As the coronavirus epidemic continues to impact the economy, employers are faced with the prospect of shutting down their operations or continuing operations with a significantly reduced workforce for an indeterminate period of time. Employers anticipating the need for significant workforce reductions should be mindful of whether these reductions will implicate the federal WARN Act, and companies with employees in New Jersey and/or New York must also pay attention to the WARN Acts in effect in those states. This article will first briefly outline the requirements of the federal, New Jersey, and New York WARN statutes and will then discuss those requirements in the context of workforce reductions necessitated by the current crisis. The WARN Statutes The WARN statutes are extremely complicated, but, as a rule of thumb, whenever a New Jersey employer is contemplating terminating at least 50 employees, the employer should seek advice from counsel familiar with the federal and New Jersey WARN statutes. Should either of those statutes apply, the affected employees must be given at least 60 days’ notice of their terminations unless a statutory exception permits a lesser period of notice. As a rule of thumb, employers in New York should seek advice from counsel...
Category: Reductions in Force (RIF)
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...
In Lico v. TD Bank et al., a federal court in the Eastern District of New York upheld an employee’s right to bring claims under the Fair Labor Standards Act (FLSA) against her employer, TD Bank (“the Bank”), for failure to provide adequate facilities and time for lactation breaks. The FLSA requires employers covered by the FLSA to provide employees (1) reasonable unpaid time at work to express breast milk for up to one year following childbirth and (2) a place, other than a restroom, that is not visible and is free from intrusion to do so.
New Jersey Court Finds Violation of Computer Related Offenses Act and Other Unlawful Conduct, Ordering Disgorgement of Profits, Attorneys’ Fees and Punitive Damages
In B&H Securities, Inc. v. Duane Pinkey et al., the New Jersey Superior Court found that former employees taking computer files from – and using the files to unfairly compete with – their employer violated the Computer Related Offenses Act, N.J.S.A. 2A:38A-1 et seq. (“CROA”), and breached other common law and contractual obligations. The Court awarded actual damages, based on plaintiff B&H’s lost profits of $737,087.00, as well as punitive damages of $100,000 and attorneys’ fees under the CROA.
The Millville Dallas Airmotive Plant Job Loss Notification Act (the “New Jersey WARN Act”), may apply not only to the direct employer, but also to parent and affiliated companies if certain factors are present. In DeRosa v. Accredited Home Lenders, Inc., et al., the New Jersey Appellate Division concluded that, “in determining single-employer status under the New Jersey WARN Act,  courts should apply the five-factor test” applicable to its federal counterpart, the Worker Adjustment and Retraining Notification Act of 1988 (the federal WARN Act). Those factors, set forth at 20 C.F.R. 639.3(a)(2) are:”(i) common ownership, (ii) common directors and/or officers, (iii) de facto exercise of control, (iv) unity of personnel policies emanating from a common source, and (v) the dependency of operations.” The appellate court left open the possibility that other tests may also apply, such as the common law standard for piercing the corporate veil and the integrated enterprise or integrated employer tests.