New Jersey Labor and Employment Law

Over the past few years, social media has exploded, and there is little doubt that it is here to stay.  There is also little doubt that your employees are routinely reading and posting information on these media.  

According to recent statistics, Facebook has more than 400 million active users, each spending an average of 55 minutes per day on that site, posting more than 60 million updates each day.  LinkedIn has reported that it has over 50 million users, and that number is growing by approximately one new member per second.  Twitter grew from 6 million users in 2008 to 18 million in 2009, and projects 26 million users in 2010.

Businesses are also taking advantage of social media.  According to Facebook, more than 1.5 million local businesses have active Facebook pages.

The explosive growth of social networking and business sites carries potential pitfalls, and employers should consider policies and procedures to address these issues.  There are certain areas that prudent employers should consider when drafting policies and procedures.

Some Issues to Consider:

• Confidential Information. Unfortunately, social media presents numerous opportunities for employees to reveal confidential information, either intentionally or unintentionally.  Employees may post status updates, which might unintentionally reveal confidential transactions or strategy.  Anonymous boards also provide a means for disgruntled employees to create significant mischief by posting propriety information.  Employers should therefore consider creating, reviewing and/or amending their confidentiality agreements and e- policies. and providing training, to make sure that employees understand their confidentiality obligations. 
• LinkedIn and Other Recommendations:  LinkedIn allows users to provide recommendations to employees, service providers and others.  While this might seem harmless, this documentation can be dangerous in a later employment discrimination or litigation with a contractor.  For example, if a terminated employee sues for discrimination, arguing that the stated reasons were pretextual, the employee may point to a LinkedIn recommendation provided by his/her supervisor as proof of satisfactory performance.
• Misleading Advertising.  Blogs, anonymous boards and various social media provide a virtually unrestricted ability for employees to tout your company’s products and services.  These postings, however, can be dangerous.  Recently, the Federal Trade Commission posted guidance, noting that companies could be liable for their employees’ endorsement of their goods and services if they fail to disclose their employment relationship. Companies should therefore consider policies and training, prohibiting such conduct.
• State Laws.  Some states have laws that prohibit employers from terminating employees for their off-duty conduct and “lawful recreational activities.”  Under these laws, employers may be limited in their ability to terminate employees for blogging and other social media activities may protected leisure-time activity.  Employers should therefore consult with their attorneys to make sure that their policies are not overbroad.
•  Invasion of Privacy.  Prudent employers should also make sure that, in their effort to control the risks mentioned above, that they do not breach employees’ expectations of privacy.  In two recent New Jersey cases, Stengart vs. Loving Care Agency, 408 N.J. Super. 54 (App. Div. 2009), and Pietrylo v. Hillstone Restaurant Group, 2008 WL 6085437 (D.N.J. 2008), the courts held that an employer’s review of an employee’s private communications is not unlimited.  Rather, employers must take care to ensure that their policies clearly set out an employee’s reasonable expectations of privacy and, even then, companies may not review confidential communications.  Again, prudent employers should ensure that e-policies, and their enforcement, are in accordance with various state laws.
• Retaliation and Other Disciplinary Concerns.  Employers must also act cautiously when taking action for employee social media activities.  For example, various federal and state laws may prohibit retaliation against employees who report or object to unlawful activities.  Similarly, employers may be subject to allegations of retaliation if they terminate employees who claim that they have been subject to unlawful harassment or discrimination.  The National Labor Relations Act may also prohibit employers from firing employees who harshly criticize management’s policies on the web, as an unfair labor practice.  Once more, employers would be wise to consult an attorney before taking action against an employee for their postings.

In my various roles as in-house Chief Ethics and Compliance Officer and employment attorney  in private practice, I have heard numerous employee complaints about a “hostile work environment” and “harassment.”  Frequently, these complaints are about abusive bosses, workplace bullying and demeaning behavior.  On further questioning, the “harassment” often falls far short of the legal standard of “severe or pervasive” unwelcome and demeaning conduct and comments based on gender, age, race, religion, national origin, disability or other protected categories.

After recently concluding a conversation with a potential client, explaining this legal standard, I happened to glance at my bookcase,.  My eyes feel on  some of my books about Japan.  I recalled a training session I attended in Japan a couple of years ago, dedicated to the topic of “power harassment,” a growing legal issue in that country. 

One of the instructors discussed different actual reported cases, in which the court found that there was  illegal “power harassment.” In some cases, supervisors “roared” at their employees.  In another case, a supervisor made an employee drink out of his shoe.  And in yet another case of illegal power harassment, ,a supervisor made a subordinate shave his head as punishment.

