A Quick Overview of New Jersey’s New WARN Act

New Jersey’s WARN Act (the Millville-Dallas Airmotive Plant Job Loss Notification Act) has been amended, effective July 19, 2020. N.J.S.A. § 34:21-1, et seq., to expand greatly its scope and requirements:

  1. Definitions: the terms below will change to expand the Act’s coverage of employers and their actions.
  • Establishment- the Act no longer applies solely to a “single place of employment.” Instead, its scope will cover all of the employer’s facilities, i.e., “Establishment may be a single location or group of locations, including any facilities located in this State.”
  • Full-Time and Part-Time Employees– Notices of layoff decisions – and the number of workers to be covered by the Act – now are mandatory for all workers. Similarly, the number of employees required for coverage under the Act also includes both full-time and part-time staff.
  • Mass Lay Off– the new definition drastically expands the Act and provides that a mass layoff requires 50 or more employees terminated “at or reporting to the establishment” arguably expanding the definition to include out-of-state employees, remote employees, etc.
  • Employer– the definition will expand to include: “any individual, partnership, association, corporation, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee, and includes any person who, directly or indirectly, owns and operates the nominal employer, or owns a corporate subsidiary that, directly or indirectly, owns and operates the nominal employer or makes the decision responsible for the employment action that gives rise to a mass layoff subject to notification.”
  1. Notice: Previously, the Act mirrored the federal WARN Act in that covered employers were required to provide 60 days’ written notice to affected employees of a mass layoff or plant closing. The amendment expands that number to 90 days’ notice. If an employer fails to provide the required notice, it must pay an extra four weeks of pay to each employee who is provided less than 90 days’ notice.
  2. Severance: The amended Act requires an employer to pay one week’s severance for each full year of employment, in a lump sum, on the first regularly scheduled pay day following the employee’s last day of employment. The severance rate is either the employee’s regular rate over the last three years of employment or the employee’s final regular rate, whichever is greater. If an employee is subject to a collective bargaining agreement, company policy or employment agreement that provides for greater severance, the employer must pay that amount. This requirement makes it very costly to conduct a layoff.
  3. Waiver and Releases: Absent approval by the Commissioner of the Department of Labor or a court of competent jurisdiction, an employer cannot obtain a waiver of any severance payments. Because affected workers are guaranteed severance under the Act, requiring the signing of a general release for this severance may no longer satisfy the requirement to offer consideration in exchange for a release of claims. Employers should consult with legal counsel as to what they may need to offer to obtain a release of claims.

These changes are significant and the impact on employers is still uncertain. Employers should consult with a Jackson Lewis attorney to ensure proper policies and procedures are in place and certainly before taking any action that may trigger the requirements of the Act.

Federal Court Dismisses Discrimination and Retaliation Claims But Not Hostile Work Environment

On January 28, 2020, the Southern District of New York allowed a hostile work environment claim to proceed based upon allegations of racial slurs, demeaning comments, and relegation of Hispanic to the least favorable job assignments and shifts. Ramirez v. NYP Holdings, Inc. The Court permitted this claim to proceed despite dismissing other claims under Title VII, Section 1981, and state and local law arising from discipline, up to and including discharge. In this instance, plaintiff was suspended indefinitely and then fired after engaging in an altercation with a White coworker because his suspension violated a last chance agreement.

In sum, that totality of the allegations, not each considered alone, often drives decisions by the courts in hostile environment harassment cases.

Refusal To Re-take Physical Abilities Test Dooms Plaintiff’s Ability To Allege Adverse Employment Action

The absence of an adverse employment action by an employer routinely is fatal to a claim of discrimination (absent proof of constructive discharge). This bedrock principle was reiterated recently in a case where an applicant alleged that she was forced to resign after failing a physical abilities test. Jane D. Dicocco v. William P. Barr (E.D. Va.)  All new hires were required to pass the test because the job itself involved “hazardous duty law enforcement positions.” After this female applicant failed the test, she was permitted to retake it within 24 hours, but declined to do so. While the applicant claimed she was too tired to retake test, the Court found that “her decision to resign rather than retake the exam and potentially fail a second time” was too speculative to support her claims.

