Walmart Takes a Seat in California

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Walmart reportedly agreed to pay $65 million to settle a case brought on behalf of nearly 100,000 current and former California cashiers who claimed the company violated their rights under a state law dating back to 1911 when it failed to provide them with seating.  The workers claimed Walmart, which denied any wrongdoing, breached its duty to make seating available “when the nature of the work reasonably permits.”

Walmart claimed that the nature of the cashier job did not reasonably permit seating, because placing stools or chairs at the store’s cash registers would pose a safety risk and hinder productivity. However, Walmart had a policy of offering stools to cashiers with medical conditions or disabilities, and store managers had the discretion to provide stools to cashiers on a case-by-case basis.

In a court filing, Walmart and counsel for the cashiers said the settlement, if approved, would be the largest ever under California’s unique Private Attorney General Act, which allows workers to sue their employers on behalf of the state and keep a portion of any award.

Curiously, other major retailers in California faced similar lawsuits, but Walmart did not act proactively to address this issue.  Even putting aside the anticipated benefit of improved employee relations resulting from voluntary compliance, with the benefit of hindsight, one has to wonder if the cost of compliance, even if it were to result in reduced productivity, would have been less than the cost to settle.

Savvy employer takeaways: Employers need to look carefully at their duty to offer reasonable accommodations to employees and to engage in an interactive process to make sure that the employer can justify any denied accommodation.

Questions? Let me know.

What New Jersey’s New Law On Employment Contracts Means for Employers: Are Non-Disclosure and Arbitration Provisions Out?

Law should know concept, The lawyer explained to the client to plan the case in court.

On March 18, 2019, New Jersey Governor Phil Murphy signed a new law, which, among other things, bars employers from requiring employees to sign or enforcing employment contracts that require employees to agree to waive certain rights or remedies and bars agreements that conceal details relating to discrimination claims.

Here’s what employers need to know:

  • Any provision in an employment contract that waives or limits any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment will now be deemed against public policy and unenforceable;
  • No right or remedy under New Jersey’s “Law Against Discrimination,” or “any other statute or case law” shall be prospectively waived;
  • A provision in any employment contract or agreement that has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment shall be deemed against public policy and unenforceable;
  • For unionized work forces, this law does not restrict agreements to waive rights contained in collective bargaining agreements, but it does extend its prohibition to clauses designed to conceal details of a discrimination claim from unionized employees;
  • Attempting to enforce an agreement that is unenforceable under this law will give employees a private right of action to sue in court and the right to recover their attorney’s fees and costs of suit if they prevail;
  • The law protects employees from retaliation for refusing to enter into an agreement that violates their rights under this new law;
  • The law does not restrict an employer’s right to impose and enforce restrictions on the use of the employer’s confidential and proprietary information other than with respect to the details of discrimination claims;
  • The law does not expressly prohibit confidentiality provisions in settlement agreements meant to prevent disclosure of the amount of a settlement;
  • The law does not require disclosure; rather it leaves the choice in the hands of the individuals involved; and
  • The law took effect immediately and applies to all new contracts and agreements and existing contracts that are renewed, modified, or amended going forward.

Although the law is aimed primarily at prospective waivers of rights and clauses concealing the details of discrimination claims, the full scope of this law’s applicability will become clear only after it has been interpreted by the courts.  For example, one of the most significant open questions is whether New Jersey courts will deem mandatory arbitration provisions in employment agreements unenforceable as to discrimination claims and, if they do, whether the Federal Arbitration Act will, in turn, be deemed to preempt such a limitation on the enforcement of arbitration clauses.  Another important question is whether courts will construe this law to bar confidentiality provisions in settlement agreements that restrict employees from disclosing the terms of the settlement.

