New Jersey Employment Lawyers Blog

New Jersey Court Rules that ADP Can Be Liable for Discrimination as a Professional Employer Organization

October 17, 2019 | Smith Eibeler LLC

An Essex County New Jersey Superior Court judge has issued an opinion that held that a Professional Employer Organization (also known as PEO) can be considered a co-employer for the purposes of the state’s Law Against Discrimination. In the case, Stephanie Perez sued not only her W-2 employer, the Dermatology Group, P.C., but also their designated PEOs, ADP TotalSource II, Inc. and ADP, LLC t/a ADP Major, for claims of pregnancy discrimination, failure to reasonably accommodate and unlawful retaliation. This is an important development in how New Jersey courts are treating the relationship between employees, their primary employers, and PEOs.

PEOs are organizations that provide support services, including human resources services, to companies. Typically, PEOs provide such services to small and medium sized companies that do not have internal staff committed to providing such services. Over the past 40 years, PEOs have become a substantial segment of the national employment landscape. According to statistics reported by the National Association of Professional Employer Organizations (“NAPEO”), there are now over 907 PEOs operating in the United States providing services to 175,000 small and medium-sized businesses, which in turn employ approximately 3,700,000 employees nationwide.

Often, PEOs are designated as the W-2 employer or act in a capacity of being a co-employer with an employee’s primary employer. As NAPEO acknowledges, PEOs typically work alongside the primary employer and “both parties might share responsibility for [certain] obligations and be ‘an’ employer” in the context of the performance of those obligations. Because many PEO’s provide advice and counsel on employment law related policies as part of their services, issues arise when that advice or counsel is wrong and plays a determinative factor in causing an unlawful termination.

New Jersey Disability Discrimination Law: Revisiting Tynan v. Vicinage 13

October 10, 2019 | Smith Eibeler LLC

New Jersey law provides for strong protections for disabled employees who suffer discrimination at the workplace. What is widely considered as on the most powerful anti-discrimination laws in the country, the New Jersey Law Against Discrimination bars discrimination of individuals based on protected characteristics in the terms and conditions of employment. The law specifically prohibits discrimination based on an employee’s disability or perceived disability and requires employers to engage in an interactive process in order to determine whether a reasonable accommodation can be provided to employees with a disability. What exactly this process and the resulting accommodations may consist of has been established by various court case rulings since the law’s passing in 1945.

Tynan v. Vicinage 13 is a landmark disability discrimination and failure to reasonable accommodated case that was decided in 2002 by a New Jersey Superior Court in the Appellate Division. The plaintiff employee in this case was employed by Vicinage 13 of Superior Court as the Hunterdon County Jury Manager. She suffered from a combination of physical and mental disabilities including migraines, Post-Traumatic Stress Disorder, depression, irritable bowel syndrome, and hypertension. The plaintiff claimed that these disabilities were exacerbated by harassment and mistreatment from her supervisor at Vicinage 13. On multiple occasions, her supervisor issued disciplinary actions against Ms. Tyan for minor oversights and threatened to terminate her employment regularly. The stress caused by the severe treatment and allegedly hostile work environment exacerbated Ms. Tynan’s disabilities and caused her to become sicker, both mentally and physically. Ms. Tynan complained formally to the Assistant Trial Court Administrato and the court’s Human Resources Division, describing her disabilities, the supervisor’s behavior, and a need for accommodations. Tynan was provided with a plan to remedy the situation involving processes of mediation between her and her supervisor.

Shortly after this plan was created, Ms. Tynan’s exacerbated medical conditions caused her to require a leave from her employment with Vicinage 13. She was approved for family leave and planned to return approximately 11 months later. During this leave, Ms. Tynan received treatment for various disabilities, particularly for her depression and hypertension. Her treating physicians recommended that Ms. Tynan continue her leave from Vicinage 13, and that it would be important for her to report to a different administrator upon return as a result of the extreme stress that Pardo’s treatment caused Ms. Tynan. At the end of her planned family leave, Ms. Tynan requested additional time off and to report to a different administrator upon return. The employer denied both of these accommodations and told Ms. Tynan that if she did not report to work immediately, she will be considered to have resigned from her position. Ms. Tynan could not return to work as a result of her disabilities and was effectively terminated from her position with Vicinage 13.

SCOTUS Watch: Significant Employment Decisions on the Horizon

October 2, 2019 | Smith Eibeler LLC

On October 8, 2019, the United States Supreme Court will consider three companion cases concerning whether Title VII of the Civil Rights Act of 1964 guarantees gay and transgender employees across the nation protection from workplace discrimination. In two cases, the Court will decide whether sexual orientation discrimination is a form of sex discrimination within the meaning of Title VII. In the third, the Court will decide whether Title VII prohibits discrimination against transgender people. The Supreme Court’s decisions to both these questions will have dramatic impact on the rights (or lack thereof) of LGBT persons throughout the country.

