New Jersey Employment Lawyers Blog

Proposed Bill Limits New Jersey Employers’ Ability to Restrain Ex-Employees Based on Unemployment Benefits Eligibility

March 16, 2014 | Smith Eibeler LLC

A new bill has been introduced to the New Jersey legislature that would invalidate any contract not to compete, not to disclose and/or not to solicit between employers and former employees if it is determined that the employee is eligible for unemployment benefits. The bill [A-3970] if passed, would not apply to any contract not to compete, not to disclose and/or not to solicit, that was in effect prior to when the bill is enacted.

The current law in New Jersey allows employers to enforce an agreement not to compete, not to disclose and/or not to solicit if the agreement protects a legitimate interest of the employer. Courts have held that, in certain circumstances, employers have a legitimate interest in protecting things such as trade secrets, confidential business information and customer relationships. In order to enforce a restrictive covenant, the terms of the not to compete, not to disclose and/or not to solicit clause must be reasonable, not impose an undue hardship on the employee and not be injurious to the public. Courts will not enforce agreements not to compete, not to disclose and/or not to solicit if the restriction is unreasonable. New Jersey courts have repeatedly held that employers do not have a legitimate interest in restricting competition. This is because New Jersey has a strong public policy affording individuals the right to pursue one’s profession and livelihood. When determining whether a restrictive covenant is enforceable, New Jersey courts will analyze the specific facts and circumstances of the employee’s former employment and new employment, along with the specific terms of the restrictive covenant.

If A-3970 becomes law, an employee would be relieved from any contractual obligation not to compete, not to disclose and/or not to solicit if they are found to be eligible for unemployment benefits. An employee is eligible for unemployment benefits if they become unemployed due to not fault of their own. Most disqualifications for unemployment benefits are because the employee either left work voluntarily without good cause attributable to the work or was involuntarily terminated for committing an act of misconduct. The three types of misconduct are gross misconduct, simple misconduct and severe misconduct. Gross misconduct is when an employee is terminated because they committed a crime of the first, second, third or fourth degree under the New Jersey Code of Criminal Justice. Simple misconduct occurs when an employee is terminated because of improper, intentional, connected with one’s work, malicious and within the applicant’s control and is either a deliberate violation of his or her employer’s rules or a disregard to standards of behavior that the employer has the right to expect of the applicant. There currently is no statutory definition for severe misconduct, but there is a bill pending to correct this oversight by the legislature. The Appellate Division has interpreted severe misconduct to be a gap-filler between simple misconduct and gross misconduct.

Case Study: Was Jonathan Martin the Victim of an Unlawful Hostile Work Environment under New Jersey Law?

November 8, 2013 | Smith Eibeler LLC

ESPN, Sports Illustrated, Good Morning America and probably even your own Facebook page, have been flooded with varying opinions on the Miami bullying/harassment scandal. This blog entry is written by our New Jersey Employment Lawyers to analyze the facts, as reported, to determine whether a hostile work environment existed that would be in violation of the New Jersey Law Against Discrimination.

For those who have been living under a rock for the week, Miami Dolphins offensive lineman Jonathan Martin left his employment with the Miami Dolphins as a result of, at least in part, constant harassment and bullying directed at him from his teammates. It has been reported that Mr. Martin checked himself into a hospital as a result of suffering from emotional distress caused by the harassment. One teammate in particular, Richie Incognito, has been suspended indefinitely for his role in the harassment and bullying. NFL Commissioner Roger Goodell has appointed the prominent attorney, Ted Wells, to conduct an independent investigation into allegations of harassment and bullying within the Miami Dolphins.

Based upon the allegations that have reported, Mr. Wells’ investigation should reveal that Jonathan Martin was subjected to a hostile work environment that would be in violation of New Jersey law. The New Jersey Law Against Discrimination makes it unlawful to discriminate against an employee on the basis of protected characteristics, which include race, color, disability and sexual orientation. In other words, the discrimination must be based upon one of these protected characteristics in order for the harassment to be against the law. In the landmark case of Lehman v. Toy ‘R’ Us, Inc. 132 N.J. 587 (1993), the New Jersey Supreme Court defined a hostile work environment based upon sexual harassment as discriminatory conduct that a reasonable person of the same sex in the plaintiff’s position would consider sufficiently severe or pervasive to alter the conditions of employment and to create an intimidating, hostile, or offensive working environment. The Lehman decision held that New Jersey employers must maintain an effective policy against unlawful harassment/discrimination. An effective policy requires, inter alia, that employers investigate complaints of harassment promptly, thoroughly and completely. All complaints of sexual harassment and other forms of discrimination must be fully investigated.

