By passing and signing into law the New Jersey Equal Pay Act (EPA), our state legislature and Governor Murphy made clear that unequal pay practices based on a person’s gender, race, national origin, disability or other protected class characteristic, for employees performing same or similar work, will not be tolerated in New Jersey. A powerful remedy found in the EPA allows an aggrieved employee to seek back pay damages for discriminatory pay practices going back 6-years!
The passage of the EPA meant that the statute of limitations for claims based on discriminatory pay was expanded from 2-years under the existing New Jersey Law Against Discrimination (NJLAD) to a period of 6-years. Specifically, this look-back provision of the EPA found at N.J.S.A. 10:5-12A, , states that, “…liability shall accrue and an aggrieved person may obtain relief for back pay for the entire period of time, except not more than six years, in which the violation with regard to discrimination in compensation or in the financial terms or conditions of employment has been continuous, if the violation continues to occur within the statute of limitations…” (emphasis added).
A plain reading of the EPA makes clear that a victimized employee is permitted to recover damages for 6-years of unequal pay so long as it is shown to the satisfaction of a court that the complained of unequal pay practices continued to take place one or more times after the EPA took effect on July 1, 2018. Despite the apparent clarity of the EPA, some employers sought to challenge this 6-year claw back period arguing that by giving effect to the 6-year statute of limitation as of its effective date would mean the law was being given a manifestly unfair retrospective application. Retrospective application of a new law or rule depends on whether there has been a departure from existing law. State v. G.E.P., 458 N.J. Super. 436, 444-445 (App. Div. 2019). If there is a departure from exiting a law, the new law or rule is only given prospective effect. Id. A new rule or law exists if “‘it breaks new ground or imposes a new obligation …. [or] if the result was not dictated by precedent existing at the time the defendant’s conviction became final.'” Id. quoting State v. Lark, 117 N.J. 331, 339 (1989) (quoting Teague v. Lane, 489 U.S. 288, 301 (1989)).
To put a finer point on it, employers argue that it would be unfair to penalize them for pay practices which were not within the reach of the two-year statute of limitations of the NJLAD. This argument initially appeared to have persuaded the District Court of New Jersey in Perrotto v. Morgan Advanced Materials, PLC, No. 2:18-13825 (D.N.J. Jan. 15, 2019). However, upon closer scrutiny of this decision, not so much.
In Perrotto, the federal district court held that the EPA did not apply retroactively. There, the plaintiff was terminated on April 5, 2018, before the EPA was enacted. In her complaint, Perrotto asserted, inter. alia., discriminatory gender-based disparity in pay and retaliation counts under the EPA. The district court dismissed Perrotto’s claims finding that the EPA was passed on April 25, 2018, with an effective date of July 1, 2018. The district court reasoned the delayed enactment evidenced legislative intent for a prospective application only.
Although at first blush the Perrotto decision appeared to be a win for employers in New Jersey seeking to limit the reach of the EPA, a closer look at the decision reveals the federal court only held that employees cannot make federal claims of unequal pay under the EPA covering a 6 year period when all the claimed violations occurred prior to the EPA’s effective date of July 1, 2018. Put differently, if an employee was a victim of discriminatory pay practices after the EPA came into effect, then the employee is entitled to recover for damages for each unequal pay violations occurring over a prior 6-year period. This is because under the EPA the statute of limitations restarts with each discriminatory paycheck the employee receives. As New Jersey Superior Court Judge Bruno Mongiardo correctly stated in Norcia v. New Jersey City University, No. PAS-L-001972-19, “To hold otherwise would mean that even though the LAD was amended effective July 1, 2018, a plaintiff cannot invoke the 6-year lookback period until July 1, 2024. The Legislature did not make any such declaration when the LAD was amended.”
If you believe you have the victim of discriminatory pay practices, immediately call the attorneys at Mashel Law at (732) 536-6161 for help or fill out the contact form on this page for help Mashel Law located in Marlboro, New Jersey, is dedicated exclusively to protecting the rights of employees.