Articles Posted by Kathleen M. Connelly

As the country reels from the coronavirus pandemic, the economic impact on businesses and employees has become painfully evident.   Whether due to personal or family illness with the virus, self-isolation, school or business closures, or a downturn in business, employees are expected to be facing extended absences from the workplace.   Many employees, especially hourly workers, may not have available paid time off or the economic cushion to weather the loss of income during the absence. Employers may not have the financial wherewithal to pay employees during these absences. In anticipation of these and other  dire economic consequences brought on by the virus, the U.S. House of Representatives passed the Emergency Paid Leave Act with the support of the President. On March 16, 2020 the House substantially revised the bill to significantly narrow the relief available to employees under the original version.  The Senate passed the bill two days later and it is now headed to the President for his signature.  The Families First Coronavirus Response Act will provide economic relief to employees affected by coronavirus-related absences.

The Act will apply to employers with 500 or less employees.   Larger employers are not covered. Administration and Senate leaders have commented that these larger employers typically provide sick leave benefits to their employees,  but many may not provide for two weeks of leave. If not, these employees may be unprotected. Employers with less than 50 employees can apply for an exemption through the Department of Labor if it would “jeopardize the viability of the business”, a vague standard that has yet to be defined.

We have outlined below key provisions of the Act that we hope will assist employers in making difficult staffing decisions going forward.

For nearly two decades New Jersey employers had to comply with the notice requirements of the Federal Worker Adjustment and Retraining Notification Act (WARN), 21 U.S.C. 2100 et seq., as well as New Jersey’s similar counterpart, Millville Dallas Airmotive Plant Job Loss Notification Act (NJ WARN Act), N.J.S.A. 34:21-2. While not identical, both statutes require New Jersey employers with 100 or more employees to provide 60 days’ written advance notice to those employees affected by a “mass layoff” or “plant closing” or a “termination of operations” or “transfer of operations” as those are defined under the respective statutes. Both laws require similar notifications to designated state and local officials. A failure to provide the required 60 days’ advance notice could result in liability for wages and benefits for the period for which the notice was not provided to the affected employee.

As a result of the Toys ‘R’ Us bankruptcy filing in 2017, more than 30,000 workers were laid off nationally, and approximately 2,000 in New Jersey. Initially, these employees were not provided with any severance benefits but an ensuing battle ultimately resulted in the establishment of an assistance fund to provide some monetary relief to affected employees. Critics claimed that these benefits fell far short of what these workers should have been paid.

The Toys ‘R’ Us closures’ effect upon the citizens of New Jersey did not go unnoticed by the state legislature. On Jan. 21, 2020, New Jersey amended the NJ WARN Act to become the first state to mandate employee severance payments in the event of a closure of operations or mass layoff of employees. The amendments also extend significant additional protections to New Jersey employees, making it the most progressive law of its kind in the country. The law goes into effect July 19, 2020.

I. Where We Are

A. What Are Restrictive Covenants in the Employment Setting in New Jersey?

Generally speaking, restrictive covenants in an employment setting take one of three forms: a covenant not to compete, a non-solicitation covenant, and/or a non-disclosure covenant.

Lindabury’s Employment Law Group partner, Kathleen Connelly joins Jeanie Coomber for her podcast series One Woman Today discussing “Workplace Sensitivity Training, Harassment and Bullying”.  In their conversation, Kathleen shares her wisdom on what constitutes “bad behavior” and how education of employees and thorough and fair investigations is paramount for employers.

You may listen to the archived podcast here.

In February of 2019 Governor Murphy signed into law sweeping legislation that significantly expands employee rights to family leave entitlements, provides greater family leave insurance benefits to employees during a leave, expands the definition of “family members,” and finally, provides greater job security to individuals taking family leave. It is critical for employers to understand the multiple changes resulting from this this legislation to ensure that employee’s rights are not being violated.

Amendments to the New Jersey Family Leave Act: While most employers are aware that those with 50 or more employees are covered by the federal Family and Medical Leave Act (FMLA) that accords employees 12 weeks of protected unpaid leave for personal medical leave, or to care for a newborn/newly adopted child or family member with a serious medical condition, many are unaware that New Jersey also has a similar Family Leave Act (NJFLA) that likewise applied to employers of 50 or more and accords 12 weeks of protected unpaid leave to qualifying employees. However, unlike the FMLA, NJFLA leave is only available for bonding with a newborn or newly adopted child, or to care for a family member with serious medical condition; the employee has no personal medical leave rights available under the NJFLA.

Effective June 30, 2019, the employee headcount for coverage under the NJFLA dropped from 50 to 30 employees, taking it out of alignment with the FMLA and making many more small employers subject to the requirements of the NJFLA to provide guaranteed protected bonding and family medical leave to qualifying employees. The amendments further expanded the NJFLA to include family leave in connection with the placement of a child into foster care with the employee or the birth of a child conceived using a gestational carrier agreement; in addition, leave in connection with the birth or adoption of a child which rights were available to employees prior to the amendments.

As yet another consequence of the #metoo movement, the New Jersey Legislature has passed legislation aimed at prohibiting employers from including certain waiver provisions and non-disclosure clauses routinely found in employment agreements. Senate Bill No. 121 (“the Bill”) , which is expected to be signed by signed by the Governor, will bring about a sea change for employers on several fronts.

The Ban on Waiver of Rights Under the LAD: Until now, employers were free to enter into agreements with employees to waive rights to jury trial and arbitrate all employment-related claims, including claims under the New Jersey Law Against Discrimination (“LAD”). In recent years New Jersey courts have declined to enforce individual arbitration agreements unless the employer agrees to preserve certain procedural and substantive rights, such as statutory rights to punitive damages and attorney fees, the full benefit of the statute of limitations period, and the absorption of the costs of arbitration by the employer. Nevertheless, properly crafted waivers and arbitration agreements were enforced by the courts despite the employee’s surrender the right to a jury trial in a judicial or arbitral forum.

Under the Bill, a provision “in any employment contract that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation or harassment shall be deemed against public policy and unenforceable.” Moreover, the Bill bars any prospective waiver of any right or remedy under the LAD or any other state statute. Whereas the rights conferred by the LAD include a jury trial, the Bill effectively prohibits an employer from entering into any agreement i) to waive a trial by jury of LAD claims in a judicial forum, or ii) to arbitrate LAD claims which necessarily dispenses with a jury. At the very least, employers may be required to exclude claims for discrimination, retaliation and harassment from arbitration agreements. No surprisingly, these mandates do not apply to collective bargaining agreements.