The take-aways are significant. First, a test must be job-related and adverse impact on the basis of gender or other characteristic should be explored and addressed. Second, after failing, offering a second chance helps to avoid charges of unfair administration. Third, if an applicant cannot perform essential job functions for non-medical reasons, he or she is not qualified.

Second Circuit: Migraines Insufficient to Support a Disability Under the ADA

The Second Circuit recently held that an employer did not violate the Americans with Disabilities Act when it refused to transfer, and then terminated, an employee because of his inability to perform his job due to migraines caused by the stress of his job.  Woolf v. Strada. In this case, Plaintiff began to suffer migraines that left him temporarily incapacitated and which negatively impaired his work. Plaintiff alleged that his migraines were related to stress at work, which worsened when he received negative performance reviews. Plaintiff provided medical documentation and requested a transfer. The Company denied the transfer because of his poor performance reviews. However, it granted his request for intermittent medical leave with full pay. After he received another poor performance review, Plaintiff was discharged.

The Second Circuit found for the employer, holding that “where a plaintiff’s condition leaves him unable to perform only a single, specific job, ‘he has failed to establish a substantial impairment to his major life activity of working.’” Because Plaintiff did not attempt to show that his work-causing migraines limited his ability to work in a range of jobs, the Court concluded that there was no ADA violation. While it might have been a safer course of action to have transferred him and continued progressive discipline, the discharge was found to be lawful.

It should be noted that this result would not be the same under many state and local laws that provide broader coverage than the ADA (including not requiring a showing of substantial limitation on a major life activity).

“No Backsies?” — Not Rehiring a Recently Retired Employee Can Lead to Liability

Based on a set of somewhat unusual facts, a federal district court in Ohio ruled that an employer that refused to rehire a recently retired individual to his former position will need to argue at a jury trial that its decision was not based on age.  In Rose v. City of Toledo, a 62-year-old employee retired from the City Water Department, and shortly thereafter, applied for two positions within the Water Department (one of which was to be rehired into his former position).  The employer interviewed eight candidates (including the plaintiff). Despite being the third highest scorer on the exam, plaintiff was not hired for any position.  Rather, his former position was filled by the fourth-highest scorer, and the remaining positions were filled by the lowest ranked applicants (all of whom were more than 10 years younger).  At deposition, the employer’s administrator testified that despite his experience doing the identical job, the plaintiff was not selected because he was not viewed as a “long-term” candidate due to his recent retirement.   This statement, combined with the large difference in ages amongst the candidates, created an inference of discrimination.  Thus, the Court denied the employer’s motion for summary judgment.

This ruling is a reminder that business decisions are subject to scrutiny even though they may seem sensible to the one making the decision. Perhaps a better course of action is to adopt a rule barring rehire within a specified period of time after resignation, discharge, or retirement.

Severe and Pervasive: Pay Attention to Your State’s Sexual Harassment Standard

A Georgia EMT sued her former employer, alleging sexual harassment and retaliation in violation of Title VII. Plaintiff alleged that sexual comments during the four months created a hostile environment. The comments included an owner calling Plaintiff attractive, saying he loved chocolate milk in apparent reference to her in a text that also included images of “tongue” emojis, and asking about her sex life with her boyfriend. Despite these comments, the lawsuit was dismissed and affirmed by the Eleventh Circuit.  D’Marius Allen v. Ambu-Stat LLC.  The Circuit Court concluded that the alleged comments, even if true, did not rise to the level of “severe or pervasive.” Moreover, the Court held that isolated comments, spread over four months, could not be described as frequent.

While this decision could be considered a “win” for employers, it is important to note that under certain recently adopted state laws, the result may be different. For example, the “severe and pervasive” standard has been eliminated (and replaced with a far lower, easier to satisfy standard) in New York. Consequently, had this plaintiff been working in New York, the Court may have reached a different conclusion.

In light of the #MeToo movement, employers should continue to stay informed of changes in the law and train supervisors accordingly.


Ohio Court Reverses Enforcement of Employment Arbitration Agreement

An Ohio appellate court reversed enforcement of an employment arbitration agreement, holding that the agreement was both substantively and procedurally unconscionable because it required the parties to submit to arbitration all claims arising among them, even those unrelated to the employment relationship.  Please click here for a complete analysis by our colleagues.

