New Jersey Employment Law Blog

We've been "off the air" for a while for reasons that involve changes of ISP's and registration of web addresses.  It's a long and boring story that best concludes with the admonition "don't try this at home." 

So Labor Day has passed, summer is unofficially over, the political season is in full swing, and we all ramp back up to top working speed.

Here's a gentle reminder as you gear back up.  Read those contracts!  Even if you can't read English.  That's the ruling of the Third Circuit Court of Appeals in a decision issued on August 28,  Morales v. Sun Constructors, Inc.

The court enforced an arbitration agreement written in English despite the fact that the affected employee did not read or speak English.  Applying traditional principles of contract analysis, the court found ruled that it was the obligation of the employee to do what was necessary to ensure that he understood the document that he was asked to sign.  So here's the lesson for employees: you will be held to the terms of the agreements that you sign, unless the employer is guilty of fraud in inducing you to sign.

The converse is true for employers.  If employees do not have the language skills and ask you to translate the agreement for them, do it thoroughly or you run the risk of having a court refuse to enforce your agreement.

Posted In Employment Law News | Comments (0) | Permalink |

About 9 months ago we posted on the legal problems of the popular tourist restaurant Tavern on the Green.  Seems that male management was accused of being a little too handy with the female wait staff. 

Now the NY Times reports that the restaurant has settled with the EEOC for $2.2 million.  Ouch.

Posted In Employment Law News , Sexual Harassment | Comments (0) | Permalink |

Yesterday President Bush signed into law the Genetic Information Nondiscrimination Act.  The new law prohibits employers from discriminating against employees or prospective employees on the basis of genetic information.  It also forbids the disclosure of genetic information, and prohibits insurance companies from making eligibility determinations and premium changes on the basis of genetic information. 

See  President Bush's remarks from yesterday's signing ceremony, and an article from Business Insurance here. 

Also, here's our prior post from last year, when the the bill had passed the House and was awaiting action by the Senate.  

We'll have more when we see the bill as signed by the President.

Posted In Employment Law News | Comments (0) | Permalink |

A federal jury in Newark reminds us that the answer is yes --- to the tune of $10.5 million --- as this report by the AP shows.

The moral of the story: if you're going to sign something, have it reviewed first by your friendly neighborhood lawyer or be prepared to live with the consequences.

Posted In Employment Law News | Comments (0) | Permalink |

We've posted before on a burgeoning issue of employment law --- so-called independent contractor litigation.  In essence, the cases claim that in some circumstances workers are treated by their employers as independent contractors are in fact employees of the company.  The issue is not just a matter of definition, but has important consequences in the real world of business.  Employees are entitled, for instance, to the overtime protections of the Fair Labor Standards Act and similar state laws.  Independent contractors are not. 

There is an obvious business reason for employers to want to classify as workers as contractors: it's cheaper and allows them to control their costs.   But it's not a low-risk strategy, as employers invite the scrutiny not only of the affected workers, but also of the IRS.

Here's a story from Lawyers USA involving such a claim against Federal Express.  We won't take your time with the facts.  They're well-explained in the story.  The important thing is that this kind of story is increasingly common, reminding employers --- all employers, large and small --- that they need to make their classification decisions carefully.  Failure to do so invites trouble. 

Posted In Employment Law News , Wage & Hour | Comments (0) | Permalink |

USA Today reports on the settlement by Xerox Corporation, for $12 million, of a race discrimination case brought by a class of its sales people.  The case was filed on behalf of a class of current and former black sales representatives. 

According to the story:

The workers said they were assigned to less profitable territories than white co-workers or were assigned to territories based on their race. They also contend they were passed over for more lucrative territories, promotions, and were denied commissions they had earned.

One plaintiff was assigned a territory in the Bronx, New York.  The position required a car.  The employee objected to the assignment on the basis of undue hardship since he did not have a car.  His manager allegedly told him he received the assignment because "blacks and the Bronx go hand in hand."

Assuming for the sake of argument that Xerox's reason for the assignment was as stated, and further assuming that assigning sales representatives to territories on the basis of perceived compatibility with the prospective customer base is a legitimate basis for a business decision, this case illustrates the danger to employers from  making decisions on the basis of the group identity of protected classes of employees.

We note that Xerox denied wrongdoing, and said that it settled the case to relieve itself of the burden of the continuation of a lengthy and expensive litigation.

Posted In Employment Law News | Comments (0) | Permalink |

The Supreme Court has upheld an EEOC rule that allows employers to coordinate retiree health benefits with Medicare for those who turn 65.  The rule, in effect, allows employers to reduce retiree benefits when they hit 65.  AARP opposed the rule on the theory that it constituted unlawful age discrimination.

Here's an LA Times article with more detail, the Supreme Court's order denying certiorari, and the EEOC rule.  

Posted In Age Discrimination , Employment Law News | Comments (0) | Permalink |

Yesterday the EEOC released a statement  indicating that reported job bias incidents rose 9% in 2007. 

Commenting on the increase in claims, EEOC Chair Naomi Earp warned that “[c]orporate America needs to do a better job of proactively preventing discrimination and addressing complaints promptly and effectively.”

The highest percentage increases were seen in retaliation (up 18%), age (15%), and disability (14%).

Race remains the most frequent source of complaints, but retaliation has moved into second place for the first time ever.  They are followed closely by sex, age, and disability, in that order.  Far fewer complaints charge national origin or religious discrimination.

Based upon the cases that we see in our practice in New Jersey, the most prevalent claims of discrimination involve retaliation, age, and disability.  Claims of race discrimination are relatively rare.  That, admittedly, is anecdotal evidence and may not reflect what other employment lawyers are seeing in their practices.  Does anyone else care to weigh in on this?

