Articles Posted in Labor and Employment

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Restrictive Covenants and Non-Compete Agreements

Restrictive covenants are clauses in contracts where the parties agree that one or both of the parties agree to restrict their ability to act in certain ways during or after the term of the contract.  There are a variety of restrictive covenants, such as “non-poaching” agreements, were a party agrees not to employ the other party’s employees; non-disclosure agreements, or NDAs, where the parties agree not to disclose the other’s confidential information or trade secrets; and non-solicitation agreements, where one or more of the parties agree not to solicit or do business with thesupreme-court-building-1209701__340-300x200 other party’s customers or clients after the expiration of the contract.

In the employment context, the most common restrictive covenant is a non-competition agreement, in which an employee agrees that during or after their employment with the other party, they agree not to compete against it.  Restrictive covenants are enforceable under New Jersey employment law, provided they meet certain requirements.  The Appellate Division of the Superior Court of New Jersey recently addressed when an employee may challenge the validity of a non-compete agreement in court in the case of Ondik vs. Princeton Eye and Ear, LLC.

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A recent New Jersey employment law decision found that even where harassment is not by a co-employee, her employer may still be liable if the victim worked closely with the harasser in her workplace.

Background

Kristine Bodner was a certified alcohol and drug counselor employed by the Center for Family Services (the “Center”), a private nonprofit social services provider. The Center is a “provider agency” for the New Jersey Department of Child Protection and Permanency (the “Department”).  She was assigned to work at the Burlington office of the Department, a department of New Jersey state4-225x300 government.  She worked closely with the Department’s supervisors.  Clients were sent by Department to the Center.  The Center would assign clients to Bodner.  She assessed clients to see if they had substance abuse issues and if so to recommend the appropriate level of care, and report them to the case workers.  She would conference cases with Department case workers.

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What is Whistleblower Law?

In New Jersey, “whistleblower law” refers to a body of law which protects employees who engage in “whistleblowing activity.”  There are two basic sources of New Jersey whistleblower law: the statutory protections of the New Jersey Conscientious Employee Protection Act (CEPA); and the common law protections under the case of Pierce v. Ortho Pharmaceuticals (Pierce), which provides similar protections.4-225x300

Who is considered a whistleblower?

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Several New Jersey employment laws govern the payment of wages.  The New Jersey Wage and Hour Law (along with the Federal Fair Labor Standards Act) governs minimum wage and overtime.  The New Jersey Wage and Hour Law governs what are considered wages and whendc-court-appeals-district-columbia-building-abraham-lincoln-statue-74985350 they must be paid.  The Supreme Court of New Jersey considered whether and under what circumstances “commissions” are considered “wages” protected by the Wage Payment Law.

Background – PPE Sales at Suuchi, Inc., During the Pandemic

Suuchi, Inc. sells a software-driven platform.  Its salespeople are paid commissions of 1.75 percent for the first $729,167 of sales based on annual recurring revenue, and 4 percent beyond that.  Suuchi’s plan stated that it was “intended to cover all sales situations.”  During the Covid Pandemic, Suuchi branched out into selling personal protective equipment (PPE).  The company sent an email advising its sales people that commissions would be based on net revenue, and commissions would be 4 percent when net revenue generated on PPE.  However, the chief executive officer sent a follow-up email clarifying that “we are providing the same commissions on these one time orders and not penalizing for not being [annual recurring revenue].”

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What is the New Jersey Law Against Discrimination?

The New Jersey Law Against Discrimination (LAD) is a state law that prohibits discrimination in employment based on certain of an employee’s immutable qualifications.  It is one of the1-300x225 strongest employee protection laws in the country.

Who is protected under the New Jersey Law Against Discrimination?

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In lawsuits where employees claim their employer wrongfully withheld overtime or minimum wage, if the employer claims that the employees were “exempt” it bears the burden of proving that they actually met the requirements of the exemption under the Federal Fair Labordc-court-appeals-district-columbia-building-abraham-lincoln-statue-74985350 Standards Act.  There was a split among the Federal Circuit Courts of Appeals regarding what that burden of proof was.  The United States Supreme Court has now resolved that conflict in the case of E.M.D. Sales Inc. v. Carrera.