The outcomes of these cases will not only have a significant impact on employees’ rights nationwide, they will also have a significant impact on the individual employee-plaintiffs in each lawsuit. For some brief background, their stories are presented below:

(1) Bostock v. Clayton County

Sex Discrimination in College Athletic Departments

September 24, 2019 | Smith Eibeler LLC

Institutions of higher education are often perceived as being ahead of the curve when it comes to issues of equality and progressive treatment of members of protected groups. In reality, this is not always the case — especially when it comes to women working as college coaches or as employees within the athletic departments of universities. In fact, there have been several high-profile instances of employment discrimination lawsuits within athletic departments of several “Power 5” athletic universities have made news in recent years. These high profile lawsuits have resulted in much needed increased public scrutiny of important issues of systemic discrimination within our country’s university athletic departments.

Perhaps most notably is the gender and sex orientation discrimination brought by a former field hockey coach and senior athletic official against the University of Iowa athletic department. In that case, Tracey Griesbaum and her partner Jane Meyer were employed by the University of Iowa’s athletic department. Griesbaum, a former field hockey coach at the University of Iowa, and Meyer, a senior department director, were romantic partners during their tenure at Iowa. Throughout their employment, both women alleged they were subjected to gender and sexual orientation discrimination by department director Gary Barta. Meyer and Griesbaum’s relationship was often scrutinized and used against them in their job performance reviews and assessments, despite being approved by administrative officials through appropriate process. Further, Meyer was passed over for promotions and paid drastically less than male coworkers who had fewer job responsibilities and less experience.

The discrimination escalated when Griesbaum was fired in 2014. The University attributed her termination to allegations that she abused her athletes, but an extensive investigation revealed that these allegations were baseless. As a senior department director who recognized the unlawful behavior, Meyer complained about Griesbaum’s termination, explaining that it was discriminatory and unlawful, and brought up additional instances of gender discrimination occurring within the department. The following day, following her complaints, Meyer was subjected to that same discrimination when she was placed on administrative leave and transferred out of the athletic department. Following Meyer’s unlawful transfer and termination, the two former employees filed lawsuit in a Iowa state court. Through the suit, Meyer and Griesbaum argued that they had been victims of discrimination based on both gender and sexual orientation.

Can the Mere Presence of a Sexual Harasser Constitute A Hostile Work Environment?

September 18, 2019 | Smith Eibeler LLC

As with any legal issue, claims of sexual harassment involve many different legal factors that require consideration. Among these are a plaintiff’s potential damages, the statute of limitations related to the legal issue, and what exactly constitutes individual instances of harassment. These factors are made increasingly difficult to assess because of the nature of sexual harassment, especially when the harassment is pervasive as opposed to severe.

Various court cases have provided clarity on many of the issues involved in sexual harassment cases. Karen Caggiano v. Armando Fontoura et al., helped to explain when a plaintiff’s right to file a complaint regarding sexual harassment expires, as well as what type of behavior may constitute continuous harassment. In this case, Karen Caggiano endured years of pervasive harassment while employed as a Sheriff’s Officer in Essex County. Armando Fontoura, among others, constantly made derogatory comments relating to Ms. Caggiano’s sexual orientation and appearance. Her male coworkers regularly propositioned her for sex in extremely explicit and offensive language, and one individual went further, exposing himself to her on numerous occasions.

Fearing termination or other adverse employment action, Ms. Caggiano did not file a formal complaint regarding the harassment. However, in December 1996, Ms. Caggiano’s Captain overheard her discussing the harassment with a coworker. Her Captain ordered Ms. Caggiano to file a formal report of the conduct. Following this report, the incidents of harassment ceased, and Ms. Caggiano, along with several of the perpetrators, were transferred to different offices. A final incident of harassment occurred in February 1997, when Ms. Caggiano was assigned to attend same sexual harassment training in a group with two of her harassers. She was forced into this interaction despite the fact that there were approximately 400 employees attending the training in groups of 10. Nearly two years later, Ms. Caggiano decided to file a civil lawsuit alleging sexual harassment in the workplace.

