New Jersey Employment Lawyers Blog

The Harmful Effects of Non Competes in New Jersey

November 2, 2024 | Smith Eibeler LLC

New Jersey employees currently restricted by non-competes are often faced with the choice – resign and be prohibited from working in their chosen industry, or stay in a job that isn’t right for them. The industry either loses a valuable, often highly experienced, individual or the employer creates a ‘trapped workforce’, building resentment and losing productivity. If litigation ensues as a result of an employee working for a company in violation of the non-compete agreement, the employee will need a significant amount of money they simply do not have to fight the case. And even if they can afford the high costs of litigation, there is never a guarantee the litigation will result in their ability to take a new job or remain in his or her new employment.

Often the terms of a non-compete can seem confusing and overbroad, leaving employees asking “how can I ever leave for a better job?”. Some non-competes bar the employee from working in the same industry for a long period of time, and/or working for a competitor within a wide geographic area. Those ready to leave their jobs can consult an attorney to find out if these terms are really enforceable.

New Jersey courts analyze the enforcement of a non-compete agreement using three factors, all of which must be met in order for an employer to succeed in enforcement; it must (1) protect the legitimate interests of the employer; (2) not impose an undue hardship on the employee; and (3) not be injurious to the public. The Court’s inquiry into these factors is fact specific to the employee, the employer, the new employer and the relationships amongst each other.

Bill to Expand New Jersey Family Leave Act to Cover Bereavement Passes in Assembly

October 31, 2024 | Smith Eibeler LLC

On September 26, 2024, the State Assembly passed a Bill (A3505) expands the circumstances under which family leave can be taken under the New Jersey Family Leave Act to include “bereavement” leave for parents who suffer the death of a child or failed adoption. Under an amended law, an employee may take bereavement leave as an additional reason for family leave, which includes the “bereavement purposes” to include the death of a child, pregnancy loss, and failed fertility treatment.

Currently, under the New Jersey Family Leave Act, eligible employees may take up to 12 weeks of job-protected leave within a 24-month period for reasons that include:

To care for or bond with a child, as long as the leave begins within 1 year of the child’s birth or placement for adoption or foster care;

Supreme Court Invalidates State Workplace Confidentiality Directive Regulation

May 6, 2024 | Smith Eibeler LLC

The New Jersey Supreme Court issued a decision today invalidating a state employment regulation that required state workplace investigators to request victims and witnesses in harassment investigations to keep all aspects of the investigation confidential. The Court held that the challenged regulation, N.J.A.C. 4A:7-3.1(j), was unconstitutionally overbroad and struck the relevant portion concerning the confidenitialty directive. The decision is a major victory for employees and their rights to speak freely and openly about issues of workplace discrimination and sexual harassment.

The challenge arose out of an employment lawsuit brought by a Department of Transportation employee who complained of sexual harassment and retaliation. After complaining to the Civil Service Commission about the sexual harassment, the employee, Viktoriya Usachenok, was interviewed by an investigator from the Division of Equal Employment Opportunity/Affirmative Action (“EEO/AA”) who required that Ms. Usachnanok sign a confidentiality agreement prohibiting her from speaking to anyone outside the state about her complaints of sexual harassment.

In her sexual harassment lawsuit, Ms. Usachenok brought a claim for declaratory judgment to invalidate a state regulation that required EEO/AA investigators to impose strict confidentiality upon victims and witnesses of incidents of harassment within state employment. In response to the lawsuit, the Civil Service Commission amended the regulation to require its EEO/AA investigators to request victims and witnesses to keep all aspects of their investigation confidential. The amended regulation was also challenged as a violation of state employees’ rights under the First Amendment and an unlawful restraint of protected rights under the New Jersey Law Against Discrimination.

New Jersey State Assembly Considers Expanding Non-Compete Restrictions

November 1, 2022 | Smith Eibeler LLC

New Jersey employees may soon find new freedom in the job market. On October 3, 2022, the New Jersey State Assembly held a hearing on Bill No. 3715, backed by the National Employment Lawyers Association of New Jersey (“NELA NJ”). If passed, the Bill would prevent employers from placing unreasonable limits on their workers when they leave for new employment. For New Jersey employees, this would mean more transparency in employment contracts and fewer restrictions on their ability to seek competitive employment opportunities.

