New Jersey Employment Lawyers Blog

President Biden Signs Executive Order Encouraging Bans on Non-Compete Agreements

July 10, 2021 | Smith Eibeler LLC

On July 9th, President Biden issued an Executive Order in the spirit of promoting competition within the American economy, in hopes to lower prices of consumer goods and resources, increase wages for workers, promote innovation, and accelerate economic growth. This Order addresses nationwide threats of corporate power and anticompetitive practices, as the percentage of industries dominated by large companies continues to grow and the rate of new business formations steadily declines. Competition decline coincides with concerns for slowed productivity growth, business investment and innovation decline, and widened income, wealth, and racial inequality. The President is attempting to “level the playing field” for American workers, taking decisive action to reduce the trend of corporate consolidation, increase competition, and deliver concrete benefits to America’s consumers, workers, farmers, and small businesses.

Most notably, the Executive Order criticizes the use of non-compete agreements as an obstacle to American workers, driving down wages and limiting employees’ ability to reenter the workplace when changing jobs. Non-Compete agreements act as a “barrier to competition,” under which one party agrees not to enter into or start a similar profession or trade in competition against another party, usually outlining restrictions based on time, geography, and area of business. Non-compete agreements are a type of restrictive covenants as they restrict the worker’s ability to move freely between employers and competitors within industries. Non-competes exist to protect employers from their departing employees who could potentially use protected information they learned throughout their employment to compete against their former employers. While at first, the purpose of non-competes was to provide the employer with an additional level of protection, these agreements have transformed into a manipulative tool to control former employees and eliminate threats of competition. Because most employees cannot afford the high costs of litigation, the mere threat of litigation for breach of a non-compete agreement usually results in the employer being successful in shutting its former employer’s new employment or prospective employment. These realities are increasingly getting the attention of state legislators who seek to reform the way non-competes can be used by employers.

This attack at non-compete agreements follows research suggesting that industry consolidation is decreasing advertised wages by as much as 17%, and tens of millions of American workers are being forced into non-compete agreements. Non-compete agreements are increasingly popular among all or most industries, oftentimes trapping employees in underpaying positions. Most notably, the overuse of non-compete agreements was criticized when Jimmy John’s, the national fast-food chain restaurant, began having employees sign non-compete agreements restricting their sandwich makers from working for competitors. In President Biden’s remarks, he referenced a similar hypothetical non-compete between McDonald’s and Burger King that would disallow a McDonald’s worker from taking a job at a nearby Burger King, asking “Come on. Is there a trade secret about what’s inside that patty?”

Supreme Court Unanimously Rules That Two Racial Slurs Are Enough to Establish a Hostile Work Environment

June 24, 2021 | Smith Eibeler LLC

SUPREME COURT UNANIMOUSLY RULES THAT SUPERVISOR’S USAGE OF RACIAL SLURS AGAINST EMPLOYEE ON ONLY TWO OCCASIONS ARE ENOUGH TO ESTABLISH SEVERITY IN A HOSTILE WORK ENVIRONMENT CASE

In an unanimous opinion, the New Jersey Supreme Court has held that the use of offensive racist slurs on two occasions could meet the severe and pervasive standard required to establish a claim for hostile work environment under the New Jersey Law Against Discrimination. The is being viewed by New Jersey employment lawyers as a victory to employee rights and their right to a work environment free of discrimination. In denying summary judgment on behalf of the employer, the race workplace discrimination case will now proceed to trial with the ultimate outcome to be decided by a jury.

In the case, Rios, Jr. v. Meda Pharmaceutical, Inc., the employee claims that on two separate occasions, his direct supervisor called him a “sp*c” and this conduct amounted to a hostile work environment. After he reported both instances to Human Resources (HR), the supervisor placed him on a performance improvement plan and he was eventually fired. At the end of discovery, the employer filed a motion for summary judgment to dismiss the case arguing that only two incidents were not pervasive or severe to constitute an actionable claim for hostile work environment. The trial court granted the motion and dismissed the lawsuit.

Supreme Court Sides With SnapChat Cheerleaders and Extends First Amendment to Protect Public Students Profane Off-Campus Statements

June 23, 2021 | Smith Eibeler LLC

In an 8-1 decision, the U.S. Supreme Court has ruled in favor of a Pennsylvania teenager in a closely watched free speech case, after the student was suspended from her high school cheerleading squad after posting a series of profane “stories” to her social media Snapchat account. This case reexamined the reach of the First Amendment as it applies to public school students when they are off school grounds.

