Tag Archives: adam gersh

Supreme Court Rules Discrimination Against LGBTQ Employees Is Discrimination On The Basis Of Sex

In a landmark decision in Bostock v. Clayton County, the Supreme Court of the United States ruled discrimination against LGBTQ employees violates Title VII of the Civil Rights Act of 1964. The 6-3 ruling is significant in that it did not rely on technical grounds, but rather on the legal analysis that disparate treatment of employees based on sexual orientation or gender identity is, by definition, discrimination based on sex. This decision upended what had been settled law until, at least, 2010, which generally held that Title VII’s protections do not extend to discrimination based on sexual orientation or gender identity.

Starting in 2011, the U.S. Equal Employment Opportunity Commission (EEOC), which is responsible for enforcing Title VII, interpreted Title VII to prohibit discrimination against LGBTQ employees, however, many courts did not agree. Eventually, the U.S. Department of Justice under the current administration took the opposite position of the EEOC, creating conflicting interpretations within the executive branch. Indeed, as the Court noted in Bostock, U.S. Congress has repeatedly tried to amend Title VII to expressly prohibit discrimination based on sexual orientation and gender identity to resolve the conflict between these varying interpretations. There is no doubt that this decision is historic and will have the most immediate impact on employers in states where LGBTQ employees are not already protected by state laws or where state laws only provided weak protections. Title VII applies to both the private and public employers with 15 or more employees and to the federal government, employment agencies, and labor organizations.

Although the Supreme Court limited its decision to Title VII, since the decision is rooted in an analysis of the meaning of protections from discrimination “based on sex,” we can expect it will form the basis for future courts to apply greater protections under other federal and state laws outside of Title VII that prohibit sex-based discrimination but were not previously interpreted to protect against discrimination based on sexual orientation or gender identity. The message to businesses is clear: Title VII does not condone discrimination based on sexual orientation or gender identity and that is also likely true of an array of other anti-discrimination laws.

Questions? Let me know.

What Employers Can Learn From Early COVID-19 Employee Lawsuits

Business solutions, success and strategy conceptJust as businesses are beginning to face the initial wave of COVID-19 impacts, lawyers are seeing the first wave of employee lawsuits.  It is premature to even call these the tip of the iceberg, but the lessons from these early cases can prove meaningful and help businesses mitigate risk.

Ordinarily, workplace injuries and illnesses are handled through each state’s workers’ compensation system, but most states have exceptions that allow employees to bring a direct lawsuit for pain and suffering damages if certain conditions are met.  The standards to bring such claims vary state-by-state, but, generally, an employee must show the employer engaged in something more than ordinary negligent conduct (often gross negligence), such as removing a safety guard from machinery.  Certain states allow employees to bring direct claims if the injury occurred under circumstances where an employer knew or should have known with substantial certainty that the injury would occur and those circumstances deviated from standard industry practice.  These claims, especially if there are other similarly injured employees, create significant risk for businesses and may not be covered by insurance.

As it relates to injuries from COVID-19, we are seeing employees claim that they contracted the virus in their workplace because their employers failed to take necessary, industry-standard precautions under circumstances in which injury was substantially certain.  It remains to be seen whether employees will be able to show their COVID-19 complications were workplace injuries and how courts will delineate what employer lapses extend beyond ordinary negligence, but there are important lessons from these early cases that may help businesses limit risk.

In one recent example, the estate of a former Walmart employee brought an action against the retailer in Illinois state court after the employee died from COVID-19 complications.  In the suit, the estate alleges Walmart knew or should have known COVID-19 was present and active in the store, but failed to protect its workers in accordance with industry standards.  According to the employee’s estate, management knew several workers and individuals had symptoms of COVID-19, however, it did not (i) cleanse and sterilize the store in order to prevent COVID-19 infection; (ii) implement, promote and enforce social distancing guidelines promulgated by governmental entities; (iii) provide the employee and other workers with personal protective equipment such as masks, latex gloves, and other devices designed to prevent COVID-19 infection; (iv) warn the employee and other workers that various individuals were experiencing symptoms at the store and may have been infected by the coronavirus; (v) address other workers at the store who communicated to management that they were experiencing COVID-19 signs and symptoms; (vi) follow COVID-19 guidelines issued by OSHA and the CDC, including providing employees with antibacterial soaps and wipes and other cleaning agents; and (vii) implement policies and procedures to promptly identify and isolate sick people as also recommended by the CDC.

Of course, at this stage these are only allegations and we do not have the benefit of Walmart’s response, but the allegations are instructive as they are guideposts to the kind of conduct that may give rise to liability. Paying attention to them will allow employers to implement policies and procedures that will protect employees and mitigate the risk of claims that the employer’s conduct is sufficient to support a claim that seeks recovery beyond that available under through the workers’ compensation system.

