Employee Rights

A few weeks ago, Congress passed a groundbreaking bipartisan bill that greatly restricts when employers can enforce pre-dispute arbitration agreements regarding workplace sexual assault and harassment claims. The bill is expected to be signed into law by President Biden in the very near future.

Inspired by the #MeToo movement, The Ending Forced Arbitration of Sexual Assault Act of 2021 amends the Federal Arbitration Act (“FAA”) by allowing an employee alleging sexual assault or sexual harassment to invalidate a pre-dispute arbitration agreement or joint-action waiver. What this means is that if an employee previously signed an agreement to arbitrate employment-related claims and later is a victim of alleged sexual assault or harassment, the employee can reject the arbitration agreement and decide to pursue his or her claims in court. Similarly, where an employee agreed to pursue claims in an individual capacity only, and not through a class action, the employee may also ignore that agreement as well and pursue such claims on a joint basis with other alleged victims.

Under this bill, while employees are given the option to negate a prior agreement, those signing such a pre-dispute arbitration or joint-action waiver agreement may nevertheless still opt to arbitrate such claims if they so choose. But, now, significantly that decision rests exclusively with the employee. The legislation also explicitly requires that courts, not arbitrators, decide whether this arbitration preclusion law applies to a given claim, regardless of whether the agreement itself vests that authority with the arbitrator, further showing a preference for court involvement in deciding such disputed preliminary jurisdictional issues.

In terms of its legal scope, the bill covers all claims of sexual assault or harassment, whether they arise under federal, state, local, or tribal law. “Sexual assault” is defined as a nonconsensual sexual act or sexual contact, as such terms are defined in Section 2246 of Title 18 (the U.S. criminal code) or similar applicable Tribal or State law, including when the victim lacks capacity to consent. “Sexual harassment” is defined as “conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law”—meaning that this covers anything that would qualify as sexual harassment under Title VII of the Civil Rights Act of 1964 (“Title VII”), and in New Jersey, conduct that would qualify as sexual harassment under the New Jersey Law Against Discrimination (“LAD”).

One positive for employers is that the bill explicitly states that it does not apply retroactively, and only applies “to any dispute or claim that arises or accrues on or after the date of enactment.”  Given the broad scope of this bill’s coverage, it will still likely invalidate pre-dispute agreements entered into prior to its enactment. Moreover, given some of the vague terms included in the bill, it will also be interesting seeing how courts will interpret those terms and whether any procedural rules will be adopted for how an employee is to invoke these negation of agreement rights. Moving forward, now is the time for employers to start reviewing and immediately evaluating their employee agreements to determine the impact of this expected new law and how it will affect what the employer may be able do in defending future sexual harassment and sexual assault cases.  This current revision to the scope of mandated arbitration may just be the start of other future legal changes in this area. In a Statement of Administration Policy issued on February 1, 2022, White House officials indicated that this bill could be a precursor for addressing forced arbitration of other employment claims “including arbitration of claims regarding discrimination on the basis of race, wage theft, and unfair labor practices.” So, employers should continue to monitor this hot topic to assess whether further legislative measures are potentially down the road to effectuate changes in forced arbitration of those claims as well.

On February 22, 2021, Governor Murphy finally signed three bills into law that effectively lay the ground work for legalized use of recreational marijuana in New Jersey.  While it could be some time before widespread legalized marijuana is available for purchase as the state establishes the needed infrastructure for the sale of the drug through state licensed dispensaries, I have fielded a number of questions already from employers regarding how far they must accommodate employee use of recreational marijuana. The reality is that employees will have wider protections under the new use law, and though those protections are not absolute, most employers now will have to come to grips with the new reality that marijuana use after work hours will no longer be grounds to automatically discipline an employee.

The new law expressly bars an employer from firing or refusing to hire a person who uses marijuana in their free time. Nonetheless, employers who have “reasonable suspicion” that a worker is “high” during work hours may still drug test such an employee and ultimately fire or discipline them if the test result is positive. Moreover, if you happen to be a Federal contractor who is subject to drug free workplace requirements, you will have more latitude even under this new legal scheme in imposing restrictions for recreational marijuana use since failing to prevent drug use in your workforce could place in jeopardy your continuing contractor status.

The law further specifically allows an employer to do random, regular or pre-employment screening, but in doing so, it must include a “scientifically reliable” test of blood, urine or saliva, paired with a physical evaluation to determine if the employee is currently impaired, as well as a physical examination by an employee who undergoes training to spot marijuana impairment. What that training will require for such employer observers will likely be crafted as part of the expected regulatory framework to be implemented by the state. So stay tuned for additional developments on this topic.