Plaintiff Brandi Levy tried out for Mahanoy Area High School’s varsity cheerleading squad, and when she did not make it, she memorialized her dissatisfaction by posting two temporary, 24-hour private stories to her Snapchat account with a friend at a local convenience store after school. The first post, which said “F**k school f**k softball f**k cheer f**k everything”, became the basis for her cheerleading coach to suspend her from the squad. Members of the cheer team notified school officials, who suspended Levy from the junior varsity cheerleading squad for the entire upcoming year under a cheer policy requiring students to be respectful, avoid profanity and not speak negatively about the sport. Levy and her family brought the case to district court. Both the district court and the court of appeals sided with Levy, granting her an injunction and nominal damage, but disagreeing with what standard applies to a school’s regulation of off-campus student speech.

The Supreme Court granted review and drew a new line where public schools have the authority to regulate student speech. The Court relied on the 1969 case of Tinker v. Des Moines Independent Community School District, which was a landmark decision by the United States Supreme Court that limited First Amendment rights of students in public schools. That decision established that public schools’ have a special interest in regulating on-campus student speech that “materially disrupts class-work or involves substantial disorder or invasion of the rights of others.” The Tinker standard holds that “[C]onduct by [a] student, in class or out of it, which for any reason—whether it stems from time, place, or type of behavior—materially disrupts classwork or involves substantial disorder or invasion of the rights of others is . . . not immunized by the constitutional guarantee of freedom of speech.” Yet Tinker is a fifty-year old case, and as such, it does not address the types of speech we often see from students today – tweets, chats, stories and other social media modalities that reach hundreds of people in a variety of different locations and at different times, depending on when the speaker’s audience of online “friends” check their smartphones or computers. Whereas students at the time of the Tinker decision were engaging in speech during school hours, with and to classmates on school grounds, public school students’ speech today has the potential to “materially disrupt[] classwork or involve[] substantial disorder or invasion of the rights of others” even when the student is nowhere near the school and the speech takes place after school hours.

Supreme Court: Showing of Adverse Employment Act Not Required For Failure-to-Accommodate Disability Claim

June 17, 2021 | Smith Eibeler LLC

In a landmark decision, the New Jersey Supreme Court has held that employees who suffer from a disability do not need to show an adverse employment action in order to prevail on a failure to reasonably accommodate claim. The case is being considered by New Jersey employment lawyers as a major victory for workplace rights of disabled employees.

The case was brought under the New Jersey Law Against Discrimination, which is widely considered one the country’s strongest state anti-discrimination laws in the country. While the Law Against Discrimination mirrors the Americans With Disabilities Act (“ADA”), it does provide for some greater protections than the federal counterpart. However, both laws share the same remedial goals to allow disabled persons to maintain gainful employment by requiring employers to provide reasonable accommodations that will allow them to perform the essential functions of the job. Accommodations are not considered “reasonable” if they impose an undue hardship on the employers business operations, and thus not required. To establish a prima facie claim when he or she is able to show that he or she: (1) qualifies as an individual with a disability or is perceived as having a disability; (2) is qualified to perform the essential functions of the job, or was performing those essential functions, either with or without reasonable accommodations; and (3) the employer failed to reasonably accommodate his or her disabilities.

In the case entitled, Richter v. Oakland Board of Education, Nos. A-23 September Term 2019, 083273 (June 8, 2021), a teacher who suffered from Type-1 diabetes, sued her employer after experiencing a hypoglycemic event in her classroom during she fainted and hit her head on a science laboratory table. As a result of the fall, Ms. Richter sustained serious and permanent life-altering injuries. Ms. Richter blames the school for the injuries because they had refused her request for an accommodation to eat lunch earlier in the day to maintain proper blood sugar levels. According to Ms. Richter, if she was granted the requested reasonable accommodation, she would not have suffered the hypoglycemic event and would not have suffered the significant injuries.

Neuwirth Seeks to Amend Whistleblower Lawsuit to Add Claims of Defamation Against Governor Murphy and Assemblyman DePhillips

May 26, 2021 | Smith Eibeler LLC

FOR IMMEDIATE RELEASE

HOLMDEL, NEW JERSEY (May 26, 2021)–Former Assistant Commissioner of the New Jersey Department of Health’s Division of Public Health, Infrastructure, Laboratories and Emergency Preparedness, Christopher Neuwirth, filed a motion today in his pending whistle-blower lawsuit to add claims of defamation against the State, Governor Murphy and Assemblyman Christopher DePhillips.