Employee’s Electronic Acknowledgement of Arbitration Agreement Sufficient

Although the Federal Arbitration Act (“FAA”) places arbitration agreements on the same footing as any other contract and generally precludes state laws banning mandatory arbitration, employers must ensure that their arbitration agreement are enforceable contracts – an issue governed by state law.

In Taylor v. Dolgencorp, LLC, an employer sought to compel arbitration of claims alleging disability and race discrimination. Plaintiff opposed the motion on the grounds that neither she nor the employer had signed the agreement. Instead, in the modern world of electronic communication, the employer utilized a website and unique login credentials as part of its hiring process, during which this worker clicked an electronic acceptance and typed her initials to acknowledge acceptance of the arbitration agreement.

The federal district court evaluated the plaintiff’s arguments under Missouri law, which has adopted the Uniform Electronic Transactions Act. That Act defines an electronic signature as “an electronic sound, symbol or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.” Following that definition, the Court held that the plaintiff’s actions — logging into a website with unique credentials, clicking an acceptance box and typing her initials — were sufficient to bind her to the arbitration agreement. The Court rejected the argument that the employer was required to sign or otherwise execute the agreement because the employer’s conduct was sufficient to show its intention to be bound.

Employers that use arbitration agreements should ensure that the process they use to communicate agreements to employees, and secure the employee’s acceptance of the agreement, results in a valid and provable contract under the laws of each state where the employer operates. Agreements also should define clearly whether the arbitrator or the court will evaluate unconscionability and other defenses to contractual enforcement.

The ADA Does Not Cover the Possibility of Future Disabilities

The Seventh Circuit Court of Appeals recently ruled that the American with Disabilities Act (“ADA”) does not protect an applicant who later may become impaired. In this instance, a worker applied for a position that would have required him to perform “safety-sensitive” tasks. After he was extended a conditional offer of employment, Plaintiff was required to pass a medical evaluation. Defendant, as a matter of course, does not hire applicants for safety-sensitive position if their body mass index (“BMI”) is over 40. Defendant reasoned that applicants who exceed BMI levels are at a substantially higher risk of developing certain conditions that can result in incapacitation on the job. Plaintiff’s BMI was 47.5.

Plaintiff filed suit asserting that the failure to hire him amounted to discrimination under the ADA on the basis of a perceived disability. The employer denied the allegations, arguing that the worker did not have a disability because “obesity” was not a qualifying impairment and, moreover, there is no evidence to suggest that he was regarded as being presently impaired. The District Court found Plaintiff’s allegations of “perceived disability” to be worthy of a trial, but the Seventh Circuit reversed, concluding that the employer did not perceive there was a current perception had an obesity-related impairment at the time of withdrawal of the offer.

This decision adds to the growing body of ADA related case-law and may add to the confusion as to when a perceived disability is protected. Interesting, the Genetic Information Nondiscrimination Act (“GINA”) is not discussed in the Court’s decision as BMI likely does not qualify as genetic information. However, employers should be aware of GINA in all employment decisions.

The Supreme Court Asks DOJ for Input on the Scope of Title VII

Recently, the United States Supreme Court invited the U.S. Solicitor General of the Department of Justice to weigh in on a petition to revive the discrimination case of Peterson v. Linear Controls Inc. David Peterson, a former Linear Controls electrician, asked the Supreme Court to overturn the Fifth Circuit decision that held more difficult working conditions alone were not enough to be covered as an “adverse employment action” under Title VII of the Civil Rights Act of 1964.

In this case, the former employee alleged race discrimination in regard to working conditions, not a discharge or other clearly adverse action. The suit alleges that Black employees were assigned to outdoor tasks in the heat without adequate water breaks, while Caucasian employees were assigned to indoor tasks. In February, the Fifth Circuit determined that an “ultimate employment decision,” which includes “hiring, granting leave, discharging, promoting or compensating,” was required to support a race bias claim under Title VII. Since none had occurred, the Fifth Circuit dismissed the Title VII claim. In doing so, the Fifth Circuit amplified a split among the Circuit Courts over the scope of Title VII, with the Third Circuit applying a similar precedent, but seven other Circuits interpreting more broadly the scope of Title VII. Where such a split exists, uncertainty results and Supreme Court guidance is needed.