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In New Jersey an employer cannot recover damages from their employee caused by the employee’s negligent errors or omissions.  Incredibly, this was not always the case. At one time, our New Jersey courts permitted employers to sue their employees to recover monies it the employer had to pay to third parties for damages caused by the employee’s negligence.  Frank Martz Coach Co. v. Hudson Bus Transportation Co, 23 N.J. Misc. 342 (N.J. Sup. Ct. 1945).  However, 16 years later in Eule v. Eule Motor Sales, 34 N.J. 537 (1961), the New Jersey Supreme Court found the proposition that an employer could seek indemnification from its employees to be “anachronistic”:

“The theoretical liability of an employee to reimburse the employer is quite anachronistic. The rule would surprise the modern employer no less than his employee. Both expect the employer to save harmless the employee rather than the other way round, the employer routinely purchasing insurance which protects the employee as well. ***”

The change in law articulated in Eule, has been applied by our New Jersey courts since then.  See e.g., Fried v. Aftec, Inc., 246 N.J. Super. 245 (App. Div. 1991) (New Jersey does not permit an employer to seek indemnity from an employee for acts of negligence causing the employer losses); Brown v. United Cerebal Palsy/Atlantic & Cape May, Inc., 278 N.J. Super. 208, (N.J. Law Div.  1994) (“The employee should not, therefore, be required to bear that cost by way of indemnification to the employer.”)

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America is in the middle of a social reckoning. Brave women are standing up and telling their stories of sexual harassment, assault, or other abuses by men in positions of power through use of the hashtag, #MeToo. The #MeToo movement, focused primarily on sharing stories of abuse, evolved into a call for action and female empowerment aptly named #TimesUp.  Although there has long been legal recourse found in our federal and state law for victims of sexual harassment in the workplace and/or victims of retaliation for reporting it, women today are being believed and vindicated on a larger scale than ever seen before. Here in New Jersey, our Law Against Discrimination (LAD) employees protects women and men alike from sexual harassment in the workplace. There are two kinds of sexual harassment: (1) quid pro quo, which is an agreement or an offer to receive a benefit (promotion, raise, continued employment, etc.) in exchange for the performance of sexual favors; or (2) a sexually hostile work environment, where, for example, a co-worker makes unwelcome and offensive sexual comments and/or advances. Lehmann v. Toys ‘R’ Us, Inc., 132 N.J. 587 (1993). Any person who aids, abets, or otherwise assists in the harassment is in violation of the LAD. N.J.S.A. 10:5-12(e).

To prove the existence of a hostile work environment under the LAD, an employee must demonstrate that the conduct in question was unwelcome, that it occurred because of his or her sex, and that a reasonable person of the same sex would consider it sufficiently severe or pervasive to alter the conditions of employment and create an intimidating, hostile, or offensive working environment. Id.  However, a victim of harassment should be mindful that the LAD is not intended to be “a ‘general civility’ code” for conduct in the workplace.'” Mandel v. UBS/PaineWebber, Inc., 373 N.J. Super. 55, 73 (App. Div. 2004) certif. denied, 183 N.J. 213 (2005). “‘[D]iscourtesy or rudeness should not be confused with [protected status-based] harassment.'” Ibid.

The LAD expressly protects workers from retaliation for having reported sexual harassment of themselves or coworkers. This includes retaliation in the form of a hostile work environment, demotion, failure to promote, transfer, cut in pay or benefits, unpaid suspension, wrongful discharge, or even “constructive discharge”.  A constructive discharge occurs when an employer takes no official action, but creates a work environment so hostile and unbearable that a reasonable employee would have no choice but to resign.

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Employers can be held liable under Title VII of the Civil Rights Act of 1964, the American with Disabilities Act (ADA) and New Jersey’s Law Against Discrimination (“LAD”) for discriminating against an employee because of the employee’s association with a member of a protected group (e.g., sex, race, national origin, religion, disability, etc.).  This means an employer is prohibited from taking adverse employment action against a worker in the form of a hostile work environment, demotion, failure to promote, cut in pay, wrongful discharge, etc., where for example: (a) a Caucasian worker married an African American or other person of color; (b) a worker gets engaged to a Muslim; (c) a female employee gives birth to a child with disabilities; or (d) an employee’s spouse becomes afflicted with a potentially terminal disease.