Restrictive covenants, more commonly known as “non-competes,” allow employers to prevent skilled employees from seeking new employment opportunities using the skills and knowledge they rely on in their current employment. Some restrictive covenants, such as trade secret and non-solicitation agreements, are critical to a business’ survival, and would still be permitted under the new Bill. While they can serve a valuable purpose to employers, they can be easily abused to limit employment prospects for employees who want to leave a company.

Assembly Bill (No.3715), first introduced in May 2022, addresses how restrictive covenants in employment contracts and severance agreements “discourage innovation and production” by driving skilled workers to other states and “impede the development of business.” More significantly, non-competes place an undue burden on skilled employees that limit their employment.

Court Reaffirms that New Jersey’s Whistleblower Protection Law Is Not Bound By the Borders of the State

August 25, 2022 | Smith Eibeler LLC

The Superior Court of New Jersey, Appellate Division, recently authored a significant ruling that reaffirmed and strengthened the resolve of New Jersey’s whistleblower law, the Conscientious Employee Protection Act (“CEPA”). In Halliday v. Bioreference Laboratories, Inc., a Texas based employee, Halliday, of a New Jersey Company, Bioreference Laboratories, Inc. (“BLI”), raised numerous complaints regarding her employer’s Houston, Texas laboratory being out of compliance with the Clinical Laboratory Improvement Amendments (“CLIA”) and thus in violation of federal law. Ms. Halliday was fired within a year of raising her complaints, leading her to file a CEPA claim against her former employer.

BLI moved for summary judgment arguing that Texas law, not New Jersey law, should apply. The trial court agreed with BLI, finding that Texas law governed the issue. Moreover, because Texas law governed the issue, and Texas lacks a whistleblower law in parity with CEPA, Ms. Halliday’s claim failed. The trial court further noted that even if CEPA applied to the issue, Halliday failed to present evidence that her termination was connected to her complaints. As such, the trial court granted BLI’s motion for summary judgment. Ms. Halliday then appealed. On appeal, the Superior Court sided with Ms. Halliday, vacated the trial court’s ruling and remanded the issue back to the trial court.

The Superior Court’s holding emphasized the core ideas of CEPA as a “remedial legislation” that was created to advance an important social goal, namely “to encourage, not thwart, legitimate employee complaint.” Pursuant to this ideal, the Superior Court looked to the definitional language used in CEPA on the terms “employee” and “employer” and held definitively that, “[CEPA] does not limit the definition of employer to persons or entities located in New Jersey, and the definition of employee is not restricted to individuals performing services in New Jersey.” This landmark holding cements the idea that CEPA is an inclusive legislation that is not fully limited to the borders of New Jersey.

Misclassification of Employees Leads to Unpaid Unemployment & Missed Disability Contributions

August 9, 2022 | Smith Eibeler LLC

Last week, in the case of East Bay Drywall, LLC v. Department of Labor and Workforce Development, the State Supreme Court upheld a determination by the Commissioner of the Department of Labor and Workforce Development (DOL) that a drywall company had been misclassifying employees as independent contractors for several years, and as a result, now owes tens of thousands of dollars in unpaid unemployment and temporary disability contributions. The Court analyzed New Jersey’s Unemployment Compensation Law, N.J.S.A. 43:21-19(i)(6)(A)-(C), colloquially known as the “ABC test” to determine whether the workers were properly classified as employees or independent contractors.

East Bay Drywall is an installation business that bids for projects and then hires subcontractors to complete those projects. Each subcontractor is hired on a per job basis and can bring on as many workers as necessary to complete the job. East Bay Drywall provides the raw materials for the work and the workers bring their own tools and perform the labor. Ultimately, East Bay is responsible for the completed project.

Up until June 30, 2013, East Bay had been reporting employee wages to the DOL. In 2016, an audit was commenced to review the company’s classification of workers it hired between 2013 and 2016, when it was no longer reporting wages. The DOL’s auditor found that four individuals and twelve business entities that had worked for East Bay during that time were improperly classified as independent contractors, and informed East Bay that it owed $42,120.79 in unpaid unemployment and short-term disability contributions. East Bay contested the audit in New Jersey’s Office of Administrative Law, where a judge concluded that only three workers had been misclassified and the other thirteen were in fact independent contractors. However, the final decision still rested with the DOL Commissioner, who ultimately upheld the findings of the audit. The Commissioner found that all sixteen workers at issue were East Bay employees under the ABC test. The company appealed, and the Appellate Division affirmed the Commissioner’s determination as to only five of the workers, finding that the other eleven were independent contractors. The Supreme Court granted certification.

