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July 11, 2018

Efforts to Legalize Recreational Marijuana in New Jersey Stall in the Legislature, While Medical Marijuana Expands

Efforts to legalize recreational marijuana in New Jersey have been slowed by political infighting in Trenton. However, the expansion of the state’s medical marijuana program raises many concerns for employers, schools, and medical providers.

On June 7, 2018, State Senator Nicholas Scutari, D-Union, introduced a bill to legalize the possession and personal use of marijuana in New Jersey, for persons 21 years old and over.  Senator Scutari’s bill also proposes an expansion of the medical marijuana program. His proposal has been met with staunch opposition within his own party, despite the support of Senate President Stephen Sweeney, D-Gloucester.

In May, State Senate Health Committee Chairman Joseph Vitale, D-Middlesex, introduced his own bill to significantly increase access to medical marijuana by adding dispensaries and cultivation centers throughout the state.  Senator Vitale is opposed to combining his bill with a recreational marijuana bill.  The Senate failed to pass either Senator Vitale’s bill or Senator Scutari’s bill before adjourning for their summer recess on July 1, 2018.

Senator Scutari’s proposal to expand the medical marijuana program raises significant issues for New Jersey employers, medical providers, schools and landlords.  Under Senator Scutari’s bill, a positive test for marijuana cannot be used as a basis to deny medical care, housing or a job “unless failing to do so would put the school, employer, or landlord in violation of federal law or cause it to lose a federal contract or funding.”  Medical and recreational marijuana use remains illegal under federal law.  This bill creates thorny legal issues that will require expert advice if the bill ultimately becomes law in its current form.

In March, Assemblyman Reed Gusciora, D-Mercer, introduced his own bill in the State Assembly to legalize recreational marijuana.  Assemblyman Gusciora’s bill did not come up for a vote in the Assembly before their summer recess.  The legislature reconvenes in September.

Governor Phil Murphy remains committed to legalizing recreational marijuana in New Jersey.  While waiting for the legislature to pass a recreational marijuana bill, Governor Murphy has acted through executive orders to expand the existing medical marijuana program.  Several health conditions were added to the program in March of this year, and enrollment has increased from 16,000 in December 2017 to 22,800 in June 2018.

The expanded list of qualifying conditions includes anxiety, migraines and chronic pain.  Employers are now confronted with the dilemma of adhering to state law, which prohibits discrimination against employees with qualified conditions, while trying to maintain an unimpaired workforce.  Employers with safety-sensitive positions are particularly affected by the expansion of the medical marijuana program.

The expansion of medical marijuana usage and the pending recreational marijuana bills raise a host of legal issues for employers, landlords, medical providers and schools.  For example, employee handbooks will have to be revised to reflect changing state law.  Please do not hesitate to contact our Labor and Employment attorneys to answer your questions.

June 11, 2018

Ready or Not, Here It Comes! Equal Pay Act is Right Around the Corner

On July 1, 2018, the Diane B. Allen Equal Pay Act (“Act”), one of the strongest equal protection pay laws in the Country, will become effective. The Act prohibits all employers from paying any member of a “protected class” at a lower rate of compensation, including benefits, than the rate paid to employees who are not members of a protected class and who perform substantially similar work when viewed as a composite of skill, effort and responsibility, unless the differential is based upon a neutral-based seniority or merit system.  Employers that do not have or fail to institute a neutral-based compensation system will be required to satisfy five (5) different factors to support compensation variances if an employee alleges pay differential discrimination.

This Act expands protections to all protected classes, including race, creed, color, national origin, nationality, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy, sex, gender identity/expression, disability or atypical hereditary cellular or blood trait of any individual, or liability for service in the armed forces. There is no grandfathering clause, and employers that fail to achieve compliance with the Act face significant liability.  If an employer is found to have violated the Act, the prevailing party could potentially be awarded his or her legal fees, treble damages, and up to six (6) years of back pay in addition to any additional relief permitted under the New Jersey Law Against Discrimination (“NJLAD”).

Is your compensation plan compliant with the Act? Do you have a neutral-based compensation plan? Have you evaluated and updated all of your compensation plans? If not, beware of inaction because the Equal Pay Act is almost here.