Savvy employer’s takeaway: While it presents a unique challenge for employers to meet new and changing guidelines for maintaining operations, it is vital that employers stay abreast of all current federal, state, and local guidance, including guidance from the CDC and OSHA, and maintain and enforce policies consistent with that guidance. 

The attorneys at Flaster Greenberg are following developments related to the COVID-19 Pandemic and formed a response team and to work with businesses to keep them up-to-date on developments that impact their business.  For more information on what employers can do to comply with the changing law and manage risk, we invite you to contact Adam Gersh, or any member of Flaster Greenberg’s Labor and Employment Practice Group.

An Employer’s Guide to the COVID-19 Coronavirus Outbreak & FAQs

Coronavirus Virus Outbreak

This is an unprecedented time and employers face an evolving crisis and fast-moving changes to laws.  The team at Flaster Greenberg is prepared to help guide employers on compliance with existing and new laws, as well as best practices.  This is a summary of the most important things employers should keep in mind when it comes to adjusting policies to address this crisis.

On March 14, 2020, the U.S. House of Representatives passed the Families First Coronavirus Response Act, which, among other things, expands paid leave and Family Medical Leave Act (FMLA) benefits.  It also offers tax credits to help offset the burdens imposed by the expanded leave.  While this is not yet law, employers should account for its implications in formulating their workplace response.

Emergency Paid Leave and FMLA Expansion

The Act has provisions relating to nutrition, public health, insurance, and more, but the most relevant proposed changes for the workplace require employers with fewer than 500 employees to offer paid leave and expands FMLA rights for employees of those businesses.  Perhaps the most significant of the changes reflected in the Act is that they require covered employers to provide additional paid leave for parents if their child’s school is closed due to the coronavirus.

In summary, for employers with fewer than 500 employees, the paid leave provisions of the Act:

  • Require covered employers to provide each full-time employee with paid sick leave to:
    • Isolate because the employee has been diagnosed with coronavirus;
    • Obtain a diagnosis or care if the employee is suffering from symptoms of coronavirus;
    • Comply with recommendations of a public official or healthcare provider on the basis that employee’s presence at work will jeopardize the health of others due to exposure to coronavirus or exhibition of symptoms of coronavirus;
    • Care for a family member who is isolating because of a diagnosis, seeking care or diagnosis for symptoms, and/or must isolate to comply with recommendations of a public official or healthcare provider on the basis that family member’s presence in the community will jeopardize the health of others due to exposure to coronavirus or exhibition of symptoms of coronavirus;
    • Care for a child if his/her school has been closed or childcare is unavailable due to coronavirus;
  • Offer up to an additional 80 hours of paid sick leave for fulltime employees and two-weeks’ for part-time employees based on hours normally worked;
  • Prohibit an employer from applying sick leave or other paid time off otherwise available to meet this requirement;
  • Protect employees from being required to find a replacement co-worker to cover time the employee will miss;
  • Protect employees from discrimination and retaliation; and
  • Allow an employer to pay two-thirds of an employee’s compensation rate if the basis for the leave is to care for a child or family member (but not the illness of the employee).

In concert with the paid leave provisions of the Act, the FMLA expansion:

  • Applies the leave requirement to all employers with fewer than 500 employees, not just those with 50 or more employees, which has been the threshold for FMLA;
  • Exempts smaller employers with fewer than 50 employees only if complying “jeopardizes the viability of the business as a going concern”;
  • Allows coronavirus leave to be deemed FMLA, job-protected leave if taken at any time though December 31, 2020;
  • Makes emergency FMLA leave available to employees who have been employed for at least 30 calendar days, as opposed to the 12 months ordinarily required for FMLA leave;
  • Expands the definition of “parent” to include stepparents and others who act in loco parentis;
  • Expands the reasons employees may take FMLA leave to include:
    • To comply with a recommendation or order by a public official or healthcare provider on the basis that (i) the physical presence of the employee on the job would jeopardize the health of others because of the exposure of the employee to coronavirus or because the employee exhibits symptoms of the coronavirus; or (ii) the employee is unable to both perform the functions of the position of such employee and comply with such recommendation or order;
    • To care for a family member if a public official or healthcare provider recommended that the presence of the family member in the community would jeopardize the health of other individuals in the community; and
    • To care for a child under 18 years of age because the child’s school is closed;
  • Prohibits an employer from requiring an employee to use paid leave as part of FMLA leave, though the employee may opt to do so;
  • Requires an employer to provide paid leave after the first 14 days (which may be covered by the emergency leave law above), provided, however, such leave may be paid at no less than two-thirds of the employee’s pay; and
  • Provides certain exemptions for the requirement to restore an employee to his/her former position for employers with 25 or fewer employees.

