Category Archives: Employment

New NYC Law Bans Use of Credit Histories in Employment Decisions

By Eleanor J. Lipsky, Esq.
elipsky@pashmanstein.com

Last month, New York City’s Mayor Bill de Blasio signed into legislation Intro. 261-A, or the Stop Credit Discrimination in Employment Act, which amends the New York City Human Rights Law.  The Act makes it unlawful for New York City employers to use an individual’s consumer credit history in making hiring and employment decisions.  The law goes into effect on September 3, 2015.

Proponents of the law argue that reliance on credit checks discriminates against minorities and low-income job applicants with poor credit histories and limits their ability to improve their credit status.  The New York City Council found that employers often use consumer credit information to make hiring decisions, despite the fact that there is little evidence linking an employee’s credit score or credit worthiness to job performance.  Credit checks may adversely affect those who have fallen behind on student loan payments or medical bills and can also have a disparate impact on women and victims of domestic violence, for instance.

The law defines “consumer credit history” as “an individual’s credit worthiness, credit standing, credit  capacity, or payment history, as indicated by: (a) a consumer credit report; (b) credit score; or (c) information an employer obtains directly from the individual…”.   The law makes it unlawful to both use an applicant’s credit history and to request a credit history for employment purposes, unless one of the exceptions to the law is met, as discussed below.

Note that New York City’s law is considered broader than most other jurisdictions that have adapted similar measures.   Other jurisdictions often provide exceptions for managerial positions, financial institutions, or positions were a credit report is substantially related to the position.   However, New York City’s law contains only a few limited exceptions that allow for the use of credit checks when necessary.  The exceptions include positions that require an employee to be bonded by the City, state or federal law; positions requiring security clearance under federal or state law; non-clerical positions with regular access to trade secrets; and positions allowing modification of digital security systems that protect employer or client networks or databases, among several others. [1]  Also note that the term “trade secrets” here does not include access to general proprietary company information and “regular access to trade secrets” does not mean access to client or customer lists.

This law applies to New York City employers of four or more individuals and is enforceable through the City Commission on Human Rights or by a civil action.  It is recommended that New York City employers therefore reassess their employment practices with respect to use of credit histories and ensure that the positions included in the carved-out exceptions to the law are distinguished from all other positions.

[1] See http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=1709692&GUID=61CC4810-E9ED-4F16-A765-FD1D190CEE6C for the legislation’s full text.

Court Holds that State Worker Classification Law Is Pre-Empted by Federal Law

Mack, S.By Sean Mack, Esq.
smack@pashmanstein.com

On February 5, 2015, a federal judge in Massachusetts dismissed two lawsuits against JB Hunt and FedEx, which had alleged that those carriers violated a Massachusetts labor law by classifying their drivers as independent contractors rather than as employees.  The Federal judge concluded that the Massachusetts law was preempted by the Federal Aviation Administration Authorization Act and therefore could not be enforced.  The FAAA expressly provides that federal statutes will preempt or supersede state laws if they could affect “prices, routes and services” of motor carriers and interstate freight movement.

Drivers have previously had success challenging their classification as independent contractors instead of employees in various state and federal courts in obtaining rulings that they were improperly classified as independent contractors.    For example, the Ninth Circuit Court of Appeals, which covers California and other Western States, has twice overturned rulings by lower courts that had concluded that drivers were independent contractors, not employees.  A federal court in Indian also ruled against FedEx in a class action concluding that it had misclassified its workers in various states.

Following those rulings, several states have enacted legislation creating a presumption that drivers are employees, not independent contractors.  New Jersey currently has bills pending in the legislature that would create a presumption that drivers of motor carriers are employees.  In 2013, the NJ Assembly passed the Truck Operator Independent Contractor Act  (A1578) that would establish a presumption that port and parcel delivery truck drivers are employees unless companies can prove otherwise.  The NJ Senate labor committee has cleared similar legislation (S1450), but the law has not yet been adopted in NJ.

The ruling in Massachusetts most likely will be appealed, but if upheld, is significant as it would provide precedent to invalidate similar worker classification laws in other states, and may dissuade states like NJ from  adopting a classification law that will be subject to preemption.

Update on Mandatory Paid Sick Leave in New Jersey

By Eleanor Lipsky, Esq.
elipsky@pashmanstein.com

Paid sick leave has traditionally been a benefit employers could voluntarily select to provide, and often only for certain employees.  However, employers should be aware that an increasing number of states and cities have begun mandating that employers provide paid sick leave to some extent.   Further, in the recent State of the Union address, the Obama Administration made it clear that it is taking steps to provide nation-wide access to paid sick leave by calling on Congress, the States, and cities to pass more of such legislation.

In 2014, the New Jersey State Assembly introduced and amended a bill entitling all employees, including part-time employees, to receive paid sick leave.   Under the bill, businesses with 10 or more employees would be required to let workers earn up to 72 hours of paid time off that they could use either when they are sick or to take care of sick relatives.  Businesses with less than 10 employees would be required to allow 40 hours of sick leave.  Under the bill, for every 30 hours worked, the employee would accrue one hour of earned sick leave, though the amount accrued does not have to carry forward from one year to the next.  While the bill is considered a pro-worker and pro-health policy measure, critics have noted that the bill does not yet address issues employers might have with seasonal employees, along with the increased cost to employers.  However, others argue business owners have an incentive to keep employees happy and healthy.

This state bill was introduced in light of a trend among some New Jersey communities that have already adopted similar sick paid leave rules locally.  So far, Jersey City, Newark, Passaic, East Orange, Paterson, Irvington, Trenton, and Montclair have all approved their own paid sick leave laws in 2014.  Many of these recent municipal ordinances became effective on January 1, 2015.  Notably, the state bill would not preempt some of these more generous municipal laws.