Finally, a frustrating reality with which employers will now need to grasp even more is that, when it comes to marijuana, there is no widely-used and accepted physical drug tests for marijuana that can detect real time intoxication absent proof of immediate drug use and impairment. Instead, the current test merely reveals the presence of marijuana in the body, which can linger sometimes days or weeks after a person last consumed the drug. This could further limit the circumstances where corrective actions can be taken against an employee for recreational marijuana use.

Accordingly, in light of the passage of this statutory framework that paves the way for legal marijuana use, employers need to start reviewing their drug testing policies and bring them into compliance with the new standards for testing for marijuana use. Furthermore, once training standards are established, employers will need to designate corporate observers and ensure that they receive the requisite training to detect marijuana impairment.  The sooner employers start to address such issues, the better it will be in dealing with this changed legal landscape involving recreational marijuana use.

Ralph R. Smith, 3rd is Co-Chair of the Employment and Labor Practice Group. He practices in employment litigation and preventative employment practices, including counseling employers on the creation of employment policies, non-compete and trade secret agreements, and training employers to avoid employment-related litigation. He represents both companies and individuals in related complex commercial litigation before federal states courts and administrative agencies in labor and employment cases including race, gender, age, national origin, disability and workplace harassment and discrimination matters, wage-and-hour disputes, restrictive covenants, grievances, arbitration, drug testing, and employment related contract issues.

Anyone watching the news today has seen report after report about a possible vaccine for the coronavirus and the speedy progress being made towards its development.  This vaccine is hoped by many to be the cure all to allow the world to go back to some semblance of the normalcy that existed before the commencement of the current pandemic. While all would seemingly acknowledge that an effective and reliable vaccine for COVID-19 would be wonderful news, the success of the vaccine in bringing back normalcy will largely depend upon how willing the general public will be in taking the vaccine. Which leads me to the question that I have already been asked by several of my clients: in an age of a pandemic, can employers force their employees to undergo a vaccine treatment as a condition of employment?

While the current pandemic is new, the above question is not. With the rise of the anti-vaccine movement, employers have actually had to grapple with this issue, especially those in the health care industry. In this regard, there are already several reported cases regarding whether hospitals and other health care providers can require employees to have flu and tuberculosis vaccines as a condition of continuing employment. Employees have been fired for not agreeing to be vaccinated, and a body of law has developed addressing this issue. Absent a compelling reason for refusing a vaccination, the case law holds predominantly that employers can indeed require vaccinations as a term and condition of employment, and employees without a valid religious or medical reason for rejecting a vaccination can indeed be fired. In the large majority of such cases, the courts have determined that the employer has a compelling interest in maintaining the safety of their workplace and the health of those whom they serve. Such legal principles would thus seemingly support the idea that, when a vaccine is discovered for COVID-19, an employer could mandate that employees receive such inoculations, subject to having to consider the possible exemptions previously noted. In an age of a pandemic, and a virus that has killed hundreds of thousands of victims worldwide, it is hard to fathom a more serious threat to public health and an employer’s workforce and its customers that could justify a required vaccine employer directive.

Moreover, in March 2020, the Equal Employment Opportunity Commission (“EEOC”) also issued COVID-19 guidance specifically addressing the issue of whether employers covered by the Americans With Disabilities Act (“ADA”) and Title VII of the Civil Rights Act of 1964 (“Title VII”) can compel all employees to take the influenza vaccine (while noting that there was not yet a COVID-19 vaccine). In responding to this question, the EEOC stated that an employee could be entitled to an exemption from a mandatory vaccination under the ADA based on a disability that prevents the employee from taking the vaccine, which would be a reasonable accommodation that the employer would be required to grant unless it would result in undue hardship to the employer.  Under the ADA, “undue hardship” is defined as “significant difficulty or expense” incurred by the employer in providing an accommodation. The EEOC made similar mention of a possible religious obligation exception under Title VII also absent the required showing of an undue hardship.

Finally, the Occupational Health and Safety Administration (“OSHA”) similarly has declared that employers may require employees to be inoculated against the flu, provided the employer provides to its employees an explanation of the benefits of the inoculation, and further allows for an exception for those employees who reasonably believe that they are at significant risk of serious medical complications from having the vaccination.