It remains to be seen whether the increase in filings presages a more aggressive enforcement approach by the EEOC. 

Posted In Employment Law News | Comments (2) | Permalink |

Recently we've been calling your attention to some helpful tools that the government has made available on the Internet.  Here's another one: the "Executive Pay Finder."  It can be found here on the SEC's website.

Just plug in the company whose executives you want to search, the program searches the company's filings, and in seconds you'll have the financial details of the compensation packages of the principal officers.

Or maybe you been offered the presidency of a smaller publicly traded company, but you don't know whether you've been offered a fair financial deal.  Go the to Finder, plug in your company's market capitalization or revenue (or both), and the program finds the compensation packages for all publicly traded companies that meet your search criteria.

It's interesting and it's helpful.  Try it.  (And once you do, you'll think a little harder about how you can get one of those jobs ...........)

Posted In Employment Law News | Comments (0) | Permalink |

Oh, what a day this has been, what a rare mood I'm in.

Well, it's been more like a week than a day.  And it's nothing at all like being in love.  But it has given employment law bloggers new material that will carry us through a lot of posts.

What is "it"?   Why the U.S. Supreme Court, of course.  We've been telling you that the Supremes had a lot of employment law cases teed up this Term, and now the decisions have started to fly.  We'll post on these in detail in the coming weeks, but for now let's summarize what has happened to date.  (The links are to the Court's slip opinions.)

First up was LaRue v. DeWolff Boberg, decided on February 20, 2008.   There's good news and bad news about LaRue.   Here's the bad news: it's an ERISA case, which means that neither the statute nor any decision interpreting it can be understood by mere mortals.  The good news: we're going to explain it anyway.  The justices --- all 9 of them --- agree that an individual with a 401(k) account can sue her Plan's fiduciary for a loss to that account, if the fiduciary causes the loss.  That's all you need to know.  Take our word for it. 

The second decision came in Sprint/United Management Co. v. Mendelsohn, decided on February 26.  Mendelsohn is an age discrimination case.  The question for the Court was whether the plaintiff would be allowed to present testimony from former Sprint employees that would tend to establish discriminatory conduct by supervisors different than the supervisor who terminated Mendelsohn.  The Court of Appeals (10th Circuit) had disallowed the testimony.  The Supremes reversed and returned the case to the trial court for further action.  Based on the Court's decision, which centers on Federal Rules of Evidence 401 (relevance) and 403 (undue prejudice), this kind of "me too" evidence may be used in certain circumstances.  What those circumstances are will vary by case.  The Court's ruling definitively establishes that there will be no bright-line rule allowing or disallowing this kind of evidence. 

The third decision is Federal Express Corp. v. Holowecki, decided on February 27.  At first blush this appears to be a technical decision of interest only to employment lawyers and others who are similarly deranged.  Here's the nub of the decision: the Court refused to allow a bureaucratic foul-up by the EEOC to defeat the plaintiff's substantive rights under the Age Discrimination in Employment Act. 

We will post on these decisions separately in the coming weeks for those who have a specific interest in them.

Posted In Employment Law News | Comments (0) | Permalink |

California state law allows the medical use of marijuana with a doctor's prescription.  Marijuana use is still illegal under federal law.  The California Supreme Court recently held that an employer acted lawfully when it fired an employee whose marijuana use was disclosed by a pre-employment drug test even though he was using the drug for medical reasons and under a doctor's supervision.  Here's a link to the opinion, along with thoughts from some California-based employment law bloggers here, here, and here.

NJ has no medical use of marijuana law, so this development has no applicability to companies that confine their business to this state.  Since many NJ-based companies now have operations in California, however, this decision will be important to them.

Posted In Employment Law News | Comments (3) | Permalink |

The US Supreme Court soon will hear two cases that involve important employment law issues.   The AP story appears here. 

The retaliation case, Crawford v. Metropolitan Government of Nashville, involves the question whether a witness in an internal investigation of a sexual harassment charge, who subsequently was fired (allegedly) for her participation as a witness, has a claim for retaliation under Title VII of the Civil Rights Act.  The Court of Appeals for the Sixth Circuit said no.  The Bush Administration says yes.  The Court will decide.  Our guess (and at this stage it really is just an educated guess) is that Crawford will be allowed to attempt to prove her case. 

The age discrimination case is Meacham v. Atomic Knolls Power Lab.

Posted In Employment Law News | Comments (0) | Permalink |

This week we're highlighting governmental efforts to be helpful to business by providing online employment law information.  This time it's the US Department of Labor that's updating its information resouces.  Find "Compliance Assistance" here.

Posted In Employment Law News | Comments (0) | Permalink |

Although this post is mostly about aviation, it is tangentially related to employment law.  And since I love airplanes (and flying them), I'm using the tangential relationship to justify writing about it here.

The "Fair Treatment for Experienced Pilots Act" was signed by the President on December 12.  It raises the mandatory retirement age for commercial airline pilots from 60 to 65.  Here's the FAA's press release on the new law.

Gray hair in the cockpit is a good thing.  Gray hair usually indicates experience --- and a lifetime of training --- which translates into safety.  Pilots remain subject to the usual FAA requirement that they qualify for a first class medical certificate every six months.

A hat tip to fellow employment law blogger Michael Fox for being on top of this development.

Posted In Employment Law News | Comments (0) | Permalink |

"No good deed goes unpunished."   "Sometimes you just can't win."

Those sentiments (and perhaps a few others) must be floating around the hallways at Northwest Airlines, where the company and its pilots' union, the Airline Pilots Association, have joined forces to  save a new retirement plan from an age discrimination challenge by a group of senior pilots.  Yahoo Finance has the AP story.

