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After two years of litigation in federal court, U.S. District Court Judge Peter Sheridan ordered Wawa, Inc. (Wawa) to pay $1.4 million in order to settle a class action lawsuit filed against it by assistant store managers called “Assistant General Managers” (AGMs) who alleged violations of the Fair Labor Standards Act (FLSA). In January 2018, Plaintiffs moved to conditionally certify a collective action based on allegations that Wawa misclassified them along with other similarly situated AGMs as being exempt under FLSA i.e., not eligible for overtime pay, and by doing so, failed to pay them overtime for hours worked in excess of 40 hours per week. Gervasio v. Wawa, Inc., 2018 U.S. Dist. LEXIS 4899 (D.N.J. January 11, 2018).

In filing their 2017 complaint against Wawa, plaintiffs alleged they were deliberately “mislabeled” as managers under the FLSA when their duties did not actually reflect managerial duties and their duties were more akin to the duties of other hourly wage employees working at the stores. Id. at *2. However, because they were labeled as managers by Wawa, they were classified as exempt employees and therefore not entitled to overtime wages they would have otherwise earned under the FLSA. Id. Although Wawa eventually re-classified its AGMs as nonexempt employees in December 2015, plaintiffs continued to seek recovery of backpay for the unpaid overtime hours they worked prior to this reclassification. Plaintiffs claimed they worked between 50-55 hours during weeks in which they worked five or more shifts but did not get paid for any time worked exceeding 40 hours. Id.

While nonexempt employees, i.e., employees eligible to receiver overtime pay, are covered by the overtime protections of the FLSA, exempt employees are not. Exempt versus nonexempt employee status depends on three factors: (1) how much the employee is paid, (2) how the employee is paid, and (3) the type of work that the employee performs for his or her employer. Generally, an employee is exempt if he or she is paid at least $23,600 per year, is paid on a salary basis, and (3) performs exempt job duties, namely executive, professional, or administrative duties for the employer. To fall within the “executive exemption,” an employee must meet the following criteria: “(1) the employee receives compensation on a salary basis, (2) [his or] her primary duty is management of a recognized department, (3) [he or] she customarily and regularly directs the work of two or more employees, and (4) [he or] she has authority to hire or fire employees.” Id. at *7 (quoting Essex v. Children’s Place, Inc., 2016 U.S. Dist. LEXIS 108853 at *9 (D.N.J. Aug. 16, 2016)).

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To ensure all New Jersey employees are fairly and timely compensated for their work, Acting New Jersey Governor Sheila Oliver signed S1790 into law this week which amends the existing New Jersey Wage Payment Law (NJWPL) to provide significantly more protections for employees who have been victims of wage theft. The new law makes it a disorderly persons offense for employers to fail to pay wages when due as required by law, or fail to pay compensation or benefits within 30 days when due.

An employer found to have violated the NJWPL as amended will now be required to pay the victimized employee his or her wages owed in addition to liquidated damages equal to 200% of the wages owed as well as reasonable costs of the action to the employee. The employer will also be fined $500 plus a penalty equal to 20% of any wages owed for the first offense, followed by $1,000 plus a penalty equal to 20% of any wages owed for each subsequent offense. Supporters of the new legislation hope that its stricter penalties for violations will hold employers accountable for unpaid wages more than the existing wage and hour legislation does. “Above all else, this law is about workers’ rights. Employers in New Jersey should be held to a high standard to treat their employees with the decency and legality they deserve. No one should be withheld one penny of the wages they are legally entitled to,” said Assemblyman Wayne DeAngelo, who sponsored the bill before it was signed into effect.

S1790 also prohibits employers’ retaliatory conduct by increasing the penalties against employers who retaliate against employees for filing wage complaints. Any such employer who does so commits a disorderly persons offense and upon conviction, is required to pay a fine between $100 to $1000. The employer is also liable to the employee for all wages lost as a result of the retaliation as well as damages equal to 200% of the wages lost as a result of the retaliation, and reasonable costs of the action to the employee. If the employee was retaliatorily discharged, the employer is required to offer reinstatement, unless the reinstatement is prohibited by law.