Courts have found protection against “association discrimination” under New Jersey’s LAD”.  See e.g. Downs v. U.S. Pipe & Foundry Co., 441 F. Supp. 2d 661, 665 (D.N.J. 2006) (“In the absence of any contrary authority, this Court concludes that the New Jersey Supreme Court would hold that NJLAD bars employment discrimination based upon a person’s association with a person with a disability”) (citing O’Lone v. N.J. Dep’t of Corr., 313 N.J. Super. 249 (App. Div. 1998) and Berner v. Enclave Condo. Ass’n, Inc., 322 N.J. Super. 229 (App. Div. 1999), cert. denied, 162 N.J. 131 (1999)); see also Pailleret v. Jersey Constr. Inc., 2011 U.S. Dist. LEXIS 42364 *22 (D.N.J. Apr. 19, 2011) (“The NJLAD affords protection to both disabled persons as well as individuals associated with disabled persons”).

In O’Lone, the New Jersey Appellate Division held “where the plaintiff is wrongfully discharged for associating with a member of a protected group, that it is the functional equivalent of being a member of the protected group”.  O’Lone, 313 N.J. Super. at 255 (emphasis added).  Downs, supra., is very instructive in this matter.  In that case, the pertinent facts were set forth as follows:

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The New Jersey Workers’ Compensation Act, N.J.S.A., 34:15–1 to -146 (Workers Compensation Act), protects and allows workers who are injured on the job to receive compensation and be made whole for their injuries. This protection generally extends to third parties as well. For example, if an employer (IT, security, or custodial firm etc.) farms out their employees for use by a third party, the third party can be held liable to the employee for common-law personal-injury or wrongful-death claims. N.J.S.A., 34:15–40.  This is true even after the employee received workers’ compensation benefits from his or her original-direct employer.

Some employers and third-parties have tried to protect themselves from third party claims by requiring prospective and current employees to sign waivers releasing the company from third-party liability for workers’ compensation in the event the employee is injured while working for those third parties. Recently, the New Jersey Supreme Court held that such waivers violate New Jersey public policy, and therefore, are invalid and unenforceable.

In Vitale v. ScheringPlough Corp., No. 078294, 2017 WL 6398725 (N.J. Dec. 11, 2017), Plaintiff, Philip Vitale (Vitale), was hired by Allied Barton Security Services (Allied Barton), as a security guard. When it hired Vitale, Allied Barton required him to sign an agreement entitled “Worker’s Comp Disclaimer” (“Disclaimer”) as a condition of his employment. In the disclaimer, Vitale agreed to “waive and forever release any and all rights” that he may have had to assert a claim “against any customer … of Allied Security to which [Vitale] may be assigned, arising from or related to injuries which are covered under the Workers’ Compensation statutes.” Id. at *3.

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Under the federal Title VII of the Civil Rights Act of 1964 and New Jersey’s Law Against Discrimination (LAD) workers are protected from sexual harassment in the workplace. There are two kinds of sexual harassment; (1) quid pro quo –agreement to perform sexual favors to receive a benefit (promotion, raise, continued employment, etc.); or (2) a sexually hostile work environment, where, for example, a co-worker makes unwelcome and offensive sexual comments and/or advances.

Showing harassment through a hostile work environment requires a plaintiff to show: (1) objectively, a reasonable person would find such an environment hostile or abusive; (2) subjectively, the plaintiff perceives the environment as hostile or abusive; (3) the hostile environment is so severe or pervasive that someone can’t function or perform work properly; and (4) the hostile work environment was sexually motivated, in other words because of a characteristic protected by Title VII and LAD. There are two ways with which a workplace environment can be considered so hostile that someone can’t function or perform work properly; (1) a single incident occurred that was extraordinarily severe/egregious; or (2) a series of incidents was sufficiently continuous and concerning to have altered the conditions of the working environment.

If an employer has workplace policies in place to prevent and rectify harassment and the employee must take advantage of those procedures before bringing a harassment claim. This is known or referred to as the “Faragher-Ellerth defense”. See Faragher v. City of Boca Raton, 524 U.S. 775 (1998); Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998). Such procedures can include having a Human Resources department which accepts and reviews harassment complaints, and if concluding that harassment took place, acts appropriately against those perpetrating the harassment. However, if an employee does complain about harassment, and management, concluding harassment took place, does not move to rectify, and prevent future harassment, then the employer can be held liable for the harassment which took place.