Available Tax Credits for Employers and Self-Employed Individuals

To help offset the burdens of compliance, the bill offers certain payroll tax credits to those employers who must pay wages to employees pursuant to the expanded paid leave and FMLA benefits under the Act.  However, these tax credits under the Act will not be available to employers already receiving a credit for paying FMLA amounts pursuant to the Tax Cuts and Jobs Act of 2017 (Public Law 115-97).

In general, employee wages are subject to a total 12.4% Social Security payroll tax, which is paid equally by employers and employees.  Under the Act, employers will receive certain refundable tax credits through December 31, 2020 to offset the portion of the Social Security tax that they are required to pay. The refundable tax credits will be provided for Social Security taxes otherwise imposed on:

  • Qualified sick leave wages of up to $511 per day paid to employees who are on sick leave to care for themselves, or if the employee is on qualified sick leave to care for a family member or child if  the child’s school is closed, then the employer will receive tax credit for Social Security tax imposed on qualified sick leave wages of up to $200 per day. Qualified sick leave pay under the Act is limited to the excess of 10 days over the aggregate number of days taken into account for all preceding calendar quarters.
  • Qualified FMLA wages of up to $200 per day (capped at a total of $10,000 for the same employee for all calendar quarters) paid to employees who are on qualified FMLA leave.

Refundable tax credits will also similarly be available to self-employed individuals who receive “qualified sick leave equivalent pay” or “qualified FMLA equivalent pay”.  Specifically, the self-employed pay tax credits will be provided for income tax assessed on:

  • 100% of an eligible self-employed individual’s pay that constitutes “qualified sick-leave equivalent pay”, or 67% of the same if the individual is taking care of a family member or a child following the child’s school closing.  For these purposes “qualified sick-leave equivalent pay” is pay that equals the lesser of the individual’s average daily self-employment income, or $511 per day if the sick leave is for the care of the self-employed individual.  The $511 limit is reduced to $200 per day if “qualified sick-leave equivalent pay” is being paid to care for a sick family member or child following a school closing.  It would be available for 10 days over the number of days taken into account in preceding years.
  • 100% of an eligible self-employed individual’s pay that constitutes “qualified FMLA equivalent pay”.  An “eligible” self-employed individual for these purposes is an individual that would be entitled to receive paid leave under the Act if he was an employee of an employer.  “Qualified FMLA equivalent pay” may only be paid for up to as many as 50 days, and may equal the lesser of $200 per day or the individual’s average daily self-employment income for the taxable year.

Technical corrections and future guidance are expected to clarify and how long these tax credits may be available to small employers and self-employed individuals.

These refundable tax credits will reduce taxes owed by employers and self-employed individuals dollar-for-dollar .  Additionally, as a “refundable” tax credit, an employer or self-employed individual will receive the full-amount of the tax credit even if the credit exceeds the employer’s entire tax bill. Therefore, employers and individuals will continue to withhold applicable taxes in the same manner as taxes are withheld for wages for qualified sick leave and qualified FMLA leave, but expect to benefit from the tax credits when they complete applicable quarterly and/or annual tax returns.

While the Act is important because it imposes new and unfamiliar obligations on employers, existing laws also provide rights and are significant to navigating the impact of this pandemic on the workplace.  To better understand how all of these laws fit together, we compiled the following answers to frequently asked questions.  Employers should understand that this situation and the law are changing in ways we cannot necessarily anticipate.  Employers should consult with counsel to review and discuss how they respond to these issues.

Q&A

Q:    I have an employee who has tested positive for coronavirus or is exhibiting potential symptoms, what do I do?

A:    Send that employee home.  You have the right to send such an employee home even involuntarily.  Under the Act, if passed, such employees would be entitled to an additional two weeks of paid leave (in addition to any other vacation, sick time, or other paid time off otherwise available) and FMLA job-protected leave.

Q:    I have an employee who has been in close contact with an exposed individual or is otherwise in a high risk situation, may I prevent the employee from working or coming to the office?

A:    Yes.  If the employee is not working remotely, he or she  will be eligible for paid leave.

Q:    May I require employees to work remotely?

A:    Yes.  Employees may be required to work remotely, however, they should be provided with necessary tools to work remotely if they do not otherwise have them and if the tools are required for work; e.g., computers, printers, etc.  Employers should keep in mind, if they require a non-exempt employee (i.e., an employee who is entitled to overtime pay) to work from home, they may not require the non-exempt employee to pay for business expenses, where doing so reduces the non-exempt employee’s earnings below the required minimum wage or overtime compensation.  This provision would only apply to the additional cost of working from home.

Q:    May I require an employee use paid time off if he or she is quarantined?

A:    Ordinarily, an employer could impose such a requirement, however, under the Act, an employee must be permitted to use mandated leave first if applicable.

