Articles Posted by Kathleen M. Connelly

In a December 11, 2021 press release, New Jersey Attorney General Matthew Plotkin and New Jersey Department of Labor Commissioner Robert Asaro-Angelo announced the filing of the first lawsuit under a 2021 law that enhances the State’s authority to curtail illegal misclassification of workers as independent contractors through actions such as direct suits in the Superior Court, work-stoppage orders and enhanced penalties.

“When employers unlawfully and callously toss their workers into the ‘independent contractor’ category they are not only depriving them of a steady paycheck, they are also stripping them of earned sick leave, workers compensation, minimum wage, and more,” said AG Plotkin.  “These are national, profitable corporations with deep pockets who are padding their profits with illegal labor schemes, and they seem to have no plans to stop this kind of behavior.”  Labor Commissioner Asaro-Angelo cautioned that companies profiting through misclassification “have been put on notice.  We are proud to have the strongest worker protection laws in the country, which also safeguard employers who play by the rules.  Misclassifying employees will not be profitable, nor overlooked.”

Under New Jersey law, workers are presumed to be employees unless the employer can establish the three criteria of what is commonly called the “ACBC test”: 1) the worker is largely free from the control or direction of the company over the performance of the work; 2) the type of work being performed by the worker is outside the company’s usual course of business, or is performed outside the company’s place of business; and 3) the worker has their own independent trade, job, profession or business.  Treating workers who do not meet these stringent criteria deprives them of the rights and benefits afforded to employees, including minimum wage, overtime, workers compensation benefits, temporary disability benefits, earned sick leave, job protected family leave, equal pay, unemployment payments, and statutory protection against unlawful discrimination.

In a retrenchment of the #MeToo movement’s maxim that “all women must be believed,” a federal jury in Philadelphia found that a University engaged in anti-male bias when it investigated female resident’s sexual assault claim and awarded the accused male employee a whopping $15 million dollars in damages.

The Facts:

The plaintiff, Dr. John Abraham, was the Director of the Musculoskeletal Oncology Center at Thomas Jefferson University Hospital, a professor at Thomas Jefferson University and a partner in the Rothman Orthopedic Institute.  After a pool party hosted by Dr. Abraham at his home, he engaged in sexual activity with a subordinate female resident physician.  Dr. Abraham claims he then filed a report with the University that the resident had intoxicated him and aggressively pursued sex without Dr. Abraham’s consent.  Dr. Abraham maintains that this complaint was not acted upon.  Thereafter, the female resident filed a report with the University alleging she was raped by Dr. Abraham.

On August 30^th, the U.S. Department of Labor (DOL) issued a long-awaited proposed rule that if adopted, will substantially expand the ranks of workers eligible for overtime payments for work in excess of 40 hours, as required by the Fair Labor Standards Act (FLSA).

Under present FLSA regulations, certain “white collar” workers who meet minimum salary requirements and perform specified duties may be classified as “exempt” employees ineligible for overtime.  The current salary threshold to qualify for the white collar exemptions is $35,560 annually, and $107,432 for the “highly compensated employee” exemption.  The proposed rule would increase that minimum salary threshold to $55,068 per annum, and $149,988 for highly compensated employees.

How Businesses Will Be Affected

The National Labor Relations Board (“NLRB” or “Board”) is responsible for enforcement of employee rights under Section 7 of the National Labor Relations Act (NLRA) to engage in protected concerted activity, such as organizing unions, discussing wages and discipline, and other terms and conditions of employment.

Many employers are not mindful of the fact that these rights extend to both unionized and non-union workplaces.  With the decline in union membership, the NLRB has increasingly turned its focus away from unionization issues to workplace practices that may run afoul of employee rights under the NLRA, as illustrated by two recent decisions from the Board.