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New Jersey is one of the states comprising the United States Court of Appeals for the Third Circuit.  In considering the scope of protections afforded workers by Title VII of the Civil Rights Act of 1964, 42 U.S.C § 2000 et seq. (“Title VII”), our Third Circuit defines an “employee” as including those workers placed by temporary staffing agencies. Faush v. Tuesday Morning, Inc., 808 F.3d 208, 213 (3d Cir. 2015).  The Third Circuit arrived at this conclusion by applying the so-called “Darden Test” set down by our United States Supreme Court in Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992).  Under the Darden Test, a court looks at the following 12 steps to determine whether a worker qualifies as an “employee” for Title VII protection purposes:  (1) the skill required; (2) the source of the instrumentalities and tools; (3) the location of the work; (4) the duration of the relationship between the parties; (5) whether the hiring party has the right to assign additional projects to the hired party; (6) the extent of the hired party’s discretion over when and how long to work; (7) the method of payment; (8) the hired party’s role in hiring and paying assistants; (9) whether the work is part of the regular business of the hiring party; (10) whether the hiring party is in business; (11) the provision of employee benefits; and (12) and the tax treatment of the hired party. However, in the Third Circuit, courts focus primarily on which entity paid the employees’ salaries, hired and fired them, and had control over their daily employment activities. Faush , supra.,808 F.3d 208 at 214.

In Faush, the Third Circuit concluded that a temporary agency worker who was “leased” to a store may be considered the store’s “employee” under Title VII, and therefore, can sue the store for discrimination.  There, Tuesday Morning Inc. (“Tuesday Morning”) had leased Faush and other temporary workers from a temporary staffing agency to perform basic labor tasks for the store such as stocking shelves. Faush alleged Tuesday Morning subjected him and other black temporary workers to racial discrimination. In reversing the grant of summary judgment to Tuesday Morning by the District Court below, the Third Circuit applied the Darden Test and found that Tuesday Morning controlled and supervised where, when and how the temporary workers worked. Further, while Tuesday Morning did not directly pay the temporary workers, the store did pay the temps based on the hours they worked and compensated them for overtime. Therefore, the Third Circuit found the method of payment used by Tuesday Morning was indistinguishable from directly paying them as permanent W-2 employees. Consequently, Faush was able to sue Tuesday Morning for employment discrimination under Title VII.

Because New Jersey’s Law Against Discrimination (the “LAD”) is supposed to be “liberally construed”, Battaglia v. UPS, INC., 214 N.J. 518, 546 (2013), and given New Jersey Courts will often look to the federal courts and their construction of federal laws for guidance in construing the LAD , Bergen Commercial Bank v. Sisler, 157 N.J. 188, 200 (1999) (finding that to the extent federal standards are useful and fair, they will be applied to LAD in the interest of achieving a degree of uniformity in the discrimination laws), it may be fairly predicted that our state courts would likely follow the Third Circuit and conclude that temp workers are to be considered employees under LAD, and permit temp workers to sue employers under LAD where workplace discrimination can be proved.

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Under Title VII of the Civil Rights Act of 1964 and under New Jersey’s Law Against Discrimination, it is unlawful for an employer to discriminate against an employee with respect to his/her compensation, terms, conditions, or privileges of employment because of the employee’s sex or gender. In such a circumstance, an employer is liable for a hostile work environment created by one or more of its supervisors if the employee suffering the discrimination establishes that: 1) the employee suffered intentional discrimination because of his/her sex, 2) the discrimination was severe or pervasive, 3) the discrimination detrimentally affected the plaintiff, 4) the discrimination would detrimentally affect a reasonable person in like circumstances, and 5) the existence of a respondeat superior relationship between the harasser and the victim employee. “Under respondeat superior, an employer can be found liable for the negligence of an employee causing injuries to third parties, if, at the time of the occurrence, the employee was acting within the scope of his or her employment.” Lehmann v. Toys ‘R’ Us, Inc., 132 N.J. 587, 619 (1993).

To establish the existence of respondeat superior liability – namely, employer liability for a supervisor’s unlawful actions or inactions – a victimized employee needs to show that the supervisor acted as the employer’s agent. Usually, to be considered an employer’s agent the worker needed to have acted within the scope of employment. See Restatement (Second) of Agency § 219(2)(d) (Am. Law Inst. 1958). However, even if the supervisor acts outside the scope of employment, the employer can still be found liable. This is because under § 219(2)(d) of the Second Restatement, an employer may be liable when employees act outside the scope of their employment if they were “aided in accomplishing the tort by the existence of the agency relation.” Stated differently, even acting outside the scope of their employment, if the employee used their position as the agent of the employer to inflict harm against a subordinate the employer can be liable.