So, as we wait for a vaccine to become available, employers should begin thinking about what they will be demanding of their employees regarding the need to receive a vaccination when it begins to be widely distributed. Should employers require vaccinations of all employees, or only those employees who are most high risk for serious complications from COVID? If an employer opts for the latter, could that approach open the door to discrimination claims from those who are older or have disabilities who are at higher risk? And, how do you handle the expected requests for religious and medical accommodations, and can you avoid such duties by arguing that accommodation would impose an undue hardship by increasing the risk of possible COVID spread in your workforce?

Employers:  Begin your analysis of these issues now because if the reports in the news are indeed true of expedited success in creating a vaccine, you will need to address those issues much sooner than you presently think.

Ralph R. Smith, 3rd is Co-Chair of the Employment and Labor Practice Group. He practices in employment litigation and preventative employment practices, including counseling employers on the creation of employment policies, non-compete and trade secret agreements, and training employers to avoid employment-related litigation. He represents both companies and individuals in related complex commercial litigation before federal states courts and administrative agencies in labor and employment cases including race, gender, age, national origin, disability and workplace harassment and discrimination matters, wage-and-hour disputes, restrictive covenants, grievances, arbitration, drug testing, and employment related contract issues.

For fans of the rock band, Lynyrd Skynyrd, forgive my modification of the lyrics to one of the band’s most iconic songs, but it perfectly captures a moment I experienced recently fielding one of the more interesting counseling questions that I received from a client this year.

The client wanted to know whether it could demand that an employee, who regularly came into work smelling bad and always in an dirty work uniform,“ clean up his act” and present to work with better hygiene because other employees were complaining about the employee’s offending body odor.  It was a great question because it got me thinking: sometimes employers forget that, in establishing job and work performance expectations, professional appearance requirements can be set as well.  Employers have every right to expect that employees will present themselves at work in a neat and clean fashion so that a desired professional image is projected to customers and other employees working in the organization.

The law allows employers to set attire and grooming rules which reflect the type of professional image that the employer wishes to project to the public, their employees, and to their potential clients.  Most (if not all) of the employee handbooks that I either prepare or review will include some type of grooming and/or attire policy, and the handbook is a great place to let employees know what the requirements will be on those issues.  So long as such rules are applied across the board, and no favoritism is shown (to some but not all) employees who violate such policies, these rules are legally valid and provide an effective way of eliminating situations where employees treat personal hygiene issues below the standards desired of the employer.

If you as an employer discover a potential violation of such a policy, it can be easily corrected by disciplining the employee simply by sending them home to correct the problem. Multiple infractions can justify harsher sanctions.

As referenced above, while an even handed application of such a policy is important, accommodations will sometimes need to be made for other legal reasons (i.e., allowing someone to grow a beard for either religious or health reasons because of skin problems associated with shaving.) Nevertheless, those situations can be addressed on a case by case basis, and should never stop an employer from implementing hygiene, grooming, and attire rules where an employer wishes to ensure that employees consistently maintain a professional image.

Accordingly, if your company does not have such policies, you should draft them now so if you are ever faced with a hygiene issue, your tool for resolution of the problem is already at your fingertips.

Hopefully, the next time you hear a reference to “That Smell,” it will be blasting out of your car radio, and not from an employee complaint about a colleague’s body odor.

Most employers are aware that they cannot discriminate against an employee on the basis of pregnancy.  But what about the mother who returns from leave after having a child and continues to breastfeed and express milk? As of January 8, 2018, those mothers are now “protected” against discrimination in the workplace under a new law which expanded the New Jersey Law Against Discrimination to prohibit any type of workplace discrimination against women who breastfeed or express milk at work.

What Does the Law Say? The new law adds breastfeeding as one of the “protected classes” under the Law Against Discrimination, which were previously limited to pregnancy, sex, marital status, race, creed, color, national origin, ancestry, age, affectional or sexual orientation, genetic information, gender identity or expression, and disability, among others.

As an Employer, What Should I Do? In the first instance, employers are cautioned not to take ANY adverse employment action against an employee who is protected under the new law. Such actions may include demotions, transfers, and terminations. Second, employers should carefully review and update their employee manuals and handbooks to ensure that they are updated to include this new “protected class” and to ensure that supervisors and co-workers do not harass or discriminate against others for breastfeeding or expressing milk. Also, employers should consider designating a “private area” as described below.

Do We Have to Provide a Separate “Expressing Area”? The law requires that employers, “as an accommodation,” provide nursing employees with a suitable room or other location with privacy, other than a toilet stall, in close proximity to the employee’s work area, so that the employee can express breast milk for the child.

