Employment Law Alert Blog

New Jersey Call Center Jobs Act: Potential Headaches for Employers

New Jersey Call Center Jobs Act: Potential Headaches for Employers

On January 21, 2020, New Jersey Governor Phil Murphy signed into law the New Jersey Call Center Jobs Act (“Act”). A copy of the Act may be found here. The new law, designed to provide protection to call center employees in the State, includes strict notice requirements along with penalties for New Jersey employers relocating a call center overseas, or transferring call center operations out of state. Under the Act, New Jersey call centers that employ at least 50 full-time employees or at least 50 workers who in the aggregate work 1,500 or more hours per week (excluding overtime) must maintain staffing levels capable of handling at least 65% of the employer’s customer volume of telephone calls, emails, or “other electronic communications” (“customer communications”) when measured against the previous six month average volume of communications originating from New Jersey callers or locations. If a call center’s staffing level falls below the required minimum levels, the employer must immediately notify the Commissioner of Labor and Workforce Development (“Commissioner”). In addition, any employer that relocates a call center, or transfers one or more of its operations comprising at least 20% of the call center’s total volume of customer communications as measured against the...

The Third Circuit Rules That Philadelphia’s Salary History Ban Is Constitutional

The Third Circuit Rules That Philadelphia’s Salary History Ban Is Constitutional

On February 6, 2020, the Third Circuit Court of Appeals ruled that a Philadelphia law that prohibits employers from asking job applicants about their salary history is constitutional, lifting the injunction the United States District Court for the Eastern District of Pennsylvania (“District Court”) imposed on certain provisions of the law. The legislation at issue, the Wage Equity Ordinance (“Ordinance” or “law”) aims to address the historic wage gaps that affect women and minorities by encouraging employers to base salary offers on prospective job responsibilities rather than an applicant’s prior wages. The Ordinance was signed into law by Philadelphia Mayor Jim Kenney in January 2017, and was set to take effect in May 2017. The law contains two key provisions: (1) the “inquiry provision,” which makes it unlawful for Philadelphia employers and employment agencies (collectively “employers”) to inquire into an applicant’s wage and benefit history; and (2) the “reliance provision,” which makes it unlawful for employers to rely on an applicant’s wage history to determine future wages. The law also prevents employers from retaliating against any candidate who does not respond to a wage inquiry. The law does not prohibit a prospective employee from voluntarily disclosing compensation history; nor, are...

New Jersey’s Misclassification Package Creates More Protections for Workers

New Jersey’s Misclassification Package Creates More Protections for Workers

On January 20, 2020, New Jersey Governor Phil Murphy signed into law six bills geared toward protecting self-employed workers. The “Misclassification Package” to which the new laws are referred, expands the Department of Labor (DOL)’s compliance and enforcement tools, and creates new penalties for employers that misclassify their workers as independent contractors instead of employees. This new legislation has been enacted in the wake of a recommendation from the Task Force on Employee Misclassification, which was established by an executive order signed by Governor Murphy in May 2018. The Misclassification Package includes the following laws, which are summarized below. A5838 – Stop-Work Orders. Pursuant to A5838, the DOL Commissioner is authorized to issue stop-work orders against employers where any State wage, benefit or employment tax law violation is found pursuant to an audit or investigation. Procedurally, the Commissioner is required to serve notice of intent to issue the stop-work order at least seven days before the order is issued. Once in effect, the stop-work order requires cessation of all business operations, and remains in effect until the Commissioner determines that the employer has come into compliance and has paid any penalties, or the Commissioner finds in a hearing that the...