NJ State Troopers File Lawsuit Following Years of Homophobic and Racial Harassment

October 9, 2021 | Smith Eibeler LLC

New Jersey’s Law Against Discrimination provides some of the strongest protections against unlawful workplace discrimination against individual members of protected classes such as race, gender and sexual orientation. Unfortunately, even with strict anti-discrimination laws and a state-wide push towards inclusivity, numerous instances of homophobic workplace discrimination and harassment continue to rise. Recently, two New Jersey State Troopers have filed suit in the Monmouth County Superior Court, alleging years of workplace discrimination within the NJ State Police Department, based on their sexual orientation.

Lieutenants John Hayes and Jamie Lascik joined the State Police in 2001, and have worked closely with New Jersey and the New Jersey State Police (“NJSP”) to create an inclusive and diverse workplace. Hayes, who is an openly gay man, and Lascik, who is a gay African American woman, alleged repeated instances of discrimination based on their sexual orientation. Their suit alleges five violations of the New Jersey Law Against Discrimination and provides detailed situations where supervisors and other employees subjected them to ongoing harassment for their sexual identity. As summarized in the lawsuit, the “ongoing harassment and disparate treatment constitute a continuing violation,” of the New Jersey Law Against Discrimination, and the situation consisted of a pattern of retaliatory hostility, recurring intimidation, and differential treatment by supervisors over the course of many years, up to and including 2021.

The New Jersey Law Against Discrimination is one of the most comprehensive anti-discrimination laws in the country. It prohibits employment discrimination and bias-based harassment on the basis of sex, sexual orientation, race, and multiple other factors. The New Jersey Law Against Discrimination also prohibits both the creation and allowance of a hostile work environment that occurs when an employee shows that their severe and pervasive harassment would not have occurred but for the employee’s protected class membership status, and that a reasonable person of the same protected class would believe that the conditions of employment have been altered to where work environment is hostile or abusive. A hostile work environment based on sexual orientation occurs when an employee is subjected to harassing and unwelcome conduct that occurs because of the employee’s sexual orientation.

Hudson County Prosecutors Office Employees to Be Disciplined for Inappropriate Social Media Posts

September 18, 2021 | Smith Eibeler LLC

Employees within the Hudson County Prosecutor’s Office could face serious disciplinary action as a result of a workplace complaint investigation conducted by an outside law firm in response to unlawful employee conduct. The investigation was prompted by a series of offensive social media posts shared by Hudson County Prosecutor’s Office employees, posted on Facebook and within their internal workplace messaging app, “Slack”.

Under New Jersey law, employers must maintain an effective policy against unlawful harassment and discrimination at the workplace. With an effective anti-harassment policy in place, harassment investigations may shield an employer from hostile work environment claims under the New Jersey Law Against Discrimination. The New Jersey Law Against Discrimination is one of the nation’s strongest legal protections for employee civil rights against discrimination and threats of harassment, including sexual harassment. The New Jersey Law Against Discrimination requires employers to investigate all complaints of harassment and discrimination promptly, thoroughly and completely.

Serious hostile work environment concerns emerged at the Hudson County Prosecutor’s Office after racist jokes’ and offensive social media comments raised tensions amongst assistant prosecutors. In March 2021, the initial internal investigation began with an examination of Assistant Prosecutor Bill Specht and Agent Kelly Sisk over “offensive and sickening” posts the two allegedly made on social media and shared via Slack. Screenshots from March 2021, were shared of Specht’s conversations within the workplace Slack chatroom, writing that “Infoshare identifies as Mexican. It sleeps when the sun is hottest.” Specht additionally shared a number of racially offensive Facebook posts, following the police killing of George Floyd and the shooting of Jacob Blake. These posts alluded to the exoneration of law enforcement officials in officer-involved shootings, an especially controversial subject for someone in his position.

Legal Protections for Covid-19 Related Workplace Leaves

August 19, 2021 | Smith Eibeler LLC

For the past year, employees have been undergoing medical screenings and answering questions about their personal health to gain access to their physical workplaces. Employers can lawfully request their health status or require them to take leave from work if they appear to have symptoms of COVID-19. Despite laws protecting employee privacy and the dignity of being in control of our own medical decisions, the public health emergency resulting from the spread of COVID-19 has drastically changed the landscape when it comes to employment decisions based on disability or perceived disability, the duty to reasonably accommodate and the prohibition against workplace retaliation.