Recently the Third Circuit in, Moody v. Atl. City Bd. of Educ., No. 16-4373, 2017 U.S. App. LEXIS 17191, at *1 (3d Cir. Sep. 6, 2017), reversed and remanded to trial a district court’s dismissal of a complaint brought by a temporary fill-in employee against a public entity employer alleging her or foreman sexually harassed her.  Specifically, a custodian foreman named Marshall worked for the Atlantic City Board of Education (“ACBOE”) and oversaw scheduling the substitute custodian hours, and demanded sexual favors from Plaintiff Moody, a temporary school custodian, in exchange for favorable work schedules. When Moody refused Marshall’s demands, Marshall stopped scheduling Moody for work. Initially, the district court dismissed liability against the ACBOE finding there was no respondeat superior relationship because Marshall was not Moody’s supervisor, and therefore, the ACBOE was not liable for what Marshall had done. However, the Third Circuit reversed, concluding Marshall was in fact Moody’s supervisor because Marshall was the one who controlled whether Moody would work or not. Since Moody was a temp/fill-in worker Marshall controlled whether Moody worked at all – not  just (what an average foreman controls) deciding which hours and days she worked – this gave Marshall “supervisor” status. The court then held “[w]hen a supervisor takes a tangible employment action against a subordinate, the employer is vicariously liable because the injury could not have been inflicted absent the agency relation.” Since Marshall used his position as foreman under the ACBOE to demand sexual favors in return for providing Moody work, the ACBOE was found to be liable for Marshall’s actions.

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To deny an employee a transfer to a lateral employment position because of his or her protected class characteristic, e.g., race/color, religion/creed, sex/gender, national origin/ancestry, age, disability, or sexual orientation, is a violation of The Civil Rights Act of 1964 § 7, 42 U.S.C. § 2000e et, seq. (1964) (“Title VII”) and the New Jersey Law Against Discrimination (the “NJLAD”). An employee demonstrating that they were the victim of discrimination needs to establish the existence of three elements: (1) that they are part of a protected category (race, sex, religion, color, or national origin); (2) they suffered an adverse action; and (3) causality, that is, they suffered adverse action from their employer because of their protected class characteristic(s). Once these three elements are established, discrimination can be found even when an employer merely withholds a benefit and the harm is not necessarily concrete or directly harmful to the employee. For example, if an employer does not give an (minority, religious, etc.) employee a particular promotion/benefit, which had otherwise been given to other, similarly placed (non-protected category) employees, it can be discrimination. This may apply even when the employer is not obligated to give those benefits/opportunities to the employees and the protected employee is not necessarily in a worse position than they were prior to being denied the requested benefit.

Recently, the D.C. Circuit in Ortiz-Diaz v. United States HUD, No. 15-5008, 2016 U.S. App. LEXIS 23805, at *1 (D.C. Cir. Aug. 2, 2016), limited prior precedent, reversed summary judgment, and remanded back to trial determination on the issue of whether a supervisor’s denial of a Hispanic employee’s lateral transfer request was discrimination under Title VII. Plaintiff, Samuel Ortiz-Diaz, worked for the Washington, D.C. Office of Inspector General and applied for a transfer to the Albany, New York, or Hartford offices. Ortiz-Diaz wanted to work at the Albany or Hartford offices to obtain a new “good” supervisor and remove himself from the control of his current supervisor who Ortiz-Diaz perceived as racially and ethnically biased. Ortiz-Diaz was even willing to take a pay cut just to get away from his biased boss, and thereby improve his career prospects, but his supervisor denied Ortiz-Diaz’s transfer request without explanation. Ortiz-Diaz sued claiming the denial of his lateral transfer was an act of discrimination. In agreeing that Ortiz-Diaz deserved to have his claims decided by a jury at trial, the D.C. Circuit Court distanced itself from prior court precedent where it was found that denial of a lateral transfer is not discrimination.  In doing so, the D.C. Circuit Court concluded that since Ortiz-Diaz was denied the opportunity to advance his career by a supervisor who he perceived discriminated against him because of Ortiz-Diaz’s Hispanic heritage, his Title VII claim of discrimination was deemed legitimate and deserving of a jury trial.