The pending whistle-blower lawsuit, which was first filed on June 16, 2020, alleges that Mr. Neuwirth was unlawfully terminated in retaliation for lodging a complaint to the State Ethics Commission concerning the conduct of two high ranking members of Governor Murphy’s administration, Acting Superintendent Colonel Patrick J. Callahan and Governor Murphy’s Chief of Staff, George Helmy. According to the First Amended Complaint, Callahan pressured Mr. Neuwirth to collect specimens of relatives of Mr. Helmy at their private residence for COVID-19 testing. When Mr. Neuwirth lodged an ethics complaint for this instruction, the Ethics Liaison Officer refused to process the complaint and implicitly threatened Mr. Neuwirth with possible criminal ramifications if he proceeded. DOH leadership then began to ostracize Mr. Neuwirth by excluding him from important COVID-19 response meetings, essentially stripping him of all decision-making duties and responsibilities, culminating in his termination on May 28, 2020.

Cuomo’s Definition of Sexual Harassment with New York Law

May 21, 2021 | Smith Eibeler LLC

New York Governor Andrew Cuomo has been under fire since March 2021, having been accused by over a half-dozen women of sexual harassment, including staffers who say the harassment took place at work. Some are surprised by the allegations given that Governor Cuomo has publicly been seen as one of the nation’s leaders in protecting the rights of women and fighting workplace sexual harassment.

On August 12, 2019, Governor Cuomo signed legislation under the New York State Human Rights Law that made that state’s sexual harassment law one of the strongest in the country. The legislation included extending the statute of limitations for sexual harassment claims from one year to three years, and rejecting the requirement found in other states, including New Jersey, that the harassing conduct must be severe or pervasive to be unlawful. These protections were in addition to the laws that Governor Cuomo signed in April 2019 as part of his 2019 Women’s Agenda. That agenda required all state contractors to affirm that they have a sexual harassment policy and that all employees have received training; prohibited employers from imposing mandatory arbitration to deal with sexual harassment claims and limited non-disclosure agreements to only those situations in which they were expressly requested by the harassment victim; required public employees found to have intentionally sexually harassed someone to reimburse the state for any judgment against it; and extended the law’s protections to contractors, subcontractors, vendors, consultants and other non-employees providing services in the workplace.

The New York State Equal Employment Opportunity Handbook defines sexual harassment as “unwelcome conduct which is either of a sexual nature, or which is directed at an individual because of that individual’s sex when such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile or offensive work environment, even if the reporting individual is not the intended target of the sexual harassment . . . Sexual harassment also consists of any unwanted verbal or physical advances, sexually explicit derogatory statements or sexually discriminatory remarks made by someone which are offensive or objectionable to the recipient, which cause the recipient discomfort or humiliation, or which interfere with the recipient’s job performance. . . . Quid pro quo sexual harassment occurs when a supervisor or other person with authority makes an employee’s submission to a sexual demand a condition of his or her employment. Sexual harassment need not be severe or pervasive to be unlawful, and can be any sexually harassing conduct that consists of more than petty slights or trivial inconveniences. It is not a requirement that an individual tell the person who is sexually harassing them that the conduct is unwelcome. In fact, the Human Rights Law now provides that even if a recipient of sexual harassment did not make a complaint about the harassment to the employer, the failure of the employee to complain shall not be determinative of whether the employer is liable.”

High School Cheerleaders Free Speech Case Heads US Supreme Court

May 3, 2021 | Smith Eibeler LLC

In our recent political climate, the First Amendment and protected speech have been prevalent topics of public discourse. The conversation around our constitutionally protected right to express ourselves freely often focuses on the words and actions of adults, especially adults in the public eye. But free speech is a right that extends to children as well, and now our nation’s highest court will be deciding how a student’s First Amendment right to free speech coexists with a public school district’s right to control certain forms of student expression.

