CLOSE X
RSS Feed LinkedIn Instagram Twitter Facebook
Search:
FMG Law Blog Line

Archive for the ‘Employment Law Blog – PA and NJ’ Category

Sexual Harassment Settlements in New Jersey – Out Of The Dark But Into The Unknown

Posted on: March 28th, 2019

By: Justin Boron

Earlier this month, New Jersey joined the growing group of states that – spurred on by the #MeToo movement – have passed laws regulating settlements of sexual harassment and discrimination claims.

With an asserted purpose of improving transparency and exposing workplace harassment to public view, New Jersey and other states, including California, New York, and Washington,[1] have made confidentiality agreements and non-disclosure agreements unenforceable in sexual harassment cases.[2] Several other states have similar bills pending in their respective legislatures.[3] And Congress similarly has eliminated the tax deduction for settlement of sexual harassment cases when there is a confidentiality clause related to the sexual harassment claims that is included within the settlement agreement.[4] Notably, however, the recent amendment to the New Jersey Law Against Discrimination is broader than many of its counterparts because it encompasses – in addition to sexual harassment claims – claims based on discrimination, retaliation, and harassment involving protected classes beyond sex.

Consistent with the national conversation on this issue, the passage of the New Jersey law invigorated debate about whether the legislation is constitutional, whether it is practicable, and whether it will ultimately achieve the end that it seeks.

At this point, it is simply too early to tell. But the legislation is raising interesting issues to watch as it takes hold in the legal practice across the country.

Is a confidentiality provision important to employers?

NDAs and confidentiality agreements have become part and parcel of almost every settlement agreement. They are so standard that attorneys regularly assume they will be included in a final settlement agreement without ever mentioning them in the negotiations. But the presumption begs the question of how important confidentiality is to an employer in a settlement agreement.

The answer will likely depend on the particular case and the particular employer, but typically employers will insist on a confidentiality agreement so the chatter about the dispute does not live on in the public eye (particularly through social media) even after the matter is resolved. Having said that, confidentiality is probably more important in a particularly bad sexual harassment case against a particularly high-profile employer than in an isolated claim against a mid-sized, single-shop employer. Going forward, counsel should seek input from their client on this issue given that federal law could impact tax treatment of the settlement payment and given that state law might outright prohibit it.

Will plaintiffs actually disclose the settlement and nature of the case?

This question bears on whether the legislation will achieve the transparency that it set out to accomplish. Advocates of the legislation presumably would not want to require an alleged victim to disclose his or her claim involuntarily. Indeed, some of the state laws passed, like New Jersey’s, would allow an employee to keep a settlement confidential if he or she chose to. If prior experience is a guide, many plaintiffs are relieved to have resolved what would be a difficult case involving public testimony about a sensitive subject. In those cases, an express confidentiality agreement might not even be necessary (although typically advisable from a belt and suspenders perspective).

Will it lower the amount that an employer is willing to pay to settle a case?

Again, the data set is not there yet to answer this question. But it is a legitimate concern. If an employer expects to confront continuing publicity about sexual harassment in its workplace even after settlement, particularly for a case where the employer might question the credibility of the allegations, it might be less inclined to pay as much money to resolve a single claim. Another reason would be that a public settlement could invite “copycat” claims, and the initial settlement amount would set a precedent for the value of each claim. This risk would motivate an employer to keep publicly disclosed settlements low to avoid a run of high dollar demands.

Final Takeaway

Generally, we expect employers to view this legislation skeptically, and it will continue to stoke critics of governmental restraints on the freedom of contract. But the silver lining is that the legislation elevates confidentiality agreements from being an after-thought in settlement discussions to a topic that attorneys must discuss with their clients and each other before reaching a final resolution.

If you have any questions or would like more information, please contact Justin Boron at [email protected].

[1] See Rev. Code Wash. (ARCW) § 49.44.210; NY CLS Gen Oblig § 5-336; Cal Code Civ Proc § 1001.
[2] See N.J. Senate Bill 121 at https://legiscan.com/NJ/text/S121/2018.
[3] See https://www.shrm.org/resourcesandtools/hr-topics/behavioral-competencies/global-and-cultural-effectiveness/pages/states-take-action-against-nondisclosure-agreements.aspx.  For a full list of state legislation, see https://www.jdsupra.com/legalnews/the-sexual-harassment-legislation-watch-24212/.
[4] See 26 U.S. Code § 162.

