Helen E. Tuttle, Author at Laborsphere

“BAN-THE-BOX” Signed Into Law in New Jersey

On August 11, 2014, New Jersey Governor Chris Cristie signed into law “The Opportunity to Compete Act”, commonly referred to as New Jersey’s “ban-the-box” law, which prohibits employers from asking about the applicant’s criminal history prior to the completion of the first interview. New Jersey is the 6th state, in a growing trend, to pass some form of the “ban-the box” law which is intended to remove obstacles to employment for people with criminal records. New Jersey will join Hawaii, Illinois, Massachusetts, Minnesota, and Rhode Island, all of which have similar laws covering private employers.

New Jersey’s law will become effective on March 1, 2015 and covers both public and private employers operating in New Jersey who employ 15 or more employees. After the first interview, New Jersey employers are free to inquire into the applicant’s criminal background and may ultimately refuse to hire the applicant based on his or her background, so long as the refusal is not based on expunged of pardoned records. In addition to the restrictions on inquiries pre-first interview, the law prohibits employers from publishing job postings or ads stating that it automatically excludes applicants with arrest or conviction records.

The Usual Exemptions

Not unlike other laws, New Jersey’s law provides for several exceptions. The law does not apply to those positions that require criminal background checks by law or regulation, including positions in law enforcement, corrections, the judiciary, homeland security, and emergency management. Also excluded are positions where certain convictions would, by law, either automatically disqualify the applicant or restrict the employer from engaging in certain business activities based on its employees’ criminal records.

Penalties and Preemption of Local Ordinances

A positive for employers is that the law will not spur more employment litigation, because it does not create a private right of action for alleged violations. However, employers who violate the law will be met with increasing fines –$1,000 for the first violation, $5,000 for second violations, and $10,000 for each subsequent violation.

Finally, the law will preempt existing or future local laws – including Newark’s local “ban-the-box” law – that regulate private employers’ use of criminal background checks.

Next Steps for New Jersey Employers

Employers operating in New Jersey should begin working with their Labor & Employment counsel now to review their employment applications, job postings, policies, and employee handbooks to ensure compliance prior to March 1, 2015. Employers should also ensure that training is provided to those individuals involved in hiring and interviewing of potential job applicants. Additionally, employers who operate in jurisdictions within and outside of New Jersey should continue to closely monitor the “ban-the-box” legislations in other jurisdictions as these laws remain a growing trend.

Finally, employers should keep in mind that under guidance issued by the EEOC and a number of state laws, an employer may be required to demonstrate the relevance of a given conviction as a basis for excluding an applicant from employment.

Employee’s Deactivation Of Facebook Account Leads To Sanctions

The latest Facebook case highlights how courts now intend to hold parties accountable when it comes to preserving their personal social media accounts during litigation. Recently, a federal court ruled that a plaintiff’s deletion of his Facebook account during discovery constituted spoliation of evidence and warranted an “adverse inference” instruction against him at trial. Gatto v. United Airlines and Allied Aviation Servs., et al. , No. 10-CV-1090 (D.N.J. March 25, 2013).

The plaintiff, a ground operations supervisor at JFK Airport, allegedly suffered permanent disabling injuries from an accident at work which he claimed limited his physical and social activities. Defendants sought discovery related to Plaintiff’s damages, including documents related to his social media accounts.

Although Plaintiff provided Defendants with the signed authorization for release of information from certain social networking sites and other online services such as eBay, he failed to provide an authorization for his Facebook account. The magistrate judge ultimately ordered Plaintiff to execute the Facebook authorization, and Plaintiff agreed to change his Facebook password and to disclose the password to defense counsel for the purpose of accessing documents and information from Facebook. Defense counsel briefly accessed the account and printed some portion of the Facebook home page. Facebook then notified Plaintiff that an unfamiliar IP address had accessed his account. Shortly thereafter, Plaintiff “deactivated” his account, causing Facebook to permanently delete the account 14 days later in accordance with its policy.