As we wait for the courts to resolve these and other open questions, employers should proceed thoughtfully when seeking confidentiality in connection with a claim of discrimination.  A precisely drafted confidentiality agreement or policy might be desirable in some situations, such as to preserve the integrity of an ongoing investigation, but employers need to be mindful of this law and understand the limitations and potential consequences of requiring confidentiality and/or taking disciplinary action when confidentiality is breached.  Employers relying on mandatory arbitration provisions should also consider the impact of this law and consult their counsel in evaluating whether to exclude discrimination claims from arbitration.

If you have any questions about this legal alert or if you run across a related issue in your workplace, please feel free to contact Adam Gersh or any other member of Flaster Greenberg’s Labor & Employment Department.

New Jersey Expands Paid Family Leave: Action Items for New Jersey Employers

wheelchair silhouetteEarlier this year, New Jersey Governor Phil Murphy signed into law a bill providing for an expansion of the New Jersey Family Leave Act (“NJFLA”) in important ways.  Prior to this bill, the NJFLA required employers with 50 or more employees to provide employees up to 6 weeks of consecutive paid leave, or 42 days of intermittent leave in any 12-month period, to care for a sick family member.

This new bill expands those protections to cover smaller employers and to extend the amount of leave, among other things.  Some of the bill’s most notable changes include:

  • As of June 30, 2019, employers with 30 or more employees will be subject to the NJFLA’s leave requirements;
  • For leave commencing on or after July 1, 2020, employees are permitted up to 12 weeks of consecutive leave (instead of 6), or 56 days of intermittent leave over a 12-month period;
  • The definition of an applicable “family member” now includes not only children, parents and spouses, but also parents-in-law, siblings, grandparents, grandchildren, domestic partners, any individual related to the employee by blood, or even any individual who shares a relationship with the employee that is equivalent to a family relationship, including foster children and children who are born via a gestational carrier;
  • Employees may also now take leave under the New Jersey Security and Financial Empowerment Act to care for any family member (as defined above) in the event of a domestic violence or sexually violent incident; and
  • Employees can now receive 85% of their weekly wage from the State’s Family Leave Insurance program, with the maximum possible benefit increasing to 70% of New Jersey’s average weekly wage, meaning, based on current calculations, the maximum weekly benefit would increase from $650 to $860.

What does this mean for employers? 

The bill’s expansion of who is covered under the NJFLA, the amount of leave required, and the increase in available compensation through the State’s Family Leave Insurance program presents new and unique challenges for employers.  For the very first time, the bill requires employers with between 30 and 49 employees to provide its employees with paid leave to care for a sick family member.  This can have dramatic consequences on the benefits provided by those employers to their employees.  Even for employers already subject to the NJFLA, the bill increases, and in some cases doubles, the paid leave they are required to provide to their employees.  Moreover, employees will be more likely to take full leave since the increase in benefits eases the financial burden of doing so.  Covered employers must now prepare for employees to take longer absences in the face of sudden and/or planned health conditions, pregnancies/births, adoptions, and even the placement of children into foster care. 

Next steps for employers? 

Given this information, below are three action items New Jersey employers should take into consideration when preparing to their workplace for the implementation of this expansion of the NJFLA 

1. Review your employee handbook and modify certain policies

The employee handbook is frequently the most basic protection an employer has to ensure compliance with employment laws.  Most employee handbooks provide for employees to take leave to care for themselves and/or a sick family member.  An employer may open itself up to liability under the NJFLA if its handbook conflicts with the Act’s minimum requirements.  In most cases, a simple update of the employee handbook can help employers become compliant with the NJFLA’s new requirements and avoid liability for failing to provide sufficient paid leave.  Many employers will also want to ensure employees are using their paid leave concurrently to minimize any disruption.

2. Provide training to managers and supervisors to ensure compliance with the NJFLA

As managers and supervisors are typically directly responsible for granting employees leave and accounting for subsequent absences, it is critical that managers and supervisors be familiar with the NJFLA’s requirements.  The best way to ensure such familiarity is to train managers so that they understand and carry out the company’s policies concerning paid leave, as well as the NJFLA’s requirements.

