Articles Posted in Employment Law

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Employers in New Jersey must review their current policies and practices to ensure compliance with a new statutory prohibition on the inclusion of non-disclosure provisions in employment contracts or settlements involving discrimination, harassment, or retaliation claims. The new law, signed by New Jersey governor, Phil Murphy, on March 18, 2019, and effective immediately, states that employers cannot insist that employees keep confidential the details of such claims or settlements. The law makes clear though that it should not be construed as prohibiting employers and employees from entering into non-compete agreements and confidentiality agreements relating to proprietary information, such as non-public trade secrets, business plans, or customer lists or information.

The law renders any provision in an employment contract that waives “any substantive or procedural right or remedy relating to a claim of discrimination, retaliation or harassment … against public policy and unenforceable against a current or former employee who is a party to the contract or settlement.” The law also does not permit prospective waivers of any right or remedy under the New Jersey Law Against Discrimination, or any other state statute or case law. The new provisions, however, do not apply to collective bargaining agreements. Continue reading ›

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Sara Tirschwell, an investor who had been hired by TCW in 2016 to raise and run a new distressed debt fund for the giant asset-management firm, suddenly found herself without a job on December 14, 2017. She had been called into a meeting with the firm’s chief compliance officer and general counsel and informed that she had unethically told an employee in another department about a potential deal. According to TCW, it was Tirschwell’s fifth violation in 18 months and grounds for termination.

Tirschwell said the firm’s chief executive offered her a $500,000 severance package on the condition that she sign an agreement promising not to sue the firm. Tirschwell did not take the deal because she didn’t think her termination had anything to do with compliance – she claims it was retaliation.

Nine days before this meeting, Tirschwell had sent an email to the head of human resources, saying that her boss, Jess Ravich, had pressured her into having sex with him several times since she started working for the firm and that he had groped her in the office. When she put a stop to it, he allegedly sabotaged her job by refusing to support her fund. The general counsel and head of HR interviewed Tirschwell about her complaint and promised to investigate. Instead, she claims she was fired in retaliation for bringing harassment claims to the attention of management. The company claimed that she knew she was about to be fired for poor performance and simply created grounds to claim retaliation especially given the many holes in her story and gaps in her memory and failure to meet performance and money raising goals. Continue reading ›

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Where an insurance agent’s contract with Allstate was terminated for failure to meet performance goals, and the insurance company subsequently denied the agent’s request to transfer the book of business to the agent’s husband, instead selling to the wife of the agent’s former supervisor, the trial court erred in dismissing agent’s claims for breach of contract and breach of the covenant of good faith and fair dealing.

In 2004, Ray McKnight, a territory manager for Allstate Insurance began recruiting Mary Slay to become an exclusive Allstate insurance agent in Lake City, Florida. Ray offered Mary the opportunity to purchase an existing book of business from a retiring agent, Rick Bringger. Ray, however, failed to disclose that he had a conflict of interest, as his wife, Faye McKnight, wanted to purchase an Allstate agent’s book of business and open up her own office in Lake City in direct competition with Mary. Ray also failed to disclose that Allstate was in the process of canceling approximately 30% of the policies in Bringger’s book of business and that Allstate had begun the process of non-renewing all mobile home policies, commercial policies, and landlord and rental policies in Florida.

In reliance on Ray’s representations, Mary retired from her job, obtained an $800,000 loan to purchase Bringger’s book of business, and signed an exclusive agency agreement with Allstate. Mary worked as an exclusive agent reporting directly to Ray, and she subsequently grew her book of business. A few months later, Ray’s wife Faye opened an exclusive Allstate agency, competing directly with Mary’s agency. Mary’s business was also harmed by the subsequent announcement by Allstate that it would no longer write commercial insurance policies in Florida and that it would not renew 95,000 homeowner insurance policies. Allstate also implemented substantial price increases, and in 2008 had its license to write new policies suspended by the Florida Insurance Commission due to its failure to comply with a subpoena. Continue reading ›

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Effective January 1, 2019, the Illinois Wage Payment and Collection Act (IWPCA), 820 ILCS 115/1 et seq., requires employers to reimburse employees for all “necessary expenditures” or losses that an employee incurs in the scope of their employment. Prior to the amendment, Illinois law generally did not require employers to reimburse employees for business expenses. Illinois is now the ninth state to impose such a reimbursement requirement on employers—joining states such as California, Iowa, and New Hampshire which have similar laws.

