On Monday, May 21, 2018, the U.S. Supreme Court issued what is widely regarded as the most important decision for U.S. employers this year.  In a 5-4 decision, in Epic Systems Corporation v. Lewis (and two other related matters), Justice Neil Gorsuch, writing for the majority, held that workplace employment agreements that bar employees from participating in class and collective action litigation against their employers do not violate federal labor laws.  In so holding, the Court rejected the position of the National Labor Relations Board (“NLRB”) and other courts that such agreements violate the National Labor Relations Act’s (“NLRA”) protection of employees’ Section 7 rights to engage in “concerted activity.”

“The policy may be debatable but the law is clear:  Congress has instructed that arbitration agreements . . . must be enforced as written” wrote Justice Gorsuch, who went on to state that the Supreme Court was compelled to abide by “a congressional command requiring us to enforce, not override, the terms of the arbitration agreements before us.”  Citing the Federal Arbitration Act’s (“FAA”) “emphatic directions” that require courts to enforce arbitration agreements, the Court overturned NLRB and multiple courts’ decisions that found class and collective action waivers inequitable, and held that only employment agreements procured by fraud, duress, and unconscionability will not be enforced.

Leading up to the Epic Systems decision, the NLRB originally held in 2012, in D.R. Horton, Inc., that arbitration programs that include class and collective action waivers ran afoul of the NLRA,  which nullified the FAA’s policy favoring arbitration agreements. Numerous courts around the country have followed the NLRB including the Sixth, Seventh and Ninth Circuits, while others including the Second, Fifth and Eighth Circuits, have not so held.  Epic Systems now resolves this Circuit split.

Importantly, the Court also held that a state law attempting to circumvent the FAA’s mandates will not stand. States, therefore, cannot try to enact their own legislation to circumvent Epic Systems.

Following Epic Systems, and absent Congressional intervention, employers are permitted to enter into and enforce individual arbitration agreements containing class and collective action waivers.  Even employers who do not currently have individual arbitration agreements containing such waivers with their employees can modify their current employment agreements to include such terms.

It is important for all employers to carefully review their employment agreements and put considerable thought into whether an arbitration agreement with a class and collective action waiver is appropriate.

Over the past several weeks, New Jersey has enacted, or plans on passing, several new bills that secure New Jersey’s position as one of the nation’s leaders in employee protections.  The first, known as the Diane B. Allen Equal Pay Act (“Pay Equity Bill”), bans employers from paying women and other protected groups less than men for similar work.  The second, the New Jersey Paid Sick Leave Act (“Paid Sick Bill”), essentially guarantees all private employees, regardless of company size, paid sick leave/time off for certain qualifying situations.

New Jersey Pay Equity Bill

As previously blogged, on Equal Pay Day (April 10th), Governor Phil Murphy announced he would sign legislation known as the Diane B. Allen Act later that month.  On April 24, 2018, Governor Murphy signed what is considered to be the “most sweeping equal pay legislation in the nation.”

In short, the new law prohibits employers from paying any member of any protected class under the New Jersey Law Against Discrimination lower wages and benefits than their male counterparts.  If an employer pays one person more than another for “substantially similar work”, that employer will have to establish the basis for the pay discrepancy.  New Jersey’s law is for broader protections than other states in that it is not limited to gender only.  Damages for a successful claim include three (3) times the monetary damage for the violation in addition to back wages for up to six (6) years.  Critics of the new law have expressed concern that it departs from the federal standards and makes New Jersey unfriendly to businesses, especially in light of recent changes in the Federal Tax Code.

The Pay Equity Bill becomes effective July 1, 2018.

New Jersey Paid Sick Bill

Governor Murphy also recently pledged to sign the New Jersey Paid Sick Leave Act on May 2, 2018, which will make New Jersey the 10th state with paid sick leave legislation.

Once signed, all private businesses, despite their size, that employ individuals in the State are required to comply with the Paid Sick Bill.  Unlike other legislation, there is no minimum number of hours an employee must work to be eligible for leave under the new law.

Leave can be used for an employee’s own qualifying need or that of a family member,  which is defined to include children, grandchildren, siblings, spouses, domestic partners, civil union partners, parents, and grandparents.  The definition of a “family member” also extends to any individual whose affiliation with the employee is the “equivalent of a family relationship.”  Leave may be used for, among other things: (1) the diagnosis, treatment, recovery, or preventative care of a mental or physical illness(s); (2) to seek counseling, relocation, legal services, and/or medical attention for an employee or family member that is a victim of domestic or sexual violence; and/or (3) to attend a school conference, meeting, or other child-education related event.  In some instances, advance written notice to the employer of the employee’s intention to take paid leave may be required.

Under the legislation, leave begins to accrue on the later of the employment date or the law’s effective date (currently anticipated to go into effect on October 29, 2018) at a rate of one (1) hour for every 30 hours worked. The law does not require employers to allow employees to accrue more than 40 leave hours in a consecutive 12 month period, with such period to be determined by the employer.