Q:    May I prohibit employees from using accrued paid time off if they are quarantined?

A:    If your employees work in New Jersey, the New Jersey Earned Sick Leave law permits use of statutorily-required sick leave (up to 40 hours) for public health emergencies if their workplace or child’s school or day care is closed or a public health authority determines the need for a quarantine.  Employees can also use this time to care for themselves or a family member who is ill.

Q:    Are advancing vacation time and exempting coronavirus-related absences an option to ease the burden on my workforce?

A:    Yes.  Employers can be more flexible with leave, however, employers should consider putting appropriate safeguards into place, such as requiring employees to repay advanced leave payments if they voluntarily leave employment within a set period of time.

Q:    If we close temporarily, do we have to pay employees?

A:    It depends.  You are required to pay non-exempt/hourly employees only for hours worked. This means, if you close your business temporarily due to coronavirus issues, you are not required to pay non-exempt/hourly employees, provided, however, you do give them required paid leave. However, employers also must account for applicable state wage and hour laws.  Salaried, exempt employees, must be paid for any work week in which they perform service.

Q:    If my employees cannot work a full schedule due to office closings, do I still have to pay them?

A:    For exempt, salaried employees, if they work at all during a week, they must be paid their pro-rated salary for that week.  For hourly employees, you need only pay them for hours worked.  Of course, all leave benefits, including those available under the Act, if it passes, apply, so paid leave may be available even if an office is closed.  In addition, an employer’s policies, procedures, or collective bargaining agreements may impose additional obligations.

Q:    My employees are scared to come to work, can I discipline them?

A:    It depends.  Employees who have disabilities should be given reasonable accommodations.  This means employees whose anxiety or other conditions are triggered by the coronavirus pandemic are due reasonable accommodations.  Additionally, the National Labor Relations Act protects nonsupervisory employees, whether they are unionized or not, who refuse to work in conditions they reasonably and objectively believe to be unsafe.  Likewise, OSHA protects employees who refuse to work in conditions they deem to be an imminent danger.

Q:    Is an employer liable if it requires employees to come to work?

A:    It could be.  As noted above, the National Labor Relations Act protects nonsupervisory employees, whether they are unionized or not, who refuse to work in conditions they reasonably and objectively believe to be unsafe.  OSHA also protects employees, both supervisory and non-supervisory, who refuse to work in conditions they deem to be an imminent danger.

Q:    Should we close our offices?

A:    Employers, absent those under governmental order to do so, are not required to close their offices.  If it is feasible, employers should do everything they can to permit remote work and limit visitors to the office and avoid large scale meetings.  This is an evolving situation and employers should follow the advice of public health officials.

Q:    Someone in my office tested positive for coronavirus, can we tell the other employees?

A:    Employers should inform employees of their risk of exposure but, if possible, should not disclose the name or any protected health information of the individual(s) infected.

Questions? Let me know.

Supreme Court of NJ Affirms Employee May State A Claim for Reasonable Accommodation for Medical Cannabis Use

medical marijuana

You may recall, in 2019, this blog post reported New Jersey’s Appellate Division joined courts that found an employee may be able to state a disability discrimination claim against an employer who takes an adverse employment action due to the employee’s use of medical cannabis.  That case, Wild v. Carriage Funeral Holdings, Inc., was one in a spate of recent decisions as courts in New Jersey and other states that allow medical use of cannabis have grappled with reconciling laws protecting employees from disability discrimination, employers’ rights to maintain workplaces free of drug use, and federal statutes outlawing cannabis use for any reason. Early decisions in these cases came down in favor of employers, permitting employers to discipline, terminate, or refuse to hire employees who use medical cannabis, even without evidence of use or impairment in the workplace.

New Jersey’s Appellate Division’s Wild ruling changed course when it held an employee may state a disability discrimination claim for failure to accommodate against an employer who takes an adverse employment action due to the employee’s use of medical cannabis.  Now, on March 10, 2020, the Supreme Court of New Jersey affirmed the decision, ruling an employer can potentially be liable under New Jersey’s Law Against Discrimination (“LAD”) for failing to accommodate an employee’s use of medical cannabis outside of the workplace.

What Happened?  In 2015, the employee, a funeral director, was prescribed and used medical cannabis as authorized by New Jersey’s Compassionate Use Act. In 2016, the employee was in an auto accident while working. The employee advised hospital staff he was authorized to use medical cannabis. The treating doctor responded that “it was clear [the employee] was not under the influence of cannabis [and, thus, his cannabis use was not a cause of the accident], and therefore no blood tests were required.”

While the employee recuperated, the employer advised that a blood test was required before the employee could return to work. The employee went to a facility to take a urine and breathalyzer test; however, the results were not provided to the employer and were not part of the case record.