Northwest and the ALPA have asked a federal judge "to declare that it's not age discrimination to tilt retirement contributions to less-experienced pilots to make up for freezing their pensions."  Unlike some other airlines, a bankrupt Northwest chose not to reduce retirement benefits by terminating  its pension plan and turning its obligation over to a federal guarantor.  Instead, Northwest kept the retirement plan but froze its pensions, so that pilots received what they earned, but their pensions stopped growing.  To make up the difference, Northwest supplemented the pension plan with a 401(k) plan, which included a company match.  Ironically, however, under this arrangement the larger 401(k) matching contributions went to the higher paid, more senior pilots.

Because of that, Northwest argued that the new plan had the perverse effect of giving older pilots who lost nothing on their pension more than they would have received before their pension was frozen. Meanwhile less-experience pilots made far less.

On December 1, with the agreement of the ALPA, Northwest terminated its matching payments.  They will resume on January 1, this time with the larger matches going to less-senior pilots in order "to equalize the difference between experienced pilots who will get their full pension, and younger pilots who no longer have the opportunity to see their pension grow."  The goal is to produce similar retirement income levels for both senior and junior pilots.  And that sounds only fair.

The plan is being opposed by some senior pilots as discriminatory based upon age.  The junior pilots, without the change, would be getting the worst of both worlds.

The case serves to illustrate how difficult it can be to reconcile the demands of groups of employees with competing economic interests.  And it moves us to raise another question that employment lawyers often ponder: "Who woulda thunk it?"

Posted In Age Discrimination , ERISA & Benefits , Employment Law News | Comments (1) | Permalink |

The sexual harassment case against Madison Square Garden and New York Knicks General Manager Isaiah Thomas has been settled on the eve of the compensatory damages phase of the trial.  The terms of the settlement were not disclosed in this report from the AP.  For background, here and here are our previous posts on the case.

The settlement avoids the assessment of compensatory damages, and also the potential for a court-ordered award of attorney's fees that alone could have run into millions of dollars.

Employment discrimination cases are a species of what lawyers call "fee-shifting" cases.  That is, the loser can be ordered to pay the winner's attorney's fees.  Usually that means that losing defendants pay winning plaintiffs, and seldom the other way around.  In smaller discrimination cases, where less money may be in play in terms of compensatory and punitive damages, attorney's fees can become the "gorilla in the room."  Defendants must always be aware of the potential for an award of fees to a successful plaintiff.  It is quite possible that, depending on the cases, the fees could be greater than the damages awarded to the plaintiff.  Thus, a realistic evaluation of the likelihood of complete success should always be a part of the defense strategy and should be evaluated on a continuing basis.

This is particularly important for small and mid-sized companies, which may not have the financial resources to absorb an attorney's fees judgment.

Posted In Employment Law News , Sexual Harassment | Comments (0) | Permalink |

Today brings news of two developments featuring coaches of women's sports teams.  The first comes from California.  USA Today reports that the former coach of the Fresno State women's basketball team  has won a jury verdict of more than $19 million.  She claims that she was fired for promoting women's issues.  The university, her former employer takes a different view, claiming inappropriate conduct on the job and obtaining a prescription pain-killer from one of her players.

Local reports from the Newark Star-Ledger bring news of the criminal conviction of a former Immaculata High School girls basketball coach as a result of having what apparently was a "consensual" sexual relationship with a player.  Patricia Balogh was convicted on four of five counts, although she avoided the most serious, which charged aggravated first degree sexual assault.  A conviction on that charge could have landed her in prison for 40 years.  As it is, she's looking at 10.  There's no word whether the victim's family plans to pursue an action for civil relief against the coach or the school.

Educational employers must be vigilant.  Inappropriate relationships between players and coaches are not common, but neither are they rare.  When they occur they have the potential to cause significant liabilities and, just as important, reputational damage. 

Posted In Employment Law News , Gender Discrimination & Sexual Harassment , Sexual Harassment | Comments (0) | Permalink |

Here's Bloomberg's followup story on yesterday's argument in LaRue v. DeWolff Boberg.  Also some thoughts from the Pension Protection Act Blog.

Many who are following this story have weighed in with their predictions on how the Supremes will rule.  So I'll pick up the challenge and go where angels fear to tread.

The prevailing view seems to be that LaRue will win a split decision, with a condition.  The condition is that the Court does not avoid the merits issue by holding that the complaint was technically deficient.  I think that's unlikely.  The court will reach the merits and will rule, 8-1, that LaRue's claim can go forward.  Why?  First principles.  In the first year of law school we were taught that there should be no wrong without a remedy.  There seems to be no dispute that LaRue was wronged, and there's no disagreement that if he loses he will have no remedy.  In the upside-down, inside-out Wonderland of ERISA law there's no guarantee that common sense and simple justice will prevail.  But this one seems too clear-cut for the Court to deprive LaRue of a remedy through a technical reading of one of the few simple and clear provisions of what is, in general, a bizarrely complex statute.

The lone holdout?  Chief Justice Roberts.

One more thought.  The defendant made the all-too-predictable argument that a finding in LaRue's favor would open the "floodgates of litigation," swamping the federal courts with 401(k) investment decision cases.  Enough already.  It won't happen, but even if it does, the system can handle it.  

Posted In ERISA & Benefits , Employment Law News | Comments (0) | Permalink |

Today the Supreme Court heard oral argument in LaRue v. DeWolff Boberg.  Here's a link to a report from Bloomberg.com to give you the background.  If you're really interested, links to the briefs of the parties can be found here.  And the transcript of the argument is also available.

