Small Print Weighs Big

By Louis Pashman, Esq.
lpashman@pashmanstein.com

In June of last year, the Appellate Division of the Superior Court issued what many considered a surprising decision.  In Rodriguez v. Raymours Furniture Corporation, 436 N.J. Super 305 (App.Div. 2014) the court held that the two year statute of limitations for claims of retaliatory discharge and disability discrimination can be modified by agreement.

In August 2007 Mr. Rodriguez submitted an application for employment with Raymour & Flanigan.  Just above the application signature line the applicant is advised to read the application carefully, that it will become part of his employment record.  It went on to say, in all capital letters that “any claim or lawsuit relating to my service with Raymour & Flanigan must be filed no more than six (6) months after…the subject of the claim or lawsuit.”  It specifically waived any contrary statute of limitations.

On April 5, 2010, Rodriguez was injured on the job.  He returned to unrestricted duties on September 28, 2010.  On October 1, 2010, he was laid off, along with 101 others, as part of a reduction in force.  Rodriguez claimed retaliation for filing a workers’ compensation claim and discrimination because of his disability.  He filed suit nine months after the alleged wrongful termination.  His suit was dismissed because of the six month limitation.

The court thoroughly examined several legal issues involved.  Among the more critical, the court determined:

1. The application that created the six month limitation was a contract of adhesion, it was part of a non-negotiable form;
2. The two year statute of limitations can be modified if the limitation period is reasonable and does not violate public policy;
3. The provision was not unconscionable. It was set forth in large type, clearly, and Rodriguez was under no time pressure to sign (he took it home before signing).  Therefore, notwithstanding that it was an adhesive provision, it was enforceable.

As I said at the outset, many were surprised at this result, but stay tuned, the New Jersey Supreme Court has agreed to review the decision.

Recent NLRB Decision On Use of Email Systems for Non-Work Purposes

By Eleanor Lipsky, Esq.
elipsky@pashmanstein.com

The National Labor Relations Board (“NLRB”) has recently ruled that when employers provide access to their email system to their employees, the employer may generally not ban non-work related emails. [1]  Both union and non-union employees are entitled to use the system to engage in statutorily protected discussions during non-working time.    This includes using company email systems for union organizing or any other activity protected by the National Labor Relations Act (“NLRA”).   Further, an employer generally cannot impose a complete ban of non-business use of its email system, unless there are “special circumstances.”  This NLRB decision overturns a previous ruling issued in 2007, which held an employer could ban all non-business email communications.  The NLRB found that the previous decision undervalued employees’ rights under the NLRA to communicate in the workplace about the terms and conditions of their employment.

The NLRB decision has some limitations, however.   The decision only applies to those employees who have already been granted email access in the course of their work.  This means employers are not necessarily required to provide employees with email access.   In addition, the NLRB decision upholds the right of employers to monitor computers and email systems for legitimate management reasons, such as preventing harassment or maintaining productivity.  Also, although generally not permitted, an employer can impose a complete ban of non-work use of email if the employer can show “special circumstances” that make such a ban “necessary to maintain production or discipline.”  However, this burden is very difficult for an employer to meet.  The decision also does not restrict an employer’s right to prohibit non-work emails during “working time.”  However, it is worth noting that the NLRB traditionally considers meal periods and work breaks as “nonworking time,” so an employer’s policy should reflect that view.   The decision fails to address common complications that can arise in such situations.  For example, even if an email is sent by someone during their nonworking time, that email is likely to be received by the recipient during their working time.  Employers might find the realities of enforcing “working” versus “non-working” time difficult.  An employer should also be careful to avoid circumstances where an employee could bring a potential legal challenge claiming that monitoring occurred in response to a protected activity, such as union organizing.  All of this should be kept in mind when considering a stricter email policy.

[1] Purple Communications, Inc., 361 NLRB No. 126 (Dec. 11, 2014).

Social Media and Technology in the Workplace

By James W. Boyan III, Esq.

jboyan@pashmanstein.com

On September 19, 2014, Maxiel Gomez and I presented a seminar entitled “Social Media and Technology in the Workplace” at the New Jersey Corporate Counsel Association’s Annual Conference.  The seminar drew a strong turnout which shows that social media is still a hot button issue for many employers.  For those who were unable to attend the conference, here are some of the key takeaways:

• The National Labor Relations Board – Office of the General Counsel (“NLRB”) has issued guidance concerning social media policies promulgated by employers;

• The NLRB takes the position that certain provisions found in social media policies violate Section 7 of the National Labor Relations Act (the “Act”);

• The NLRB has brought enforcement actions against several employers who have terminated employees for allegedly engaged in “concerted activity” on a social media site;

• Many states, including New Jersey, have enacted password protection laws that prevent employers from demanding that an applicant or employee disclose a social media password;

• Employers should be careful that they are not considering information disclosed on social media about an applicant’s membership in a protected class when they make employment decisions;

• Employers can monitor social media to investigate whether employees are engaged in fraudulent or disloyal conduct; and

• Employers should review their social media policies to ensure that they comply with the law and be cautious when they seek to discipline an employee for violating a social media policy.

