SERVING OUR CLIENTS AND COMMUNITY DURING COVID-19

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On July 9th, President Biden issued an Executive Order in the spirit of promoting competition within the American economy, in hopes to lower prices of consumer goods and resources, increase wages for workers, promote innovation, and accelerate economic growth. This Order addresses nationwide threats of corporate power and anticompetitive practices, as the percentage of industries dominated by large companies continues to grow and the rate of new business formations steadily declines. Competition decline coincides with concerns for slowed productivity growth, business investment and innovation decline, and widened income, wealth, and racial inequality. The President is attempting to “level the playing field” for American workers, taking decisive action to reduce the trend of corporate consolidation, increase competition, and deliver concrete benefits to America’s consumers, workers, farmers, and small businesses.

New Jersey Employment LaywersMost notably, the Executive Order criticizes the use of non-compete agreements as an obstacle to American workers, driving down wages and limiting employees’ ability to reenter the workplace when changing jobs. Non-Compete agreements act as a “barrier to competition,” under which one party agrees not to enter into or start a similar profession or trade in competition against another party, usually outlining restrictions based on time, geography, and area of business. Non-compete agreements are a type of restrictive covenants as they restrict the worker’s ability to move freely between employers and competitors within industries. Non-competes exist to protect employers from their departing employees who could potentially use protected information they learned throughout their employment to compete against their former employers. While at first, the purpose of non-competes was to provide the employer with an additional level of protection, these agreements have transformed into a manipulative tool to control former employees and eliminate threats of competition. Because most employees cannot afford the high costs of litigation, the mere threat of litigation for breach of a non-compete agreement usually results in the employer being successful in shutting its former employer’s new employment or prospective employment.  These realities are increasingly getting the attention of state legislators who seek to reform the way non-competes can be used by employers.

This attack at non-compete agreements follows research suggesting that industry consolidation is decreasing advertised wages by as much as 17%, and tens of millions of American workers are being forced into non-compete agreements. Non-compete agreements are increasingly popular among all or most industries, oftentimes trapping employees in underpaying positions. Most notably, the overuse of non-compete agreements was criticized when Jimmy John’s, the national fast-food chain restaurant, began having employees sign non-compete agreements restricting their sandwich makers from working for competitors. In President Biden’s remarks, he referenced a similar hypothetical non-compete between McDonald’s and Burger King that would disallow a McDonald’s worker from taking a job at a nearby Burger King, asking “Come on. Is there a trade secret about what’s inside that patty?”

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HOLMDEL, NEW JERSEY (May 26, 2021)–Former Assistant Commissioner of the New Jersey Department of Health’s Division of Public Health, Infrastructure, Laboratories and Emergency Preparedness, Christopher Neuwirth, filed a motion  today in his pending whistle-blower lawsuit to add claims of defamation against the State, Governor Murphy and Assemblyman Christopher DePhillips.

The pending whistle-blower lawsuit, which was first filed on June 16, 2020, alleges that Mr. Neuwirth was unlawfully terminated in retaliation for lodging a complaint to the State Ethics Commission concerning the conduct of two high ranking members of Governor Murphy’s administration, Acting Superintendent Colonel Patrick J. Callahan and Governor Murphy’s Chief of Staff, George Helmy. According to the First Amended Complaint, Callahan pressured Mr. Neuwirth to collect specimens of relatives of Mr. Helmy at their private residence for COVID-19 testing. When Mr. Neuwirth lodged an ethics complaint for this instruction, the Ethics Liaison Officer refused to process the complaint and implicitly threatened Mr. Neuwirth with possible criminal ramifications if he proceeded. DOH leadership then began to ostracize Mr. Neuwirth by excluding him from important COVID-19 response meetings, essentially stripping him of all decision-making duties and responsibilities, culminating in his termination on May 28, 2020.

On April 1, 2021 the American Rescue Plan Act (“ARPA”) went into effect, providing much needed relief as the country continues to reel from the impact of COVID-19. ARPA, which was signed into law on March 11, 2021, is a comprehensive, albeit temporary, funding bill addressing the economic and public health needs of both individuals and organizations that have been negatively impacted by the pandemic. It’s funding plan includes financial support for programs such as the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps), schools, child and elder care, mental health and addiction, housing and pension plans, among others. For qualifying employees, ARPA also extends and expands unemployment benefits and health insurance coverage under COBRA.

EC398118-061F-44BE-86E6-51A7805EDF17-300x167The Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as COBRA, allows qualifying employees – those who work for organizations employing more than 20 people – and their spouses and dependents to continue receiving health insurance coverage despite termination of their employment or reduction in their work hours, both events that would otherwise cause individuals to lose employer sponsored insurance coverage. The employee must pay an often high premium, but COBRA allows those who can afford it to avoid a gap in health care coverage.