One of the presenters, who was an attorney in Japan, recounted the abuse that he suffered as a junior attorney at his firm.  He swore that, when he became partner, he would never treat his employees that way.  He was surprised to recently learn that his associates felt that he was, in fact, a bully.  He thought about it, and realized that they were right.  In fact, he openly acknowledged that his behavior was as bad, if not worse, than that of his prior supervisors.  Amazingly, he then stated that, upon reflection, he realized that his behavior was entirely appropriate, because it would have been unfair for his subordinates to have an easier time than he was forced to endure.  And so the cycle continues.

One of my American colleagues was flabbergasted.  She wondered how it was possible that supervisors could engage in this egregious behavior, but even more floored by the fact that employees would accept this.  I believe that this abuse was possible based, in part, on the lack of mobility in the Japanese workforce; employees are traditionally expected to work for the same employer from graduation to retirement.  If one has no choice but to stay, supervisors have the leverage to do what they want, and employees generally have few options: accept it, try to complain (and endure possible retaliation), or try to get the law changed.

Increasingly, I am seeing despair in those who come to me.  Put simply, in the current economic environment, the leverage in the workplace has changed, and employees feel that they can’t readily quit and find another job.  They feel stuck.  While bullying may not be illegal, prudent employers may want to be diligent to make sure that supervisors do not abuse this power, lest they find themselves with a demoralized workforce and mass migrations once the economy recovers.

Last week’s Division of Civil Right’s (DCR) decision in Lin v. Dane Construction Co., DCR Docket No. EM14WB-54045 (Feb. 24, 2010) provides a good reminder that racial slurs and stereotypes in the workplace are unacceptable, regardless of whether or not they are uttered in front of  members of that racial group.

In Lin, the DCR found that the owner of a company made numerous derogatory comments about African-Americans and Jamaicans in front of the Complainant employee, who was Asian.  For example, the DCR found that the owner had used the word “n___r” on several occasions and ranted against someone that he assumed was Jamaican based on his “cool runnings” accent.  The DCR found that the owner

acknowledged that he used [the word “n___r”] on at least one occasion within earshot of Complainant. He explained that following an argument over the phone with a client he believed to be Jamaican, he used the slur “n___r” both in his office and perhaps a second time as he continued his “rant” coming down the stairs. He stated that this was an isolated incident and that he did not regularly use such language in the office. However, he admitted that in “private office personal conversations, these words may have popped up, been overheard” and that “[in our office,] we can discuss things the way we want.”

The Complainant was upset by this, as her fiancé was Jamaican, and their child was half Jamaican.  Further, according to the DCR, the evidence established that the owner was aware of these facts before he made the derogatory comments.  When Complainant reminded him that her son was bi-racial, he laughed off her concern, and told her that he wasn’t referring to her son.  Ultimately, the Complainant quit, without another job, due to the continuing comments and lack of response to her complaints.

Based on this evidence, the DCR concluded that there was probable cause of a racially hostile work environment in violation of the New Jersey Law Against Discrimination.  The DCR further concluded that the Complainant was “constructively discharged,” as a reasonable person would find that the working conditions were intolerable and that there was no option but to resign.

Although this is only a probable cause finding, and not a final determination, this case should serve as a reminder to prudent employers that inappropriate racial comments have no place in the workplace, regardless of who may or may not be listening.  Further, even “private” comments may serve as a basis for a hostile work environment claim.  Finally, if an employee complains about a hostile environment, this concern should be taken seriously, and not laughed off.

The DCR’s decision is at http://www.nj.gov/oag/newsreleases10/02.24.10_Shi-Juan_Lin_v._Dane_Construction.pdf

In the past few days, the New Jersey Appellate Division handed down two separate unpublished opinions, which should serve as a stark reminder to employees that, based on ill-considered and rash words, they may be subject to termination and denial of unemployment benefits, even if they didn’t mean what they had said.

In Rooth v Board of Review, Docket No. A-2761-08T3 (February 25, 2010), the employee voluntarily quit her job as a disciplinary audit financial specialist for the Office of Attorney Ethics on June 20, 2008.  In a formal resignation letter, she advised that July 4 would be her last day of employment, to move to Florida.  Four days later, on June 24, she decided to rescind her resignation, after realizing that her application for a mortgage in Florida might be at risk if she was unemployed.  Her employer denied her request, but allowed her to work for an extra two weeks.   The employee then sought unemployment benefits, claiming that she was willing to work, but that her employer didn’t allow her to rescind her resignation, in effect, terminating her employment. The Appellate Division affirmed the denial, noting that the employer had no obligation to accept her decision not to resign, particularly in light of her stated decision to relocate to Florida as soon as her financing was in place.