What constitutes “Severe Misconduct” under New Jersey Unemployment Law?

July 31, 2013 | Smith Eibeler LLC

In 2010, the New Jersey legislature amended New Jersey Unemployment Benefits law to include a new basis for disqualification of benefits called “severe misconduct”. Prior to the change in law, a claimant could be denied from receiving unemployment benefits if he or she was terminated for “misconduct” or “gross misconduct.” Misconduct is defined by the regulations as an act that is “improper, intentional, connected with one’s work, malicious, and within the individual’s control, and is either a deliberate violation of the employer’s rules or a disregard of standards of behavior which the employer has the right to expect of an employee. Gross misconduct is defined by law as a termination caused by the claimant as a committing a crime of the first, second, third or fourth degree under the New Jersey Code of Criminal Justice.

While adding “severe misconduct” as a new basis for unemployment benefits disqualification, the Legislature did not define what “severe misconduct” means, and instead set forth a non-exclusive list of examples of what could be severe misconduct. These examples include “repeated violations of an employer’s rule or policy; repeated lateness or absences after the applicant receives a written warning from their employer; falsification of records; physical assault or threats that do not constitute gross misconduct; misuse of benefits or sick time; abuse of leave; theft of company property; excessive use of drugs/alcohol on the job; theft of time; or where the behavior is malicious and deliberate but is not considered gross misconduct.

Since the amendment to the unemployment law, our New Jersey unemployment lawyers have seen far too many cases in which the lack of a clear definition of severe misconduct has resulted in an unjust and unfair result for our clients. A lot of confusion for Appeal Tribunal examiners stems from the fact that last statutory example of severe misconduct (where the behavior is malicious and deliberate but is not considered gross misconduct) is in fact a lesser standard than the regulations definition of misconduct.

Appellate Division Remands Sexual Orientation Discrimination Case Back for Trial

May 20, 2013 | Smith Eibeler LLC

The New Jersey Appellate Division recently reversed a trial court’s decision dismissing an employee’s claims for sexual orientation discrimination under the New Jersey Law Against Discrimination. In remanding the case for trial, the Appellate Division found that the school employer’s motivation for forcing the employee teacher to resign is a question of fact for the jury to decide at trial.

In the case, Savoie v. The Lawrenceville School, Michael S. Cary and Catherine Boczkowski, Mr. Savoie, a homosexual, was employed as a teacher at The Lawrenceville School in 1982 until June 2003. During his approximate twenty (20) year career, Mr. Savoie received many awards and even held the position of Department Chair at one point. In 1991, Mr. Savoie’s domestic partner, Richard Bierman, moved into his on-campus housing with him. At this point, the two of them began an openly gay lifestyle. Thereafter, Mr. Bierman began perceiving that he was being discriminated against by three male faculty members and one female administrator. For example, Mr. Bierman, testified that these individuals were “very nasty” to him and the administrator told him that “[she] did not approve of [their] lifestyle.”

In June, 2002, the school’s grounds crew entered Mr. Savoie and Mr. Bierman’s on-campus housing to repair a water main break outside the home. Because it was emergent, the grounds crew entered the house despite neither Mr. Savoie nor Mr. Bierman being home. When grounds crew entered the house, they discovered certain sexually explicit objects in the basement, such as four pieces of apparatus hanging from the ceiling on chains, videotapes, a computer of the shelf, a tripod without a camera and KY brand lotion. A year later, in June 2003, the new Buildings and Grounds Director began replacing old condensing units. Two employees of the ground crew advised that they were uncomfortable about returning to the home as a result of what they saw the previous year. Ultimately, one of the employees went in the house and reported that he saw similar sexual objects that he had seen the year prior.

Did ex-Rutgers Basketball Coach Mike Rice Create an Illegal Hostile Work Environment in Violation of the New Jersey Law Against Discrimination?

April 4, 2013 | Smith Eibeler LLC

Rutgers University terminated its basketball coach in the wake of ESPN’s broadcast of a videotape showing him physically and verbally abusing players during practice. Public opinion seems nearly unanimous that Mike Rice’s conduct warranted his termination, but the question remains did he create an unlawful hostile work environment under New Jersey Law Against Discrimination?