The LaRue case is a big deal in the world of employment law. It will affect the rights of every participant in a 401(k) plan.  There are millions of them (and you know who you are).  It presents the question whether a participant can sue a plan fiduciary for losses sustained in individual accounts due to mismanagement by the fiduciary.  Consider the facts, which are simple.  Mr. LaRue participated in his company's 401(k) plan.  DeWolff Boberg was the fiduciary.  Fearing a market decline, LaRue twice asked DeWolff to sell his riskier investments and reinvest the money in safer bond investments.  DeWolff failed to sell as requested, and LaRue sustained a loss of around $150,000.  LaRue sued, but the lower courts dismissed his complaint on the theory that he could not sue the plan fiduciary for losses to his individual account.   

The Supreme Court will now decide whether individuals who sustain losses at the hands of fiduciaries can sue to recover their money.

My fellow bloggers are weighing in on this one in force.  Here are the preliminary views of Scotusblog, Boston ERISA Law Blog, and Ross Runkel.

Posted In ERISA & Benefits , Employment Law News | Comments (0) | Permalink |

The New York Times reports that in Federal Express Corporation v. Holowecki the US Supreme Court will decide an arcane but important question: whether the filing of what is technically the wrong EEOC form when making a complaint of discrimination is enough to defeat the plaintiff's claim in court.  It's interesting in a technical kind of way, but unlikely to carry the day for Federal Express, the defendant.  Courts like to see cases decided on their merits, not technicalities.  The law abounds with examples of this policy preference.  Especially since those who complain to the EEOC usually do not have legal training, it is unlikely that the Court will deprive them of their day in court as long as they have provided enough information to the EEOC to give the employer fair notice of what they are claiming. 

We will let you know when a decision comes down.

Posted In Employment Law News | Comments (0) | Permalink |

Over time we've followed the saga of Brian Valery, the Anderson Kill paralegal who falsely told his employer --- a major law firm --- that he had gone to law school and passed the bar.  His reward was employment as an attorney.  Valery eventually got caught. 

Law.com reports that Valery has now pled guilty to grand larceny for accepting an attorney's salary under false pretenses.  He now has until January 30, 2008 --- his sentencing date --- to repay $150,000.  If he does, it's 5 years probation.  If not, it's 5 to 15 in the slammer.

Valery is an extreme case, but we can't stress enough the importance to professional services firms of checking the qualifications of new hires. 

Posted In Employment Law News | Comments (0) | Permalink |

We've posted previously on the age discrimination case that was brought by the EEOC on behalf of demoted and fired partners of legal giant Sidley Austin.  The case has been followed closely by the legal community since it had the potential to affect the mandatory retirement policies of many large firms.  Now the Wall Street Journal reports that the case has been settled, with $27.5 million dollars being divided among 32 plaintiffs.

Due to the settlement, interesting and important questions about what it means to be a "partner" in a large law firm will not be decided by the court, at least not in this case.  Francis Pileggi of the Delaware Corporate and Commercial Litigation Blog has some thoughts on the subject, as does Professor Larry Ribstein on Ideoblog.    

A somewhat similar case was decided in New Jersey in 2006, where the issue was the definition of "employer" for purposes of CEPA, New Jersey's whistleblower law.  You can follow up through our post on Feldman v. Hunterdon Radiological Associates, bearing in mind that the issues, though similar, are not identical.

Posted In Age Discrimination , Employment Law News | Comments (0) | Permalink |

The news has been all over the media, so we won't bother with anything detailed.  Here's a link if you're interested the details of the Knicks' latest loss, this one in the courtroom to the tune of $11 million in punitive damages. 

And the damage to the team will just get worse.  Compensatory damages still have to be decided, which could tack millions more onto the judgment.

Posted In Employment Law News , Sexual Harassment | Comments (0) | Permalink |

Two newsworthy items this morning.

Early reports are that the jury has reached a partial verdict in the sexual harassment suit against The New York Knicks and general manager Isiah Thomas.  The only thing that the jury has not yet decided is whether Thomas should pay punitive damages.  Ouch.  The defense team couldn't have slept well last night.

Reuters reports that a federal judge in San Francisco has "extended an order preventing the Department of Homeland Security from launching a controversial new program to root out illegal immigrants in the nation's workforce."   The extension is for 10 days while the court decides on the legality of the program.

More on both when available.

Posted In Employment Law News | Comments (0) | Permalink |

The Kansas City Star reports on the recent settlement of a class action alleging age discrimination against Sprint Nextel Corp.  The case involved about 1,700 former employees and settled for $57 million.   The plaintiffs  alleged that Sprint targeted for layoff employees age 40 and older.  Sprint denied the charges.

The case is noteworthy for the amount of discovery that was conducted.  Two million pages of documents were exchanged and 600 depositions were taken.

The class in this case did somewhat better financially than the plaintiffs in a similar case in Georgia that was recently resolved.  The average settlement in the Georgia case was about $6,000 per plaintiff, while in the more recent case the average was $20,330.

The court has yet to rule on the plaintiffs' attorneys' application to approve about $19 million in fees.

Age discrimination class actions continue to hold the potential for expensive and risky litigation that can cost major employers large amounts of money.  For smaller employers the prospect of defending multi-plaintiff cases can be even more dangerous since the cost of defense and the potential verdicts can easily outstrip the company's available resources.  Thus, as a general rule every termination decision, and certainly every decision to terminate multiple employees, should be made only with the assistance of experienced employment counsel. 

Posted In Employment Law News | Comments (0) | Permalink |

Employees (or more frequently, ex-employees) often harbor the impression that the threat of punitive damages will force their employers into a quick settlement of whatever complaint they have with their employer.  They need to be disabused of that notion in all but the most egregious situations.  In New Jersey punitive damages verdicts are hard to come by.