New Jersey Department of Labor Issues Final Regulations for Earned Sick Leave Law

New Jersey Department of Labor Issues Final Regulations for Earned Sick Leave Law

The New Jersey Earned Sick Leave Law (“ESLL”), which became effective in October 2018, requires New Jersey employers, among other things, to provide their employees with one hour of sick leave for every 30 hours worked, with a maximum of 40 hours annual paid sick leave. Such leave may be used for an employee to care for their own or a family member’s physical or mental health or injury; address domestic or sexual violence against themselves or a family member; attend a child’s school-related meeting, conference or event; or take care of their children when school or child care is closed due to an epidemic or public health emergency. The New Jersey Department of Labor and Workforce Development (“NJDOL” or “Department”) recently issued final regulations for the ESLL (“final regulations” or “regulations”), ending more than a year of waiting for employers, from the time the NJDOL issued proposed ESLL rules (“proposed rules”), for which the 60-day comment period ended in December 2018. The regulations can be found here. The final regulations do not contain much in the way of substantive changes as compared to the proposed rules, but include extensive responses to more than 100 public comments, and provide guidance...

New Jersey Amends Its WARN Act to Extend Advance Notice and Require Severance Pay

New Jersey Amends Its WARN Act to Extend Advance Notice and Require Severance Pay

The New Jersey “Millville Dallas Airmotive Plant Job Loss Notification Act” (“NJ WARN Act” or “Act”), which requires covered employers to provide employees (and designated state and local government officials) with advance notice of covered “mass layoffs,” the shutdown of an establishment, or transfers of operations, was recently amended to place more onerous obligations on New Jersey employers. Senate Bill 3170, which becomes effective July 19, 2020, requires employers to provide 90 days’ (instead of 60 days’) notice to affected employees. The Act also contains enhanced severance provisions, requiring employers to pay severance to all affected employees, even those who receive proper notice under the Act. As a preliminary matter, many of the NJ WARN Act’s definitions have been amended, greatly expanding the Act’s reach. For example, “employer” is now more broadly defined to include “any individual, partnership, association, corporation, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee, and includes any person who, directly or indirectly, owns and operates the nominal employer, or owns a corporate subsidiary that, directly or indirectly, owns and operates the nominal employer or makes the decision responsible for the employment action...

New Jersey Appellate Panels Disagree on Enforceability of Arbitration Agreements Concerning Transportation Workers

New Jersey Appellate Panels Disagree on Enforceability of Arbitration Agreements Concerning Transportation Workers

On June 4 and June 5, 2019, separate panels of the Appellate Division of the New Jersey Superior Court issued diametrically opposed decisions calling into question the enforceability of arbitration agreements involving employees and independent contractors who provide transportation services. In Colon v. Strategic Delivery Solutions, LLC and Arafa v. Health Express Corporation, two Appellate Division panels considered the same legal question: are arbitration agreements enforceable under New Jersey law where one of the signatories is exempt from arbitration under the Federal Arbitration Act (FAA)? Despite the uniformity of the issue considered, the respective holdings stand in stark contrast to one another, creating confusion as to how to interpret arbitration agreements moving forward. Colon and Arafa involved strikingly similar facts. Both the Colon and Arafa plaintiffs contracted with the respective corporate defendants to provide transportation and delivery services on their behalf with regard to pharmaceutical products. Both defendants classified the plaintiffs as independent contractors; and both plaintiffs executed arbitration agreements governing the terms and conditions under which they were to provide transportation services. Most significantly, in both cases the arbitration agreements at issue explicitly stated that they were to be governed pursuant to the FAA (The Arafa agreement stated that...

Supreme Court Further Restricts Class Arbitration Finding It Must be Unambiguously Authorized

Supreme Court Further Restricts Class Arbitration Finding It Must be Unambiguously Authorized

In a 5-4 decision authored by Chief Justice Roberts, joined by Justices Thomas, Alito, Gorsuch, and Kavanaugh, the U.S. Supreme Court in Lamps Plus Inc. v. Varella held that courts may not infer from an ambiguous agreement that parties have consented to arbitrate on a classwide basis. Lamps Plus Inc. v. Varella involved an employee who had filed a class action against his employer. Lamps Plus responded by seeking to compel arbitration on an individual rather than a classwide basis. The district court dismissed the case and compelled arbitration, but on a class basis. Lamps Plus appealed, and the Ninth Circuit upheld the district court’s decision. The Ninth Circuit’s reasoning hinged on the fact that the arbitration agreement was ambiguous about the availability of class arbitration. The Ninth Circuit thus distinguished Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., 559 U. S. 662 (2010), arguing that in Stolt-Nielsen the parties had stipulated that the agreement was silent about class arbitration, whereas the parties had no such stipulation in Lamps Plus. Because the Ninth Circuit held that the agreement was ambiguous, the appellate court turned to California’s contra proferentem rule and held that this state law contract principle required the court to interpret...