The employee eventually returned to work, but, his supervisor advised him that his employment was “being terminated because they found drugs in your system”, though no test results had been provided to the employer. In a subsequent letter, the company told the employee it had terminated him not because of his drug use, but because he failed to disclose his use of medication contrary to company policy. The employee brought an action alleging he had been a victim of disability discrimination.

What did the Courts decide?  The trial court dismissed the employee’s claims, finding that New Jersey’s Compassionate Use Act “does not contain employment-related protections for licensed users of medical cannabis.” The employee appealed.

On appeal, a three-judge panel of New Jersey’s Appellate Division reversed the dismissal. The Appellate Division cannabis found that the LAD might require such an accommodation. Although the Compassionate Use Act does not make illegal an employer’s adverse action against an employee for medical cannabis use, by the same token, the Appellate Division stated it does not immunize an employer’s conduct that might otherwise have been a violation of the LAD.  In affirming the decision, the Supreme Court held an employee may state a failure to accommodate claim under the LAD against an employer who takes an adverse action against the employee for use of cannabis outside of work when that use is otherwise compliant with the Compassionate Use Act.

What do employers need to know?  It is important to understand neither the Appellate Division nor the Supreme Court ruled this employee was a victim of disability discrimination. In fact, the Appellate Division expressly recognized that the case was at the earliest stages, and the employer had pled potentially valid defenses.  The Court ruled only that the case could not be dismissed on its face.

New Jersey employers need to be mindful that they no longer have a free pass to take adverse employment actions against employees and candidates solely because they use medical cannabis outside of the workplace.  It is important to note, the courts in New Jersey have not suggested an employer must accommodate impairment due to medical cannabis use, so employers should remain vigilant about addressing employee impairment issues.  The law as to when an accommodation is reasonable is still developing.  For instance, a requested accommodation that may make an employer ineligible to bid on certain projects or that conflicts with established safety laws and regulations will be subject to greater scrutiny than a requested accommodation that does not impose added burdens on the employer.

In other words, stay tuned, because we have certainly not heard the last word on this topic.

Questions? Let me know.

 

Going Gaga Over Gag Orders

Letterboard with acronym NDA for "non disclosure agreement"

In the era of #MeToo, the gag order (legally speaking, non-disclosures or confidentiality clauses) has come under attack as a tool that silences victims and is responsible for compounding the damage to victims by keeping them from telling their stories. This issue took center stage in a recent Democratic Primary debate when Michael Bloomberg was chastised about confidentiality orders his employees signed and pressured by the other candidates to release these employees.

The victim oppression concern is a valid one with an intuitive appeal.  Why should victims be silenced?  Isn’t it in our collective best interests to hear from them so we can help them heal and protect the rest of us from predators?  While these sentiments address serious societal concerns, they also oversimplify the role of confidentiality clauses by narrowly casting them only as tools used only to hide bad behavior.  Often, they are tools that facilitate settlement and efficient resolutions of disputes that offer benefits that are less obvious than the victim-silencing purpose dominating the public discourse.

Imagine for a moment that you are a CEO of a small sales organization and a direct report accuses you of gender discrimination in the way you assign sales leads after you were selected for the position over that colleague. Suppose that you have strong evidence the claim is baseless because the manner in which leads are assigned is fully supported by objective performance evidence. Consider that defending against this baseless claim (a) will cost upward of $250,000 your company cannot afford to spend without diverting resources from significant business needs, (b) will disrupt your business, and (c) may even be in the hands of an insurer who can pressure you to settle. On top of that, do not forget that even after you present compelling objective evidence, you still must overcome the emotional appeal of the alleged victim with the jury.  Now, imagine if you can resolve this case for $7,500.  Would you want to settle such a claim?  Of course not.  But does it make good business sense?  Perhaps.

Even if paying the claim might be a sound economic decision, there are other concerns to weigh.  What would happen if it came out that you resolved this case? Would it look like you did something wrong?  Would it hurt your reputation?  Would it hurt your business?  Would it jeopardize the stability of the workforce? Would it invite others to bring baseless claims for a payday?

One way to balance these concerns and make a good business decision is to resolve the case with an agreement that includes a non-disclosure clause.  It is not a perfect answer and, in certain states, it is not allowed (see this legal alert), at least, to the extent it requires a person to keep the underlying allegations confidential. Nevertheless, it is an important incentive to resolve a claim. The accuser is able to resolve a case, the accused is able to continue business operations, and would-be con artists are not as incentivized to bring copycat claims to chase a windfall.

