New Jersey’s Whistleblower Law Is Not An End Run Around Labor Law Preemption

By: Meredith R. Murphy

New Jersey’s Appellate Division has rejected two Atlantic City nightclub workers’ attempts to artfully plead their way around preemption under the National Labor Relations Act (NLRA) and the Labor Management Relations Act (LMRA) by alleging a whistleblower claim under New Jersey’s Conscientious Employee Protection Act (CEPA). The case was brought by two “Tipped Floor Euros,” i.e., alcoholic beverage servers, who alleged retaliation and constructive discharge following their complaints regarding tip-pooling, wage payments and being forced to perform duties prohibited by the collective bargaining agreement (CBA). The case is O’Donnell v. Nightlife, et al. (April 17, 2014).

In rejecting the plaintiffs’ CEPA claims, the Appellate Division took a narrow view of the whistleblower statute, citing the standard that the conduct complained of must “pose a threat of public harm, not merely private harm or harm only to the aggrieved employee.” [Opinion, p. 11, available here, citing Mehlman v. Mobil Oil Corp., 153 N.J. 163, 188 (1988)] The Appellate Court agreed with the trial court that most of the plaintiffs’ complaints alleged violations of the CBA, not violations of law, and accordingly, not violations of CEPA.

The Appellate Division also took a broad view of preemption under the NLRA and LMRA. The Court gave credit to plaintiffs’ attempts to “artfully phrase” the language in the complaint – alleging that failure to pay the share of the nightly tip pool constituted “fraud” and failure to pay full minimum wage for non-tipped work constituted a “violation of [New Jersey] wage and hour laws.” However, the Appellate Division ultimately ruled that such state causes of action are presumptively preempted under NLRA and LMRA and were appropriately dismissed as preempted because they each ultimately asserted violations of the CBA or claims that required interpretation of the CBA.

Accordingly, based on this precedent, a unionized employee’s remedy lies not under CEPA but through the union grievance procedure and the relief available under Sections 7 and 8 of the NLRA.

Obligations for Employers Before, During and After a Storm

By: William R. Horwitz

As cleanup from the Nor’easter that pummeled the East Coast last week continues, and the prospect of more snow looms, we hope that you and your families, as well as your businesses and employees, are safe and warm and that the lights are on. As this has been one of the more problematic winters in recent memory, we wanted to remind employers of some of their obligations before, during and after a storm.

Temporary Closings

Unless your agreements or policies provide otherwise, you are generally not required to pay non-exempt employees when they are not working. Therefore, if your business is closed and your employees do not report to work, you are not obligated to pay non-exempt employees. However, make sure that these employees are not checking work e-mails, communicating with supervisors about work-related issues or otherwise working from home, because non-exempt employees are entitled to receive pay for these activities even if they do not physically report to work.

Note that some states require an employer to pay employees for reporting to work, even if the business closes and the employer sends them home. For example, a New Jersey employer must pay employees who report to work at least one hour of pay. A New York employer must pay employees who report to work at least four hours of pay (or the number of hours in the scheduled shift if it is less than four hours). With regard to exempt employees, they are generally entitled to receive their full salaries, even if the business is closed – at least if the shutdown lasts for less than a week. If a business is closed for an entire week and an exempt employee performs absolutely no work during that time, the employer is generally not required to pay the employee for the week.

When a business is temporarily closed, the employer can require exempt employees to use accrued vacation time for the time off, but this requirement should be set forth clearly in the Employee Handbook and any employment contracts.

Cleanup

After a storm passes, employees whose homes remain without power, who are repairing damage to their property or whose children’s schools remain closed, may seek additional time off from work. While an employer that can afford to do so may allow additional flexibility to these employees in order to give them peace of mind and boost their loyalty and morale, these requests may otherwise be handled pursuant to the employer’s contracts and policies.

Other Issues

In addition to the above general points, employers should also be aware of state laws that affect certain employees and certain industries. For instance, in New York and New Jersey, the prohibition against mandatory overtime for health care personnel includes an exception for a declared state of emergency. New Jersey also provides protections for employees who miss work because of their responsibilities as volunteer first responders.

Conclusion

Extreme weather and natural disasters that disrupt business create big headaches for employers and employees. We recommend clear and consistent communication with your employees to avoid confusion about your expectations. Also, maintaining sound employment policies and consulting with counsel when issues arise is critical for avoiding additional headaches resulting from ensuing workplace legal liability.

Accounting Firm Partner Cannot be a Whistleblower Under New Jersey’s Conscientious Employee Protection Act

Editor’s Note – The below appeared in Legal Briefs, Drinker Biddle’s periodic summary of judicial decisions affecting accounting and financial services professionals.  To view the entire issue click here.