Should you require a thorough analysis and assessment of your current compensation plans and policies, or require any assistance in crafting updated, neutral-based compensation plans, please do not hesitate to contact our Labor and Employment law attorneys to ensure your compliance with this new, comprehensive law.

April 14, 2018

New Tax Code Provision Disallows Deductions for Some Settlements

A little-discussed provision in the Tax Cuts and Jobs Tax Act (“Act”) signed into law earlier this year by President Trump may increase the after-tax cost for companies to settle sexual harassment or sexual abuse claims. The Act will now disallow a business deduction for amounts paid to settle such claims, including attorneys’ fees, if the settlement contains a nondisclosure agreement.

Specifically, the Act adds Section 162(q) to the Internal Revenue Code, which simply provides that:

No deduction shall be allowed under this chapter for –

  1. any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement; or
  2. attorney’s fees related to such a settlement or payment.


Although the new language of Section 162(q) appears simple, the application of the new rule may make for difficult settlement negotiations or pose additional problems for employers and employees alike. For example, there is no exception in the Act to allow for deductions of settlement costs even if the employee making the claim wishes to include a nondisclosure agreement, rather than the employer. More perplexing, the law does not define “sexual harassment or sexual abuse,” leaving that definition up to employment and/or tax lawyers when fashioning settlement provisions or filing business tax returns. Finally, the law does not specify whether settlement payments or attorneys’ fees may be deducted when the settlement resolves allegations that include, but are not solely based on, sexual harassment or abuse claims.

Careful drafting of settlement agreements and structuring of payment plans may lessen the impact of this provision. However, until and unless the IRS issues further guidance on these issues in the form of rulings or regulations, the employer may not immediately know the tax implications of including nondisclosure language in a particular settlement agreement. Both employers and employees should therefore carefully consider the plain language of the Act and its possible effects when planning for legal settlements or tax purposes.

If you are concerned about the drafting or impact of potential sexual harassment settlements, or if you have any questions about how this new tax provision could affect your business operations, future settlement negotiations or tax filings, please do not hesitate to contact our Labor & Employment Law attorneys.


March 29, 2018

Paid Sick Leave Law Clears the Assembly

Statewide paid sick leave took one step closer to becoming a reality in New Jersey on Monday of this week when the New Jersey Assembly passed Bill A1827, which mandates that state employers provide employees with paid sick leave. Numerous New Jersey municipalities have adopted similar laws, but the passage of Bill A1827 portends the implementation of a statewide benefit.

An identical Bill (S2171) is presently making its way through the State Senate. It is expected that some form of paid sick leave legislation will be approved by both houses this year and submitted to Governor Murphy, who is expected to sign the legislation.

The approved Assembly Bill applies to all New Jersey employers, except public employers that provide paid leave benefits by law, rule or regulation, and allows employees to accrue one hour of earned sick leave for every 30 hours worked. There is a cap of 40 hours, which does not carry forward from one year to the next. Time off may be used for a host of reasons, including the employee’s or a family member’s illness, to attend a school conference or meeting, or to recover from domestic violence. The Bill permits an employer to require reasonable documentation of the need for the use of sick leave if the leave is for three or more consecutive days.  Employers may prohibit employees from using foreseeable earned sick leave on certain dates, and may require reasonable documentation if employees use sick leave that is not foreseeable during those dates.

The Bill prohibits retaliatory personnel actions against an employee for the use or requested use of earned sick leave or for filing a complaint for employer violations. The Bill also sets requirements for recordkeeping and for notifying employees of their rights.

Follow the New Jersey Employment Law Blog for updates on this legislation and other legislative initiatives impacting the workplace.

March 20, 2018

Gender Pay Equity Bill Advances to Floor Vote

Yesterday, New Jersey’s Assembly Labor Committee recommended the passage of the Gender Pay Equity bill. The proposed law prohibits unequal pay for “substantially similar” work and provides that such acts violate New Jersey’s Law Against Discrimination (“LAD”). The legislation makes it unlawful for an employer to pay a rate of compensation, including benefits, to an employee of one sex less than the rate paid to an employee of the other sex for “substantially similar work,” defined as being comprised of skill, effort and responsibility. The bill is identical to the version the Senate committee previously approved. The last step for the legislation will be final votes by both houses, which is expected in the upcoming weeks.