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Assembly Bill 1094, which prohibits employers from screening applicants based on the applicant’s salary history, was signed into law on July 25, 2019 after passing in the New Jersey Assembly and Senate earlier this year. Under this new legislation, it shall be an unlawful employment practice for any employer:

(1) To screen a job applicant based on the applicant’s salary history, including, but not limited to the applicant’s prior wages, salaries or benefits; or

(2) To require that the applicant’s salary history satisfy any minimum or maximum criteria

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Although the statute of limitations for filing a claim under New Jersey’s Law Against Discrimination (LAD) lapses after two years from the last act of discrimination, a plaintiff may still have a viable LAD claim under the continuing violation doctrine according to a recent Appellate Division decision in Mansour v. Brooklake Club Corp., 2019 N.J. Super. Unpub. LEXIS 1579 (N.J. App. Div. decided July 10, 2019).

Plaintiff Adel Mansour was employed as a cook for Defendant Brooklake Club (Brooklake) between 2003 and 2016. Id. at *2. He alleged that during the time he worked for Brooklake his supervisor harassed him because Mansour was Egyptian and Muslim. Mansour’s supervisor frequently made unwelcome comments to or around Mansour about former Egyptian President Hosni Mubarak and the Muslim Brotherhood and implied Mansour had ties to terrorist organizations and activities. Id. at *2-3. In March 2014, when Malaysia Airlines flight 370 disappeared, Mansour’s supervisor “joked” about the pilot being Egyptian and then hung a large world map in the kitchen on which he wrote “Adel, where is it?” in reference to the lost plane. Id. at *4. Mansour’s supervisor also continuously criticized Mansour for not eating pork and frequently referenced that Muslims do not eat pork for religious reasons, telling Mansour, “…you Muslims don’t know what you’re missing.” Id. at *5-6. Mansour felt singled out by this conduct and told his supervisor to stop on numerous occasions, but the comments continued. Id. at *4-5.

The trial court found Mansour’s hostile work environment claim untimely because most of the alleged discriminatory acts took place outside of the LAD’s two-year statute of limitations. Id. at *5. However, the Appellate Division agreed with Mansour that the trial court “misapplied the continuing violation doctrine and failed to recognize the cumulative pattern of ongoing harassment he suffered directly related to his religion and nationality.” Id. at *7.

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Although a Plaintiff may attempt to prove his discrimination claim by showing how he was treated differently than similarly situated workers not of his protected class, e.g., race, according to a recent decision of the federal District Court of New Jersey there must be little or no difference in the offered comparator evidence other than the protected class characteristic of the Plaintiff. Wilson v. M & M Mgmt. Co., 2019 U.S. Dist. LEXIS 107955 (D.N.J. decided June 27, 2019). For example, in the race discrimination claim brought in Wilson, the Court required an African American Plaintiff to show there was no discernable difference between his conduct and those of the Caucasian coworkers he was comparing himself to other than their race. Unfortunately, for Aaron Wilson he was not able to do so.

Plaintiff Aaron Wilson worked as a driver for Defendant M & M Management Company which housed a thrift store located in West Berlin, New Jersey. Id. at *1. Wilson was terminated in January 2016, after which he filed a lawsuit against his employer alleging hostile, work environment, retaliation and wrongful discharge based on his African American race under both Title VII and the New Jersey Law Against Discrimination (LAD) Id. at *6-7. Wilson alleged that M & M terminated him in retaliation for his complaints about a white coworker’s racially discriminatory behavior toward him. Id. However, M & M argued instead that the actual reason for Wilson’s termination was his excessive documented disciplinary infractions over a period of two years. Id.

