, saving law firms a tremendous amount of money. While law firms typically pay temp attorneys $25 to $125 per hour, they can bill clients double, sometimes triple the amount they pay the contract attorney. It is not uncommon for temp lawyers to work 10 to 12 hours a day, and even work overnight shifts. There have been reports of temp attorneys having to work in sweatshop-like conditions in crowded basements with few breaks. The length of time worked can be inconsistent as a case can settle at any time, leaving the temp attorney no notice that they may not have a job to go to the next morning. The number of temp attorneys has increased in recent years as law firms struggle to meet client needs and provide cost effective service.

While temp work comes with advantages and disadvantages to both the employer and employee, it is important that both parties proceed in this area with eyes wide open. Employers may want to consider the risk of liability a temporary attorney may pose to the firm and whether it is worth taking out malpractice insurance for their temporary lawyers. On a similar note, employers should also think about whether the temp lawyers are being trained properly and guided through their work. Further, employers may want to ensure that the work conditions for temp attorneys meet state and federal standards with respect to health and safety.

Meanwhile, temp attorneys, like every employee, should be aware of their rights. Temp attorneys have many of the same rights as full-time, permanent employees with respect to discrimination and retaliation law, wage and hour law, and workplace safety rules.

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.

In a refreshing change for this conservative United States Supreme Court, the justices gave broad application to Title VII’s anti-retaliation protections in its recent decision in Thompson v. North American Stainless, LP . The Court found that an employee may bring a claim for retaliation under the federal civil rights law when he or she suffers an adverse employment action because someone “closely related” to the employee engaged in protected activity, such as filing a charge of discrimination or opposing discrimination.

In this case, Eric Thompson and his fiancée, Miriam Regalado, were both employed by North American Stainless. Three weeks after receiving notice that Regalado had filed a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”), the company fired Thompson for alleged performance-based problems. Thompson filed his own EEOC charge and later sued the company, claiming that he had been fired in retaliation for his fiancée’s EEOC charge. The lower federal courts held that the anti-retaliation provisions of Title VII did not protect Thompson because he did not personally engage in protected activity on his own behalf or on behalf of his fiancée.

The Supreme Court reversed the Sixth Circuits decision, finding that the anti-retaliation provisions of Title VII must be construed broadly to encompass any employer action that might dissuade a reasonable worker from making or supporting a charge of discrimination. Clearly, an employee might be discouraged from making a charge of discrimination if she knew that her fiancé would be fired!

The Court refused to identify a fixed class of relationships for which third-party reprisals are unlawful but it noted that firing a close family member will likely fall within Title VII’s anti–retaliatory protections but that “a milder reprisal on a mere acquaintance “ will not.

New Jersey employers and employees should take notice of this ruling because protection from retaliation is equally broad under the New Jersey Law Against Discrimination (NJLAD). Moreover, New Jersey courts generally look to Title VII for guidance in interpreting the NJLAD. An employee may have a cause of action for retaliation where he or she is closely associated with someone who has engaged in a protected activity and should consult a competent employment attorney for guidance.