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Employees are often unable to defend themselves against employers attempting to restrain their post-employment business activities through non-compete agreements.  While employers can sometimes show they have a protectable interest in restraining a former employee’s post-employment business activities, it has become far too common that employers inappropriately use restrictive covenants against former employees who simply cannot afford to defend themselves in an expensive commercial litigation.  These employees are often left with no recourse and have no choice but to cave to their former employer’s unreasonable and anti-competitive demands.

Two recent New Jersey cases provide hope and a roadmap to fight against employers who unfairly attempt to use non-compete agreements to the detriment of the former employee and their ability to make a living.  Both cases illustrate that there are ways to fight back against employers who attempt to use non-compete agreements to restrain competition and retaliate against their former employees.

The first case, Abuaysha v. Shapiro Spa LLC, et al., Docket No.: BER-L-988-18, was brought by our firm, Smith Eibeler on behalf of a terminated employee. This case involves a former massage therapist who filed an emergent Order to Show Cause against her former employer to be relieved of her non-compete agreement after she alleged unlawful termination from her employment.  Specifically, the plaintiff alleged that she was unlawfully fired in retaliation for leaving work and taking leave in order in order to get medical treatment after being told that she may have contracted the shingles virus from a client upon whom she had just performed a massage.  The plaintiff alleged that she told her supervisor that she needed to leave work to get medical treatment to make sure she did not have shingles and that she would not perform any further massages until a doctor cleared her to return to work.  The employer terminated her when she returned to work after a few days of leave.

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New Jersey is getting closer to becoming the tenth state to enact a paid sick leave law. On Thursday, April 12, 2018, the New Jersey Senate passed  (A1827) and is headed for Governor Murphy’s desk for his signature.  The bill was approved in March by the Assembly.

The legislation would allow workers to accrue one hour of earned sick leave for every 30 hours.   Employees who work for employers with less than 10 employees can accrue up to a maximum of 40 hours per year and employees who work for employers that employ more than 10 employees can accrue up to a maximum of 72 hours per year. Workers would be eligible for paid sick leave after 120 days of employment.

Certain types of employees are exempt from the bill, namely certain construction employees, per-diem health-care workers and public employees who have sick leave benefits in place. Employees who are employed by temporary employment agencies will accrue the benefits based upon the time they are employed with the agency and not for each separate client they are assigned.  The employer must pay the sick leave earned by the employee at the same rate of pay with the same benefits as the employee usually earns.

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The United States Supreme Court has declined review of a 7th Circuit Court of Appeal decision holding that the American’s with Disabilities Act (“ADA”) does not require employers to provide any reasonable accommodation of an extended medical leave for any more than twelve (12) weeks under the Family and Medical Leave Act (“FMLA”).

In  Severson v. Heartland Wood, Inc. No. 15-3754 (7th Cir. Sept. 20, 2017), the employee, Mr. Severson, went out on company approved FMLA leave for severe back pain in June 2013.  The day before he was supposed to return to work, he underwent back surgery necessitating an additional 2 or 3 months of medical leave to recover from the surgery. Mr. Severson, having exhausted his FMLA leave, asked his employer Heartland for the additional medical leave.  The company refused and terminated his employment.  Mr. Severson then sued his employer arguing that he was not being given the extra leave as a reasonable accommodation under the ADA.

The District Court sided with the employer on a summary judgement motion.  On appeal, the Seventh Circuit agreed, holding that the employer did not have to provide the additional leave other than the 12 weeks of medical leave available under the FMLA. Specifically, the Seventh stated that, “The ADA is an antidiscrimination statute, not a medical-leave entitlement.” The Court also reasoned that the goal of an ADA accommodation is to allow disabled employees to perform the essential functions of their jobs, not to excuse them from working and that “a multi month leave of absence is beyond the scope of a reasonable accommodation under the ADA.”

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It is not uncommon for employers to make an employee’s execution of an arbitration agreement a condition of their employment at the inception of the employee’s employment. But what happens when, in the midst of employment, an employer all of a sudden demands an employee’s agreement to an arbitration agreement under the threat of termination? Does an employee have to sign the arbitration agreement in order to remain employed?  What if the employee refuses to sign the arbitration agreement and, as a result, is suspended and not permitted to return to work by their employer?

A recent New Jersey Superior Court has held that an employer cannot take adverse employment action against an employee who refuses to sign an arbitration agreement that requires her to waive her statutory rights under the Law Against Discrimination.