New York Follows New Jersey’s Lead in Adopting Laws to Combat Wage Inequality and Workplace Discrimination

September 11, 2019 | Smith Eibeler LLC

On the morning of July 10, 2019, New York State Governor Andrew Cuomo signed new legislation into law providing protections for equal pay for women and increasing protections against race and gender based employment discrimination. The legislation was signed at the ticker-tape parade for the United States Women’s National Soccer Team, who won the World Cup on July 7^thand have made headlines in recent months regarding gender-based pay disparity. The passage of these bills was a symbolic action of solidarity between New York State and the U.S. Women’s National Team, who filed an equal pay lawsuit in Federal Court earlier this year. After signing the legislation into law, Governor Cuomo stated, “We say to the U.S. Soccer League, and we say to FIFA, if you don’t pay women what you pay men, then you have no business in the state of New York.”

These three bills, signed this past summer, are part of a larger effort by the New York State to provide greater protections to employees in the state, aiming to prohibit employment discrimination based on gender and race. These laws will hopefully mark the development of a more employee-friendly workplace environment within the state. As New York is the third largest contributing state to America’s national GDP, such an improvement would be significant. New Jersey has also adopted significant employee-friendly legislation in the past two (2) years, including the New Jersey Equal Pay Act, the S121 Non-Disclosure Bill, Paid Sick Leave and amendments to the New Jersey Wage Payment and New Jersey Wage and Hour law. Following these enactments, New York’s similar enactments will serve to further enhance the protections for employees within both states, and across the region.

The first of two bills Governor Cuomo signed on July 10, Senate Bill 5248, prohibits wage differentials based on protected class status. It requires equal pay for substantially similar work when performed under similar working conditions. Similar to the New Jersey Equal Pay Act, the bill only allows for a differential rate of pay when it is based on a seniority or merit system, a system that measures earnings by quantity or quality, or a bona fide factor consistent with business necessity. Additionally, the bill lowers the burden of proof for a person claiming discrimination and provides a civil penalty for violations of the act. The stated purpose of the law is to prevent irrelevant factors – such as gender – from influencing employers in their salary distribution decisions. The passage of this law came after a wave of equal pay lawsuits have shaken governments across the United States. The bill will go into effect 90 days after its enactment.

Federal District Court Refuses YMCA’s Request for Gag Rule in Sexual Harassment Lawsuit

September 5, 2019 | Smith Eibeler LLC

A recent federal court decision serves as a reminder of the extremely high burden a litigant has in order to close court proceedings from the public. In our judicial system, the doors of the courthouse open in assuring the public’s right to access to the judicial process. This federal court decision is being considered by many as a victory for the public’s freedom to access judicial information.

In the federal case, Silvka v. YMCA of the Pikes Peak Region, a Colorado District Court struck down the defendant employer’s motion for a gag order and a motion to restrict. In the opinion, Chief Judge Brimmer’s provided a thorough explanation and insight into the public’s right to have access to judicial proceedings. The order also reflected the core principle’s espoused in Professor Eugene Volokh’s objection to the motions raised by the YMCA; that the First Amendment and the common law assert a public right to access court proceedings whether civil or criminal in nature.

The motion for a gag order came as a result of Silvka’s complaint against the YMCA of the Pikes Peak Region. The complaint alleged that a YMCA manager sexually harassed and forcibly groped the former employee and that the YMCA failed to conduct a proper investigation into her complaints. The allegations of the sexual harassment lawsuit include a hostile work environment that involved employees binge drinking, and male upper level personnel abusing their power by coercing young female employees to have sex with them in order to advance in the organization. Silvka claimed to be the latest victim of this culture in her complaint. In response to the complaint and its publication by local news outlets in Colorado, the YMCA sought to impose a gag order fearing the complaint’s publication would prejudice a jury against them.

Court Affirms Hostile Work Environment Verdict Against Middlesex County Sheriff’s Office

August 29, 2019 | Smith Eibeler LLC

The Superior Court in New Jersey’s Appellate Division has rejected an employer’s attempt to overturn a Somerset County jury verdict finding it liable for creating a hostile work environment based upon an employee’s disability. In the case Joseph Iko v. County of Middlesex, the Appellate Division took specific note of the overwhelming testimony of the employee’s co-workers induced at trial corroborating the employee’s claims that he was the subject to frequent verbal taunts while at work concerning his diabetes and other related medical problems. Based upon the trial evidence, the court found that the jury rightfully applied the facts of the ongoing harassment in finding that the employee was subjected to an unlawful hostile work environment and affirmed the verdict. In doing so, the court rejected the employer’s argument that the employee had to provide expert testimony regarding the exact qualities of his or her disability in order to proceed with his claim of a hostile work environment.