The Ortiz-Diaz decision demonstrates how some federal courts continue to expand the protection of federal employment discrimination laws. Our courts in New Jersey often look to federal law as a key source of interpretive authority when assessing allegations of unlawful discrimination. Grigoletti v. Ortho Pharm. Corp., 118 N.J. 89, 97 (1990). Given the liberality typically accorded the interpretation and application of the NJLAD, it may be fairly predicted that our state courts would likely follow the D.C. Circuit Court by prohibiting discriminatory employment practices which take the form of denying an employee a lateral transfer.

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Mashel Law, L.L.C. recently filed a class action lawsuit in the United States District Court of New Jersey against Lyft, Inc. (Lyft) on behalf of current and former Lyft drivers who entered contracts with Lyft to receive a portion of the fare Lyft charges customers, that is, the fare charged the rider less Lyft’s applicable commission fee, and any applicable charges such as service fees, cancellation fees, damage fees, tolls, surcharges, and taxes, but who did not receive the contracted driver’s fee, and who opted out of arbitration. Lyft is a “ridesharing” business that originated in San Francisco, California in 2012, and whose chief competitor is Uber. Lyft operates in at least 33 other states in the United States.

Under this straightforward common law breach of contract action, the proposed class consists of all persons nationwide who entered contracts with Lyft to provide transportation services to customers (riders) of Lyft in exchange for a portion of the fare Lyft charges riders, to wit, the fare charged the rider (plus tips if applicable) less applicable charges such as service fees, cancellation fees, damage fees, tolls, surcharges, taxes, and who opted out of arbitration. The complaint also asserts common law claims of breach of the implied covenant of good faith and fair dealing, fraud, and unjust enrichment.

A class action lawsuit is appropriate when large numbers of similarly situated people have suffered same or similar injuries by the acts or omissions of a wrongdoer, typically a large corporation. Under the Federal Rules of Civil Procedure, a class may be certified if the requirements of Rule 23 are met, including: (1) numerosity; (2) commonality of law or fact; (3) typicality between the class claims and those of the named parties; and (4) adequacy of representation by the named parties and class counsel. Fed. R. Civ. P. 23(a).  “[T]he proposed class must also satisfy at least one of the three requirements listed in Rule 23(b).” Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2548 (2011). A party seeking certification pursuant to Rule 23(b)(3), must show that “the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.” Fed. R. Civ. P. 23(b)(3).

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Under the federal American with Disabilities Act (“ADA”), and the New Jersey Law Against Discrimination (“LAD”), a disabled employee is entitled to be reasonably accommodated by their employer so long as to do so does not create an undue hardship for the employer or coworkers. However, for an employee to be entitled to a reasonable accommodation for a disability, the ADA and LAD requires that the disabled employee can perform the essential functions of their job with or without an accommodation. Put differently, an employer is not required to accommodate an employee who cannot perform his or her essential job functions even with an accommodation. Hennessey v. Winslow Township, 368 N.J. Super. 443, 452 (App. Div. 2004), aff’d, 183 N.J. 593 (2005).

What constitutes an “essential function” requires a very fact specific determination. To do so, the U.S. Equal Employment Commission suggests the following factors be considered: (1) the employer’s job descriptions; (2) whether the position exists to perform that function specifically; (3) the experience of employees who actually hold that position; (4) the time spent performing the function; (5) the consequences of not performing the function; (6) whether other employees are available to perform the function, and; (7) the degree of expertise or skill required to perform the function. However,when looking at the job description factor, the New Jersey Supreme Court in Grande v. Saint Clare’s Health Sys., Nos. A-67, 076606, 2017 N.J. LEXIS 746, at *1 (decided July 12, 2017) recently reaffirmed that an employer cannot arbitrarily define which requirements are “essential” job functions.

Maryanne Grande (“Grande”) was a Registered Nurse who suffered repeated injuries while working at Saint Clare’s causing damage to her shoulders and neck. Following her last medical leave, Grande was cleared by her doctor to return to full-duty. However, before permitting her to do so, Saint Clare’s required Grande to undergo and pass a functional capacity evaluation (an FCE). The FCE concluded that Grande was fit to perform medium category work (occasional lift and work up to 50 lbs.) with certain job alterations to avoid prolonged or repetitive neck movements, and required assistance when performing patient transfers or guarding patients or handling loads greater than 50 pounds. Thereafter, Saint Clare’s informed Grande that they were terminating her employment because they felt she had limitations which prevented her from safely doing her job.