New Jersey has some of the strictest anti-discrimination and anti-harassment laws in the United States. Most notably, New Jersey’s Law Against Discrimination outlaws unlawful employment discrimination against any person on the basis of protected characteristics, which includes sex, sexual orientation, national origin and others. In 2007, the New Jersey Supreme Court in a case called L.W. v. Toms River Regional Board of Education, 189 N.J. 381 (2007) extended the workplace protections provided under Law Against Discrimination to situations where schools fail to stop severe and pervasive bullying based upon protected characteristics such as sex, sexual orientation and national origin. This means that if a school permits severe and pervasive harassment based upon a protected characteristic, the school can be found liable. Moreover, if the school knows or should know of the existence of unlawful discrimination or harassment, the law requires that the school investigate, remediate and prevent it from happening again.

The video shown by ESPN of several Rutgers basketball practices reveals numerous incidents of Mike Rice pushing, kicking and throwing basketball balls at players. It also depicts Mike Rice yelling gay slurs at players calling them “faggots” and other inappropriate comments. ESPN has also reported that Mike Rice regularly called one of his former players who transferred to Rhode Island, Gilvydas Biruta, names relating to his national origin of Lithuania and gay slurs. Former Rutgers assistant coach, Eric Murdock, who is anticipated to file a lawsuit against Rutgers for unlawful retaliation and wrongful termination, has alleged that Mike Rice would constantly scream at Mr. Biruta by using his national origin and gay slurs. For example, Mr. Murdock says that Mike Rice called Mr. Biruta a “soft-ass Lithuanian bitch,’ ‘soft-ass Lithuanian pussy’ and ‘Lithuanian faggot.'” Mr. Biruta told ESPN that he took offense to Rice’s name calling and insults stating, “If you’re going to criticize me as a basketball player, I’m OK with that,” he said, “but he would criticize me as a person.” Mr. Biruta also told ESPN that the main reason he transferred was because of Mike Rice’s treatment of him.

COURT FINDS EMPLOYER’S ALCOHOL POLICY IMPOSED ONLY ON RECOVERING ALCOHOLICS IN VIOLATION OF THE NEW JERSEY LAW AGAINST DISCRIMINATION

March 1, 2013 | Smith Eibeler LLC

The New Jersey Appellate Division decided that a company’s mandatory program and policy implemented only against employees suffering from alcoholism is a violation of the New Jersey Law Against Discrimination. In A.D.P. v. ExxonMobil Research Company, ExxonMobil Research and Engineering Company (Exxon) forced employees identified as recovering alcoholics to sign a contract that required only those employees to submit to mandatory clinical drug testing for two (2) years and monitoring for an additional three years. Other employees were not subject to drug or alcohol testing except for cause. In reversing the lower court’s grant of summary judgment in favor of Exxon, the Appellate Division determined that the additional terms and conditions of employment imposed by Exxon based on Plaintiff’s disability of alcoholism constitutes a claim for disability discrimination.

Plaintiff began working for a predecessor company of Exxon in 1978 as a research technician. She continued with Exxon and worked for a total of twenty-nine years. Plaintiff was consistently ranked as a top performer and received eight promotions from 1983 through 2005 becoming a Senior Research Associate. After the death of Plaintiff’s husband in 2004, she suffered from depression and other medical conditions. In August of 2007, Plaintiff disclosed to a nurse at Exxon that she was an alcoholic and planned to check herself into an inpatient rehabilitation program in order to receive treatment for her alcohol dependency and depression. Plaintiff successfully completed inpatient rehabilitation at Carrier Clinic and outpatient treatment at Hunterdon Medical Center. Before Plaintiff was allowed to return to work at Exxon, she was required to sign an after-care contract pursuant to Exxon’s company-approved after-care program. The after-care contract identified Plaintiff as an employee recovering “from chemical dependency” and mandated she participate in the after care program, totally abstain from alcohol and drugs not prescribed by a physician, submit to clinical substance testing for a minimum of two years after completion of a Primary Treatment Program and be monitored for an additional three years. The mandatory testing was to be periodic and unannounced. The policy applied to Plaintiff also stated that an employee suffering from alcohol or drug dependency that refuses rehab, fails to respond to treatment, or fails to exhibit satisfactory work performance would be disciplined up to and including termination.