In Cator v. Hotel ML/Coco Key West Resort et al., Plaintiff, a black female, had made complaints about race discrimination during the course of her employment. During the same time period, her employer implemented a new policy mandating, as a condition of her continued employment, that all current and prospective employees execute an arbitration agreement. Plaintiff refused to execute the arbitration agreement and waive her statutory rights to have her claims of race discrimination adjudicated in a court of law and by a jury of her peers. In response to her refusal to sign the arbitration agreement, the employer suspended her from work and advised her that she would not be permitted to return to work unless and until she signed the arbitration agreement. As a result, the employee filed a lawsuit for claims under the New Jersey Law Against Discrimination.  One of the claims was specifically whether an employer unlawful retaliates against an employee for refusing to sign an arbitration agreement that waives their statutory rights under the law.

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Less than one week from Opening Day of the major league baseball season, Congress has passed legislation that will exempt minor league baseball players from the wage protections mandated under the federal Fair Labor Standard Act (“FLSA”).  This means that Major League Baseball and Minor League Baseball will not be required to pay their minor league baseball players a minimum wage, any overtime pay, or any compensation for spring training or during the off season.

The legislation will also likely put an end to a pending lawsuit brought by minor league players in which they are attempting to gain the legal wage protections available under the FLSA.  The lawsuit was filed in 2014 by lead plaintiff and former minor leaguer, Aaron Senne, who argued on behalf of himself and other minor league baseball players, that Major League Baseball and Minor League Baseball were violating the FLSA by not paying the players minimum wage and overtime pay.  Most minor league players make less than $7,500 a season and work between 50-60 hours a week during the season without factoring in travel time.  Minor league games take place six to seven days a week and require extensive travel for the players.

The FLSA requires that employers pay covered employees no less than $7.25 for every hour worked.  Most states have similar minimum wage laws in place, such as New Jersey that has enacted the New Jersey Wage and Hour Act.  The New Jersey Wage and Hour Act currently mandates employers pay eligible employees a minimum wage of $8.60 per hour.  The FLSA also requires that employers pay covered employees overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay.  The New Jersey Wage and Hour law contains the same provision requiring employees provide eligible employees with overtime compensation.

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The New Jersey Legislature passed legislation this week that mandates equal pay to all New Jersey employees and penalizes New Jersey employers who discriminate against women and other protected classes in their paychecks. The bill has now been sent to Governor Murphy, who has made clear that he will imminently sign the bill into law.

The bill, entitled the Diane B. Allen Equal Pay Act, is named after state senator Diane B. Allen who left her broadcasting job in 1994 after filing gender and age discrimination complaints with the Equal Opportunity Employment Commission.   The New Jersey Equal Pay Act will modify the New Jersey Law Against Discrimination by strengthening the protections already provided by the current anti-discrimination law against employment discrimination by making it unlawful to discriminate against employees in their compensation.

Specifically, the New Jersey Equal Pay Act makes it an unlawful for an employer to pay a rate of compensation and benefits to employees of a protected class which is less than the rate paid to employees not in the same class for substantially the same work. Protected classes include such traits as sex, race, ethnicity, military status or national origin of the employee.  Once it is signed into law, the New Jersey Equal Pay Act will prohibit an employer from reducing the rate of compensation of any employee to comply with the new law.  This means that an employer who has been and continues to be in violation of the law cannot then decrease the compensation of any employee to the compensation of another employee who is being discriminated against in their compensation.

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The New Jersey Supreme Court will soon decide whether someone who leaves a job for another job that never commences will still be eligible for unemployment benefits.

Under New Jersey Unemployment Benefits law, an individual is disqualified for unemployment benefits if he or she has left work voluntarily without good cause attributable to the work.  N.J.S.A. 43:21-5(a).  In 2015, due to increased political pressure to fix what was commonly referred to as the “Black Hole” of New Jersey unemployment law, the New Jersey legislature specifically amended N.J.S.A. 43:21-5(a) to assure that employees are no longer found to be ineligible for leaving one job for an equal or better job, but lose the subsequent job prior to the expiration of the 8 week employment requirement.  Specifically, the Legislature stated that there will not be a disqualification if the individual “voluntarily leaves work with one employer to accept from another employer employment which commences not more than seven days after the individual leaves employment with the first employer, if the employment with the second employer has weekly hours or pay not less than the hours or pay of the employment of the first employer, except that if the individual gives notice to the first employer that the individual will leave employment on a specified date and the first employer terminated the individuals before that date, the seven-day period will commence from the specified date.”

