Although less frequently invoked than other provisions contained within the New Jersey Law Against Discrimination (LAD), the statute prohibits discriminatory refusal to do business with independent contractors because they or their family members possess one or more protected class characteristics. Specifically, N.J.S.A. § 10:5-12(l) provides:

“It shall be…an unlawful discrimination…For any person to refuse to buy from, sell to, lease from or to, license, contract with, or trade with, provide goods, services or information to, or otherwise do business with any other person on the basis of the race, creed, color, national origin, ancestry, age, pregnancy or breastfeeding, sex, gender identity or expression, affectional or sexual orientation, marital status, civil union status, domestic partnership status, liability for service in the Armed Forces of the United States, disability, nationality, or source of lawful income used for rental or mortgage payments of such other person or of such other person’s family members, partners, members, stockholders, directors, officers, managers, superintendents, agents, employees, business associates, suppliers, or customers.…”

Similarly, the LAD prohibits discriminatory terminations of contracts. Rubin v. Chilton, 359 N.J. Super. 105 (App. Div. 2003).

In J.T.’s Tire Servs., Inc. v. United Rentals N. Am., Inc., 411 N.J. Super. 236 (App. Div. 2010), the court held that the plaintiffs stated a cause of action under N.J.S.A. § 10:5-12(l) by alleging that United stopped doing business with J.T. because J.T.’s owner refused to submit to sexual demands from United’s branch manager. The court noted that it was well-established that sexual harassment is a form of sex discrimination violative of the LAD.  Noting the holding in J.T., the appellate court in Rowan v. Hartford Plaza Ltd, LP, 2013 N.J. Super. Unpub. LEXIS 766 (App. Div. 2013) likewise concluded, “We see no reason why the same principle [articulated in J.T.] would not apply to refusals to continue contracting with a contractor who has made allegations of a hostile work environment under appropriate factual circumstances.”.

In McMahon v. Univ. of Med. & Dentistry of N.J., 2011 U.S. Dist. LEXIS 124109 (D.N.J. 2011), the United States District Court of New Jersey held that the University of Medicine & Dentistry of New Jersey (UMDNJ)’s discriminatory dismissal of a student from the Certified Registered Nurse Anesthesia program would constitute a violation of N.J.S.A. § 10:5-12(l). The court found that UMDNJ should be considered a “person” for purposes of N.J.S.A. § 10:5-12(l), since the court in Rubin v. Chilton, supra., held that a hospital could be construed as a “person” under the LAD. The court noted that, “the [New Jersey] Appellate Division has held that the relationship between university and student is one which generally has contractual aspects, since the student comes to a university to be educated, and pays tuition for that service.”

Based on an arguably unduly restrictive statutory interpretation of a prior version of N.J.S.A. § 10:5-12(l), the New Jersey Appellate Division in Sashihara v. Nobel Learning Cmtys., Inc., 461 N.J. Super. 195 (App. Div. 2019) held the LAD did not protect against a discriminatory failure to contract with the parents of a disabled child. Perhaps in direct response to the unfavorable outcome in Sashihara, the New Jersey legislature amended N.J.S.A. § 10:5-12(l) in January 2020 to substitute “family members” for “spouse,” thereby expanding the scope of the statute to prohibit discriminatory refusal to do business based on the protected characteristics of a person’s family members (and not just the spouse).  As used in the LAD, “family member” means a child, parent, parent-in-law, sibling, grandparent, grandchild, spouse, partner in a civil union couple, domestic partner, or any other individual related by blood to the person, and any other individual with a close association to the victim which is equivalent to a family relationship.

At Mashel Law LLC, we effectively handle LAD claims. Do not hesitate to call the attorneys at Mashel Law (732) 536-6161 or fill out the contact form on this page, for immediate help.  At Mashel Law, LLC, located in Marlboro, New Jersey, we are dedicated to protecting the rights of employees.

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