Best Practices for Verifying Employee Work Eligibility While Avoiding Discrimination Issues

By Eleanor Lipsky, Esq.
elipsky@pashmanstein.com

When hiring new employees, employers should be careful to comply with laws prohibiting the hiring of undocumented immigrants, while also ensuring that no discrimination on the basis of national origin or citizenship occurs.

The Immigration and Nationality Act (INA) is a federal law that makes it illegal for employers to knowingly hire persons who are not authorized to work in the United States.  Under the INA, an employer must check documents to confirm the identity and work eligibility of all persons they hire and complete a Form I-9, the Employment Eligibility Verification form, for every new employee, whether they are a citizen or not.  Failure to comply with the Form I-9 can result in sanctions against employers.  Further, the INA makes it unlawful for an employer to continue to employ an undocumented worker or one who loses their authorization to work at a later point.

However, the INA also prohibits discrimination when hiring and firing on the basis of one’s national origin or citizenship status.  The U.S. Department of Justice’s Office of Special Council for Immigration-Related Unfair Employment Practices offers suggestions for how an employer can avoid committing any immigration-related discrimination.[1]  For instance, an employer should allow an employee to choose which documents to present for the Form I-9, as long as it satisfies the requirements of the Form.   An employee would have a case against an employer who demanded to see a certain type of document, such as a green card, if the employee already provided appropriate documents otherwise.

Most importantly, an employer should treat all applicants the same and not make any assumptions when interviewing, offering a job, and when verifying work eligibility.  Any type of “citizens only” hiring policy or requirement that applicants have a particular immigration status is usually illegal.  The same guideline applies to a firing decision — for example, an employer cannot choose to fire or lay off someone solely because they only have a temporary work permit in favor of someone with legal permanent residency.

Keep in mind that an employee or prospective employee is protected under the INA if he or she is a U.S. citizen, national, permanent resident, temporary resident, refugee, or asylee.   Remember that U.S. citizenship or nationality belongs to any individual born of a U.S. citizen, along with all persons born in Puerto Rico, Guam, the Virgin Islands, Northern Mariana Islands, American Samoa, and Swains Island. Further, employers should recognize that refugees or those with recently granted asylum may not yet have Social Security numbers.   This could become a particular concern if an employer uses an on-line application system requiring such information because it could create an unnecessary hurdle for individuals who are in fact authorized to work in the United States, and thus should be avoided.

Employers should review their hiring and work eligibility verification policies in order to ensure compliance and avoid any potential fines and penalties imposed by the INA.

[1] See http://www.justice.gov/crt/about/osc/.

 

Will USCIS Visit You?

By Louis Pashman, Esq.
lpashman@pashmanstein.com

First, congratulations if you know what USCIS is.  On the assumption you don’t, it is the U.S. Citizen and Immigration Services.  USCIS has a Fraud Detection and National Security Directorate (FDNS) to see to it that no immigration benefits make their way to people who are a threat to National Security, public safety or who try to defraud the immigration system.

With all those ominous acronyms, perhaps you feel you are in the middle of a spy novel.  Well, just to amplify that feeling, FDNS now has an on-site audit program.  Agents make random, unannounced site visits to look at employees in H-1B (professionals) or L (intracompany) status.  Agents seek to make certain that information about your company vis-a vis such employees remains accurate.  Are the employee’s title, duties, hours, salary and location the same as was on the application?

Since USCIS takes the position that an amended petition must be filed if there is a “material change” in the terms and conditions of employment, you must keep in touch with your counsel.

This is serious stuff.  A word to the wise….

Employee Theft of Confidential Documents

By Louis Pashman, Esq.
lpashman@pashmanstein.com

In 2010, the NJ Supreme Court issued an opinion in the case of Quinlan v. Curtis-Wright.  Quinlan had filed a sex discrimination claim against Curtis-Wright after being passed over for promotion.  While an employee, Quinlan copied a large number of confidential documents to support her claim.  She gave those documents to her attorney who turned them over to defense counsel in discovery.  Quinlan, at that point, was still an employee.  She then copied a confidential performance evaluation.  During a deposition of a representative of defendant, Quinlan’s counsel used that document. At that point Quinlan’s employment was terminated and she added a retaliation claim to her complaint.  The NJ Supreme Court upheld a jury verdict in favor of Quinlan for 8.7 million dollars, holding that the taking and use of confidential documents in support of her claim was protected activity.  The court laid out a seven part test to determine whether an employer can terminate such an employee.