In fear of losing her job, Plaintiff signed the after-care contract and submitted to nine (9) random breathalyzer tests between October 29, 2007 and August 20, 2008. Exxon had no reasonable cause to believe Plaintiff had been drinking alcohol at work or was intoxicated when these breathalyzer tests were administered. The tests were administered solely because of the after-care contract Plaintiff was required to sign as a recovering alcoholic. On August 22, 2008, Plaintiff was forced to take yet another “random” breathalyzer test. This test produced blood alcohol concentration (BAC) readings of .047 and 0.43.3. These readings are well below the threshold BAC of 0.08 set by New Jersey law as driving under the influence. Plaintiff was terminated on August 26, 2008. Exxon articulated that the only reason Plaintiff was terminated was because she violated the after-care contract in having a positive test. Exxon confirmed that, “an employee’s status as an alcoholic is the lone trigger for requirements of total abstinence and random testing without cause.” The company also confirmed that Plaintiff performance had absolutely nothing to do with her termination and that even if she was in the top 1 percent of her group, she would still have been terminated for failing the test.

Is Houston Rockets’ Royce White’s Request For His Own Doctor to Have Final Say As to Whether He Can Play a Reasonable Accommodation under the Americans with Disabilities Act?

February 1, 2013 | Smith Eibeler LLC

HBO Real Sports aired a story last night about Houston Rockets rookie Royce White and his ongoing battle for the Houston Rockets to provide him his requested reasonable accommodations under the Americans with Disabilities Act. White suffers from mental health disabilities, including Generalized Anxiety Disorder and has not been able to practice or play a game as a result of not being provided his requested for reasonable accommodations.

After a storied career at Iowa State, White was drafted by the Houston Rockets with the 16th pick in the 2012 NBA draft. Prior to the draft, the Houston Rockets, along with other NBA teams, were aware of White’s mental health disabilities and the risks associated with his disabilities that could impact his ability to perform in the NBA. After being drafted, and after signing a 3.3 million dollar contract, White has not been able to play because he believes he has not received the requested accommodations he needs for his disability.

White has requested that the Houston Rockets provide him a medical health protocol as a reasonable accommodation under the Americans with Disabilities Act. More specifically, White has asked for a driver to drive him to all NBA games, which Houston has agreed to provide him. The current sticking point between White and the Houston Rockets is White’s request to have an independent doctor have the final say as to whether White is medically able to play a particular game. White says that this is necessary because the Houston Rockets’ doctors work for the Houston Rockets and therefore have the Houston Rockets’ best interest and not his in mind when making the decision as to whether he is medically able to play. Houston Rockets will not grant this particular request because they feel it is unreasonable. After talks concerning this request hit a standstill, the Houston Rockets suspended White on January 6, 2013 and have stopped paying him his 3.3 million dollar salary.

SUMMARY JUDGMENT DENIED WHERE GENUINE ISSUES OF MATERIAL FACT EXIST AS TO WHETHER EMPLOYEE WAS FIRED FOR POOR PERFORMANCE OR IN VIOLATION OF FMLA PROTECTED RIGHTS

January 10, 2013 | Smith Eibeler LLC

The United States Court of Appeals for the Seventh Circuit reversed a District Court’s grant of summary judgment in an action alleging TIN Inc. (“TIN”) violated the Family Medical Leave Act (“FMLA”) by interfering with an employee’s right to take leave and retaliating against that employee. The Seventh Circuit reversed the District Court’s decision that TIN terminated Mr. Jeff Pagel’s employment due to his poor performance rather than for his taking of FMLA protected leave. The Court determined that there were still genuine issues of material fact as to why Mr. Pagel was terminated. Therefore, the grant of summary judgment in TIN’s favor was reversed and the case was remanded for further proceedings.

Jeff Pagel worked for TIN as an outside salesman from May 2000 until his termination in October 2006. Mr. Pagel produced at least $7 million dollars in sales for the company per year, earning a $180,000 annual salary. On January 1, 2006, TIN instituted a new policy that required outside salesmen to submit daily activity reports to their Regional Sales Manager. Salesmen then would be given a periodic evaluation that included an assessment of their compliance with this new reporting system.

In July 2006, Mr. Pagel experienced several health problems and disabilities including being diagnosed with septal wall ischemia (a blockage in a portion of his heart). Mr. Pagel’s health problems caused him to take a medical leave of absence from work. On August 29, 2006, Mr. Pagel underwent an angioplasty and stent replacement, spent one day in the hospital and was advised to rest for several days following the operation. The next week Mr. Pagel’s symptoms returned and he was admitted to the hospital for two nights. It was determined that Mr. Pagel also had an irregular mass in his left lung that was unrelated to his septal wall ischemia.