Accounting Firm Partner Cannot be a Whistleblower Under New Jersey’s Conscientious Employee Protection Act

The district court for the District of New Jersey recently ruled that an accounting firm partner may not claim he was a whistleblower who was improperly fired by his firm.  In Largie v. TCBA Watson Rice, Civil Action No. 10-cv-0553 (D.N.J. Aug. 20, 2013), the court considered the plaintiff Largie’s claim that he had been wrongfully terminated in retaliation for his attempted disclosures about alleged fraudulent practices at his accounting firm.  The firm contended that it had fired Largie for his chronic absences and for attributing fees from the firm’s clients to another accounting firm.  Largie was the director of the firm’s taxation department and an equity partner, holding a 10.5 percent interest in the firm. He also set his own schedule and did not report to anyone else.  Without reaching his claims of fraudulent practices, the court found that Largie was not an employee who was entitled to protection under the CEPA statute.  Largie’s ability to influence the operations and activities of the accounting firm meant that he had the power to save himself from the kind of unlawful retaliatory actions the CEPA statute was intended to prevent.

New Jersey Expands Protections Against Pregnancy-Based Discrimination By Employers And Other Entities

Update 1/23/14 – On Wednesday, January 22, 2014, Governor Christie signed  S2995 into law.  LaborSphere’s original post on the legislation appears below. 

By: Meredith R. Murphy

New Jersey is on the precipice of expanding anti-discrimination protections to both pregnant women and new mothers and those recovering from childbirth.  The State Senate and now the State Assembly have passed identical measures with only one dissenting vote in either legislative body.  The expansive legislation now awaits the signature of Governor Chris Christie in order to become law. 

Amendments to New Jersey Law Against Discrimination

In order to address the perceived vulnerability of pregnant women in the workplace as well as to foster the goal of healthier pregnancies and recovery from childbirth, the legislation passed by New Jersey’s legislature expands the anti-discrimination and anti-retaliation protections of New Jersey’s Law Against Discrimination (“NJLAD”).  Should it pass, both pregnant women but also those who have recently given birth or have medical conditions related to pregnancy will be statutorily protected against disparate treatment and retaliation by employers, labor organizations, landlords, lending institutions as well as an array of other entities that offer public accommodations.

Further, not only does the pending legislation add “pregnancy” to the array of protected categories covered by the NJLAD.  It also specifically requires employers to provide “reasonable accommodations,” such as bathroom breaks, breaks for increased water intake, periodic rest, assistance with manual labor, job restructuring, modified work schedules and temporary transfers to less strenuous or hazardous work.

The legislation implied but does not specifically state that any such requested accommodations will likely need to be based on the advice of a physician.  As such, it appears that pregnant women and those who have recently given birth cannot merely demand that an accommodation is “reasonable” and necessary absent some input from her physician.

Further, employers are not obligated to agree to any requested accommodation, even if it is supported by a physician’s recommendation, if such an accommodation would impose an “undue burden” as defined by the statute.  The proposed legislation provides specific factors to be utilized in determining whether an accommodation would impose undue hardship on the operation of an employer’s business.  These include:

  • overall size of the employer’ business with respect to the number of employees;
  • number and type of facilities;
  • size of budget;
  • the type of the employer’s operations, including the composition and structure of the employer’s workforce;
  • the nature and cost of the accommodation needed, taking into consideration the availability of tax credits, tax deductions and outside funding; and
  • the extent to which the accommodation would involve waiver of an essential requirement of a job as opposed to a tangential or non-business necessity requirement.

New Protection To Employees Seeking Information About Claims

Perhaps the start of a new trend, among the proposed amendments to the NJLAD is also a provision that protects any employee against reprisals by employers for asking coworkers or former coworkers for information that is part of an investigation or in furtherance of a possible claim under the NJLAD.  Such information may include requests for data regarding pay, compensation, bonuses or benefits.  Significantly, this new protection extends beyond pregnant women and those who have recently given birth. 

Impact of Amendments

If enacted, the amendments to the NJLAD would override the New Jersey Supreme Court’s 2005 ruling in Gerety v. Atlantic City Hilton Casino Resort, 184 N.J. 391 (2005).  In that case, New Jersey’s highest court held that the NJLAD does not protect against the firing of a female worker who exceeded the leave available under state and federal as well as the defendant-employer’s policy.  Under the proposed amendments, it is likely that the accommodations requested in the Gerety case, by a plaintiff who had a difficult pregnancy with twins, would be considered reasonable and covered under the NJLAD.