In its decision the district court emphasized that even though M & M met its burden of articulating a legitimate nondiscriminatory reason for firing Wilson based on his extensive disciplinary record, Wilson would still have opportunity to prevail on his claims if he was able to show the reasons offered by the employer for firing him were pretextual, and in fact he was actually terminated in retaliation for the exercise of his protected right to complain of a racially biased hostile work environment. Id. (citing to McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) for the proposition that once a plaintiff makes prima facie showing of discrimination and a defendant successfully refutes it, the burden shifts to the plaintiff to show that defendant’s reasons were pretextual). To show pretext, the relevant standard requires a plaintiff to “demonstrate such weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions in the employer’s proffered legitimate reasons for its actions that a reasonable factfinder could rationally find them ‘unworthy of credence.’” Wilson at *11 (quoting Keller v. Orix Credit Alliance, 130 F.3d 1101, 1109 (3d Cir. 1997).

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The Appellate Division recently held that in enacting the New Jersey Law Against Discrimination (NJLAD), the Legislature intended the Act to be construed as broad enough to extend to certain nonresidents who sought employment in the State. Calabotta v. Phibro Animal Health Corp., N.J. Super. LEXIS 100 (June 27, 2019).

Plaintiff David Calabotta, an Illinois employee, sued his New Jersey-based employer Phibro Animal Health Corporation under the NJLAD after his supervisors first failed to consider him for a promotion due to his wife’s battle with breast cancer. His employment was ultimately terminated. Defendant Phibro argued that Illinois law should apply because Calabotta resided in Illinois and worked out of the Illinois office. Id. at 6. However, Calabotta maintained that New Jersey law and the NJLAD should apply because the company headquarters were in Teaneck, the senior executives who made all employment decisions regarding Calabotta’s status were at the New Jersey headquarters, and the promotional position he sought was in New Jersey. Id at 6 and 11.

The court in Calabotta found that, after careful examination of the NJLAD’s text and legislative history that there was no legislative intent to limit LAD to job applications who live in New Jersey or to those who perform all of their employment functions in New Jersey. Generally, the best indicator of the legislative intent behind the enactment of a statute is the statute’s plain language. Calabotta, N.J. Super. at 25 (citing Lippman v. Ethicon, Inc., 222 N.J. 362, 380-81 (2015) and quoting Donelson v. DuPont Chambers Works, 206 N.J. 243, 256 (2011)). However, if a statute’s plain language is ambiguous, then courts look at extrinsic evidence for their analysis, such as legislative history. Parsons v. Mullica Twp. Bd. of Educ., 226 N.J. 297, 308 (2016). In this case, the confusion and ambiguity stemmed from the construction of the NJLAD’s preamble, which uses the word “inhabitant,” despite the fact that “inhabitant” is not used in the rest of the statute. Calabotta, N.J. Super. at 27-28.

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Recognizing the unique vulnerability of hotel housekeeping and room service employees who often work alone while cleaning guests’ rooms, New Jersey Governor Phil Murphy signed into law this month a requirement that ensures hotels with over 100 guest rooms provide its employees with panic button devices to protect them when confronted with sexual assault and harassment situations. This new law was proposed in the aftermath of the sexual assault of a 51-year old room cleaner in Bally’s Hotel and Casino in 2018, which sparked outrage among similarly situated workers throughout the state who feared for their safety. In enacting this law, which will take effect in January 2020, New Jersey becomes the first state to require such protection for its employees.

The new law additionally recognizes that hotel employees who are often recent immigrants who speak little English and therefore may feel intimidated to report inappropriate or criminal conduct for fear of retaliation from their employers. The public policy goals of this legislation are in line with existing pro-employee rights laws in effect in our state such as the New Jersey Law Against Discrimination (LAD).