Employer’s Best-Qualified Policy to Fill Vacant Positions does not Negate Requirement to Provide a Reassignment Reasonable Accommodation under the Americans with Disabilities Act

December 27, 2012 | Smith Eibeler LLC

The United States Court of Appeals for the Seventh Circuit clarified the interpretation of the term “reassignment” under the Americans with Disabilities Act (ADA) by concluding that an employer’s best-qualified policy to fill vacant positions would not automatically establish undue hardship to avoid the granting of a reasonable accommodation request. In EEOC v. United Airlines, the Seventh Circuit reversed the District Court’s dismissal of the Equal Employment Opportunity Commission’s (EEOC) claim brought against United Airlines on behalf of disabled employees who requested a reasonable accommodation in the form of a reassignment but were denied that request because of a “competitive transfer policy.”

In 2003, United Airlines developed “Reasonable Accommodation Guidelines” that detailed the reasonable accommodation process for current employees who were no longer able to perform the essential functions of their job due to their disability. The guidelines indicated that a transfer could be a reasonable accommodation but the transfer process was “competitive.” The competitive transfer policy essentially denied disabled employees requesting a transfer as a reasonable accommodation automatic placement in vacant positions. Instead, disabled employees would only be given preferential treatment and a more qualified candidate could be chosen for the vacant position instead. The EEOC filed this suit on behalf of disabled United Airlines’ employees affected by this policy, asserting that the Americans with Disabilities Act requires employers to advance a disabled employee requesting reassignment as a form of reasonable accommodation over a more qualified candidate so long as the disabled employee can perform the essential functions of the job and such placement does not cause an undue hardship.

The EEOC also asserted this argument in EEOC v. Humiston-Keeling. In Humiston-Keeling, the court held that “the ADA does not require an employer to reassign a disabled employee to a job for which there is a better applicant, provided it’s the employer’s consistent and honest policy to hire the best applicant for the particular job in question.” EEOC v. Humiston-Keeling, Inc., 227 F.3d 1024, 1029 (7th Cir. 2000). In this case, the EEOC requested the Court overturn that decision. In support of their argument, the EEOC cited to U.S. Airways Inc. v. Barnett. In Barnett, an employee of U.S. Airways injured his back but initially invoked his seniority status instead of his disability to obtain a transfer. However, two senior employees subsequently bid for the same position and the disabled employee, after asserting a request for a reasonable accommodation, was denied due to U.S. Airways’ seniority system. The Court determined that under those circumstances, the seniority system was sufficient to meet the employer’s burden of showing the accommodation was unreasonable. The Court noted that the seniority system, although a disability-neutral rule, did not provide an automatic exemption from accommodation requirements. Other facts specific to the situation established an undue hardship.

NEW JERSEY BILL LOOKS TO FINALLY DEFINE THE DIFFERENCE BETWEEN “SIMPLE MISCONDUCT” AND “SEVERE MISCONDUCT” IN NEW JERSEY UNEMPLOYMENT COMPENSATION LAW

November 30, 2012 | Smith Eibeler LLC

In 2010, Governor Christie and the New Jersey state legislature revised New Jersey Unemployment Compensation Law to include a new “severe misconduct” standard to disqualify certain employees from receiving unemployment benefits. Because of the ambiguity of the statutory revisions to the revised law, New Jersey unemployment lawyers, claims examiners, employers and employees have been left without clear guidance as the difference between being terminated for “severe misconduct” versus the “simple misconduct.”

The revised New Jersey Unemployment Compensation Law did not change the definition of simple misconduct. Simple misconduct is defined as actions that are improper, intentional, connected with one’s work, malicious and within the applicant’s control and is either a deliberate violation of his or her employer’s rules or a disregard to standards of behavior that the employer has the right to expect of the applicant. A simple misconduct disqualification will prevent an applicant from receiving unemployment benefits for the week of the termination and the subsequent seven weeks.

The major change contained in the revised legislation was to include a new “severe misconduct” category for disqualification of unemployment benefits. Under the revised law, being terminated for “severe misconduct” will disqualify a claimant from receiving unemployment benefits indefinitely or until he or she becomes re-employed, works for four weeks, earns at least six times their weekly benefit amount and is terminated from that employment due to no fault of their own. The problem with the enactment of the new “severe misconduct” standard is that it is completely void of a definition of what constitutes “severe misconduct.” Instead, the revised statute only sets forth “examples” of “severe misconduct” that include the following: repeated violations of an employer’s rule or policy, repeated lateness or absences after the applicant receives a written warning from their employer, falsification of records, physical assault or threats that do not constitute gross misconduct, misuse of benefits or sick time, abuse of leave, theft of company property, excessive use of drugs/alcohol on the job, theft of time, or where the behavior is malicious and deliberate but is not considered gross misconduct.