More broadly, while the federal Family Medical Leave Act and New Jersey Family Leave Act each allow for a maximum of twelve weeks of pregnancy-related leave, under the proposed amendments, the amount of leave available to a woman who is pregnant or recovering from childbirth is not as clearly defined.  To the extent a women seeks an accommodation – including additional leave or a reduced work schedule – because of pregnancy and childbirth-related conditions, an employer has, at the very least, an obligation to review and consider such requests.

Should the proposed amendments to the NJLAD be passed, we recommend a review of leave policies as well as training for managers to identify requests for accommodations.  Each request for accommodation must be considered carefully and should it appear to impose an undue burden, then the statutorily defined factors must be taken into account.

New Jersey Raises State Minimum Wage

By:  Meredith R. Murphy

This past November the voters of New Jersey approved a ballot question both raising the state minimum wage and amending the State Constitution to tie future increases to inflation.  Here is what employers need to know:

1.  Effective January 1 the state minimum wage for almost all employees has increased  from $7.25 per hour to $8.25. 

2.  Going forward, the state minimum wage will be increased every January 1 in accordance with an increase in the federal government’s consumer price index for all urban wage earners and clerical workers (commonly referred to as the CPI-W) as of the preceding September 30.

Employers should also be aware that if at any time the federal minimum wage should surpass that which is provided by the State Constitution’s formula, the state minimum wage will be automatically increased to match the federal wage rate.  Employers with employees in New Jersey should replace their New Jersey State Wage and Hour Law Abstract poster with the new poster [click here to download] that reflects the change.

New Jersey Gender Equity in Pay – Notice and Posting Requirements Effective January 6, 2014

By: Marion B. Cooper

Governor Chris Christie signed Assembly Bill 2647 (the “Gender Equity Notice and Posting Law,” N.J.S.A. 34:11-56.12) into law, effective November 21, 2012 requiring New Jersey employers with 50 or more employees to conspicuously post a notice, where it would be accessible to all workers in each of the employer’s workplaces, informing employees of their “right to be free of gender inequity or bias in pay, compensation, benefits, or other terms or conditions of employment” under the New Jersey Law Against Discrimination, other New Jersey State law, Title VII of the Civil Rights Act of 1964 and the federal Equal Pay Act of 1963.  (http://www.njleg.state.nj.us/2012/Bills/PL12/57_.PDF)

Under the Gender Equity Notice and Posting Law, employers have 30 days from December 9, 2013, the date the New Jersey Division of Labor and Workforce Development (“NJDLWD”) issued the “notice” to comply.  The gender equity notice is now available for download from the NJDLWD at: http://lwd.state.nj.us/labor/forms_pdfs/EmployerPosterPacket/genderequityposter.pdf

Here is what “covered” employers (those employers with 50 or more employees, whether they work inside or outside of New Jersey) must do:

  1. Beginning January 6, 2014, conspicuously post the gender equity notice where it is accessible to all employees in each of the employer’s workplaces.  If the covered employer has an internet or intranet site for its employees’ exclusive use to which all employees have access, posting of the notice on such a site will satisfy the conspicuous posting requirement.
  2. By February 5, 2014, provide each employee hired on or before January 6, 2014 with a written copy of the gender equity notice.
  3. After January 6, 2014, provide each employee with a written copy of the gender equity notice at the time of the employee’s hiring.
  4. Beginning January 6, 2014, and on or before December 31 of each subsequent year, provide each employee a written copy of the gender equity notice.
  5. At any time, upon the first request of the worker, provide each employee a written copy of the gender equity notice.

Covered employers may distribute the gender equity notice as follows:

  1. By email;
  2. Via printed materials, including, but not limited to, a paycheck insert, brochure or similar informational packet provided to new hires, an attachment to an employee manual or policy book, or flyer distributed at an employee meeting; or
  3. By way of an internet or intranet site, so long as it is accessible by all employees, for employees’ exclusive use and the employer provides notice to workers of its posting.

Covered employers must ensure that the gender equity notice contains an acknowledgment, indicating that the worker has received the notification and has read and understands its terms.  The acknowledgment must be signed by the employee, in writing or electronically verified form, and returned to the employer within 30 days of receipt.  The notice must be posted in English, Spanish, and any other language the employer reasonably believes is the first language of a significant number of workers in the covered employer’s workforce, provided that the NJDLWD has issued a form notice in that language.

New Jersey employers (with 10 employees or more) are reminded of the similar, annual posting and distribution requirements of the New Jersey Conscientious Employee Protection Act (“CEPA”) and of the new posting requirement of the New Jersey SAFE Act, which provides unpaid leave for victims of domestic violence.  As the end of 2013 rapidly approaches, New Jersey employers are encouraged to take time out to make sure that all postings are current for the new year, that all distribution requirements are or will be satisfied, and that handbooks are updated to reflect these new laws.