Under ARPA, the federal government is financing a subsidy to offset the cost of COBRA premiums until September 30, 2021. Individuals who qualify for the COBRA subsidy will not have to pay any amount for their continued coverage during this window. The employer sponsored group health plan will cover the cost, and the federal government will reimburse the employer through a payroll tax credit. Specifically, the employer will pay the COBRA premium directly to the insurer and then request a refund against its Federal Unemployment Tax in the total amount of COBRA premiums paid. This subsidy will be available to employees who were terminated or suffered a reduction in hours involuntarily, were previously eligible for COBRA and either did not elect to enroll, or who enrolled but since dropped the coverage. The subsidy will include medical, dental and vision coverage. It is important to note that this subsidized coverage is temporary and will end when employees either exceed COBRA’s existing 18-month coverage limit or become eligible for other health coverage, including a spouse’s insurance coverage, Medicare or other employer-provided coverage. For all employees, it will end on September 30, 2021.

In the wake of several recent equal pay settlements between female university professors and their employers, the newest litigation of this ilk has popped up in New Jersey. A lawsuit filed under the New Jersey Equal Pay law in state court last week by five women professors at Rutgers University alleges that they are paid significantly less than their male counterparts. Three of the five plaintiffs are world-renowned scholars in their fields, having published multiple books, hundreds of articles, given numerous presentations, and won several awards. In fact, two of the plaintiffs have achieved the most prestigious professional designation at Rutgers, and yet all five are still paid tens of thousands of dollars less than male professors with the same or less impressive credentials.

IMG_5357-300x169One of the plaintiffs, Professor Deepa Kumar, who teaches journalism and media studies and is one of the country’s leading experts on Islamaphobia, was hired in 2004 at a salary that was the same or higher than four white men and women who were hired contemporaneously. However, today, Professor Kumar makes approximately $25,000 less per year than other professors in her department despite multiple attempts to negotiate pay raises. Another plaintiff, Professor Judith Storch, a distinguished professor of nutritional sciences, recently learned that her salary was on average $46,000 lower than all other distinguished professors in biomedical science.

Remarkably, Rutgers already has in place a system of review by which professors may request wage increases in order to advance the goal of pay equity. The plaintiffs in the current lawsuit claim that system is not working. In 2018, the University’s faculty union commissioned a study that showed pay discrepancies between male and female faculty members. Overall, women faculty were paid 7% less than men. Over time, that gap can add up to a substantial amount of lost income. Professor Kumar estimates that she has lost over $300,000 since her employment with Rutgers began. Another litigant against Rutgers, Professor Nancy Wolff claims she lost $500,000. Putting that loss into terms of gender inequity, Professor Wolff pointed out that half million dollars that should have been paid to her was instead used by her employer to pay her white male counterparts at significantly higher rates than she was being paid.

Most people know that Workers’ Compensation provides benefits to employees who get injured or sick as a result of their jobs. Workers’ compensation is a State-run insurance program that provides medical and other benefits to individuals who suffer job-related ailments. It also provides death benefits to an employee’s dependents if the employee dies as a result of the job-related illness or injury. Workers’ compensation is a no-fault program, which means that a sick or injured employee will receive the benefits no matter who was at fault, but in exchange, the employee cannot bring a civil action against the employer except under circumstances involving intentional acts.

IMG_0999-300x169So what about all the essential workers who are risking their health showing up to work every day during the Covid-19 pandemic? First responders, healthcare workers, and employees working to provide essential goods and services during the Statewide shut down are among those at the greatest risk of contracting and becoming sick from the virus. How does New Jersey’s Workers’ Compensation Law protect them? Can Covid-19 be considered a work-related illness during our current public health crisis?

New Jersey lawmakers have recognized this as a serious problem in today’s workforce and have passed legislation to protect essential employees who contract Covid-19 at work. Senate Act No. 2380, approved on May 14, 2020, mandates that if during the public health crisis declared by Executive Order 103 (and extended by any subsequent executive orders) an essential employee contracts Covid-19 while at work outside of his or her home, there will be a rebuttable presumption that the contraction of the virus was work-related and fully compensable under New Jersey’s Workers’ Compensation Law, disability retirement, and any other benefits provided to individuals who suffer illness or injury related to their employment.  This presumption in favor of the essential employee can be rebutted by a preponderance of the evidence that shows the employee was not exposed to the virus while at work.

On March 27, 2020 the President Trump signed into law a massive stimulus bill, H.R. 748, which provides, among other things, a host of employment related protections and benefits to New Jersey workers. The stimulus package, titled the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act (hereinafter referred to as the “CARES Act”), provides aid to American citizens that have been negatively impacted by the novel Coronavirus, COVID-19, pandemic.