The same is true, and increasingly so, in the federal courts, especially in light of the Supreme Court's ruling that in order to meet constitutional due process requirements most punitive damages awards should be in a single digit ratio to compensatory damages, that is, not more than 9:1.  

Law.com reports that the United States Court of Appeals for the Third Circuit, the federal appellate court that covers New Jersey,  has drastically reduced an award of punitive damages to a plaintiff.  The case is not an employment dispute, so we will not go into detail here about the facts.  Suffice it to say that a jury awarded the plaintiff $109,000 in compensatory damages and $30 million in punitive damages.  The trial judge reduced the punitive damages award to $2 million, finding the jury's 275:1 ratio to be plainly excessive and unconstitutional.  The trial court's reduction brought the ratio down to about 18:1. 

The Court of Appeals further reduced the punitives award to $750,000, a ratio of about 7:1.

It is important to understand that the analysis of the constitutional viability of a punitive damages verdict is more complex than the rote application of a mathematical formula.  Nonetheless, the Third Circuit's analysis signals that increasingly careful review will be engaged in by the appellate courts, which will not hesitate to overrule the trial courts when they believe that constitutional boundaries are exceeded.  And this in turn means that plaintiff's lawyers usually should counsel their employment law clients not to pin their hopes of success on a significant punitive damages award.  Management side lawyers, conversely, now can counsel their clients with greater assurance and a better answer to the question "what's the exposure on punitives?" than "whatever the jury decides."   

Posted In Employment Law News | Comments (0) | Permalink |

After an 11 month delay and much partisan rancor, David Palmer, President Bush's nominee to chair the EEOC --- the agency that enforces the federal anti-discrimination laws --- has asked that his nomination be withdrawn.  Among the criticisms that have been leveled at Palmer while working in EEOC's litigation enforcement section: filing a disproportionate number of enforcement actions alleging racial discrimination against whites, and focusing on religious discrimination.  Here's the story from the Washington Post.

No word so far on another nominee.

Posted In Employment Law News | Comments (0) | Permalink |

The LA Times reports that the House of Representatives has passed a bill that would reverse the decision of the US Supreme Court in Ledbetter v. Goodyear, which strictly construed Title VII's 180 day requirement for filing of pay discrimination claims.  We previously posted on this decision here, wondering whether Congress would make good on its threat to overturn the decision through legislation.  The House bill, if passed by the Senate and signed into law, would return the law to where it stood before the Supreme Court ruled. 

Curiously, according to the report the veto-averse White House has threatened to veto this bill if it is passed by the Senate.  The government has no direct stake in the litigation, and the bill would merely restore the status quo.  What is it about this situation that would cause the White House to threaten the ultimate sanction of a veto?

Posted In Employment Law News , Title VII | Comments (0) | Permalink |

Here's an item from Law.com that addresses the employment law implications of Falcons QB Michael Vick's possible involvement in a dogfighting ring.  We emphasize that Vick has denied wrongdoing and has not been charged with a crime. 

If Vick is charged with participating in dogfighting, or if he's indicted by a grand jury, the standard NFL contract would allow the team to suspend Vick for at least four games *** [or] the Falcons could use a suspension as justification for terminating Vick's contract.

 If the Falcons were to decide to release Vick, he would stand to lose about $70.5 million remaining on his contract.

Posted In Employment Law News | Comments (0) | Permalink |

The Workplace Law Prof reports that the Supreme Court's Ledbetter decision, about which we posted here and here, has quickly caught the attention of Congress.  Which may just consider legislation to undo what the Court did. 

We shall see.

Posted In Employment Law News | Comments (0) | Permalink |

Here's a case that the US Supreme Court has agreed to hear in the Fall.  It's another that deals primarily with technical matters of procedure.  (It involves the validity of the plaintiffs' filing of an administrative charge with the EEOC.  Such a filing is a prerequisite to bringing a lawsuit under federal anti-discrimination laws.)

Whatever the Supreme Court eventually decides, it will have little effect in New Jersey.  Experience tells us that most discrimination cases in New Jersey are filed under the NJ Law Against Discrimination --- commonly known as the LAD --- because its remedies usually are more favorable to plaintiffs and it does not have a requirement that plaintiffs first file with an administrative agency.  Thus, the LAD usually is a better choice for plaintiffs than similar federal statutes.

Posted In Age Discrimination , Employment Law News | Comments (0) | Permalink |

An editorial in this morning's Newark Star-Ledger applauds "a little-noticed decision last week by the state Supreme Court that allows 72,000 current and former New Jersey employees to bring a class-action lawsuit against Wal-Mart."  The decision in Iliadis v. Wal-Mart may not have attracted much notice from the public at large, but it is just a few days old and already is attracting lots of notice from employment lawyers.  See preliminary reactions from Law.com, Bloomberg News (via Wal*Mart Watch), and New Jersey Lawyer.

We posted on this case on January 10, 2007, when the Appellate Division of NJ Superior Court affirmed a trial court's denial of class action status to a claim that could involve as many as 72,000 Wal-Mart employees.  We noted that "a lot of dollars are riding on the outcome" of the pending appeal to the Supreme Court.

The plaintiffs allege that Wal-Mart violated statutes, regulations, and its own policies about how employees should be paid.

The Court's 5-1 opinion by Chief Justice Zazzali ordered (over the dissent of Justice Rivera-Soto) that the plaintiff class be certified, so the case will go forward as a class action.  We will keep you informed as it does.

Posted In Employment Law News , Wage & Hour | Comments (0) | Permalink |

Law.com reports that litigation over allegedly excessive administrative expense charged by 401(k) plans is being filed around the country. 

The suits come amid stepped-up investigations by a congressional committee, the U.S. Department of Labor and the U.S. Securities and Exchange Commission into inadequate disclosures of administrative fees charged to employees in 401(k) and other retirement plans.