In this case, the plaintiff Mr. Iko was employed by the Middlesex County Sheriff’s Office from 1992 until his retirement in 2017. Mr. Iko was diagnosed with Type I Diabetes early in life and had to manage his symptoms throughout his entire adult life. At times the illness caused Mr. Iko to experience related medical issues that required him to take time off from work for surgical procedures. On one occasion, Mr. Iko had to undergo a pancreas transplant procedure, which was complicated by an aortic tear. Mr. Iko also experienced issues with his eyesight.

In addition to struggling with numerous medical issues, Mr. Iko faced severe and pervasive discrimination from his supervisors and coworkers on the basis of these disabilities. Several of Mr. Iko’s supervisors and coworkers referred to him as “Eye Lab”, “Half-Dead”, “Mr. Magoo”, “Stevie Wonder” and “Walking Dead”, among other such names. These nicknames were offensive to Mr. Iko, who repeatedly asked the harassers to stop. Mr. Iko’s supervisors also directed expletives and derogatory statements toward him related to his failing pancreas and eyesight. Mr. Iko attempted to lodge a formal complaint of harassment with the Sheriff, but his Captain told him that the Sheriff would not speak with him. Unable to address the ongoing discrimination and harassment internally, Mr. Iko felt he had no choice but to file a lawsuit against Middlesex County for disability discrimination.

Out of Control: New Jersey Independent Contractor Misclassification Tackled by Task Force

August 21, 2019 | Smith Eibeler LLC

A recent gubernatorial task force has released a report addressing a major problem that many employees are facing across the state of New Jersey. According to the Report of Governor Murphy’s Task Force on Employee Misclassification, 12,315 employees were improperly classified as independent contractors, rather than employees, in 2018. This misclassification can cause major issues for workers by limiting their access to essential legal protections provided to New Jersey employees. There has been a growing trend of misclassification, with the number of employees misclassified as independent contractors increasing by 40% over the past decade. Unfortunately, this trend continues to create problems for workers across the State to this day, which is why Governor Murphy’s task force was so greatly needed.

Generally, in order to determine whether a worker is properly classified as an employee or an independent contractor for wage payment law and wage and hour law purposes, New Jersey courts utilize what is known as the ‘ABC Test.’ The ABC Test starts off with a presumption that a worker is an employee. An employer can rebut this presumption only if they can establish the existence of each of the following three factors:

The worker is free from control or direction in the performance of their services, both under the contract and in fact;

NJ Courts Clarify Restrictive Covenant Agreement Limitations

August 13, 2019 | Smith Eibeler LLC

The New Jersey Appellate Division issued an opinion last month that has provided additional clarity to what limitations a company may permissibly impose on its employees pursuant to non-competition clauses with restrictive covenant agreements. The court’s opinion (delivered in an action involving six consolidated appeals) reaffirmed the long-standing principle that employers can impose certain provisions commonly found in restrictive covenant agreements in the interest of fair competition; however, the court also held that certain other common provisions should be struck from restrictive covenant agreements as the court found them to be unduly harmful to employees.

In ADP, LLC v. Kusins, the court reviewed the restrictive covenant agreements signed by six individual employees of the human resources management software company ADP. The agreements stipulated (in pertinent part) that upon leaving the company, the employees could not compete with ADP by soliciting the ADP clients or potential clients with whom those employees had a previous business relationship with, or whose information they became aware of during their tenure at ADP. This restriction was only applicable within the geographic area specified by the restrictive covenant agreement. This type of restriction, while seemingly onerous, has unfortunately become commonplace in our society. Despite employment attorneys making arguments to the contrary, courts have routinely upheld these types of restrictions on the basis that they do not cause undue harm to the employees. Through the recent opinion in Kusins, the Appellate Division has taken the opposite view and found that these restrictions are too great.

In their opinion, the Appellate Division identified two distinct restrictive covenant agreements signed by the six employees. The first contained traditional provisions, which the court found to be non-controversial and enforceable. In so holding, the court reaffirmed the general vitality of restrictive covenant agreements in New Jersey – coming as little surprise. The second restrictive covenant agreements signed by the employees was the main point of contention. These restrictive covenant agreements were signed via a “clickwrap” agreement by the employees and were provided only to those employees recognized as “top performers.” In exchange for signing these restrictive covenant agreements, the employees would be entitled to stock option rewards. The court acknowledged that ADP had a legitimate need to impose these additional restrictive covenant agreements on their top performers, because those employees had heightened ability to harm ADP through competition, due to their proven capacity in this industry. Nonetheless, the court soundly rejected the provisions as they were written and “blue-penciled” or edited the restrictive covenant agreements to lessen the restrictions, remove the undue harm to the employees, and render the restrictive covenant agreements enforceable.