Philadelphia Burdens New Fair Workweek Law to Impact 130,000 Workers & Employers

Posted on: January 9th, 2019

By:  John McAvoy

On December 7, 2018, the Philadelphia City Council passed the Fair Workweek Employment Standards Ordinance by an overwhelming margin of 14-3. Effective January 1, 2020, the objective of the Ordinance, which was introduced in June by Councilwoman Helen Gym (D), is to provide more predictable hours, advanced scheduling, among a slew of other protections for the roughly 130,000 workers in the food, service, and hospitality industries. The Ordinance’s seven co-sponsors hope the new restrictions will help break the cycle of poverty plaguing the nation’s fifth largest city.

To that laudable yet impracticable end, the Fair Workweek Ordinance imposes significant restrictions and standards on large service industry employers with respect to how they schedule, hire, and pay their workers. It also provides for a private right of action against employers that permits recovery of back pay, presumed damages, liquidated damages up to $2,000, attorneys’ fees and equitable relief.

After much debate with local businesses, the new Ordinance as enacted covers only those “retail establishments,” “hospitality establishments,” and “food services establishments” that employ 250 or more employees overall and have 30 or more locations worldwide, including chains and franchise locations.

New York, San Francisco and other large municipalities through the country have been implementing similar “fair workweek” laws since 2014. Philadelphia is the second largest city to adopt the practice. Like similar legislation enacted across the country, Philadelphia Fair Workweek Ordinance imposes four main requirements on employers:

  1. Schedules in Advance. Employers must provide new hires with a written, good faith estimate of the employee’s work schedule. That schedule can change, but the initial estimate must include: the hours the employee can expect to work over a typical 90-day period; whether the employee can expect to work any on-call shifts; and “a subset of days and a subset of times or shifts that the employee can typically expect to work, or days of the week and times or shifts on which the employee will not be scheduled to work.” The employee can request a different work schedule, but the employer is free to grant or deny the request for any reason that is not unlawful. Employers will also have to consider employee work schedule requests, including requests not to be scheduled for certain shifts, days, times or locations as well as requests for changes in hours worked. Additionally, employers must provide employees with a written work schedule at least 10 days before the first day of a scheduled period (14-days effective January 1, 2021). Employees must receive notice of any proposed changes to the posted work schedule as promptly as possible and prior to the change taking effect, and they have the right to decline to work any hours not reflected on the posted work schedule.

 

  1. Predictability Pay. The Ordinance requires employers to compensate employees for changes to the work schedule. This is commonly referred to as “predictability pay.” The amount of the mandated compensation is to be determined. There are, however, exceptions to this requirement. For example, if the employee initiates the schedule change, or there’s a mutual agreement between the employer and employee, an emergency, or for one of the other less common reasons outlined in the Ordinance, then employers are under no obligation to provide predictability pay.

 

  1. Rest Between Shifts. An employee may decline, without penalty, any work hours that are scheduled or otherwise occur less than 9 hours after his or her prior shift ends. However, if the employee works that second shift, the company must pay that employee $40.

 

  1. Offer Work to Existing Employees. Employees must offer extra shifts to current employees before hiring a new employee. However, if existing employees turn down the offer of extra shifts or if extra shifts would implicate overtime pay, then employers are free to hire new employees.

Employers who violate these requirements subject their business to potential liability. The Free Workweek Ordinance makes it unlawful to interfere with, restrain, or deny the exercise of protected rights under the ordinance. Retaliation is also prohibited, with a rebuttable presumption of retaliation for any adverse action within 90-days of an employee exercising protected rights, unless the adverse action was due to well-documented disciplinary reasons that constitute just cause. The Office of the Mayor of Philadelphia is charged with enforcing the new Ordinance, raising questions as to enforcement policy and litigation.

Prudent employers should start preparing their businesses now, Even though the new requirements and standards imposed by the Ordinance do not take effect for another year. Complicating matters further is the fact that the Ordinance, as a whole, is rather vague and ambiguous in terms of the restrictions it imposes and the ways in which those restrictions will be enforced. Although the legislature should eventually issue regulations to resolve some of the uncertainty, it is unclear when that will occur or if it will happen before the Ordinance takes effect next January. As a result, employers are left fending for themselves to make sweeping changes to their scheduling, hiring, and payment policies, practices, and procedures towards complying with the Ordinance.