The Landmark Stericyle Decision’s Impact On Employee Handbooks and Other Workplace Rules

Under New Jersey’s Unemployment Compensation Law, employers have long been obligated to provide separating employees with a Form BC-10 which includes instructions for claiming unemployment benefits, and to provide a reason for the employee’s termination when requested by the NJ Division of Unemployment and Temporary Disability Insurance (the “Division”).  Because employers historically ignored or were ignorant of these requirements, the State Legislature amended the Unemployment Compensation Law to include additional reporting requirements and enhanced penalties for those who continue to ignore these obligations.  These changes went into effect on July 31, 2023.

The Employer’s Reporting Obligations

Regardless of the reason for the employee’s separation, immediately upon a separation of employment the employer must:

Mandatory Sexual Harassment Policy Requirements

Since October 2018 New York has mandated employers to adopt written sexual harassment policies and provide yearly sexual harassment training.  The State developed a Sexual Harassment Model Policy and model harassment training materials that employers can use, or employers can develop their own policy and training materials so long as they meet the State’s minimum standards for compliance.

In April 2023 the New York Department of Labor updated its Sexual Harassment Model Policy (the “Model Policy”), model harassment complaint form, and model training materials, which can be found here.  The updated Model Policy

Following through on Governor Hokhul’s promise in her 2022 State of the State address, New York lawmakers passed a blanket ban on all non-compete agreements, thus joining the growing federal and state efforts to curb their use.   However, the bill imposes greater restrictions than those implemented in other jurisdictions, including California, North Dakota, Oklahoma, Colorado, Illinois and Maryland.  The bill will take effect 30 days after it is signed by the Governor.

The Broad Scope of the Ban: 

The bill prohibits all employers, regardless of industry, from seeking, requiring, demanding or accepting a non-compete agreement from any “covered individual,” defined as any person who performs services on such terms that the individual is economically dependent on the other.  Thus, unlike other laws that include a carve out for highly compensated employees, the ban extends to all workers across the board, including workers hired as independent contractors.

On June 13, 2023, the National Labor Relations Board (“NLRB” or “Board”) reverted to its prior employee friendly independent contractor test to find that makeup artists, wig artists, and hairstylists (“the stylists”) working for the Atlanta Opera were employees rather than independent contractors.  This revived independent contractor test will significantly impact employers who will now face a higher bar when seeking to classify workers as independent contractors excluded from the protections of federal labor laws.

The Discarded SuperShuttle Standard:  Since 2014 the NLRB applied the following non-exhaustive list of factors to determine independent contractor status:

• The extent of control the employer exercises over the work

On May 30, 2023, the Department of Labor (“DOL”) issued an opinion letter clarifying how to calculate leave taken under the Family and Medical Leave Act (“FMLA”) during a week containing a holiday. It is important for employers to properly calculate employee FMLA leave time because a miscalculation could be considered an interference with an employee’s FMLA rights.

The FMLA requires covered employers to provide eligible employees up to twelve workweeks of unpaid leave within a twelve-month period for qualifying family or medical reasons or twenty-six workweeks of unpaid leave within a twelve-month period for caretaking of qualifying service members.  Employees may take FMLA leave intermittently by taking leave in separate blocks of time or by working shortened weeks or days. The amount of FMLA leave taken by employees is calculated as a fraction of the employee’s actual workweek. For example, an employee who normally works forty hours a week but takes off eight hours for FMLA reasons, would use 1/5 of a week of his or her FMLA leave entitlement.

Full Workweek of FMLA Leave

On May 30, 2023 Jennifer Abruzzo, General Counsel for the National Labor Relations Board , sent a memorandum to all Regional Directors expressing her view that except in limited circumstances, non-compete provisions in employment and severance agreements constitute unfair labor practices under Section 7 of the National Labor Relations Act (“NLRA”) because they “tend to chill employees in the exercise of Section 7 rights” which protect employees’ rights to take collective action to improve working conditions.  While many mistakenly believe the NLRA’s reach only extends to unionized workplaces, both unionized and nonunionized employers are liable for unfair labor practices that violate employee Section 7 rights.

More specifically, the memorandum claims that non-competes interfere with employees’ ability to:

• Concertedly threaten to resign to secure better working conditions;