Alternatively, employers can provide employees with 40 leave hours on the first day of the benefit year as an alternative to accruing time.  If employers “front load” such leave, employees may carry over accrued but unused leave or employers must offer employees compensation for unused leave by the end of that benefit year.

Employers should consult with an attorney regarding the anticipated employer notice, posting, and record keeping requirements associated with the Paid Sick Bill, as well as determining employee eligibility and duration of waiting periods that may be implemented before leave can be used.


In mid-April of this year, the legal landscape in New York was fundamentally altered when sweeping measures designed to combat sexual harassment were passed by both the State and the City of New York.

Starting with New York State, on April 12, 2018, Governor Andrew Cuomo signed into the law the New York State Budget, which contains several bills designed to prevent sexual harassment in the workplace.  The critical pieces of the New York State Budget addressing sexual harassment include the following:

  1. Effective April 12, 2018, the New York State Human Rights Law is amended to grant sexual harassment protection to non-employees, including contractors, subcontractors, vendors, consultants, and others who provide services under a contract.
  2. Effective July 11, 2018, employers in New York are prohibited from requiring employees to submit their sexual harassment claims to mandatory arbitration, even if agreements to arbitrate such claims were in place prior to the effective date of the law. It is anticipated that employers will challenge this legislation as being preempted by the Federal Arbitration Act.
  3. Also effective July 11, 2018, employers are prohibited from including a non-disclosure provision in settlements agreements for sexual harassment claims. However, where the plaintiff/complainant prefers the inclusion of such a provision, he/she shall have 21 days to consider and accept the non-disclosure/confidentiality provision, and he/she shall then have 7 days to revoke acceptance of the agreement with a confidentially provision once signed.
  4. Starting October 9, 2018, all employers in New York (regardless of size) will be required to adopt a written sexual harassment policy and conduct annual trainings which must be “interactive”. Employers will have the option of adopting the State’s model training program and policy (which will be developed by the Department of Labor, but have not yet been released), or employers can create their own policy and training program, which must equal or exceed the State’s requirements.  At a minimum, the policy must:
    1. Prohibit sexual harassment and provide examples of prohibited conduct;
    2. Include information concerning federal and state laws on sexual harassment and remedies available to victims;
    3. Include a model complaint form;
    4. Inform employees of rights and redress available to them and all forums where disputes can be adjudicated; and
    5. State that sexual harassment is a form of employee misconduct and sanctions will be enforced against individuals engaging in sexual harassment and against supervisory and management personnel who knowingly allow such behavior to continue.

Similarly, on April 11, 2018, New York City passed the “Stop Sexual Harassment in NYC Act”, a package of bills designed to combat and prevent sexual harassment in New York City.  The “Stop Sexual Harassment in NYC Act” includes the following bills/provisions:

  1. Effective immediately, the New York City Human Rights Law will apply to all employers in New York City regardless of size with regard to any “unlawful discriminatory practice based on a claim of gender-based harassment…” This stands in contrast to other provisions of the New York City Human Rights Law, which provide protections to employers with 4 or more employees.  The law will also extend the statute of limitations for filing complaints with the New York City Commission on Human Rights (the “Commission”) from 1 year to 3 years.
  2. The Commission will be required to design an anti-harassment rights and responsibilities poster (in both English and Spanish), which New York City employers must display in a conspicuous location. Employers will also be responsible for providing an information sheet to employees on sexual harassment which is distributed at the time of hire and may be included in the employee handbook.  The information sheet shall also be available in English and Spanish.  This provision takes effect 120 days from the law’s signing, provided the Commission takes all appropriate actions.
  3. Effective April 1, 2019, all employers with 15 or more employees in New York City must conduct annual sexual harassment trainings. These trainings must occur within 90 days of hire, must be “interactive”, and employers are required to retain records of attendance for 3 years.  The training must also include:
    1. An explanation of sexual harassment as a form of unlawful discrimination under local law;
    2. A disclaimer that sexual harassment is also a form of unlawful discrimination under state and federal law;
    3. A description of what sexual harassment is;
    4. The complaint process at the various New York agencies and the EEOC;
    5. A provision prohibiting retaliation; and
    6. A statement regarding the importance of by-stander intervention in any incidents of sexual harassment.

While conducting sexual harassment trainings has always been a recommended “best practice” for all employers regardless of location, New York joins only a handful of states including California, Connecticut, and Maine in requiring such trainings.  All New York State employers should ensure that their sexual harassment policies and trainings are firmly in place by the October 9, 2018 deadline.  Additionally, to the extent they have not already complied with the overlapping New York State requirements, all New York City employers should also be prepared to meet the April 1, 2019 deadline for the City’s requirements.