Along came the case of State v. Saavedra.  Saavedra was an employee of the North Bergen Board of Education who filed a claim for gender, ethnic and sex discrimination and retaliation.  During discovery, her attorney produced many confidential documents she took, including some originals, while an employee.  Many of those documents seemed to have no relevance to her claims.

Subsequently, she was indicted for Official Misconduct and Theft.  Saavedra moved to dismiss the indictment, arguing that Quinlan legalized her conduct.  Both the trial and appellate courts disagreed with that proposition and refused to dismiss the indictment.

There are several obvious differences between Quinlan and Saavedra.  Saavedra was a public employee, Quinlan was not.  Many of the documents Saavedra took were unrelated to her claims, not the case with Quinlan.  Saavedra was a criminal matter, Quinlan civil.

Because of Saavedra, employers can exhale, but just a little.  There are many unanswered questions.  The Supreme Court had agreed to hear the case so, hopefully, those questions will be answered.

Consultant Cannot Be Sued in New Jersey

By Maxiel Gomez, Esq.
mgomez@pashmanstein.com

Background

In Baanyan Software Services v. Kunch, 433 N.J.Super. 466 (App.Div. 2013), the Appellate Division found that a computer analyst doing consulting work for a New Jersey corporation in Illinois could not be subject to suit in New Jersey.

Plaintiff Baanyan Software Services is a multi-national software consulting company with headquarters in Edison, New Jersey.   Baanyan employed defendant Hima Bindhu Kuncha as a computer systems analyst.  Kuncha’s services were retained pursuant to a written consulting agreement. At the time the agreement was signed, Kuncha lived in California and negotiated the contract through e-mail and telephone calls with representatives of Baanyan.  An executed copy of the agreement was sent by Kuncha to Baanyan at its New Jersey headquarters.  The agreement did not contain a forum selection clause.

In February 2011, as per the terms of employment, Kuncha relocated to Illinios where she provided services to two of Baayan’s clients.  Kuncha never worked in New Jersey, nor did she ever provide any services for a client in New Jersey.  In December 2011, Kuncha ceased working for Baanyan and began working for Halcyon, one of Baanyan’s competitors.

Baayan filed suit against Kuncha alleging breach of contract, tortious interference with business relationships, breach of fiduciary obligations, unjust enrichment and fraud.  Kuncha thereafter moved to dismiss for lack of personal jurisdiction.  On December 7, 2012, the trial court granted Kuncha’s motion to dismiss finding that there were insufficient contacts with the state of New Jersey to establish personal jurisdiction.

Baanyan appealed arguing that Kuncha’s contacts with New Jersey which consisted of entering into a consulting agreement with a New Jersey corporation, providing services for and accepting payments from the New Jersey Corporation, with receipts bearing the corporation’s New Jersey address and providing timesheets to the corporation, are sufficient to establish personal jurisdiction over the consultant in New Jersey.

The Court’s Decision

The Appellate Division found that Baayan lacked general jurisdiction because Kuncha never resided nor did business in New Jersey and her conduct was at all times limited to the state of Illinois.  The Court also found that there was no specific jurisdiction over Kuncha because: 1) there was no evidence in the record to establish that Kuncha sought employment with Baanyan in New Jersey; 2) Kuncha’s telephonic and electronic communications with Baanyan did not establish “minimum contacts” with New Jersey; and 3) “to allow Baanyan, an international company, to compel an individual employee to defend against a New Jersey lawsuit, where that employee was hired to work in Illinois, and never lived in, worked in or visited New Jersey, violates principles of fair play and substantial justice.”

Best Practices

This decision provides some guidance on how multi-national companies with telecommuting employees can control the location of a suit brought against former employees.   While the Court did not state whether the outcome would have been different had the employment contract between Baanyan and Kunch contained a forum selection clause, an employer is better suited for asserting jurisdiction where the parties contractually agreed to a specific forum for resolving disputes.  In addition, employers can require that telecommuting employees attend periodic training and meetings at the corporation’s headquarters and assign clients with contacts in its home state.  Indeed, a forum selection clause and more in-state contacts in this case may have brought the employee under New Jersey’s jurisdiction.

Employee Statements on Social Media Targeting Employment Issues Can Be Protected

By Eleanor Lipsky, Esq.
elipsky@pashmanstein.com

The National Labor Relations Board (“NLRB”) enforces the National Labor Relations Act (“NLRA”), which protects the rights of employees to act together to address work conditions, with or without a union.   Under the NLRA, employees have “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection….”[1]   The NLRA’s protection extends to certain conversations or statements employees make on social media relating to their employment.  Employers should be aware of this law before reprimanding or terminating an employee, as this can be considered retaliation against union organizing and related concerted activities.