The IWPCA defines necessary expenditures as “all reasonable expenditures. . . required of the employee in the discharge of employment duties and that inure to the primary benefit of the employer.” In addition to the necessary expenditure requirement, for an expense to be reimbursable: (1) the employer must have “authorized or required” the expense; and (2) the employee must request reimbursement of the expense incurred along with all appropriate documentation validating the expense within 30 days of incurring the expense—unless the employer’s reimbursement policy provides for a longer period. The law specifically excludes the following types of losses from those that an employer is obligated to reimburse: (1) losses due to an employee’s own negligence; (2) losses due to normal wear; and (3) losses due to theft unless the theft was a result of the employer’s negligence. Continue reading ›

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The #metoo, can be viewed as a disease in business practice.  In its wake, thousands of women have come forward to raise complaints of sexual harassment.  Workplace harassment does not simply remain in the realm of celebrity, its reach is much greater.  People are getting worked up about it and are taking sides.  Statistically speaking, since the movement began, the Legal Defense Fund has received more than 3,500 requests for assistance from workers in more than 60 different industries in all 50 states. Any business anywhere could be targeted for some event that could have happened for a time period prior to the current management in place.

In the past, people have not spoken up because of the fear.  With taking a stance can come the loss of job which leads to a loss of financial security.  The risk was too great.  This had lead to many debates and reconsideration of the way in which business practices transact business and of its operation.

Businesses are looking towards countering that culture.  Getting their name enmeshed in a lawsuit looks like a poor reflection on them from a commercial perspective.  Consumers have that much power.  That is why bystander protections are measures being introduced.  Ensuring policies that already exist in manuals are enforced or stood by are another way of standing firm to the commitment of culture. Continue reading ›

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With the increase in sensitivities to gender and race discrimination and the resulting lawsuits, more corporations are seeking ways in which to help cater for the divisions in gender and background of employees.

Sexual harassment suits have gone up in the light of the #metoo and many other ethnic-related and religious identities are not holding back when it comes to taking behavior that they do not approve of to the courts.

Some suits have gone so far to include the following words in their pleadings as proof of an alleged racist or sexist culture:

A consumer bureau “maintains a biased culture replete with harmful stereotypes regarding its racial minority and female employees that infect its policies and decision-making, including performance evaluations, compensation, and promotions.” (U.S. Consumer Financial Protection Bureau have charged they were discriminated against by officials of the bureau once headed by Cordray.) 

In that suit, the bureau has responded by stating Cordray “worked hard to build a more inclusive and diverse workplace, launching initiatives to ensure women and minorities receive fair treatment and fundamentally reforming the management practices of the bureau. Civil rights leaders stood by Director Cordray then, and they stand by him now.”

This has forced some companies to change their approach when it comes to steering away from segregated groups within a workforce environment.  People who are not included, do not divest and are more likely to drive up costs for employers overall.  Disgruntled, angry employees take it to the news and courts, leading to bad publicity and unnecessary costs. Continue reading ›

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Sick leave is the leave of absence granted in cases of illness. Current changes are being made in this realm of the paid absence of duty and coming fast.  Federal requirements have not been in place for paid sick leave.  The Family and Medical Leave Act (FMLA) does not require unpaid sick leave.  In cases of where an employee has worked for their employer for at least 12 months, and have worked for at least 1,250 hours over the previous 12 months, and work at a location where at least 50 employees are employed by the employer within 75 miles, they are eligible.  America is the only country amongst a lineup of 22 developed nations that doesn’t guarantee pay if an employee, or a close member of the employee’s family, gets an illness and needs to take a sick day.