Defendants moved for spoliation of evidence sanctions, claiming that the lost Facebook postings contradicted Plaintiff’s claims about his restricted social activities. In response, Plaintiff argued that he had acted reasonably in deactivating his account because he did know it was defense counsel accessing his page. Moreover, the permanent deletion was the result of Facebook’s “automatically” deleting it. The court, however, found that the Facebook account was within Plaintiff’s control, and that “[e]ven if Plaintiff did not intend to deprive the defendants of the information associated with his Facebook account, there is no dispute that plaintiff intentionally deactivated the account,” which resulted in the permanent loss of relevant evidence. Thus, the court granted Defendants’ request for an “adverse inference” instruction (but declined to award legal fees as a further sanction).

The Gatto decision not only affirms that social media is discoverable by employers, but also teaches that plaintiffs who fail to preserve relevant social media data will face harsh penalties. Employers are reminded to specifically seek relevant social media (Facebook, Twitter, blogs, LinkedIn accounts) in their discovery requests since such sources may provide employers with sufficient evidence to rebut an employee’s claims. This case also serves as a reminder and a warning to employers that the principles of evidence preservation apply to social media, and employers should take steps very early in the litigation to preserve its own social media content as it pertains to the matter.

The Supreme Court Rules: Pharmaceutical Representatives Qualify as Outside Salespersons

The Supreme Court recently handed down a decision clarifying the contours of the “outside sales” exemption to the Fair Labor Standards Act (“FLSA”) and settled a split between the U.S. Court of Appeals for the Second and Ninth Circuits. The Court rejected the attempt by the Department of Labor (“DOL”) to reverse the longstanding industry practice of classifying pharmaceutical sales representatives as exempt employees based on its finding that the DOL had never suggested that the industry practice was improper and had never taken legal action to stop the practice. The Court observed that to reverse the longstanding practice in that circumstance would be an improper “unfair surprise” to the industry.

In Christopher v. SmithKline Beecham Corp., two pharmaceutical representatives claimed that their employer failed to pay them overtime wages based on an improper classification as exempt outside sales employees. The representatives’ work consisted mainly of visiting doctors’ offices and encouraging them to prescribe SmithKline drugs. Each week, the employees worked about 40 hours calling on physicians, and spent another 10 to 20 hours on other miscellaneous tasks. Although the employees were well-compensated, they were not paid overtime wages for hours they worked in excess of 40 hours per week.

The Supreme Court considered whether these employees were “employed . . . in the capacity of outside salesman” and therefore exempt from overtime wages under the FLSA. Congress did not define the term “outside salesman” but delegated that authority to the DOL by regulation. The statute nevertheless provides that “‘sale’ or ‘sell’ includes any sale, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition.”

In reaching its decision, the Court first determined that the DOL’s interpretation of the statute was not entitled to deference because it had never been formally promulgated as a regulation. Instead, after years of silence, the DOL presented its interpretation in amicus briefs filed in related litigation in the Second and Ninth Circuits, and then presented a completely different interpretation in its submission to the Supreme Court in the Christopher appeal.

Having determined that there was no basis to defer to the Agency’s interpretation, the Court used the traditional tools of statutory interpretation to determine whether the pharmaceutical representatives were exempt outside salespersons. Under that analysis, the Court found that pharmaceutical representatives make sales for purposes of the FLSA, and therefore are exempt, even though they do not technically “sell” anything to the physicians they visit, because the “other disposition” catchall category in the statute’s definition of “sale” should be understood to include the sales representatives’ practice of obtaining nonbinding commitments from physicians to prescribe the employer’s drugs. The Court was also convinced that pharmaceutical sales representatives are “outside salespersons” under the statute because they act like salespersons, are paid like salespersons, and receive training to close sales like salespersons.

A cautionary note: this Supreme Court decision is limited to pharmaceutical industry representatives only. While the “outside sales” exemption may continue to be litigated, this decision has provided much guidance on a previously undefined term under the FLSA. And, of course, the decision has no impact on state wage and hour laws that do not track the FLSA.