Wage and Hour Protections for New Jersey Employees

New Jersey employment law provides that employers must pay minimum wage and overtime to most employees unless they are exempt.  The Federal Fair Labor Standards Act provides similar protections.  The main exemptions under both Federal and New Jersey employment law are similar.  Administrative, executive, professional and “outside sales” employees are exempt from minimum wage and overtime provided they make a minimum salary.

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New Jersey employment law offers strong protections to employees.  Among these are the New Jersey Wage Payment Law and the New Jersey Wage and Hour Law, both of which were amended in 2019 to increase the statute of limitations from two years to six, and increase3-225x300 penalties for violations.  In August 2024, the New Jersey Legislature further strengthened these laws to prevent employers from taking advantage of complaining employees because of their immigration status.

New Jersey Wage Protections

New Jersey’s Wage and Hour Law and Wage Payment Law provides the basic protections regarding the payment of wages to New Jersey employees.  (The Federal Fair Labor Standards Act provides similar penalties at the Federal level, but with a shorter limitation period and lesser penalties.)  Failure to pay overtime or minimum wage, or failure to pay wages to employees when due, allows the employee to recover her unpaid wages for the last six years plus liquidated damages, making the entire recover 300 percent of the wrongfully unpaid wages.  Additionally, the employer will be required to pay the employee’s attorneys fees.  (An employer will have a good faith defense available for liquidated damages for a first violation, but not for the unpaid wages themselves or the employee’s attorneys fees.)

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New Jersey employment law provides significant protections for employees who are pregnant, breastfeeding, or have recently given birth.

The New Jersey Law Against Discrimination provides protection against discrimination against pregnant and breastfeeding employees.  It also requires that employers make reasonablekids-300x225 accommodations available so that pregnant or breastfeeding employees and new mothers can perform their jobs.  It prohibits retaliation against employees who request such accommodations.  The New Jersey Law Against Discrimination gives a non-exhaustive list of such reasonable accommodations: “bathroom breaks, breaks for increased water intake, periodic rest, assistance with manual labor, job restructuring or modified work schedules, and temporary transfers to less strenuous or hazardous work.”

The New Jersey Law Against Discrimination generally gives more extensive protection to employees than Federal law, including pregnant and breastfeeding employees, and New Jersey State courts generally provide greater procedural protections for employees than Federal court.  Nonetheless, Federal law also provides protections for pregnant employees.

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New Jersey employment law governs the hiring of municipal police officers and firefighters, particularly Titles 11A and 40A of New Jersey Statutes.  These local first responders play critical roles in our society.  New Jersey employment law therefore closely regulates the hiringjoe-b-300x200 process to ensure that New Jersians are served by only the best law enforcement officers and firefighters.

There are two roots for hiring local government law enforcement officers and firefighters.  In civil service jurisdictions, an applicant must pass a civil service examination, score high enough on the list to be reached, pass physical and psychological examinations, pass a background investigation, and successfully complete a police academy course.  Municipalities which have not adopted civil service have more discretion in hiring, in that the applicants do not have to take a civil service examination or be ranked high enough on a civil service hiring list.  However, many non-civil service jurisdictions utilize a “chief’s test” in place of the civil service examination. Civil service municipalities retain some discretion in hiring through the “Rule of Three.”

Initial hires must be at least 18 years of age, but no more than 35, although there are exceptions to the maximum age requirement for veterans and law enforcement officers and firefighters with prior service in another jurisdiction.  They must be New Jersey residents, although recently discharged veterans receive a grace period to move to New Jersey.  A municipality cannot require an applicant to be a resident of the local jurisdiction, but it can give a preference to residents.  residence can also be used as a tie breaker in promotions.  The “veterans preference” is applicable to hiring in civil service municipalities.

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New Jersey’s Requirement for Employers to Provide Reasonable Accommodations for Disabled Employees

New Jersey’s Law Against Discrimination and Title VII of the Civil Rights Act of 1964 prohibit discrimination because of an employee’s disability.  New Jersey civil service law also prohibits discrimination because of an employee’s disability.  These laws require employers to provide7-300x225 reasonable accommodations so that disabled employees can perform their duties.

The regulations promulgated by the New Jersey Division of Civil Rights implementing the Law Against Discrimination’s reasonable accommodation requirement require employers to engage in an “interactive process” with the employee to determine what reasonable accommodations the employer can provide for the employee.

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