3. Documentation

Thorough and precise documentation will help support any decision to deny an employee’s request for leave to care for a sick family member that is later challenged.  Document every decision granting or denying any employee’s request for paid leave, as this will help demonstrate uniformity in the employer’s decision-making.  Further, the NJFLA permits employers to request written proof of covered occurrences, such as medical notes from an employee’s family member’s doctors.  Employers should not hesitate to exercise this right under the NJFLA, and should adopt policies urging managers to do so. 

If you have any questions about this legal alert or if you run across a paid family or sick leave issue in your workplace, please feel free to contact Adam GershJeremy Cole, or any other member of Flaster Greenberg’s Labor & Employment Department.

U.S. Dept. of Labor Makes Its Move

Employment attorney adam gersh

As long-time readers of this blog may recall, since 2015, the U.S. Department of Labor  has been trying to update its Fair Labor Standards Act  regulations to qualify more employees for overtime pay. For basic exemptions, meaning those that are not industry-dependent such as the administrative, executive and professional exemptions, employers may generally classify as exempt from overtime pay only employees who meet both a duties test and a salary test.  Since 2004, federal law allowed employers to designate salaried workers who earn at least $455/week (the equivalent of $23,660/year) and meet certain “white collar exemption” duties-test requirements as exempt from overtime.  This month, the DOL issued a proposed rule to increase that salary exemption to $679/week (equivalent to $35,308/year).  If adopted, salaried employees who meet an applicable duties test and earn more than $455/week but less than $679/week will no longer be exempt from overtime under the basic exemptions.  Importantly, the DOL proposed rule will allow employers to use nondiscretionary bonuses (for example incentive bonuses tied to productivity or profitability) and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the salary test.  The DOL is also proposing to increase the exemption that applies to highly compensated employees.  Currently, salaried employees who earn at least $100,000/year in salary are exempt from overtime regardless of whether they satisfy the applicable duties test.  Under the proposed rule, the highly compensated employee salary threshold will increase to $147,414/year, meaning employees paid less than that threshold amount will be subject to a duties test or other exemption.  The proposed rule does not seek a change to any of the duties tests for the basic exemptions.

Savvy employer takeaways: Employers need to evaluate their payroll to identify salaried employees who meet the applicable duties test but may no longer be exempt and assess whether increasing the employee’s salary or making the employee overtime eligible makes more sense.  Employers also need to consider applicable state law, which may be more restrictive than the exemptions permitted under the FLSA.

Questions? Let me know.

The New Paid Sick Leave Law in New Jersey & Other Hot Topics Employers Need to Know

AEG.JSC Sick Leave Law Seminar - LinkedIn 1200x627

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On October 29th, New Jersey’s new paid sick leave law goes into effect requiring nearly all private-sector businesses to provide employees with paid sick time, regardless of the size of the business or the number of hours an employee works. Are you in compliance? Most businesses are not and will need to adopt new policies.

Get a head start on this and join me and my colleague on Thursday, October 18th for a seminar analyzing and discussing the impact of the new sick leave law changes and what it means for NJ employers.

Other hot topics in employment law will include:

  • Medical marijuana in the workplace
  • New Jersey’s Equal Pay Act
  • Update on disability and mental health in New Jersey
  • Wage & hour laws and the pitfalls of an independent contractor

Speakers:

  • Adam E. Gersh, Labor & Employment Shareholder, Flaster Greenberg PC
  • Jeremy Cole, Labor & Employment Attorney, Flaster Greenberg PC

Date & Time:

Thursday, October 18, 2018
Registration and Networking:  8:00 – 8:30 a.m.
Seminar and Q&A: 8:30 – 9:30 a.m.