On March 27, 2018, the New Jersey Legislature passed the Diane B. Allen Equal Pay Act (the “Act”), which amends the New Jersey Law Against Discrimination (“LAD”), to strengthen protections against employment discrimination and promote equal pay for women.  A link to the Act can be found by clicking here. Governor Phil Murphy, who campaigned vigorously on a platform of women’s rights and equal pay for equal work leading into last year’s election, has indicated he will sign the legislation when it is presented to him, giving New Jersey one of the nation’s most comprehensive equal pay initiatives.  The Act takes effect on July 1, 2018.

The Act amends the LAD by making it an unlawful employment practice for an employer to pay any employee who is a member of a protected class less than the rate paid to other employees who are not members of that protected class for “substantially similar work when viewed as a composite of skill, effort and responsibility.”  The Act is thus much broader than just advocating gender pay equity.  Instead, the Act expands equal pay on the basis of membership in the protected class which includes, inter alia, race, creed, color, national origin, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy or breastfeeding, sex, gender identity or expression, disability or atypical hereditary cellular or blood trait of any individual, or liability for service in the armed forces.  With the passage of the Act, the LAD, which was already one of the broadest anti-discrimination laws in the country, only intensifies and strengths the protections afforded to members of protected classes who work and/or live in New Jersey.

The Act does, however, carve out limited exceptions concerning when an employer may pay a different rate of compensation to members of the protected class, including if the pay differential is due to a seniority or merit based system.  An employer may also pay different rates to individuals if they can demonstrate each of the following:

  1. That the differential is based on one or more legitimate, bona fide factors other than the characteristics of members of the protected class, such as training, education or experience, or the quantity or quality of production;
  2. That the factor or factors are not based on, and do not perpetuate differential in compensation based on sex or any other characteristic of members of a protected class;
  3. That each of the factors is applied reasonably;
  4. That one or more of the factors account for the entire wage differential; and
  5. That the factors are job-related with respect to the position in question and based on a legitimate business necessity.

See here

Under the Act, an unlawful employment practice can occur each time an employer’s pay practices discriminate against an employee, and the employee can seek back pay for a six (6) year period.  Thus, the Act lengthens the statute of limitations for claims based on pay equity to a period of six (6) years in contrast to the LAD’s two (2) year statute of limitations.

Lastly, in terms of damages, if an employer is found guilty of violating the pay practices in the Act described above, a judge or jury can award treble damages for the violation.  Treble damages are also available to an employee who can successfully prove that her employer retaliated against her for requesting, discussing, or disclosing to (i) any other employee or former employee of the employer, (ii)  a lawyer from whom the employee seeks legal advice, or (iii) any government agency, information regarding employee compensation/pay practices.  Likewise, treble damages are available to an employee or prospective employee who is asked by the employer to sign a waiver regarding discussing or disclosing pay practices or rates.

Employers should be aware of the July 1, 2018 effective date for the Act.  In the meantime, businesses should carefully review their employee handbooks as well as hiring and compensation practices to insure pay equity for employees who perform “substantially similar work”.

When Congress passed the Americans with Disabilities Act, or the ADA as it is routinely referred to, in 1990 it probably could not have envisioned the sheer number of lawsuits that would be filed under the ADA in the ensuing years.  While there have been some ebbs and flows in the volume of such filings over the years, ADA lawsuits, nevertheless, have, by and large, abounded and continue to do so to the present day.

The rules of engagement with respect to ADA lawsuits may have begun to change, however, on February 15, 2018 when the United States House of Representatives passed H.R. 620, the ADA Education and Reform Act of 2017.  The bill is now pending in the Senate.

While there are probably two major components of H.R. 620, the most significant changes with respect to lawsuits under the ADA are as follows:

  • Prior to filing a lawsuit, the aggrieved party must serve the owner or operator of a place of public accommodation with a detailed notice of the alleged violation or violations of the ADA;
  • The owner or operator is then provided with 60 days to respond to the notice, describing how the violation or violations will be addressed; and
  • The owner or operator is then given another 120 days to correct the violation or violations—referred to as removing the barriers—or to at least make substantial progress in doing so.

Currently, there is no requirement that a party suing for alleged violations under the ADA provide any kind of notice to the owner of operator of a place of public accommodation prior to filing a lawsuit.  As such, opponents of H.R. 620 fear that the bill will dramatically impact access to courts for persons with disabilities seeking to remedy ADA violations.  Proponents of the law, on the other hand, believe changes are necessary to curtail what they see as an abundance of frivolous lawsuits designed to do nothing more than generate attorney’s fees.

If the ADA Education and Reform Act of 2017 passes the Senate, it is unclear what impact, if any, it will have on the newest trend in ADA lawsuits, namely lawsuits against owners or operators of websites, alleging that those websites are not accessible to the legally blind or visually impaired.  At first blush, it would not appear that this amendment to the ADA would apply to such claims in that the bill specifically uses the term “architectural barriers” which would seem to confine its scope to physical issues with a place of public accommodation.  Of course, since websites did not exist when the ADA was passed in 1990, the true scope of the ADA Education and Reform Act of 2017 will probably be an issue shaped by courts in the years to come.