The LAD provides a significant level of protection to New Jersey workers by prohibiting employers from retaliating against employees for complaining about harassment or discrimination. N.J.S.A., 10:5-12(d). Under the LAD, it is an unlawful practice “for any person to take reprisals against any person because that person has opposed any practices or acts forbidden under this act.” Id. The panic button legislation adds an additional layer of protection for hotel service employees underscoring the fact that hotel employers had been failing to adequately address these workers’ safety concerns.

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Under the New Jersey Law Against Discrimination (LAD) employees may now be able to pursue a failure to accommodate disability discrimination claim even if they do not suffer an adverse employment action for having requested such an accommodation. Put differently, a worker may sue their employer under New Jersey state law for failing to grant their request to reasonably accommodate their disability even if they are not fired, suspended, demoted, had their hours reduced, salary/rate of compensation cut and/or were not subjected to a hostile work environment for having asked their employer to accommodate their disability. In Richter v. Oakland Bd. of Educ., 2019 N.J. Super. LEXIS 84 (App. Div., June 11, 2019), our Appellate Division recently decided that an employee “need not demonstrate an adverse employment action to establish a prima facie case of a failure to accommodate claim under the LAD.” Richter, N.J. Super at 4.

Plaintiff Mary Richter suffered from a hypoglycemic episode, in which her blood sugar dropped too low causing her to have a seizure and faint in front of her students. Richter, N.J. Super. at 7. Richter alleges that as a result of her fall, she had to undergo extraction of her right front tooth and implantation of a dental bridge and bone grafts. Id. She also now suffers from such symptoms as loss of smell, vertigo, dizziness, post-concussion syndrome, severe emotional distress, among others. Id. Prior to this incident, Richter asked the school principal to adjust her schedule to an earlier lunch period. The principal told her that she was needed for cafeteria duty during the earlier lunch period and while the vice principal advised her that she should skip her assigned cafeteria duty to eat lunch earlier, Richter thought she was obligated to work during cafeteria duty because she did not receive permission in writing. Id. at 6. Her late lunch schedule required Richter to consume three or more glucose tablets while teaching to maintain her sugar at stable levels, which ultimately did not work and allegedly caused her to faint. Id. The Superior Court below dismissed Richter’s complaint because it concluded as a matter of law that Richter could not establish an adverse employment action by the BOE. Id. at 3.

To establish an employer’s failure to accommodate, an employee must show “that he or she (1) ‘qualifies as an individual with a disability, or [ ] is perceived as having a disability, as that has been defined by statue’; (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) that defendant ‘failed to reasonably accommodate [his or her] disabilities.’” Royster v. N.J. State Police, 227 N.J. 482, 500 (2017) (citing to Victor v. State, 203 N.J. 383 (2010)). Notably missing from the requirements is a showing of adverse employment action. In Victor, the Court was willing to recognize a disability discrimination claim for failure to accommodate despite the absence of adverse employment action if the employee was able to show that the failure to accommodate forced him or her to “soldier on without reasonable accommodation, making the circumstances so unbearable that it would constitute a hostile employment environment.” Victor, 203 N.J. at 421.

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A worker in New Jersey who is fired for complaining to their employer about its New Jersey’s wage law violations may be able to sue to recover damages under our state’s whistleblowing laws. Recently, the New Jersey Appellate Division clarified that a plaintiff does not need to allege both a violation of a statute and a matter of public policy to state a cause of action under New Jersey’s Conscientious Employee Protection Act (CEPA). Costa v. Total Rehab & Fitness, 2019 N.J. Super. Unpub. LEXIS 1286 (App. Div., June 5, 2019). CEPA defines protected “whistle-blowing activity” to occur when an employee “discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer, or another employer, with whom there is a business relationship, that the employee reasonably believes is… in violation of a law, or rule or regulation promulgated pursuant to law.” N.J.S.A. 34:19-3.

In reversing in part the Camden County Superior Court’s earlier decision dismissing allegations of CEPA violations in plaintiff’s complaint for failure to state a claim, the Appellate Division reasoned that the complaint should have been dismissed without prejudice to give the plaintiff an opportunity to amend her complaint as the circumstances of her termination may have amounted to a violation of CEPA.