 

 

Small Print Weighs Big

Pashman, L.By Louis Pashman, Esq.
lpashman@pashmanstein.com

In June of last year, the Appellate Division of the Superior Court issued what many considered a surprising decision.  In Rodriguez v. Raymours Furniture Corporation, 436 N.J. Super 305 (App.Div. 2014) the court held that the two year statute of limitations for claims of retaliatory discharge and disability discrimination can be modified by agreement.

In August 2007 Mr. Rodriguez submitted an application for employment with Raymour & Flanigan.  Just above the application signature line the applicant is advised to read the application carefully, that it will become part of his employment record.  It went on to say, in all capital letters that “any claim or lawsuit relating to my service with Raymour & Flanigan must be filed no more than six (6) months after…the subject of the claim or lawsuit.”  It specifically waived any contrary statute of limitations.

On April 5, 2010, Rodriguez was injured on the job.  He returned to unrestricted duties on September 28, 2010.  On October 1, 2010, he was laid off, along with 101 others, as part of a reduction in force.  Rodriguez claimed retaliation for filing a workers’ compensation claim and discrimination because of his disability.  He filed suit nine months after the alleged wrongful termination.  His suit was dismissed because of the six month limitation.

The court thoroughly examined several legal issues involved.  Among the more critical, the court determined:

  1. The application that created the six month limitation was a contract of adhesion, it was part of a non-negotiable form;
  2. The two year statute of limitations can be modified if the limitation period is reasonable and does not violate public policy;
  3. The provision was not unconscionable. It was set forth in large type, clearly, and Rodriguez was under no time pressure to sign (he took it home before signing).  Therefore, notwithstanding that it was an adhesive provision, it was enforceable.

As I said at the outset, many were surprised at this result, but stay tuned, the New Jersey Supreme Court has agreed to review the decision.

Social Media and Technology in the Workplace

By James W. Boyan III, Esq.

jboyan@pashmanstein.com

On September 19, 2014, Maxiel Gomez and I presented a seminar entitled “Social Media and Technology in the Workplace” at the New Jersey Corporate Counsel Association’s Annual Conference.  The seminar drew a strong turnout which shows that social media is still a hot button issue for many employers.  For those who were unable to attend the conference, here are some of the key takeaways:

  • The National Labor Relations Board – Office of the General Counsel (“NLRB”) has issued guidance concerning social media policies promulgated by employers;
  • The NLRB takes the position that certain provisions found in social media policies violate Section 7 of the National Labor Relations Act (the “Act”);
  • The NLRB has brought enforcement actions against several employers who have terminated employees for allegedly engaged in “concerted activity” on a social media site;
  • Many states, including New Jersey, have enacted password protection laws that prevent employers from demanding that an applicant or employee disclose a social media password;
  • Employers should be careful that they are not considering information disclosed on social media about an applicant’s membership in a protected class when they make employment decisions;
  • Employers can monitor social media to investigate whether employees are engaged in fraudulent or disloyal conduct; and
  • Employers should review their social media policies to ensure that they comply with the law and be cautious when they seek to discipline an employee for violating a social media policy.

Best Practices for Verifying Employee Work Eligibility While Avoiding Discrimination Issues

By Eleanor Lipsky, Esq.
elipsky@pashmanstein.com

When hiring new employees, employers should be careful to comply with laws prohibiting the hiring of undocumented immigrants, while also ensuring that no discrimination on the basis of national origin or citizenship occurs.

The Immigration and Nationality Act (INA) is a federal law that makes it illegal for employers to knowingly hire persons who are not authorized to work in the United States.  Under the INA, an employer must check documents to confirm the identity and work eligibility of all persons they hire and complete a Form I-9, the Employment Eligibility Verification form, for every new employee, whether they are a citizen or not.  Failure to comply with the Form I-9 can result in sanctions against employers.  Further, the INA makes it unlawful for an employer to continue to employ an undocumented worker or one who loses their authorization to work at a later point.

However, the INA also prohibits discrimination when hiring and firing on the basis of one’s national origin or citizenship status.  The U.S. Department of Justice’s Office of Special Council for Immigration-Related Unfair Employment Practices offers suggestions for how an employer can avoid committing any immigration-related discrimination.[1]  For instance, an employer should allow an employee to choose which documents to present for the Form I-9, as long as it satisfies the requirements of the Form.   An employee would have a case against an employer who demanded to see a certain type of document, such as a green card, if the employee already provided appropriate documents otherwise.

Most importantly, an employer should treat all applicants the same and not make any assumptions when interviewing, offering a job, and when verifying work eligibility.  Any type of “citizens only” hiring policy or requirement that applicants have a particular immigration status is usually illegal.  The same guideline applies to a firing decision — for example, an employer cannot choose to fire or lay off someone solely because they only have a temporary work permit in favor of someone with legal permanent residency.

Keep in mind that an employee or prospective employee is protected under the INA if he or she is a U.S. citizen, national, permanent resident, temporary resident, refugee, or asylee.   Remember that U.S. citizenship or nationality belongs to any individual born of a U.S. citizen, along with all persons born in Puerto Rico, Guam, the Virgin Islands, Northern Mariana Islands, American Samoa, and Swains Island. Further, employers should recognize that refugees or those with recently granted asylum may not yet have Social Security numbers.   This could become a particular concern if an employer uses an on-line application system requiring such information because it could create an unnecessary hurdle for individuals who are in fact authorized to work in the United States, and thus should be avoided.

Employers should review their hiring and work eligibility verification policies in order to ensure compliance and avoid any potential fines and penalties imposed by the INA.

[1] See http://www.justice.gov/crt/about/osc/.