Brandi Levy was 14 years old when she found out she didn’t make the varsity cheerleading squad at her high school. In response, she and a friend posted a video to Snapchat in which they put up their middle fingers and said “F— school, f— softball, f— cheer, f— everything.” The girls were off campus during non-school hours and posted to a personal social media account. But the “chat” made its way to her coaches at Pennsylvania’s Mahanoy Area High School, and in response, Brandi was cut from the cheerleading squad for the entire year. The coaches’ reasoning was that Brandi’s post violated team rules to be respectful, avoid profanity and refrain from putting any negative information regarding Cheer on the internet. When the athletic director, principal, superintendent and school board all refused to reverse the decision of the cheerleading coaches, Brandi and her parents filed a federal lawsuit with the help of the American Civil Liberties Union (ACLU).

In 2017, the United States District Court for the Middle District of Pennsylvania granted Brandi’s request for a preliminary injunction stopping the school from removing her from the cheerleading squad and barring it from enforcing its ban on students’ speech off campus. The court found that, at that stage of the proceedings, Brandi had successfully shown the court that she was likely to succeed on the merits of her case and suspending her violated her First Amendment rights. The court based this decision on its view that Brandi’s off campus speech was not disruptive to the school’s operations and therefore, the school had no authority to control it. Brandi rejoined the JV squad for her sophomore year, but her lawsuit was years from being over. In the meantime, she continued cheering, making varsity both her junior and senior years.

Ocean City Beach Patrol Accused of Rampant Sexual Harassment and Assault of Teen Lifeguards

April 23, 2021 | Smith Eibeler LLC

For many teens, a summer job is a rite of passage, a way to earn money and gain independence, and start the transition into adulthood. For many teen girls working for Ocean City Beach Patrol, their summer lifeguarding jobs allegedly also came with unwanted groping, sexual harassment and sexual assault at the hands of their male supervisors. In recent news, local media sources have reported that a viral Instagram account called @ocbp_predators has led the Cape May County Prosecutor’s Office to investigate hundreds of allegations of sexual harassment and assault by members of the Ocean City Beach Patrol (OCBP). Reading through the accounts is disturbing. According to the anonymous posters, most of the misconduct was perpetrated by adult men in their thirties and forties against teenaged female lifeguards working for the OCBP.

Providing a link to RAINN, the national sexual assault hotline, the Instagram account contains allegations of male guards, some of whom are also teachers in Ocean County public schools, being involved in incidents where their teenaged direct reports were continuously sexualized at work and plied with drugs and alcohol at after-work parties, where often they would wake up unaware of what had happened to them the night before. Several of the Instagram posts referred to older male lifeguards repeatedly citing New Jersey’s age of consent, which is 16, to assert their entitlement to have sexual contact with the younger girls they supervised. However, New Jersey bars any adult in a position of authority having sexual contact with employees under the age of 18.

It seems clear that if the allegations against the male lifeguard supervisors are true, they could be facing criminal penalties, but that is not always the case. Sexual assault against teenagers is a significant societal problem that often goes unaddressed. According to TeenHelp.com, teenagers account for at least half of all reported instances of sexual abuse, with teens of working age (16-19) being over three times as likely as the general public to be victims. Additionally, once victimized, the same teen is more likely to experience further abuse, and when the victim is a high school aged female, she is more likely than others to develop eating disorders, risky sexual behaviors, unwanted pregnancies, and suicidal ideation. Despite these staggering statistics, less than one-third of sexual assaults against teens are reported. The low reporting rate may be due in part to the fact that only about half of abusers are eventually arrested and a measly 16% are imprisoned. Of those who do go to jail for their crimes, the average sentence is about 4 months. Approximately 80% of jailed rapists report that their victims were under the age of 18. What laws, other than the criminal code, are there to protect these girls?

#KnowYourRights Alert: Federal Government Is Now Subsidizing Cobra Coverage for Eligible Employees

April 16, 2021 | Smith Eibeler LLC

On April 1, 2021 the American Rescue Plan Act (“ARPA”) went into effect, providing much needed relief as the country continues to reel from the impact of COVID-19. ARPA, which was signed into law on March 11, 2021, is a comprehensive, albeit temporary, funding bill addressing the economic and public health needs of both individuals and organizations that have been negatively impacted by the pandemic. It’s funding plan includes financial support for programs such as the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps), schools, child and elder care, mental health and addiction, housing and pension plans, among others. For qualifying employees, ARPA also extends and expands unemployment benefits and health insurance coverage under COBRA.

The Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as COBRA, allows qualifying employees – those who work for organizations employing more than 20 people – and their spouses and dependents to continue receiving health insurance coverage despite termination of their employment or reduction in their work hours, both events that would otherwise cause individuals to lose employer sponsored insurance coverage. The employee must pay an often high premium, but COBRA allows those who can afford it to avoid a gap in health care coverage.