Among other things, the cases that have been filed have attacked undisclosed fees charged for mutual funds and annuities.  At least one alleges that the sponsoring employer violated its fiduciary duty to its 401(k) plan participants by engaging a mutual fund company that charged undisclosed fees.   And some cases challenge employers that engage funds that charge high fees, even where full disclosure is made to employees.

It does not appear that any of these cases have been finally decided.  However, some courts have decided motions in which they have upheld the viability of the plaintiffs' legal theories.

We will keep you advised as we follow this new area of employer liability.

Posted In Employment Law News | Comments (0) | Permalink |

AP reports that Sprint-Nextel has agreed to settle a class action suit that claims that it committed age discrimination against some 1700 plaintiffs during a downsizing that took place from late 2001 until early 2003.  The amount of the settlement is $57 million. 

This case follows closely the settlement of another case making same kinds of claims for about $5.5 million. 

Sprint-Nextel denied any wrongdoing, saying that it wanted to put the matter behind it so it could continue with business. 

Posted In Age Discrimination , Employment Law News | Comments (0) | Permalink |

The Houston Chronicle has an article today about the nationwide trend of an increasing number of age discrimination claims filed by baby boomers. 

"[A]ge-bias litigation is a scenario being repeated across the country as companies' streamlining efforts take a toll on baby boomers whose salaries make them targets for layoffs.  "We're seeing a ton of it," [an EEOC senior trial attorney] said."

Employment lawyers tend to agree that age discrimination cases are a bottom-up phenomenon.  Companies generally try to be fair and set appropriate policies.  Lower-level managers who implement those policies are the ones who usually create discrimination problems.

Here's a common scenario:

"[T]the bulk of age-discrimination complaints are brought by a sole plaintiff. These plaintiffs tend to have several things in common: They've worked for one employer for many years, have been stellar performers and were fired after new managers had taken over. 

"What we see over and over again is a new boss comes in and the new boss wants to reorganize and change things," said [one attorney]. "The new boss makes life miserable for the long-term, exceptional employees, and soon some or all of them begin to receive unfair scrutiny and eventually are fired, moved out or demoted."

 Demographics suggest that this trend will not change soon.  And, as the article points out, retaliation claims will probably follow the surge in pure age discrimination claims.

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Law.com reports that the IRS has made sweeping changes to its deferred compensation rules that affects common business compensation practices, including stock options, bonuses, and severance policies. The new rules impose tougher standards and penalties for violations.  Compliance is due by December 31, 2007. 

Employers should review the changes with counsel to ensure that their policies meet the new standards. Don't assume that they don't apply to you.  And the penalties for non-compliance have teeth.

As one employment attorney put it:

"A lot of clients are sort of in denial of [the rules]," said Harrelson of Nashville, Tenn.'s Waller Lansden Dortch & Davis. He believes the rules will catch many employers by surprise. "They are so broad and so invasive that you can have people you never dreamed of falling under these rules."

Now you know.  Don't be one of those caught by surprise. 

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From the Arizona Republic comes a story reminding us that sexual harassment does not always fall neatly into the usual "male harassing female" model.   An Arizona construction company agreed to pay $60,000 to settle a complaint filed by the EEOC on behalf of a male employee.  "In addition to paying $60,000 the EEOC settlement by consent decree requires T.R. Orr to provide training and other relief to educate employees about sexual harassment and their rights under Title VII of the Civil Rights Act of 1964 . . .."

The case was brought on behalf of a male construction worker who was subjected to physical harassment by a co-worker.  The co-worker had a history of such conduct, and the employer knew about it. 

The article does not specify the gender of the harasser, although it appears to have been a woman.  But it really doesn't matter.  The harasser could have been female or male and the liability would have been the same.   Since about 15% of sexual harassment claims with the EEOC are filed by men, employers need to think beyond the usual stereotype to ensure that harassing conduct is promptly addressed.  Failure to do so risks a financial wake-up call from the EEOC or a private plaintiff.

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A Reuters report demonstrates how the law changes with changing times. These days that often means changing with advances in medicine and technology.  A bill that will prevent discrimination based upon a person's genetic makeup, HR 493, has overwhelmingly passed the House.  Senate consideration is next.  The White House backs the measure, while the United States Chamber of Commerce opposes it.

New York Democratic Rep. Louise Slaughter, who sponsored the bill with Illinois Republican Rep. Judy Biggert (news, bio, voting record), said it will eliminate a new form of discrimination and remove people's reluctance to take part in genetic research and testing.

Rep. Slaughter's press release is available on her web site.

The bill includes sections that govern the employment practices of employers, employment agencies, labor unions, and training programs.

The Chamber of Commerce, according to the Reuters story, says that employers do not discriminate on the basis of genetic testing.  It fears the imposition of new regulations and damages in lawsuits.

We will keep you advised as HR 493 advances through the legislative process.

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The EEO-1 or "Employer Information Report"  must be filed annually with the EEOC by all employers that have at least 100 employees, and by those that have at least 50 employees and $50,000 worth of federal government contracts.  The EEO-1 requires employers to provide the government with a count of employees by job category, broken down by race, ethnicity and gender.

The EEO-1 has been around since the mid-1960's.  A revised version must be filed for reports due starting on September 30, 2007.

The EEOC's FAQ's are helpful.   Extensive filing instructions are also available.  Section D - Employment Data, is the only part of the form that has changed.

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For years the NFL has treated its 70+ Drug Program Agents [DPA's], who collect urine samples for the drug testing program, as independent contractors.  The IRS recently ruled that the DPA's are league employees, not independent contractors.  Here's the story as reported by the New York Daily News.

