Please note that, in light of Governor Murphy's recent "stay at home" order in New Jersey due to the COVID-19 pandemic, McLaughlin & Nardi, LLC's attorneys and staff are working remotely at this time. However, we are still ready, willing, and able to address all of your individual and business legal needs. Please contact us by phone at (973) 890-0004 or email at info@esqnj.com. We are committed to providing the same high level of legal services that our clients have come to expect over the years. Thank you.

Articles Posted in Business Law

Published on:

The Appellate Division of the State Superior Court recently issued an opinion on New Jersey construction law in the case of In re Protest Of Contract Award For Project A1150-08, N.J. Executive State House Comprehensive Renovation And Restoration which has troubling NJ_State_House-300x200implications for contractors.  The decision is published, so it is precedent for future cases in which contractors challenge the award of New Jersey construction contracts by state and local governments.  In this post I won’t dwell on the details of which contractor was right and which was wrong, but rather I’ll focus on the Appellate Division’s examination of the procedures followed, which is a cautionary tale about the ability of New Jersey construction contractors to meaningfully object to the award of public contracts.

Background

On November 15, 2019, the New Jersey Division of Management and Construction (“DPMC”) awarded a contract for renovation and restoration of the New Jersey State House to Daniel J. Keating Company, the lowest bidder at $199,498,000.  Hall Construction Co., Inc., which had bid $205,777,000, was the second lowest bidder.

Published on:

The New Jersey Wage and Hour Law regulates minimum wage and overtime requirements.  It is New Jersey’s counterpart to the Federal Fair Labor Standards Act.  The Wage and Hour Law and Fair Labor Standards Act are bedrock elements of New Jersey employment law.  Under the Wage and Hour Law, New Jersey employers must pay overtime at a rate of one and half times an employee’s regular pay if she works more than forty hours a week.  However, if the employer is in imagesCAWQ89PSthe trucking industry, the employer is only legally required to pay overtime at the rate of one and half times minimum wage.  However, if the employer should have paid the higher rate but paid the lower rate, it can raise the defense that it did so in “good faith” reliance on government orders or regulations.

In the case of Branch v. Cream-O-Land Dairy, Elmer Branch filed a class action lawsuit in the New Jersey Superior Court against his employer, Cream-O-Land Dairy, on behalf of himself and similarly situated truck drivers employees, for non-payment of overtime in violation of the Wage and Hour Law.  Cream-O-Land argued that it was not required to pay the higher rate for two reasons.  First, it argued that it was a “trucking industry employer,” and that all the employees were paid at least the lower overtime rate.  Second, it argued that it met the “good faith” defense.  The trial agreed that Cream-O-Land satisfied the good faith defense and dismissed the case on that ground.  Branch appealed to the Appellate Division of the Superior Court which reversed, finding that the matters on which Cream-O-Land relied did not satisfy the statutory requirements of the Wage and Hour Law.

Cream-O-Land then appealed to the Supreme Court of New Jersey.  Because the trial judge did not address the exemption for trucking industry employers the Supreme Court, like the Appellate Division,  examined only whether Cream-O-Land satisfied the good faith defense.  It ruled that it did not.

Published on:

The Appellate Division of the Superior Court recently issued an opinion illustrating several important points regarding construction liens under the New Jersey Construction Lien Law and collection of payment under the New Jersey Prompt Payment Act.

Background

In that case, Prime Time Construction, LLC vs. Vimco, Incorporated, , Prime Time Construction, LLC was the general contractor on three construction projects inconstruction-machine-3412240__340-300x202 Paterson.  The properties were owned by three limited liability companies which were related to Prime Time.  Prime Time executed written subcontracts with Build Logistics, Inc. (“BL”) to do the masonry and excavation work on the projects.  BL executed a written contract with Vimco to provide materials for two of the projects.  Vimco provided the materials directly to BL; it had no contract with Prime Time or the owners.  Prime Time paid BL the full amount under the contract for all the work it performed and materials it provided.  However, BL abandoned the project and failed to pay Vimco.

Published on:

Following a $2 trillion plus stimulus bill passed in the Spring of 2020, the Congress has finally been able to come to terms on another economic stimulus and relief bill, and the president has finally signed it into law.  The bill is over nearly 5,600 pages long and has a whole host of miscellaneous provisions included therein.

However, for small businesses several issues were of particular concern.  First, there have been a host of issues, questions, and need for clarification on the small-business-300x215previously created Paycheck Protection Program (“PPP”).  Back in the Spring of 2020, that program was created to provide money to small businesses to help them pay their payroll while suffering from financial issues caused by the Covid-19 pandemic and widespread shut-downs and stay-at-home orders. The new stimulus bill clarifies that expenses paid with these funds may still be used in tax deductions and the amount of the PPP loan would not be considered in calculating the company’s gross income.

PPP funds were generally supposed to be used for (and would only be forgiven for) use in covering payroll, mortgage interest, rent, and utility payments.  The new bill should be expanding forgivable expenses to operational expenditures for software or computing services for business operations, property damage due to public disturbances that were not covered by insurance or other compensation, payments to suppliers where the supplies were essential to the operations, made pursuant to a contract prior to the covered period, or for perishable goods, or worker-protection costs required to comply with requirements of state or local governments, the CDC, OSHA, or the Department of Health and Human Services.

Published on:

As a result of the COVID-19 pandemic, the federal government passed the Families First Coronavirus Response Act (“FFCRA”) on March 18, 2020.  This law includes two Acts providing for paid leave to be enforced by the US Department of Labor’s Wage and Hour  Division.  They provide great protections for New Jersey employees which should help the economic recovery.