Are They Entitled to Extra Break Time? The short answer is “no.”  The law does not require employers to provide nursing mothers with extra break time. Rather, employers must treat a nursing mother’s breaks the same as any other employee’s and is not required to pay the nursing mother for their breastfeeding “breaks” unless the employee was already receiving compensation for that time.

Are There Any Limits to Employers’ Obligations? In fact, there are. Like all laws dealing with workplace accommodations, the law requires that the above accommodations be made unless the employer can demonstrate that providing the accommodations would impose an “undue hardship” on the  operations of the business.

How Do Employers Determine if an Undue Hardship May Exist? This is where employers need to be very careful and consider seeking professional advice. Whether an undue hardship exists is “fact sensitive” and includes factors such as the number of employees in the business, the number and type of the employer’s facilities, the employer’s budget, type of operations, composition and structure of workforce, nature and cost of the accommodation, and whether granting the accommodation would involve the employee’s not being able to perform an essential function of her job.

What if the Accommodation Simply “Costs too Much”? Again, this is where employers should heed the advice that “forewarned is forearmed.”  This means that there are legions of court and agency decisions that suggest that while the cost of an accommodation may be a factor in determining whether an undue hardship is presented, cost alone may not be “enough” to deny the accommodation. Again, other factors, described above, should be identified, analyzed, and considered in the “formula” as to whether an undue hardship may be presented by the employer’s accommodating a request under the new law.

By now, most employers are familiar with New Jersey’s Conscientious Employee Protection Act (CEPA) found at N.J.S.A. 34:19-1 which generally protects employees engaged in “whistleblowing activities” from adverse employment actions such as termination or demotion. However, not every complaint or concern about an employer’s conduct rises to the level of whistleblowing under CEPA.  As a result, the looming threshold question in cases brought under CEPA is whether the so-called “whistleblower” reasonably believed that the employer’s conduct was violating either a law, rule, or regulation promulgated pursuant to law, or a clear mandate of public policy.

On September 26, 2017, New Jersey’s Appellate Division (in an unpublished yet informative decision rendered by Judges Yannotti and Carroll) addressed this issue in Jareer Abu-Ali v. Pinnacle Foods Group, LLC., No. A-1895-15T2 (App. Div. September 26, 2017).

The Basic Facts

Abu-Ali was the Director of Product Development for Pinnacle Foods, owner of several food brands including Vlasic Pickles and Log Cabin syrup. Over a period of time, Abu-Ali raised concerns with his supervisors about certain practices involving the company’s products, most of which he believed were violating Pinnacle’s internal standards and protocols about product ingredients and labeling. He also complained about Pinnacle’s alleged fraudulent financial projections.

After Abu-Ali engaged in conduct deemed inappropriate towards another employee, Pinnacle decided to reclassify his position as an “independent contributor” at the same level of compensation and benefits. Abu-Ali refused the reclassification and resigned when he was advised that if he refused the reclassification, he could either resign or be terminated. Abu-Ali sued, claiming that Pinnacle violated CEPA by retaliating action against him for his whistleblowing activities.

What Did the Courts Do?

After discovery was completed, the trial court granted summary judgment in favor of Pinnacle (i.e., judgment as a matter of law since there were no material facts in dispute). On September 26, 2017, Appellate Judges Yannotti and Carroll agreed with the trial court and “threw the case out” as a matter of law.

How Could This Happen When Abu-Ali Expressed Legitimate and Valid Concerns about Pinnacle’s Practices?

Most important is that the trial court and Appellate Panel agreed that while Abu-Ali may have had a reasonable belief that Pinnacle violated food and drug laws by failing to modify nutritional levels after changing the ingredients in the jars, that he failed to present sufficient evidence to show that he had a reasonable belief that Pinnacle was violating some law, rule, regulation, or clear mandate of public policy with regard to all of the other practices he complained about.

That is, in asserting virtually every complaint he made about Pinnacle’s practices, Abu-Ali simply raised “concerns” related to possible deviation from Pinnacle’s internal standards and specifications while at the same time failing to cite any rule, regulation or standard that Pinnacle allegedly violated. In rejecting his claims that he need not identify specific standards that he reasonably believed were violated, the Court soundly reaffirmed that “a plaintiff must first find and enunciate the specific terms of a statute or regulation, or the clear expression of public policy, which would be violated if the facts as alleged are true.” (Quoting N.J. Supreme Court in Dzwonar v. McDevitt).

Did Abu-Ali Really Suffer Adverse Employment Action?