Employers should be aware that the Gender Pay Equity law provides for treble damages for some violations, and considers each paycheck issued based on a discriminatory basis a new, separate violation of the LAD for statute of limitations purposes. The law also allows for an aggrieved employee to obtain relief for back pay for the entire period of time in which the violation has been continuous, if the violation continues to occur within the statute of limitations.

The proposed law would prohibit employers from retaliation against an employee for disclosing or discussing compensation with or about current or former employees. When the law is passed, employers should review their employee handbooks and policies and revise any policies that prohibit employees from discussing compensation.

February 1, 2018

Employers Should Engage in an “Interactive Process” When Considering Accommodations Requests Under the ADA

Under the Americans with Disabilities Act (“ADA”) of 1990, employers must provide reasonable accommodations to qualified individuals with disabilities unless the employer can demonstrate that the accommodation would impose an undue hardship on the employer.   There is no one-size-fits-all approach to determining the reasonableness of an accommodation.  For instance, it may not be an undue hardship for an employer with thousands of employees and a hundred-million-dollar budget to provide an employee with a costly piece of equipment in order for the employee to perform his/her essential job functions, but this may not be the case for a small employer with a limited budget.

Nevertheless, before an employer unilaterally rejects an employee’s accommodation request, no matter how unreasonable it may appear, the law requires that the employer and employee engage in an “interactive process” to explore the request further so that the employer has a better understanding of the employee’s limitations and the purported need for the accommodation. The process may also involve consideration of possible alternatives if the request appears too burdensome. Irrespective of the outcome, it is prudent for the employer to send a follow-up letter to the employee documenting that the process took place, what was discussed and the outcome, including any follow-up that is required.  The failure to engage in this interactive process may be considered an adverse employment action under the ADA, thus exposing the employer to liability.


January 19, 2018

“#MeToo” Is a Reality, and It Is Not Going Anywhere

It is a nightmare scenario for any manager – A secretary in your company shares a “#MeToo” experience on social media, implicating another of your employees. You have not seen the post, but your assistant has and mentioned it to you as soon as you entered your office.  You soon learn that other employees and members of the public have also seen the post and are talking about it in the hallway.  What do you do?  Do you dismiss it out of hand, once again condemning social media as a worthless outlet pandering to attention-seekers?  Do you believe it at once, based on the individuals involved?  Is this the first time the employee’s name has been mentioned?  Have other employees or former employees commented about this employee’s behavior?  Is it a not-so-secret secret that this employee may overstep boundaries?

Businesses both large and small are facing these very dilemmas every day, particularly as the #MeToo movement seemingly gains new life and growth daily. It is nearly impossible to watch the evening news or browse the Internet without seeing an announcement that a politician, celebrity or corporate officer has been accused of sexual harassment.  The accusations, however, are not limited to the rich and famous.  Our cities and towns, our large and small businesses, are not immune to such accusations.

Under many employee handbooks and manuals, a simple social media post on Facebook or some other social media website may not satisfy the requirements for a complaint. But do not get comfortable.  That does not mean that you can disregard the existence of the issue, or that you can wait until a formal complaint is filed in accordance with the strict wording of your procedures. Such rigid requirements could allow, or even tacitly encourage, predatory acts to continue, or intimidate victims such that a formal complaint will never be filed.

When confronted with a #MeToo posting you should meet with the employee involved to reinforce your commitment to eradicating workplace harassment and show that you take all such allegations seriously. This will also enable you to reinforce your policies governing the use of social media and establishing a productive work environment, and explain the proper procedure to be followed for making a claim of workplace harassment.  This interaction may also reveal that the employee has a legitimate concern about workplace conduct, which you should then treat as you would any other similar accusation by conducting a thorough investigation consistent with your productive work environment policy.

How you respond to a #MeToo posting has serious consequences for your business. The attorneys in our Labor and Employment Group have decades of experience assisting our corporate and management clients addressing issues of employee misconduct.  Contact one of our attorneys if you need assistance or have questions about responding to a #MeToo posting.