Under ARPA, the federal government is financing a subsidy to offset the cost of COBRA premiums until September 30, 2021. Individuals who qualify for the COBRA subsidy will not have to pay any amount for their continued coverage during this window. The employer sponsored group health plan will cover the cost, and the federal government will reimburse the employer through a payroll tax credit. Specifically, the employer will pay the COBRA premium directly to the insurer and then request a refund against its Federal Unemployment Tax in the total amount of COBRA premiums paid. This subsidy will be available to employees who were terminated or suffered a reduction in hours involuntarily, were previously eligible for COBRA and either did not elect to enroll, or who enrolled but since dropped the coverage. The subsidy will include medical, dental and vision coverage. It is important to note that this subsidized coverage is temporary and will end when employees either exceed COBRA’s existing 18-month coverage limit or become eligible for other health coverage, including a spouse’s insurance coverage, Medicare or other employer-provided coverage. For all employees, it will end on September 30, 2021.

Trump Campaign Gag Orders Are Unenforceable Against Employees Exercising First Amendment Rights

April 6, 2021 | Smith Eibeler LLC

A former employee of Donald Trump’s 2016 Campaign has won a major legal victory against her former employer. Denson v. Donald J. Trump for President, Inc., Slip Copy, 2021 WL 1198666 (S.D.N.Y. March 30, 2021). Jessica Denson has won a summary judgment motion against the Campaign barring it from enforcing overly broad and vague non-disclosure and non-disparagement clauses contained in her Employment Agreement. The District Court for the Southern District of New York found in favor of plaintiff Jessica Denson and against defendant Donald J. Trump For President, Inc. and declared the Campaign’s non-disclosure and non-disparagement provisions invalid and unenforceable as unconstitutional under the First Amendment.

Denson argued that the non-disclosure and non-disparagement provisions of the Employment Agreement are unenforceable under New York law for several reasons, including that they restrict employee speech ad infinitum, their definition of confidential information is practically all-encompassing, they restrict speech on political matters and other topics of public concern, they threaten employees with severe financial penalties for breach, and they prevent employees from reporting misconduct in the workplace. In response, the Campaign claimed, among other things, that its privacy interests outweighed employee rights to unfettered free speech, and employees had waived their First Amendment rights anyway by signing the Employment Agreement. Also in response to Denson’s claims that the non-disclosure and non-disparagement clauses were overbroad prohibitions on free speech and therefore unenforceable, the Campaign argued that she had failed to adequately identify how they had hindered her speech. Specifically, the Campaign pointed to Denson’s public statements expressing her negative opinions of the Campaign and former President Donald Trump, which she had posted on social media platforms over the past couple of years, allegedly without any legal action being taken against her. The Campaign even went so far as to confirm that it has no plans to enforce the non-disclosure or non-disparagement clauses against Denson in the future if she chooses to continue expressing her views. The Campaign argued that Denson could not show that the Employment Agreement “chilled” her exercise of free speech without presenting a specific, objective present or future harm. The Court disagreed.

Relying on the reasoning of a 2010 case called Ashland Mgmt. Inc. v. Altair Invs. NA, LLC, 59 A.D.3d 97, 102 (1st Dept. 2008), aff’d as modified, 14 N.Y.3d 774 (2010), the Court applied a standards based test to the Employment Agreement. Specifically, the Court analyzed whether the clauses at issue were “reasonable in time and area, necessary to protect the employer’s legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee.” As to the scope of the clauses, the Court found them to be essentially unlimited. The Campaign had defined “confidential Information” to include a variety of vague categories without clear definitions or limits. In fact, the Court was unpersuaded by the Campaign’s argument that certain categories of information are integral to the Campaign’s privacy interest, such as campaign strategy and communications. The Court found that even with respect to those categories of legitimate interest, the terms were not adequately defined, and thus were broad enough to cover any information at all relating to the Campaign. Recognizing that the Campaign has a legitimate interest in protecting certain information from disclosure, the Court still held that the non-disclosure provision was not written narrowly enough. “Indeed, the vagueness and breadth of the provision is such that a Campaign employee would have no way of knowing what may be disclosed, and accordingly Campaign employees are not free to speak about anything concerning the Campaign. The non-disclosure provision is thus much broader than what the Campaign asserts is necessary to protect its legitimate interests, and therefore is not reasonable.”