These 2 Acts are the Emergency Family and Medical Leave Expansion Act, and the Emergency Paid Sick Leave Act.  While the provisions were initially only supposed to apply from the effective photo__1894482_mclaughlin_nardi_4712date of April 1, 2020 through December 31, 2020, they may be extended.  Much depends on the current standoff between Congress and President Trump.

The Emergency Paid Sick Leave Act applies to all employers with less than 500 employees.  No prior employment or employment history with the employer is required for employees to be covered. The Act generally provides for 80 hours (or 2 weeks) of paid sick leave to qualifying employees.

Published on:

It is interesting that the trend in New Jersey employment law is to enforce arbitration agreements in employment contracts, while at the same time finding them unenforceable in consumer and commercial contracts.  However, the law is the same: whatever the area, arbitration agreements are interpreted and enforced – or not enforceable – under New Jersey contract law.  It’s therefore worth looking at two recent opinions in these areas to see what can be learned.

The Knight Case:  Consumer Contracts and Consumer Fraud

In the first, a published opinion in case of Knight v. Vivint Solar Developer, LLC, the Appellate Division of the Superior Court of New Jersey stuck down an arbitration agreement which the defendants tried to enforce in a consumer fraud lawsuit over the sale of solar panels.  After Knight sued, Vivint filed a motion to courthouse-1223280__340-300x200dismiss her complaint and enforce an arbitration agreement which required the parties to arbitrate their disputes.

Published on:

Construction Arbitration

Complex New Jersey construction law cases can be extremely expensive to litigate in court because of the amount of documents involved, the number of witnesses, and the need for experts.  Therefore, many construction contracts contain arbitration provisions.  The view is that arbitration can save money in the 352099_construction_3-002-300x225litigation process, but still provide an enforceable dispute resolution process.

However, it would not be accurate to call construction arbitration “cheap” or “inexpensive.”  Essentially, arbitration is a private litigation process with limited discovery and appeal rights.   By limiting discovery, particularly depositions, a significant source of expense is eliminated, and by limiting appeal rights, arbitration can provide more finality.  However, there is still discovery.   Documents are generally exchanged before the hearing, so there is still expense, but costs are saved because arbitration rarely involves depositions.  Likewise, while experts are not normally deposed, they are still required and must prepare pre-hearing reports about their expected testimony.  All of this entails significant expense.  In addition, while there are minimal filing fees and the services of courts are generally free, the use of an arbitration forum in construction law disputes entails significant fees, and in addition the parties have to pay the arbitrator for all his or her time.

Published on:

The recent trend has been for courts to find arbitration agreements enforceable under both Federal and New Jersey employment law.  However, prior to enforcing an arbitration agreement, courts must  find that there was actually agreement.  This simple concept was emphasized again by the Appellate Division of Contract-pen-thumb-300x225-80678-300x225the Superior Court of New Jersey in the case of Christina Imperato v. Medwell, LLC.

In that case, Christina Imperato was hired by Medwell, a chiropractic office.  She had a limited education and no prior medical or office experience.  When she was hired, Dr. Ali Mazandarani sat with her and had her sign some pre-employment forms.  They were not explained; Mazandarani sat with her, handed her the forms, and pointed to where she should sign.  She was not given the opportunity to read these or take them home.  The documents included a five page agreement which required that employment disputes be resolved by arbitration rather than court.

Imperato sued Medwell in the Superior Court of New Jersey for sexual harassment in violation of New Jersey’s Law Against Discrimination.  Medwell’s attorneys filed a motion asking the court to dismiss the lawsuit and order the case to arbitration.  The trial judge allowed discovery, including depositions, on the limited question of whether Imperato signed the arbitration agreement, and if so whether she signed it voluntarily and knowingly.  The judge then held a hearing with live testimony on that single issue.

Published on:

The New Jersey Supreme Court once again expanded  the enforceability of arbitration agreements under New Jersey employment law.  In its opinion in Skuse vs. Pfizer, Inc., the Court left in place the requirements necessary for agreements to arbitrate employee/employer disputes columns-round-300x201under New Jersey employment law, but in its application let the exceptions swallow the rule.

Pfizer’s Arbitration Agreement

Pfizer adopted an arbitration “agreement” – actually, more of a policy.  It was not a contract signed by an employee and Pfizer.  Rather, the employee was deemed to have agreed to arbitrate employment disputes if she continued working for Pfizer for sixty days after the policy’s effective date.  Employees were notified by email (to over 28,000 employees) about the policy and given a deadline to “acknowledge” having received it.  Whether the employees did or did not acknowledge receipt, they would be deemed to have “agreed” to the policy by their continued employment.  There was a training module with four slides which purported to explain the policy; one of the slides gave the employees the option to print a copy, but they were not given a copy by Pfizer; another thanked the employee for taking the training.  In the FAQ section of the training module employees were told that if they did not agree they would be fired.

Published on:

A recent New Jersey construction law opinion by the Appellate Division in the case of CNJ Construction Corporation vs. Autobuilders General Contracting Services, Inc. illustrates just how important the precise language in a construction contracts is, and just how important itconstruction-9-10-300x225 is to have a well-written contract.

The Case of CNJ v. Autobuilders

Autobuilders General Contracting Services, Inc. was general contractor on a project for the construction of a Maserati dealership in Morris County.  Autobuilders entered into four subcontracts with CNJ Construction Corporation for demolition, concrete, steel and site work on the project.  Each of the subcontracts contained a provision that Autobuilders could terminate the contracts for cause if CNJ failed to perform, but had to give CNJ three days written notice prior to termination, during which time CNJ could cure the default and avoid termination.  The notices had to be delivered by certain specified means, which did not include regular mail.  No notice was required if CNJ abandoned the job.  The contract provided that if CNJ was terminated for cause, it would be liable for any increased cost incurred by Autobuilders for completing its work on the project with other subcontractors.

Contact Information