Starting July 1, a new law will take effect and requires any business with 18 or more employees to give workers paid “sick and safe” days.  This allows for time off to deal with illness, family issues, domestic violence, and other similar circumstances. The new law provides up to three days of sick and safe leave in 2018, four in 2019 and five in 2020 and beyond. The Department of Labor and Training will post information on its website, www.dlt.ri.gov, within a couple of weeks to guide employers.  Those who have questions should call the department at (401) 462-8000. Continue reading ›

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Inquiries into the background history of an employee have the potential to affect the salary set for an employee in the future. Questions such as, “how much did you make
in your previous job?” have the potential to legally tie up employees and not in a good way. Though the question may lead to the formulation of a salary or not intentionally
meant to do a harm, to some the interview question may sound like bait. This is especially when it comes to women being more “woke” in a post-Trump era. Typically,
women minorities have had a history of earning less, as with other minorities and the pinch is felt during the interview process.

This salary question may come in pre-screening for an interview, during an interview or after the interview process. Several states have measures in place that now preclude
employers from being able to ask employees about prior pay. Does this curtail the gap between race and gender? Employers are generally looking for the standard set by industry
but from a legal perspective, these standards are now viewed as being set with an imbalance and huge discrepancy. That is why the courts have also stepped into place
to interpret what is legal and not when it comes to this process. There are companies that have moved forward and already adapted to the changes in the current legal climate. For that reason, changes have been made to ensure that this type of question is not asked. Hiring policies have been made to reflect in with some of the bigger names that do not wish to even take a legal risk or set a standard that would not be fair.

A Philadelphia law banned questions about pay in a federal district court ruling by ruling that it was an impingement on free speech. A recent ruling was made by a female who
sued her employer for paying her less than her male colleague based on the scale of her prior salary. It was clearly made known to the court that she had received the same step increases as males under the union contract but was hired at a lower rate due to her prior salary. The employer testified to that being the only basis for the difference. Application of the Equal Pay Act could not justify this at all. It was a clear violation as the act prohibits discrimination against employees on the basis of sex by paying lower wages “for equal work on jobs requiring equal skill, effort, and responsibility performed under similar working conditions.” Continue reading ›

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Inquiries into the background history of an employee have the potential to affect the salary set for an employee in the future. Questions such as,  “how much did you make in your previous job?” have the potential to legally tie up employees and not in a good way.  Though the question may lead to the formulation of a salary or not intentionally meant to do a harm, to some the interview question may sound like bait.  This is especially when it comes to women being more “woke” in a post-Trump era.  Typically, women minorities have had a history of earning less, as with other minorities and the pinch is felt during the interview process.

This salary question may come in pre-screening for an interview, during an interview or after the interview process. Several states have measures in place that now preclude employers from being able to ask employees about prior pay.  Does this curtail the gap between race and gender? Employers are generally looking for the standard set by industry but from a legal perspective, these standards are now viewed as being set with an imbalance and huge discrepancy.  That is why the courts have also stepped into place to interpret what is legal and not when it comes to this process.

There are companies that have moved forward and already adapted to the changes in the current legal climate.  For that reason, changes have been made to ensure that this type of question is not asked.  Hiring policies have been made to reflect in with some of the bigger names that do not wish to even take a legal risk or set a standard that would not be fair.  Continue reading ›

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President Barack Obama during his tenure had enacted protections by law to find that“sexual orientation is inherently a ‘sex-based consideration.’”  The current President Trump was determined to change that and the issue was brought up before the courts in a  landmark civil rights case which bars employers from discriminating against their workers based on sexual orientation.

President Trump had intervened in a discrimination lawsuit filed by a sky-diving instructor and argued that Title VII of the 1964 Civil Rights Act did not explicitly cover sexual-orientation discrimination in the workplace.  This is despite the separation of powers doctrine that is in place and was, therefore,  a stance that put it at odds with the Equal Employment Opportunity Commission.

The United States Court of Appeals for the Second Circuit rejected the notion that sexual-orientation discrimination was not covered in the Civil Rights Act.  It was determined that  “race, color, religion, sex or national origin,” should also be extended to include sexual orientation. An appellate court in Atlanta has ruled the opposite.

The issue is still largely a political one as the ruling could create a scenario in which the issue of gay rights at work will be decided by a Supreme Court.  The Supreme Court nomination choice of Justice is Neil M. Gorsuch and so has the weight and bearing of Trump attached.

For now, the private party that lost the case has not decided whether the Supreme Court will decide the case or not, in a review of the decision.  Continue reading ›

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