Alternatively, imagine, after getting a coveted promotion, you learn your boss selected you because he/she expected you would show your appreciation with sexual favors. Soured on the work culture and feeling like you’ve been stigmatized, you assert a claim, settle, and resign.  You have a right to put this behind you and move on, but are concerned it will affect you in unanticipated ways.  How will potential employers react if they learn you claimed you were promoted based on your boss’s sexual interest in you and not your merit?  Will referral sources, clients, and other contacts view you negatively?  Do you want to leave open the possibility that the boss or others who are privy to the situation will trash your reputation?  Would you prefer a confidential settlement to protect yourself?

The ways in which confidentiality settlement allow parties to get beyond these types of concerns and to a settlement influences the entire system.  For example, consider whether settlement would be less likely if these concerns could not be mitigated.  Moreover, consider whether attorneys representing employees would be less willing to take a case if the only chance for recovery was to win a trial with all the associated risks and costs.

In these ways, confidentiality clauses are helpful and efficient. Moreover, the view that confidentiality clauses are aimed only at keeping victims from talking about their experiences is overstated.  Certainly, that happens and is a matter of public concern, but, often, confidentiality clauses serve other goals and facilitate settlement.  Indeed, many times the accuser has already told his/her version of events in a publicly-filed complaint or by testifying at a hearing, meaning confidentiality only practically applies to the amount of money paid to settle, not the underlying conduct.

Likewise, the idea that these agreements hide the conduct of serial abusers is also misplaced.  Generally, a confidential settlement would need to be disclosed in litigation alleging similar conduct by another victim.  Indeed, most confidentiality agreements are required to include an exception allowing information about a complaint to be produced if sought in a subsequent legal matter.

None of this is to say that confidentiality clauses are not overused and abused.  Concerns that they can be a tool of victim oppression are serious and warranted.  Victims have been silenced unfairly and unjustly.  These instances, however, do not mean that all confidentiality clauses should be viewed as markers of victim oppression. It is important to weigh the range of competing factors served by confidentiality agreements, so we can take a more balanced view without presuming they are only a means to silence victims and protect harassers and predators.

Questions? Let me know.

2019 Law At Work – Year In Review

New Year 2020 Loading Bar ConceptThey say the only thing in life that is constant is change, and we certainly saw that in 2019.  This was a big year for change in employment law as legislators, courts, and regulators, shaped the workplace to reflect societal changes.  The changes we saw included new requirements that address continued fallout from the #MeToo movement, concerns about wage distribution and equity, and balancing the rights of employers and unions.  Coupling these legal changes with competitive pressures due to labor shortages in certain industries, the stakes are higher than ever for employers.  We are seeing rapid change in the workplace and now is not the time fall behind.  In case you missed it, here are some issues that we brought to employers this year:

New 2020 Overtime Rule Means Employers Must Reevaluate Which Employees Are Overtime Eligible 

As you may recall, the U.S. Department of Labor released a Final Rule which was to go into effect on December 1, 2016, but, due to a court-issued injunction, followed by change of administration, it never did.  Now, we have an updated version that goes into effect on January 1, 2020.  Although the proposals leading up to these new rules garnered a lot of ink, the new rules make some changes that were not expected and maintain the status quo in areas that were expected to change. The DOL says the increase in salary thresholds will boost wages for 1.3 million U.S. workers. More here.

What Employers Need to Know About New Jersey’s Tough New Wage Theft Law 

On August 6, 2019, New Jersey amended its Wage and Hour Law and adopted the new Wage Theft Act (WTA), creating one of the toughest wage and hour enforcement laws in the country.  This law puts a high burden on employers and imposes significantly increased liability for employers who fail to pay wages owed, including potential jail time.

Click here to read more about what this means for employers and what employers should do to protect themselves from liability under the WTA.

New Jersey Prohibits Employers From Asking Prospective Employees About Their Salary Histories  

Beginning in January, employers will no longer be able to screen job applicants based on their wage or salary history, or inquire about their historical salary, compensation and benefits. However, a prospective employee may still voluntarily provide salary information. The bill doesn’t go into effect until January 25th, but employers should be preparing to amend their recruitment processes before it is enacted.

Practically, this law means employers will need to rely on measures other than a candidate’s salary history in setting compensation, including internal pay policies and market-based analysis. Click here to learn more.

SCOTUS Rules Requirement to File Charge Before Suing Under Title VII is Nonjurisdictional: Employers Must Raise Defense Timely 

The main takeaway from the opinion named in this legal alert is that employers faced with violations of Title VII must be careful to promptly raise the defense, when available, that the employee failed to file a charge with the EEOC within the allotted time period. In many Circuit Courts of Appeal, including the Third Circuit, this has long been the law, while in other Circuits, employers could raise this defense at any time. Now, all employers must raise it timely. Employers and their counsel should be careful to do so.

If you are facing any complaints under Title VII and/or any state equivalents, click here to read about this case in more detail.