The uncertainty and other difficulties employers will likely experience navigating the exacting requirements of Philadelphia’s Fair Workweek Ordinance is nothing new. Employment law is rapidly changing and evolving in Philadelphia at an unparalleled pace. The Fair Workweek Ordinance joins the ranks of similarly taxing legislation such as Philadelphia’s Salary History Ban Law and its Ban-the-Box Law, to name but two of the many legislative minefields presently impacting local employers.

Given this is a rapidly changing and developing area of the law, employers are encouraged to charge someone in their human resources and/or compliance departments with staying current on Philadelphia’s new employment ordinances and regulations. Noncompliance with an applicable regulation or ordinance, no matter how vague it may be written, can lead to civil liability and ignorance of the law is no defense. Therefore, it is important that employers stay apprised of the rapidly changing employment laws. The person charged with this responsibility should understand the impact a new or proposed law might have on the business and recognize what, if any, changes in the law require an amendment to company policies. It is also suggested that employers consult with experienced legal counsel to ensure that their policies and procedures are fully complaint with new legislation.

Need help understanding/navigating Philadelphia’s new legislation or want to learn more about what Philadelphia’s Fair Workweek Ordinance means for your local business? Let Freeman Mathis & Gary’s employment experts help. Feel free to call or email John McAvoy (215.789.4919 [email protected]) for assistance with your company’s policies and procedures.

Arbitration Agreements in New Jersey Need More Details

Posted on: November 16th, 2018

By: Chris Curci

On November 13, 2018, the Superior Court of New Jersey, Appellate Division, issued an important decision holding that an arbitration agreement between the employer and employee was not enforceable. Flanzman v. Jenny Craig, Inc., Docket No. L-6238-17.  The arbitration agreement read:

Any and all claims or controversies arising out of or relating to [plaintiff’s] employment, the termination thereof, or otherwise arising between [plaintiff] and [defendant] shall, in lieu of a jury or other civil trial, be settled by final and binding arbitration. This agreement to arbitrate includes all claims whether arising in tort or contract and whether arising under statute or common law including, but not limited to, any claim of breach of contract, discrimination or harassment of any kind.

According to the Appellate Division, this agreement was unenforceable because it “failed to identify the general process for selecting an arbitration mechanism.” What exactly does that mean?

In its effort to clarify this standard, the Appellate Division stated that an employer is not required to “detail in the arbitration agreement the exact manner in which the arbitration” will proceed. However, an employer must identify the “forum” for the arbitration and clearly explain how the employee’s judicial rights to a jury trial are being replaced by the arbitration rights.

For example, the Court noted that it would be sufficient for an employer to (1) identify a forum such as the American Arbitration Association (“AAA”) or the Judicial Arbitration and Mediation Services (“JAMS”), and (2) adopt that forum’s rules and procedures. The Court opined that this would be sufficient because AAA and JAMS’s rules and procedures address numerous procedural issues, such as: (1) notification requirements, (2) how to initiate proceedings, (3) management conferences, (4) discovery, (5) the location of the hearings, (6) the number of arbitrators, (7) how to communicate with the arbitrator, (8) attendance requirements, (9) dispositive motions, (10) evidence, (11) modification of awards, (12) and applications for fees, expenses and costs.

In other words, while the arbitration agreement is not required to “detail the exact manner in which the arbitration will proceed,” an employer must specifically identify a forum such as AAA or JAMS and incorporate that forum’s rules and procedures. This allows the employee to fully understand how his or her judicial rights to a jury trial are being replaced by arbitration.

Employers should review their employee arbitration agreements to ensure their enforceability. If you need help with this or any other employment related question, Chris Curci practices Labor & Employment law in Pennsylvania and New Jersey and is a member of Freeman Mathis & Gary’s Labor and Employment Law National Practice Section. He represents employers in litigation and advises clients on all aspects of employment law. He can be reached at [email protected]om.

Is Your Attendance Policy Too Rigid?