But what happens if the new job is rescinded, due to no fault of the employee, before the employee ever starts his or her first day of work?  This is exactly what happened in the case entitled McClain v Board of Review. Patricia McClain had been a teacher at the Learning Edge Academy, in Galloway Township. On Oct. 12, 2015, she accepted an offer to teach at another school, in Egg Harbor, to start within seven days after she left her former employer. Unfortunately, a day after McClain quit her job at the Learning Edge, her job offer at  Kids Choice was rescinded.  As it turned out, the teacher she was supposed to replace, returned to the school, thus eliminating the need for the new position, and a new job for Ms. McClain.  Ms. McClain, now finding herself unemployed, applied for unemployment benefits, for which she was denied by the State Department of Labor’s Board of Review.

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Our New Jersey employment law office routinely receives inquiries from unemployed workers who are denied their claim for unemployment benefits after needing to leave their job as a result of a medical condition.  In some situations, the worker should be entitled to unemployment benefits, while in others, they should not receive them.  The answer to this inquiry is not always straight forward.

A worker must show that although they can no longer perform their current job because of the medical condition, they are able to medically work in another job position. In other words, they are not disabled.  Instead, they have a medical condition that prevents them from performing the essential functions of their current employment.

Under New Jersey Unemployment Law, a person will be disqualified from receiving unemployment benefits if he or she leaves work voluntarily and without good cause attributable to such work.  The burden is on the unemployed worker to prove he or she left their employment for good cause attributable to such work.  Good cause attributable to the work has been defined as cause sufficient to justify the employee’s voluntarily leaving the ranks of the employed and joining the ranks of the unemployed.

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A recent New Jersey Appellate Court has confirmed that an employee has good cause to leave her job and be eligible for unemployment benefits if the reason for quitting is because she was continuously sexually harassed for an extended period of time.

In the case of Gerard v. Board of Review, decided September 12, 2017, the claimant Jamielyn Gerard worked as an administrative assistant for Surface Source International, Inc. (SSI) from February 2008 until she resigned in April 2014. According to Ms. Gerard, the warehouse manager continuously called her names, swore at her and used many derogatory terms after she witnessed and confronted him making out with her supervisor in the warehouse. After she confronted her manager about what she saw, the warehouse manager started having a vendetta against her. The warehouse manager had a vendetta against her called her “[m]any verbal names; anything he could say to hurt me. He was commenting on the type of clothes I was wearing, the type of underwear I had on. He . . . stole personal property out of my desk, he vandalized my desk. He physically harassed me[.] [H]e touched me from behind, he had grabbed me. We . . . got into a physical altercation where he took me and slammed me into his desk.” Ms. Gerard further testified, “And he has done so much things to me, and I have continuously met with them and spoke with them and told them all this, and . . . they never did anything to help the situation.” SSI’s owner told her “that the devil he knows is better than the devil he doesn’t know . . . even though he was harassing me and tormenting me.”

Ms. Gerard’s testimony that she made complaints to the company was admitted by SSI. In fact, Ms. Gerard’s manager testified that Ms. Gerard complained that she had been physically and verbally harassed, but excused SSI’s failure to properly investigate stating when the company confronted the warehouse manager, he would say that he “didn’t do anything.” The manager further testified the owner personally met with the manager and the company wrote him up after he slammed his Ms. Gerard into his desk. Even this undisputed testimony was not enough for the Appeal Tribunal to find that Ms. Gerard had good cause to leave the hostile work environment directed at her.

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The New Jersey Appellate Division recently found that a claimant should be eligible for unemployment benefits for weeks that she attempted to claim unemployment benefits but was unable to do so due to the Division of Unemployment and not due to any fault of her own.

In the case of Smith v. Board of Review, the employee, Conchita Smith, was laid off from her job with the United States House of Representatives on March 15, 2013.  Despite being terminated a month early, Ms. Smith waited until April 21, 2013 to file for unemployment benefits.  Ms. Smith claimed that she was waiting for her employer’s instructions on how to file for unemployment benefits, although she admitted that she was familiar with the unemployment process.  After being found eligible for unemployment benefits, Ms. Smith failed to report her claim for unemployment every two weeks and, as a result, was found to be ineligible for benefits for those weeks.  However, during at least some of the weeks, Ms. Smith claimed that she was unable to report her claim due reasons caused by the Division of Unemployment and through no fault of her own.  For example, Ms. Smith claimed that she was placed on hold for inordinate periods of time (only to be disconnected) and the online system persistently rejected her Personal Information Number that had been provided her to contact the Division and report her claim for unemployment benefits.

The Court ruled in Ms. Smith’s favor by remanding the matter back to the Appeal Tribunal for further proceedings regarding her eligibility for unemployment benefits for the weeks in which Ms. Smith attempted to reach the Division but was unable to do so through no fault of her own.   The Court found that Ms. Smith should be entitled to unemployment benefits for any weeks she was unable to claim due to the fault of the Division of unemployment.