Many recent NLRB decisions have reviewed what is considered a protected concerted activity.  In Pier Sixty, No. 02-CA-068612 (NLRB, Apr. 18, 2013), an employee made a posting on Facebook that contained harsh expletives against the employer, along with a call to vote for forming a union.   The NLRB found that the employee’s posting constituted a protected concerted activity and was directly related to on-going union organizing.  Despite the name-calling, the NLRB noted that statements will only lose protection where they are “so violent or of such serious character as to render the employee unfit for further service.”[2]

In Kroger Co. of Michigan, No. 07-CA-098566 (NLRB, Apr. 21, 2014), the Administrative Law Judge found that a general restriction on employee speech concerning rumors, speculation, personnel matters, and employer’s business plans was also prohibited under the NLRA because it was overly broad.   In contrast, a policy prohibiting “harmful gossip” about managers, but without application to a specific topic that encompasses protected subjects, could be upheld.[3]   The line between prohibiting behavior that is harmful to the business and prohibitions that discourage communication about work conditions is a fine one for employers.

As the NLRB’s involvement and commentary on social media policies continues to grow, it is worth noting that there is often a level of subjectivity in their decisions.    Regardless, in consideration of these decisions, employers should be careful to not enact social media policies that prohibit employee discussions regarding wages or other employment terms.   Any restrictive policies should be limited to necessarily addressing potential violations such as discrimination, harassment, release of trade secret, confidentiality or privacy breaches. Employers should review any existing social media policies to take account of the NLRA’s protections and also keep in mind that these NLRB decisions apply to businesses regardless of whether their employees are represented by a union or not.

---

[1] 29 U.S.C. § 157.

[2] Pier Sixty, No. 02-CA-068612(NLRB, Apr. 18, 2013), citing St. Margaret Mercy Healthcare Centers, 350 NLRB 203, 204-205 (2007), enf’d 519 F.3d 373 (7th Cir. 2008), quoting Dreis & Krump Mfg. v. NLRB, 544 F.2d 320, 329 (7th Cir. 1976).

[3] See Hyundai American Shipping Agency, Inc., 357 NLRB No. 80 (2011).

What NYC Employers Should Know about Paid Sick Time Requirements

By CJ Griffin, Esq.
cgriffin@pashmanstein.com

Recently, the New York City Earned Sick Time Act went into effect and employers who have NYC locations or employees who perform work in NYC must now provide paid sick leave to their employees.

The Act requires that employers with five or more employees who perform work in New York City at least 80 hours during a calendar year must provide those employees with 40 hours of paid sick leave each calendar year.  Employers with fewer than five employees must offer at least 40 hours of unpaid sick leave each calendar year.  The Act allows the employer to define its calendar year, so long as employees are given the allotted sick time within a 12-month period.

The Act allows employees to carryover up to 40 hours of sick time to the next year, but employers are only required to allow the employee to use 40 hours of sick time per a year.  Employers can choose to compensate employees at their regular rate for unused sick time, but are not required to do so.  If employers do compensate the employee, then the employee is no longer entitled to carry that unused sick time over to the next year.

Finally, the Act prohibits an employer from making any threat, discipline, discharge, demotion, suspension, or reduction in an employee’s hours, or any other adverse employment action against an employee who exercises or attempts to exercise his or her right to sick time under the Act.

Employers must be aware that they are required to give written notice to their employees of their right to sick leave, including accrual and use of sick leave, the right to file a complaint, and the right to be free from retaliation. The written notice must be given to each employee on his or her first day of employment and must also be posted in the workplace.  The notice must state the employer’s calendar year, including start date and end date, and be given to employees in their primary language.  Employers can find sample notices available at http://www.nyc.gov/PaidSickLeave.

Significant Changes to Overtime Rules in the Works

By Jim Boyan, Esq.
jboyan@pashmanstein.com

On March 13, 2014, President Barack Obama issued a Presidential Memorandum directing the Secretary of Labor, Thomas Perez, to revise the Fair Labor Standard Act’s (“the Act”) “outdated” overtime rules.  The Obama Administration believes that federal overtime regulations “have not kept up with our modern economy.”

The Memorandum indicates that the new overtime rules should “update existing protections consistent with the intent of the Act and address the changing nature of the workplace.”  Based on President Obama’s comments on this issue the following changes are likely:

• A sharp increase to the minimum salary requirement for the administrative, executive and professional exemptions (currently $455 per week or $23,660 per year) and

• New requirements that will make it more difficult for employers to rely on the administrative, executive or professional exemptions to the Act’s overtime requirements.

Although it may be several years before any changes to the overtime rules will take effect, employers would be wise to monitor this issue.  New Jersey employers should be aware that any changes to the federal overtime regulations will automatically change the state’s overtime rules which incorporate the federal rules by reference.