Location:

Flaster Greenberg PC’s Cherry Hill Office
1810 Chapel Ave West
Cherry Hill, NJ 08002

Credits:

Attorneys: 1 substantive PA CLE credit (NJ reciprocal)
Accountants: 1 PA & NJ CPE credit
Human Resource Professionals: 1 HRCI credit

Facebook Live:

Not able to make it in person? You’ll still be able to attend the presentation via Facebook Live! Tune into FG’s Facebook Page on October 18th at 8:30 a.m. to hear from our panelists as they navigate through the new law and help you identify the strategy that best suits your business.

*Please note that attendees must be present in-person to be eligible for Pennsylvania and New Jersey CPE, HRCI and substantive Pennsylvania CLE credit.

Employment Law Myth Busters – The “Unenforceable” Non-Compete

Man is signing Non compete agreementNon-compete and other restrictive covenants are commonly used by employers in many industries to protect their trade secrets and legitimate business interests.  While employees may be willing to sign them when they take a new position, they are often frustrated by them when it comes time to look for a new job. Some employees take to Google to see if their agreement is enforceable.  What they find on Google often provides them with false confidence that their non-compete or other restrictive covenant is unenforceable, but relying on Google research in the complicated, fact-sensitive legal morass of non-compete agreements is risky business.  True, a Google search can turn up numerous court opinions that express the view that non-competes are viewed unfavorably by courts as anti-competitive restraints on trade and, as such, are narrowly construed and enforced only to the extent that they protect a legitimate business interest of an employer.  However, those cases may or may not be useful in deciding whether your restrictive covenant is likely to be enforced. First, the law governing non-competition agreements varies from state to state. Thus, an opinion by a court in California applying California law (which bars enforcement of restrictive covenants except under specific, narrow circumstances), for example, is of little help in assessing whether a court in New Jersey or Pennsylvania, where non-competes are routinely enforced, is likely to enforce a restrictive covenant under that state’s laws. Making the analysis even more complicated, courts decide whether to enforce restrictive covenants based upon a thorough review of the specific language used in the agreement; even slight variations in the language of the agreement can lead to vastly different results. In addition, because they are viewed as anti-competitive, a court will generally enforce one only if it is well drafted so that its restrictions narrowly target the business interests at issue and nothing more.  The finer points of enforcing restrictive covenants, such as non-competes, are too detailed to address here, but employees with employment agreements that contain restrictive covenants and businesses that are hiring employees subject to them should not rely on Google to assess their enforceability or their liability for a breach.

Savvy employer takeaways: Employers should have an experienced employment lawyer evaluate the enforceability of their employees’ post-employment restrictions and the enforceability of post-employment restrictions by which prospective employees may be bound.  Employers should also require candidates to disclose whether they are subject to any restrictive covenants before offering them employment. 

Questions? Let me know.

Fast Food Chain Turns $626 Loss Into Nearly $8 Million

Chipotle Mexican Grill

When Chipotle Mexican Grill Inc. fired store manager Jeanette Ortiz, accusing her of stealing $626 in cash from the safe, it could never have expected its minimal theft loss to balloon into a nearly $8 million jury verdict against if for wrongful termination of Ortiz. Even worse, an assessment of potential punitive damages against Chipotle in that case is still pending.  Nevertheless, according to an article in the Fresno Bee, jurors awarded Ortiz nearly $8 million after finding that Chipotle had wrongfully terminated her.  According to Ortiz, she was innocent of theft and was set up in retaliation for filing a claim for workers’ compensation benefits due to a work-related wrist injury.  The article reported Chipotle had video of the theft but refused to show it to Ortiz and eventually taped over the evidence.  Apparently, Chipotle failed to preserve text messages and other written notes about the firing as well. Although the article does not elaborate, it is quite likely the jury reached an adverse inference that the missing evidence would have been helpful to Ortiz in proving her case.

Savvy employer takeaways: While it is impossible to know for sure how much weight the missing evidence had on the jury’s decision, employers are wise to preserve all evidence relating to employee misconduct to avoid even an appearance of wrongdoing. As in politics, although the original offense is bad enough, the ensuing cover-up is always worse.

Questions? Let me know.

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