The Equal Employment Opportunity Commission (EEOC) is a federal agency that enforces workplace anti-discrimination laws, including the Americans with Disabilities Act and the Rehabilitation Act. The Americans with Disabilities Act makes discrimination based on disability illegal and protects from retaliation individuals who exercise their rights under that law. Other laws, including state and local laws, such as the New Jersey Law Against Discrimination and the New York City Human Rights Law, provide employees with additional protections. Anti-discrimination laws continue to apply during the time of the COVID-19 pandemic, but they must coexist with guidelines released by the Centers for Disease Control (CDC) and state and local health authorities concerning, among other things, an employer’s right to access employees’ medical information and perform health screenings in the workplace. The intertwining of anti-discrimination laws and public health regulations in the current climate has created a question about whether a COVID-19 infection or perceived infection qualifies an employee for anti-discrimination protection based on disability. The answer will be different depending on whether federal or state law governs the employment relationship, and if state law, which state.

Disability discrimination occurs under the federal Americans with Disabilities Act when an employer treats an employee unfavorably because he or she has a disability, has a history of a disability (such as cancer that has entered remission), or because the employer believes the employee has or used to have a disability. However, not all medical conditions equate to disabilities under the legal definition of the term. A person can show that he or she has a disability in one of three ways: (1) he or she has a physical or mental condition that substantially limits a major life activity (such as walking, hearing, learning, or limits the operation of a major bodily function); (2) he or she has a history of such a disability (past depression that is currently being successfully treated); or (3) he or she is subject to an adverse employment action (such as demotion, termination or a change in job duties or pay) due to the employer’s belief that he or she has a physical or mental impairment that is more than something minor and temporary.

Court Rules No Violation of First Amendment For Woman’s “Maskless Tirade”

August 11, 2021 | Smith Eibeler LLC

Nationwide, courts have responded to COVID-19-related lawsuits and made novel decisions pertaining to cases arising from the failure to follow state and federal executive orders. Most recently, the New Jersey Superior Court denied a Defendant’s motion to dismiss for a lawsuit alleging assault and the infliction of emotional distress after she refused to follow the New Jersey mask mandate. In denying her motion to dismiss, the New Jersey court voiced its opinion that Free Speech under the First Amendment does not extend to “maskless tirades”, especially during the peak of a global pandemic.

In November of 2020, Lilach Kuhn, the defendant, entered Citibank’s Englewood, NJ branch without a mask in direct violation of Executive Order 122, enacted in April 2020, requiring face coverings in public spaces in an attempt to slow the spread of COVID-19. Plaintiff, bank employee Sanaa Rami, approached Kuhn and reminded her of the requirement to wear a face covering. Ms. Rami was concerned for her own and others’ health and safety. In a viral video recorded by onlookers of the incident, the Defendant erupted in a fit of rage directed at Ms. Rami and refused to adhere to the face-covering mandate. shouted at Ms. Rami saying “I am going to court to fight masks and you are not going to tell me what to do,” and “You work for me! I do not work for you! I have been a customer since 1990. Were you born then? Shame on you!.” When Rami offered to get her a clean mask, Defendant responded yelling, “Don’t make me wear your mask! Are you trying to kill me? What happens if you have corona[virus]?” and “I am a scientist! There is no corona[virus]!”

First Amendment rights have been referenced in arguments throughout the nation in response to and challenging COVID-19 health and safety mandates , including the constitutionality of mandatory mask mandates. During the height of the COVID-19 pandemic, many public health officials and politicians urged or required citizens to wear face-coverings to help slow the spread of the COVID-19 virus. One of the most common arguments against these mask mandates is that they infringed on the individual’s Freedom of Speech under the First Amendment. The First Amendment protects freedom of speech, press, petition, assembly and religion. This includes the right to express one’s opinions without government censorship or restraint. Freedom of speech does not include the right to incite actions that would harm others such as, as the Supreme Court famously opined in Schenck v. United States, shouting fire in a crowded theater. Accordingly, the right does not extend protection to obscenity, fighting words, and true threats.