In DeBari v. Board of Review, Docket No. A-4544-08T2 (March 1, 2010), the employee was fired after it was reported that he told a co-worker:

I will wait by the door at 6:00 am and shoot the first person with buckshot, then drag the body into the file room and wait for the next guy. A few employees, I wouldn’t shoot them in the chest, I’ll shoot them in the knees and watch them suffer. I got a gun in my f___g car now. You guys are f____g lucky I got my meds. It doesn’t matter anyway, because I’ll get off.

Employee was charged with a disorderly person offense, which was dropped after he successfully completed a pre-trial intervention program.  In applying for unemployment benefits, the employee denied making that statement, and noted that he was never convicted of the crime.  Other employees testified that, while he made “some generalized threats, which were a way he commonly speaks,” this was “just Joe running his mouth.”  The court affrirmed the denial of benefits, noting that a criminal conviction is not necessary, and that, based on all the evidence, there was credible evidence that the employee engaged in gross misconduct in the workplace by making threats against co-workers.

Under the New Jersey Law Against Discrimination (NJLAD), victims of discrimination may be entitled to  front or back pay (economic damages) if their employer fires them or makes their working conditions so intolerable that a reasonable person would feel that they have no option but to quit (a “constructive discharge); they are not entitled to damages if they voluntarily quit.  Last week,  the Appellate Division ruled that victims of retaliation under the New Jersey Conscientious Employee Protection Act (CEPA) likewise cannot recover economic damages unless they were fired or constructively discharged.  Although DuPont may have avoided liability, the case is a stark reminder that retaliation is all too common in response to complaints, the need for employers to take these allegations seriously, and juror sympathy to workers who have suffered retaliation.

In  Donelson v. Dupont Chambers Works, the New Jersey Appellate Division threw out a jury verdict of over $1.2 million ($724,000 in economic damages and $500,000 punitive damages) under the New Jersey Conscientious Employee Protection Act, because plaintiff never argued that he was constructively discharged.   In Donelson, the plaintiff claimed that his employer and co-workers retaliated against him after he complained about potential  Occupational Safety and Health Administration (OSHA) violations.  More specifically, .he  claimed that Dupont imposed restrictions on him, not imposed on others, concerning his use of vacation, sick time and personal leave days; falsely ccused him of failing to complete required employee training; accused him of failing to attend some of the safety meetings in the summer, even though DuPont had always excused him from such summer meetings in the past; falsely accused him of being lazy and described him in an internal memorandum as “not [one of] our best performers”; ordered him to notify a supervisor when and where he was going to lunch, a rule not imposed on other operators; and described him in an e-mail as a “very high maintenance” employee over whom management should maintain a “watchful eye.”

The plaintiff alleged that the retaliation escalated over time.  He claimed that he was wrongly disciplined for failing to perform required tasks.  He also alleged that DuPont failed to investigate other hotline complaints that he raised. Plaintiff also claimed that his employer required him to undergo a humiliating mental status examination, which resulted in an eight week mandatory disability leave of absence based on the clinician’s conclusion that plaintiff was too emotionally stable to work.  After plaintiff returned from the two month leave in June 2004, he claimed that this mandatory leave made him feel “kicked to the curb” and worthless, and that he  worried about new allegations.

Plaintiff filed suit in February 2005, and went on a voluntary leave of absence in January 2007, from which he never returned.  Instead, he retired from DuPont in December 2007.  At trial, plaintiff claimed that, since that time, he earned $50,000 to $60,000 less per year than he had earned at DuPont.

At trial, the jury found that DuPont had retaliated against plaintiff in violation of the New Jersey Conscientious Employee Protection Act, resulting in economic damages of $724,000.  The jury found that there was no emotional distress damage, but also awarded $500,000 in punitive damages.

The Appellate Division vacated this entire award.  CEPA defines “retaliatory action” as “the discharge, suspension or demotion of an employee, or other adverse employment action taken against an employee in the terms and conditions of employment.” The Appellate Division also recognized that retaliation is not limited to a single discrete action, but may include “many separate but relatively minor instances of behavior directed against an employee that may not be actionable individually but that combine to make up a pattern of retaliatory conduct.”  Nevertheless, the Appellate Division held that, because plaintiff never claimed that he was forced to leave his job, DuPont could not be responsible for the economic damages resulting from plaintiff’s voluntary resignation.  The Court did recognize, however, that plaintiff would have been entitled to emotional distress damages, even if he had not been forced out.

Interestingly, the trial court judge suggested that the facts might support a constructive discharge claim. 

It is likely that this decision will be appealed to the New Jersey Supreme Court.