Although the financial impact of the IRS ruling has not been established, it reportedly could cost the NFL tens of millions of dollars for employment taxes, pension contributions, and other benefits that should have been paid to the DPA's over the years.

The NFL's reaction probably is "can't we use instant replay to take another look at this?" 

The employee - independent contractor distinction continues to arise in many business contexts.  Microsoft, for instance, was rather famously impaled on the distinction a few years ago.  Many business --- of all sizes --- use independent contractors.  If your business is one of them, be sure to have your workers properly classified in case the IRS comes knocking.  You don't even have instant replay.  And few have NFL-style money to set right what was done wrong.

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According to this article from Law.com, eleven states, New Jersey among them, are considering laws that would give employees the right to sue their employers for damages resulting from bullying or abuse by their bosses.  Employees usually can sue only for things like unlawful discrimination.  The new laws, if enacted, have the potential to implicate a much wider range of workplace conduct.

New Jersey already gives employees a limited common-law right to sue for workplace abuse through the tort of "intentional infliction of emotional distress."  While it is frequently invoked by plaintiffs in employment litigations, they seldom succeed because of the egregiousness of the conduct that must be proved. 

I will not comment on the wisdom of the proposed laws (at least for now).  But think about the potential impact on employers in light of the survey cited in the article.  Forty-four percent (44%)(!!!) of employees polled said that they have a supervisor or manager whom they consider to be abusive.  That's an astonishing figure, and it's hard to tell whether it says more about the bosses or the employees.

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FedEx, fighting charges that it discriminated against people of color, has agreed to settle the dispute for almost $55 million, according to a report this morning.  The overnight delivery company has also agreed to overhaul its pay, discipline, and promotion policies.

The FedEx explanation for the settlement?

"We voluntarily entered into the consent decree because we believe that this action demonstrates our deep commitment to diversity and equal employment opportunities." In the consent decree, FedEx Express also continues to deny that it practiced discrimination.

The dispute involved FedEx's Basic Skills Test, used in personnel decisions, which whites passed at disproportionately higher rates than blacks and Hispanics.

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A report today from Reuters, quoting the Wall Street Journal, reveals that Wal-Mart has a "sophisticated surveillance operation that included snooping not only on employees, but also on critics, stockholders and the consulting firm McKinsey & Co."

The revelations come from Bruce Gebbard, a Wal-Mart security worker who was fired in March for conducting unauthorized surveillance on behalf of the company.  Gebbard admitted intercepting telephone calls from a NY Times reporter.

"Gebbard said in the Journal that he recorded the calls on his own because he felt pressured to stop embarrassing leaks. But he said in the Journal that most of his spying activities were sanctioned by superiors."

There's more.

"The company also deployed cutting-edge monitoring systems made by a supplier to the Defense Department that allowed it to capture and record the actions of anyone connected to its global computer network, the Journal said."

Yikes. I assume that includes anyone who shops Wal-Mart online.  And you have to wonder how much information they can capture.

Wal-Mart characterizes its security operations as normal. 

We'll see.  Something tells me that we're going to hear more about this.  In the meantime, employees need to understand that these kinds of systems and programs exist and conduct themselves accordingly in the workplace.  You can bet that Wal-Mart is not alone in having this kind of program.

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Cracker Barrel, the national restaurant chain, has sued two of its insurance carriers for failing to pay its defense costs against an EEOC complaint, reports nashvillecitypaper.com.  The EEOC alleged that Cracker Barrel employees engaged in repeated sexual harassment of female workers.  There were also allegations of racial discrimination. 

The case was settled when Cracker Barrel agreed to pay a collective $2 million to 51 employees. 

Its insurance carriers allegedly refused repeated requests that they defend and indemnify Cracker Barrel.

In the face of that refusal, Cracker Barrel has sued the carriers in federal court in Nashville.  The case has just been started and the carriers' defenses have not been formally stated.  Since businesses need to know if the employment-related insurance that they have purchased will actually be available when it is needed, we will follow this issue for you.

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Some recent articles report on recent trends in employment litigation, and specifically the kinds of claims that are being filed by plaintiffs.  Lawyers USA, for instance, recently highlighted a 10% increase in the number of religious discrimination charges that were filed with the EEOC in 2006.  (As noted below, despite the percentage increase, religious discrimination charges constitute a very small portion of the EEOC's docket.)

On March 16 Law.com published an article on a boomlet (pardon the pun) in age discrimination claims as baby boomers approach retirement age.

These articles led me to take a look at the EEOC's statistics on the charges filed with them.  Racial discrimination charges lead the way, followed closely by sex discrimination and retaliation charges.  Age and disability discrimination complaints show up in the charges of about a fifth of the people who filed charges in 2006.  National origin charges appear in about 10% of cases, and religious discrimination in only 3%.  Equal Pay Act charges are barely a blip on EEOC's radar screen.

In my New Jersey practice the most common recent complaints are related to disability and Family and Medical Leave Act issues.  Similarly, our new Jersey Employment Law Blog statistics indicate that the largest number of recent searches involve disability and leave posts.

Has anyone seen different trends in New Jersey?  Nationally?

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Here's some cheery news for a Friday: more workers than ever are dissatisfied with their jobs.  According to a story reported by Reuters, employee dissatisfaction is the highest ever measured.

In a survey of 5,000 U.S. households, more than half of all respondents said they dislike their current jobs, compared to less than 40 percent in a similar survey conducted 20 years ago.

These days, the lowest levels of job satisfaction are among younger workers, the survey found. Only 39 percent of respondents aged 25 and younger said they liked their current jobs -- the lowest level in the survey's 20-year history -- compared to 45 percent for workers between 45 and 54.