Posted on: September 6th, 2018

By: Christopher Curci

Employers need to be mindful of both the Family Medical Leave Act (“FMLA”) and Americans with Disabilities Act (“ADA”) when considering how to enforce their attendance policies.  When an employee requests time off from work to attend to a medical condition, most employers will consider the request as one for medical leave under the FMLA.  However, what happens if the employee has exhausted his or her FMLA leave or is not eligible for FMLA leave.  Many employers will simply conclude that the employee is not eligible for FMLA leave without considering whether the ADA requires the leave as a reasonable accommodation.  This common mistake often results in a violation of the ADA.

For example, in August 2018 the EEOC filed a lawsuit against Stanley Black & Decker for terminating an employee who took leave for medical treatments related to her cancer.  To qualify for FMLA leave, the employee must have been employed with the company for at least one year and worked at least 1,250 hours during the prior year.  In the Stanley Black & Decker lawsuit, the employee requesting leave had been employed for less than one year.  When she asked Human Resources what her options were to receive her medical treatments, she was correctly told that she was not eligible for FMLA leave.  However, Human Resources did not consider whether the requested leave was a reasonable accommodation under the ADA.

What happened?  The employee exceeded her allowed vacation days to undergo her cancer treatments and Stanley Black & Decker terminated her employment for excessive absenteeism in violation of its attendance policy.  Then what happened?  The EEOC filed a lawsuit against Stanley Black & Decker for violating the ADA.

Per the EEOC, Stanley Black & Decker’s attendance policy “does not provide exceptions for people who need leave as an accommodation to their disability.”  EEOC Regional Attorney Debra M. Lawrence said, “Employers can run afoul of the ADA if they have a rigid attendance policy that penalizes employees taking leave as a reasonable accommodation for their disabilities.”

Inflexible leave policies that discriminate against individuals with disabilities is one of six national priorities identified by the EEOC’s Strategic Enforcement Plan.  The take away: when an employee requests leave due to a medical condition, employers must consider both the FMLA’s leave requirements and the ADA’s reasonable accommodation requirements.

Christopher Curci practices Labor & Employment law in Pennsylvania and New Jersey and is a member of  Freeman Mathis & Gary’s Labor and Employment Law National Practice Section.  He represents employers in litigation and advises clients on all aspects of employment law.  He can be reached at [email protected].

 

Discrimination Suit Over Service Dog Revived By Third Circuit

Posted on: August 23rd, 2018

By: Barry Brownstein

The Third Circuit has revived a lawsuit by the parents of an epileptic girl who claim a Pennsylvania school discriminated against her by barring her service dog.

In 2014, Traci and Joseph Berardelli sued the Allied Services Institute of Rehabilitation Medicine, which operates a school with a specialized program for dyslexic students, after it barred their daughter from bringing her service dog to school to help alert staff to her epileptic seizures. The school claimed the dog would be a distraction, and the Berardelli’s daughter missed many school days when her seizures were bad. When the school finally permitted the service dog to accompany her, the reprieve did not last long, as school officials required that it wear a “special therapeutic shirt designed to decrease allergens” that caused the dog to overheat. The parents’ lawsuit alleged that the school violated the ADA, the Rehabilitation Act, and a Pennsylvania discrimination law.

The United States District Court for the Middle District of Pennsylvania dismissed the ADA and state discrimination claims, ruling that they improperly sought damages.

On appeal, Traci and Joseph Berardelli argued that “reasonable modifications” required under the ADA are substantively the same as “reasonable accommodations” provided for in the Rehabilitation Act, and thus, service animal requirements in the ADA apply to both laws.

The Third Circuit ruled that the district court erred in its instructions to the jury about the Rehabilitation Act claim and improperly disallowed testimony about ADA service animal regulations because that was not the law being considered.  In its enforcement of the ADA, the Department of Justice has ruled that service animals are reasonably permitted to be used by disabled persons in public places as long as they are housebroken, not out of control, and pose no risk to the public.

The Third Circuit ruled that the Rehabilitation Act of 1973 and its progeny the Americans With Disabilities Act of 1990 must be interpreted the same way with respect to reasonable accommodations that must be provided to those with disabilities, including the use of service animals. Thus, under the Rehabilitation Act just as under the ADA, a covered actor ordinarily must accommodate the use of service animals by individuals with disabilities. The Third Circuit also overturned dismissal of the claim made under Pennsylvania discrimination law, ruling that the district court erred because that law does permit damages as a remedy.

If you have any questions or would like more information, please contact Barry Brownstein at [email protected].