Third Circuit Permits Extra-Strong Restrictive Covenants for Extra-Good Employees

Third Circuit Permits Extra-Strong Restrictive Covenants for Extra-Good Employees

In a recent “precedential” opinion, the Third Circuit, applying New Jersey law, approved an employer’s use of an additional, extra-stringent restrictive covenant for its high-performing salespeople, subject to careful blue lining by the court to ensure that the covenant does not create an unreasonable burden for the employees. ADP, LLC, the well-known provider of payroll and other human resources services, required its new sales employees, as a condition of employment, to sign a Sales Representative Agreement and a Non-Disclosure Agreement. Together, the two agreements essentially prohibited the employee, for one year after the termination of employment, from soliciting ADP customers “with which the Employee was involved or exposed” while employed at ADP. Once employed, ADP’s sales staff could earn stock awards by meeting certain sales targets. But to receive an award, the employee had to sign a third agreement, a Restrictive Covenant Agreement, which imposed still more post-employment restrictions on the employee. Among other things, the Restrictive Covenant Agreement essentially prohibited the employee for two years after termination from soliciting all current and prospective ADP customers, whether or not the employee was “involved or exposed” to the customer while employed by ADP. The Restrictive Covenant Agreement also contained a geographic...

NYC Council Passes Legislation Barring Pre-employment Marijuana Testing

NYC Council Passes Legislation Barring Pre-employment Marijuana Testing

On April 9, 2019, the New York City legislature passed legislation that would amend Section 8-107 of the New York City Administrative Code to prohibit employers from testing job applicants for marijuana or tetrahydrocannabinols (THC) – the active ingredient in marijuana. Specifically, the law states, “it shall be an unlawful discriminatory practice for an employer, labor organization, employment agency, or agent thereof to require a prospective employee to submit to testing for the presence of any tetrahydrocannabinols or marijuana in such prospective employee’s system as a condition of employment.” The legislation creates an exception for individuals who apply to specifically defined roles; such as police officers or peace officers, those requiring a commercial driver’s license, those requiring the supervision or care of children, medical patients, or other vulnerable persons, and those with the “potential to significantly impact the health or safety of employees or members of the public.” Furthermore, the law would not apply to drug testing that is required pursuant to: (a) regulations promulgated by the federal department of transportation; (b) federal contracts; (c) a federal or state law, regulation, or order that requires drug testing of prospective employees for purposes of safety or security; or (d) a collective...

United States DOL Proposed Update to FLSA Overtime Rules

United States DOL Proposed Update to FLSA Overtime Rules

On March 7, 2019, The United States Department of Labor (DOL), announced a proposal to update the overtime rules under the Fair Labor Standards Act (FLSA). Under the FLSA, employers are required to pay employees at least the minimum wage for all hours worked, and overtime pay (at 1 ½ times an employee’s regular rate) for all hours worked in excess of 40 in a workweek. To be exempt from these requirements, an employee must be paid on a salary basis, at or above a set minimum weekly salary level, and meet certain specific requirements concerning their job duties. In March 2014, President Obama directed the DOL to update and modernize regulations under the FLSA governing overtime exemptions for “white collar” employees (i.e., executive, administrative and professional employees). After receiving more than 270,000 comments, in May 2016, the DOL issued a final rule, substantially increasing the minimum salary levels for the overtime-exempt classifications, from $455 per week ($23,660 per year) to $913 per week ($47,476 per year), and incorporating mechanisms to adjust the salary level in the future (“2016 Rule”). Under the 2016 Rule, the salary level needed to satisfy the highly compensated employee (HCE) exemption (which includes a less...