In terms of residence, the Northeast fared poorly, with workers in New Jersey, New York and Pennsylvania reporting particularly high levels of dissatisfaction.  Perhaps the crowding, commuting nightmares, and high taxes are to blame?

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Cash balance plans are in the air.  Yesterday we reported on a decision by Judge Chesler of the District of New Jersey that upheld Dun & Bradstreet's cash balance plan against an age discrimination attack.  Today the Third Circuit has weighed in on the issue, holding that PNC's cash balance plan does not unlawfully discriminate against older workers.  The opinion is here and a related news article here.

The opinion is long and complicated, but it amounts to the idea that younger workers may benefit disproportionately from cash balance plans not because the employer affirmatively discriminates, but because of the time value of money.  This, the court found, is not unlawful.

The Third Circuit is the second court of appeals to weigh in on this issue, in concert with the Seventh Circuit in the IBM case.  There is still district court precedent from the Second Circuit that goes the other way and finds cash balance plans discriminatory.

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Earlier this month we reported on a big win the the US Supreme Court for IBM, whose cash balance retirement plan was challenged by older workers as age discriminatory.  The defect, the plaintiffs argued, was that the plan treated younger workers more favorably.  The Supreme Court ruling does not settle the issue on a national level because it merely refused to hear an appeal of a lower court decision of the case.

Now the same issue has come to New Jersey.  US District Judge Stanley Chesler has ruled that Dun & Bradstreet's cash balance plan does not unlawfully discriminate against older workers.  Judge Chesler ruled that "the principle of compound interest and the passage of time produce the age differences that plaintiff complains of, but these are things that are correlated with age; they are not the effects of age discrimination."

There are cases from other jurisdictions that take an opposite view, so this is an issue that the Supreme Court will probably end up reviewing. 

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IBM just had a good day in the US Supreme Court, which refused to review decisions favorable to the computer giant in two cases.  In the first the court refused to review a lower court decision holding that IBM's "cash balance" pension plan does not unlawfully discriminate against older workers.  That saved a potential liability of $1.4 billion (that's billion with a "b").  Not a bad result.

In the second case the high court refused to consider the appeal of an employee who claimed that he was fired in retaliation for his complaints under the Fair Labor Standards Act about IBM's allegedly unlawful failure to pay overtime to some employees.

More detail here.

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Here's a story about an interesting survey recently conducted by Yahoo HotJobs, which indicates that nearly 50% of the respondents plan to change jobs in 2007.  The sample of respondents was not scientifically selected, but the results are intriguing nonetheless.

Among them:  "The Yahoo survey, which was conducted in the last two weeks of October, found the primary reason most people were looking for another job was to improve their salary and benefits, but the opportunity for more career growth was critical for about 19 percent of respondents."

It will be interesting to see if a trend toward job mobility is established in the coming year. 

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2006 was our first year of blogging about employment law issues, with an emphasis on New Jersey law.   Some seven months and 67 posts later, we are on the threshold of 2007, which will be our first full calendar year of blogging.  The approach of the New Year provides us with the traditional  opportunity to look back at some of the items that caught our attention in 2006.

This was a big year for CEPA, NJ's whistleblower law, from new notice and posting requirements to cases that clarify the definition of "employees" who are protected by the law.

The impact of bad language in the workplace on eligibility for unemployment benefits was the subject of another court decision.

The importance of conducting a thorough background check on the licensure of professionals was illustrated by two cases of attorneys who belatedly were discovered not to be licensed to practice law, much to the embarrassment of their employers --- a large law firm and the federal government.

 We looked at a new NJ statute --- the tongue-twisting Worker Freedom from Employer Intimidation Act.  Which is not nearly as sweeping in scope as its title suggests.

We reviewed a number of stories that dealt with pensions and benefits.

And we had some fun with the creative --- and blessedly pragmatic --- federal judge who forced some difficult attorneys to settle a discovery dispute by playing a game of "rock, paper, scissors."

We're looking forward to bringing more to you in 2007.  In the meantime, we wish you and your families a very happy, healthy, personally fulfilling and prosperous New Year.

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All of us at Steinberg Law Offices want to take this opportunity to wish our clients and friends a very Merry Christmas,  Happy New Year, and the happiest of all holiday celebrations.  The simple message of the season is Joy and Peace, and we hope that you find those things over the next weeks and into 2007.

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This isn't really employment law news, just a friendly reminder.  It's office party time.  When you go, don't forget that if you're smart, your emphasis will be more on the "office" than the "party."  Check out the advice you find here and here.  It's worth reading and heeding.

Have a good time, but remember that you're at a business function.  Act appropriately and you will benefit (or at least not self-destruct).  Behave badly and you might just find yourself at someone else's holiday party next year.

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Yesterday's post addressed the plight of some demoted partners of the large law firm Sidley Austin, who are caught in the middle of an age discrimination litigation between the EEOC and Sidley.  Their problem is that Sidley wants access to potentially embarrassing information about those who have moved on to new employment --- information that the attorneys want to keep private for fear that its disclosure could hurt their careers and financial situations.  Some are so concerned that they have asked the EEOC to remove them from the litigation. 

The EEOC so far has refused, noting that it --- the Government --- is the plaintiff, not the individuals.  In other words, the EEOC is going forward with the case on behalf of the attorneys whether the attorneys want them to or not.

With this fresh in my mind I came across this article by Professor Walter Williams, an economist at George Mason University.  It reminds us of the skeptical and cautious view of the Founding Fathers on governmental powers.  It's a quick read and worth the little time it will take. 

I offer it for your consideration with just this comment.  The power of government brought to bear upon a small business or individual can be extraordinarily intimidating.  Keeping the playing field level is one of the most important functions performed by lawyers.  Citizens need to know this and lawyers need to remember it.

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"I'm from the Government and I'm here to help you."&