January 12, 2018

New Jersey Prohibits Discrimination Against Breastfeeding Women

New Jersey has just become the eighteenth state to prohibit workplace discrimination against nursing mothers. Legislation (S2709/A2294) signed into law on January 8th by outgoing Governor Christie amended the New Jersey Law Against Discrimination (“LAD”) to add breastfeeding as a protected category. The amendment, which is effective immediately, makes it a civil rights violation for a working woman to be fired or otherwise discriminated against because of breastfeeding or related medical conditions, as well as expressing breast milk during breaks. The legislation also applies to the other areas covered by the LAD, including housing and places of public accommodation.

The new law also requires an employer to accommodate a nursing employee by providing reasonable break time each day and a suitable room or other location with privacy, close to the work area, to express breast milk. The location cannot be a toilet stall. The law does not require that the break time be paid, unless paid break time would be available to other employees similar in their ability or inability to work. The employer must provide the accommodation unless it can demonstrate that doing so would be an undue hardship on its business operations.

While a 2010 amendment to the federal Fair Labor Standards Act required covered employers to provide break times to nursing mothers employed in positions which are not exempt from the Act’s overtime provisions, that law did not cover all employers or all employees. In contrast, the LAD requirements apply to all New Jersey employers.

SPSK’s Labor and Employment attorneys are available and ready to answer any questions you may have about the new law’s requirements.


January 7, 2018

NLRB Flips Over Past Practice

Recently, the National Labor Relations Board (“Board”) issued its decision in Raytheon Network Centric Systems, 365 NLRB No. 161 (December 15, 2017), which reinstated the Board’s long-standing policy that there is no duty to bargain over changes to terms and conditions of employment made pursuant to past practice.  This decision overturns the Board’s 2016 decision in DuPont, 364 NLRB No. 113, where a divided Board departed from years of Board precedent and held that actions consistent with an established past practice constitute a change, and therefore trigger the duty to bargain.

In Raytheon, the parties had a collective bargaining agreement (“CBA”) that included the right of the employer to change benefit plans and costs.  The employer had previously exercised this right every year for the previous 12 years.  After the expiration of the most recent CBA, while negotiations for a successor agreement were ongoing, the employer again made unilateral changes to health care benefits as it had done in the past, without bargaining.  The union filed an unfair labor charge, and an Administrative Law Judge ruled in the union’s favor, finding that employer had a duty to bargain under DuPont.

On appeal, a 3-2 majority of the Board reversed DuPont and reinstated the standard that had been in place for decades prior to DuPont.  The Board concluded in Raytheon that bargaining is not required when no “change” has occurred, and that no “change” occurs when the employer takes action that is not materially different from its long-standing past practice even if there is some degree of employer discretion involved.  The Board also held that this principle applies regardless of whether a CBA was in effect when the past practice was created, or no CBA existed when the disputed action was taken.  The Board’s decision in Raytheon, reaffirms the legitimacy and applicability of past practice both during contract negotiations and after the expiration of a CBA.  The Raytheon decision also portends what is likely to be a more employer-friendly shift in Board policy under the current administration.

If you are concerned about memorializing your past practices without committing an unfair labor practice, or if you have any questions about the Raytheon decision or how it may affect your business operations or contract negotiations, please do not hesitate to contact our Labor & Employment Law attorneys.

December 15, 2017

NLRB Overrules Browning-Ferris Industries and Reinstates Prior Joint-Employer Standard

Today, the National Labor Relations Board overruled the Board’s 2015 decision in Browning-Ferris Industries, 362 NLRB No. 186 (2015) (“Browning-Ferris”), and returned to the pre–Browning Ferris standard that governed joint-employer liability.

Today’s decision affects all future and pending cases.  Under the pre-Browning Ferris standard, two or more entities will be deemed joint employers under the National Labor Relations Act (NLRA) if there is proof that one entity has exercised control over essential employment terms of another entity’s employees (rather than merely having reserved the right to exercise control) and has done so directly and immediately (rather than indirectly) in a manner that is not limited and routine.

Under this pre-Browning Ferris standard, proof of indirect control, contractually-reserved control that has never been exercised, or control that is limited and routine will not be sufficient to establish a joint-employer relationship.  The 3-2 Board majority concluded that “the reinstated standard adheres to the common law and is supported by the NLRA’s policy of promoting stability and predictability in bargaining relationships.”

Today’s decision is positive news for employers, particularly those who utilize staffing companies.

If you have any questions about how this decision affects your business, our Labor & Employment attorneys can help you.