New Jersey Creates Employment Protections for Medical Cannabis Patients and Providers

In addition to the range of court decisions that shape how employers treat employees who use medical cannabis, in July, New Jersey’s legislature weighed in with new requirements. Now, no matter how an employer ultimately chooses to treat employees and applicants who use medical cannabis lawfully under the Jake Honig Compassionate Use Medical Cannabis Act, employers need to amend their drug screening programs and hiring processes to ensure that they are in compliance with this law. Employers also need to consider whether they will accept a valid medical explanation as a basis to disregard a positive test, especially in light of recent court rulings that may create liability for employers who take adverse action against employees and applicants who use medical cannabis in accordance with state law. Click here to learn more.

New Jersey Requires Pre-Tax Transportation Fringe Benefits 

The federal Tax Cuts and Jobs Act of 2017 eliminated a federal tax deduction for employers which had allowed them to deduct the cost of providing qualified transportation benefits to employees (thereby removing the tax incentive for employers to do so). In response, earlier this summer New Jersey enacted “An Act Concerning Pre-Tax Transportation Fringe Benefits” requiring all New Jersey employers with 20 or more employees to offer employees the opportunity to set aside wages on a pre-tax basis for the purchase of qualifying transportation services, such as transit passes and commuter highway vehicle travel. Click here to learn more about what this means for employers, including next steps and how to ensure your company is in compliance.

What Employers Need To Know: New Jersey’s Appellate Division Issues Historic Ruling On Medical Marijuana Users’ Rights in the Workplace

New Jersey employers need to be mindful that they no longer have a free pass to take adverse employment actions against employees and candidates solely because they use medical marijuana; those affected by such decisions will be emboldened by this new case, and their lawyers will be confident that a lawsuit challenging the adverse actions is more likely to survive a motion to dismiss at the beginning of the case. As the law in New Jersey now stands, employers are not required to accommodate medical marijuana use, but there is now an increased risk if they refuse. Additionally, various bills have been proposed and are being considered by the New Jersey legislature, which, if adopted, may expand employee rights in this area of the law.

As of right now, employers remain free to take adverse action if an employee shows any sign of impairment from use of medical marijuana, or, for that matter, any other drug, legal or not. More here.

Medical Cannabis Goes to Work 

Employers who take action against a candidate or employee based on a positive result for cannabis when the employee has a valid medical authorization and no evidence of impairment should be prepared for a fight.  Employees and their lawyers are looking for these cases in many states to try to change the law. Employers need to decide if screening out medical cannabis users is worth the risk of a potentially expensive court battle. More here.

Unions High on Cannabis 

As businesses across the country look to capitalize on the “green rush” from states’ expanded medical and adult use cannabis laws, unions are also eager to take advantage of the opportunities presented by this burgeoning, and quickly maturing, industry.  For instance, the United Food and Commercial Workers International Union has formed a cannabis-focused division and is actively representing cannabis workers in many states and seeking to expand to others.  These unions may also get a boost from legislative action in certain states.  Under New Jersey’s proposed cannabis expansion law, for example, licensee applicants who have entered into a labor peace agreement or a collective bargaining agreement receive preference in the license competition.  Expect unions to seek to represent workers in cannabis-related construction, retail, farming, cultivation, security, and processing.

Employers operating in and/or servicing the cannabis industry should consider and plan for the potential impact of labor unions in their industry.

Walmart Takes a Seat in California 

Earlier this year, 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.” This case is a friendly reminder that 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. More here.

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

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. Click here for a checklist of what employers need to know, including what this law prohibits and applies to in the workplace.

Questions? Let me know.

Medical Cannabis Goes to Work

marijuana for medicinal purpose

In the latest salvo in an evolving legal issue, a federal court in Arizona ruled against Walmart in a recent lawsuit for terminating an employee who possessed a valid medical marijuana card after a drug test of the worker came back positive.  On the issue of cannabis use by employees, employers are having increasing difficulty reconciling their duty to make reasonable accommodations for employees suffering from disabilities with their drug screening policies.  Employers can and should take action to prevent impairment at work.   But how should an employer in a state where medical cannabis is legal handle an employee who tests positive in a drug screen but produces a valid authorization for use of medical cannabis?  To date, with certain exceptions, most courts have permitted an employer to refuse to hire a candidate or to enforce discipline against an employee who tests positive for cannabis, despite a valid authorization to use it for medical purposes. However, employees and others are challenging that norm regularly on the state and federal level.  Stay tuned.

Savvy employer takeaways: Employers who take action against a candidate or employee based on a positive result for cannabis when the employee has a valid medical authorization and no evidence of impairment should be prepared for a fight.  Employees and their lawyers are looking for these cases in many states to try to change the law. Employers need to decide if screening out medical cannabis users is worth the risk of a potentially expensive court battle.  

Questions? Let me know.