IMG_3844-300x169Included in the Act’s employment protections are additional unemployment compensation benefits, expands paid leave protection, and provides payroll protections to small businesses. The bill has been heavily negotiated by both political sides for the past few weeks.  The final negotiated bill has received overwhelming bipartisan approval, receiving an approval by the Senate on Wednesday in a 96-0 vote. The employment related benefits provided under the CARES Act to New Jersey workers include the following:

Unemployment Benefits

An Essex County New Jersey Superior Court judge has issued an opinion that held that a Professional Employer Organization (also known as PEO) can be considered a co-employer for the purposes of the state’s Law Against Discrimination.  In the case, Stephanie Perez sued not only her W-2 employer, the Dermatology Group, P.C., but also their designated PEOs, ADP TotalSource II, Inc. and ADP, LLC t/a ADP Major, for claims of pregnancy discrimination, failure to reasonably accommodate and unlawful retaliation. This is an important development in how New Jersey courts are treating the relationship between employees, their primary employers, and PEOs.

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PEOs are organizations that provide support services, including human resources services, to companies. Typically, PEOs provide such services to small and medium sized companies that do not have internal staff committed to providing such services. Over the past 40 years, PEOs have become a substantial segment of the national employment landscape. According to statistics reported by the National Association of Professional Employer Organizations (“NAPEO”), there are now over 907 PEOs operating in the United States providing services to 175,000 small and medium-sized businesses, which in turn employ approximately 3,700,000 employees nationwide.

Often, PEOs are designated as the W-2 employer or act in a capacity of being a co-employer with an employee’s primary employer. As NAPEO acknowledges, PEOs typically work alongside the primary employer and “both parties might share responsibility for [certain] obligations and be ‘an’ employer” in the context of the performance of those obligations.  Because many PEO’s provide advice and counsel on employment law related policies as part of their services, issues arise when that advice or counsel is wrong and plays a determinative factor in causing an unlawful termination.

As with any legal issue, claims of sexual harassment involve many different legal factors that require consideration. Among these are a plaintiff’s potential damages, the statute of limitations related to the legal issue, and what exactly constitutes individual instances of harassment. These factors are made increasingly difficult to assess because of the nature of sexual harassment, especially when the harassment is pervasive as opposed to severe.

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Various court cases have provided clarity on many of the issues involved in sexual harassment cases. Karen Caggiano v. Armando Fontoura et al., helped to explain when a plaintiff’s right to file a complaint regarding sexual harassment expires, as well as what type of behavior may constitute continuous harassment.  In this case, Karen Caggiano endured years of pervasive harassment while employed as a Sheriff’s Officer in Essex County. Armando Fontoura, among others, constantly made derogatory comments relating to Ms. Caggiano’s sexual orientation and appearance. Her male coworkers regularly propositioned her for sex in extremely explicit and offensive language, and one individual went further, exposing himself to her on numerous occasions.

Fearing termination or other adverse employment action, Ms. Caggiano did not file a formal complaint regarding the harassment. However, in December 1996, Ms. Caggiano’s Captain overheard her discussing the harassment with a coworker. Her Captain ordered Ms. Caggiano to file a formal report of the conduct. Following this report, the incidents of harassment ceased, and Ms. Caggiano, along with several of the perpetrators, were transferred to different offices. A final incident of harassment occurred in February 1997, when Ms. Caggiano was assigned to attend same sexual harassment training in a group with two of her harassers. She was forced into this interaction despite the fact that there were approximately 400 employees attending the training in groups of 10. Nearly two years later, Ms. Caggiano decided to file a civil lawsuit alleging sexual harassment in the workplace.

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New Brunswick, NJ (January 23, 2019)–Katie Brennan and her legal team responded on Wednesday to the news that the Middlesex County Prosecutor’s Office (MCPO) has declined to prosecute her rapist, Al Alvarez. Brennan’s attorneys cited grave concerns about the MCPO’s process and vowed to continue the fight for justice.

“We are deeply disturbed and disappointed by this egregious miscarriage of justice,” said Brennan’s attorney, Katy McClure of Smith Eibeler, LLC. “The Hudson County Prosecutor’s Office failed Katie Brennan. The Governor’s staff failed her. The Attorney General failed her. And now the Middlesex County Prosecutor’s Office has failed her as well.”

In yet another legislative win in favor of New Jersey workers, Governor Murphy has signed a bill eliminating the controversial severe misconduct disqualification for unemployment benefits.   As of Friday, August 24, 2018, the severe misconduct disqualification has been repealed from the New Jersey unemployment law.  The bill also makes other significant changes to unemployment law concerning misconduct.  The change of law is being viewed by plaintiff employment attorneys as another legislative victory for New Jersey employees.

The History of Severe Misconduct

The severe misconduct disqualification was first enacted into law in 2010 and created a new total disqualification of unemployment benefits as a more severe penality than that of simple misconduct’s temporary seven (7) week disqualification. Prior to the 2010, a claimant would be disqualified for six weeks if it was found that they committed misconduct and could only be totally disqualified from receiving unemployment benefits if it was found that the termination was for gross misconduct.  Gross misconduct is when the claimant is terminated as a result of committing a criminal act, such as stealing, assault and other conduct punishable by criminal law.

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