Catherine Costa worked as an occupational therapist for Total Rehab & Fitness between April and September 2013. During her employment, she agreed to be paid in accordance with a scaled compensation system based on the number of patients that visited her during the week. Despite the agreed upon compensation system in place, Costa’s employer frequently paid her less than required by her contractual rate which is a violation of the New Jersey Wage Payment Law (NJWPL). After a series of email exchanges in which Costa informed her employer about the discrepancies in her paycheck only to be met with frustration toward her demands, Costa was terminated. Id. at 4-6. The Superior Court dismissed Costa’s complaint because of her failure to specify that her employer violated the NJWPL. However, it also went one step further and concluded that Costa’s complaints about shortages in her paycheck involve “a purely personal and private dispute, insufficient to meet the elements of a CEPA claim.” Id.

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Plaintiffs attempting to sue Strategic Delivery Solutions LLC (SDS) in a class action suit over a myriad of violations of the New Jersey Wage Payment Law (WPL) and New Jersey Wage and Hour Law (WHL) must bring their claims individually through opaque private arbitration rather than as a class in open court before a jury of their peers according to an Appellate Division opinion published on June 4, 2019. Colon et. al. v. Strategic Delivery Solutions, LLC., 2019 N.J. Super. LEXIS 78. This is an unfortunate outcome for plaintiffs, who otherwise had strong claims for New Jersey wage law violations. When hired by SDS, plaintiffs entered into independent vendor agreements, which contained clear and unambiguous arbitration provisions. According to this appellate court, by signing these agreements plaintiffs gave up their rights to bring class actions claims, waived a jury trial, and agreed to binding arbitration. Colon at 4. Moreover, the appellate court concluded that even if the Federal Arbitration Act (FAA) does not apply, the New Jersey Arbitration Act (NJAA) does, and arbitration is required to settle these wage disputes.

In their initial suit filed in December 2016, plaintiffs alleged that from February 2015 to March 2016, they were working out of an SDS facility in Elizabeth performing truck driving and delivery functions for the company. They claim that SDS made unlawful deductions from their compensation in violation of the New Jersey Wage Payment Law during this time. N.J.S.A., 34:11-4.1 to 4.14. Additionally, plaintiffs allege that SDS misclassified them as independent contractors rather than employees and in doing so failed to pay them one-and-a-half hourly rate for any time they worked over forty hours per week in violation of the overtime provisions contained within the WHL. N.J.S.A., 34:11-56a to 56a38. Withholding wages and failing to pay employees the required one-and-a-half-hour overtime rate for excess hours worked are both serious abuses against New Jersey wage laws. Id. However, the Appellate Division agreed that plaintiffs must arbitrate their claims based on this arbitration provision, so sadly plaintiffs will not have their day in court.

Had the plaintiffs not entered into such agreements with the company, they would have had strong claims for a class action lawsuit against SDS for violating the New Jersey employment law statutes. The WHL was enacted to protect employees from unfair wage practices, such as giving employees excessive hours of work. N.J.S.A. 34:11-56a. Therefore, the distinction between independent contractor and employee, which is what plaintiffs are disputing in this case, is not a minor one in terms of application of the wage laws applicable to the employee-employer relationship. The WPL, which governs the time and mode of payment of wages due to employees, excludes independent contractors from its definition of “employee.” Hargrove’s v. Sleepy’s, LLC, 220 N.J. 289 (2015). Similarly, the WHL, which establishes a minimum wage or overtime rate payable to employees, does not do so for independent contractors. Neither the WPL nor its regulations differentiate between an employee and an independent contractor, however the New Jersey Supreme Court held that in distinguishing the two, courts may apply the ABC Test, which is taken from the New Jersey Unemployment Compensation Act. Id.