This issue was “strike two” for Abu-Ali, who claimed his reclassification constituted adverse employment action. “Not so fast,” suggested the Courts, who opined that not every employment action “that makes an employee unhappy” is an adverse employment action under CEPA. Here, Abu-Ali’s grade level, compensation, and work responsibilities remained unchanged and, to make matters worse, he made clear that he would never accept the reclassified position which precluded him from establishing that he had been subject to either a constructive discharge or an adverse employment action.

So What’s the Take-a-Way Here?

Each potential CEPA claim “stands on its own.”  When an employee complains or expresses concerns about an employer’s practices, the employer should be mindful that such complaints may or may not rise to the level of a “reasonable belief” of a violation under CEPA. The recommended course of action is to consult your labor and employment counsel as soon as possible to attempt to prevent a future CEPA claim.

In the Winter of 2016, the New Jersey Appellate Division made a significant change to employment law in New Jersey when the Court held that without a clear and unambiguous waiver of the right to sue, an employee cannot be forced to arbitrate employment claims (meaning that generally, arbitration agreements found in employee handbooks cannot be enforced).  On February 6, 2017, the Appellate Division once again made a significant ruling regarding employment law and an employee’s waiver of a right to a jury trial.  Specifically, the Appellate Division held that a waiver of a right, in this case a waiver of a right to a jury trial, must be clearly and unambiguously established and there must be a mutual understanding of the terms of the waiver.  Although no specific language is required to accomplish the waiver of the jury trial, the employee must have full knowledge of his or her legal rights and an intent to surrender those rights.

The case, Noren v. Heartland Payment Systems, Inc., Docket No. A-2651-13T3 (App. Div. Feb. 6, 2017), involves Greg Noren, an employee with Heartland Payment Systems employed as a Relationship Manager from April 1998 through June 2005.  In July 2002, Noren signed an employment agreement which contained a provision waiving a right to a jury trial.  Specifically, the provision stated:

HPS and RM irrevocably waive any right to trial by jury in any suit, action or proceeding under, in connection with or to enforce this Agreement.

In January 2003, Noren signed another agreement, superseding all prior agreements.  However, this agreement contained an identical jury waiver provision and indicated that his employment was at-will.  In June 2006, Noren’s employment was terminated.  Although Noren demanded a jury trial, the demand was denied by the trial court as a result of the jury waiver provision.

In evaluating the jury waiver provision of the agreement, the Appellate Division noted that a person’s right to a trial by jury is guaranteed by the New Jersey Constitution and in the case of a CEPA claim (as well as other statutory claims such as claims under the New Jersey Law Against Discrimination), explicitly established by statute.  Therefore, the Appellate Division was required to determine whether the jury waiver provision was a “legally enforceable waiver of this constitutionally and statutorily guaranteed right. . . .”

The Court explained that when a contract contains a provision waiving a right, the waiver must be “clearly and unmistakably established.”  The Court went on to explain that a waiver “must reflect that [the party] has agreed clearly and unambiguously to its terms,” and that there cannot be a clear and unambiguous waiver “without a ‘mutual understanding’ of the terms of the waiver.”  A person waiving his or her rights must clearly understand his or her legal rights and must have a clear and unambiguous intent to give up those rights.

As was noted above, the Court indicated that there is no specific or required language for a waiver of rights provision.  However, the Court did explain that even though a specific statutory or constitutional right does not need to be identified in the waiver, the provision must still contain clear and plain language that is understandable to the average person that a statutory and/or constitutional right is being waived.  The Court stated:

In short, to effect a waiver, the language must clearly explain (1) what right is being surrendered and (2) the nature of the claims covered by the waiver.

The Court held that in the Noren case, the jury waiver provision did not identify or reference a waiver of a right to a jury trial in regard to statutory claims and did not extend the scope of claims as including all claims relating to the employee’s employment.  As a result, the jury waiver provision contained in Noren’s agreement failed to “clearly and unambiguously explain that the right to a jury trial” included a waiver of a jury trial as to a CEPA claim.  The Appellate Division remanded the case back to the trial court for a jury trial.

What does this case mean for you as an employer?  This means that any employee waiver (not just a waiver of a jury trial) of a constitutional or statutory right must be clear and unambiguous and must reflect that the employee has agreed clearly and unambiguously agreed to the terms of the waiver.  The waiver must be written in plain language that an average person can understand.  If you have employee contracts or employee manuals that contain waivers of constitutional and/or statutory rights, now is an appropriate time to undergo a review of those provisions to bring them into compliance with New Jersey law.