What Employers Need To Know: New Jersey’s Appellate Division Issues Historic Ruling On Medical Marijuana Users’ Rights in the Workplace

Marijuana Medical PrescriptionEver since the use of properly prescribed medical marijuana became legal in New Jersey, Courts have grappled with reconciling state and federal laws protecting employees from disability discrimination, and employers’ rights to maintain workplaces free of drug use. In simple terms, New Jersey law permits the use of medical marijuana, which is illegal under federal law. With limited exceptions, the decisions in these cases have come down in favor of employers’ right to enforce workplace drug rules. Generally, courts have permitted employers to discipline, terminate, or refuse to hire employees who use medical marijuana, even if there is no evidence of use or impairment in the workplace.

This week, New Jersey’s Appellate Division joined the minority of courts that have found an employee may be able to state a disability discrimination claim against an employer who takes an adverse employment action due to the employee’s use of medical marijuana.

What Happened?

In 2015, the employee, a funeral director, was diagnosed with cancer and was prescribed and used medical marijuana as authorized by New Jersey’s Compassionate Use Act as part of his treatment. In 2016, the employee was in an auto accident while working and he was taken by ambulance to a hospital. The employee advised hospital staff he was authorized to use medical marijuana. The treating doctor responded that “it was clear [the employee] was not under the influence of marijuana [and, thus, his marijuana use was not a cause of the accident], and therefore no blood tests were required.”

While the employee recuperated, his father took his medical prescription and marijuana license to his son’s supervisor and explained what had happened and why the hospital had not given a drug test. Later that day, the employer called and spoke to the employee’s father to advise that a blood test was required before the employee could return to work.

Later that evening, the employee went to a facility to take a urine and breathalyzer test; however, the results of those tests were not provided to the employer and were not part of the case record.

The next day, the employee returned to the funeral home, not as an employee, but because a close friend’s family member had died. While there, he and his supervisor spoke briefly about his job status. His supervisor said he had not heard from “corporate” but did not see how it would be a problem since the employee had a prescription for his marijuana use. The employee told the supervisor, “I only take it when I am home, not at work because I don’t want to jeopardize my license for what I have worked so hard for.”

The employee eventually returned to work, but, shortly after his return, his supervisor advised him that “corporate” was unable to “handle” his marijuana use and that his employment was “being terminated because they found drugs in your system”, though no test had actually been provided to the employer. In a subsequent letter, the company told the employee it had terminated him not because of his drug use, but because he failed to disclose his use of medication that might adversely affect his ability to perform his job duties. According to a company policy, “employees must advise their immediate supervisor if they are taking any medication that may adversely affect their ability to perform assigned duties safely.”

The employee brought an action alleging he had been a victim of disability discrimination.

What did the Courts decide?

The trial court dismissed the employee’s claims, finding that New Jersey’s Compassionate Use Act “does not contain employment-related protections for licensed users of medical marijuana.” The employee appealed.

On appeal, a three-judge panel of New Jersey’s Appellate Division reversed the dismissal in a unanimous decision. The Appellate Division acknowledged that the Compassionate Use Act unambiguously states it does not “require . . . an employer to accommodate the medical use of marijuana in any workplace.” Nevertheless, the appellate panel found that the New Jersey’s Law Against Discrimination might require such an accommodation. Although the Compassionate Use Act does not make illegal an employer’s adverse action against an employee for medical marijuana use, by the same token, the Appellate Division stated it does not immunize an employer’s conduct that might otherwise have been a violation of the Law Against Discrimination. For this reason, the Appellate Division reversed the trial court’s dismissal and permitted the case to proceed.

What do employers need to know?

At the outset, it is important to understand that the Appellate Division did not rule that this employee had been a victim of disability discrimination. In fact, the Court expressly recognized that the case was at the earliest stages, and the employer had pled potentially valid defenses.  The Court ruled only that the case could not be dismissed on its face.

Although this precedent is now binding on state trial courts in New Jersey, it is far from settled law, and may well be subject to an appeal to the New Jersey Supreme Court. However, New Jersey employers need to be mindful that they no longer have a free pass to take adverse employment actions against employees and candidates solely because they use medical marijuana; those affected by such decisions will be emboldened by this new case, and their lawyers will be confident that a lawsuit challenging the adverse actions is more likely to survive a motion to dismiss at the beginning of the case. As the law in New Jersey now stands, employers are not required to accommodate medical marijuana use, but there is now an increased risk if they refuse. Additionally, various bills have been proposed and are being considered by the New Jersey legislature, which, if adopted, may expand employee rights in this area of the law.

In other words, stay tuned, because we have certainly not heard the last word on this topic. With that said, employers remain free to take adverse action if an employee shows any sign of impairment from use of medical marijuana, or, for that matter, any other drug, legal or not.

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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.

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.

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.

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