As we have previously blogged, the New Jersey Earned Sick Leave law goes into effect on October 29, 2018. In connection with implementation of the law, the New Jersey Department of Labor and Workforce Development has issued a “Notice of Employee Rights.”  The Notice is available here.

The Notice must be provided to new employees when they begin employment and to all existing employees by November 29, 2018.  Employers must also post this notice in a conspicuous and accessible place at all work sites and also must give copies to employees on request.  Employers should note that the Department of Labor is in the process of translating the Notice into ten (10) additional languages and requires that the Notice be given in English, Spanish or any other language for which notifications have been provided and which is the first language of a majority of the workforce.

On October 17, 2018, New Jersey’s Appellate Division, in a published decision, refused to enforce an arbitration clause in an employment agreement where the clause did not select a forum for arbitration thereunder or describe a process for selecting such a forum.  In Flanzman v. Jenny Craig, Inc. et al., the plaintiff, after being terminated at the age of eighty-two, sued her former employer for employment discrimination pursuant to New Jersey’s Law Against Discrimination.

The employer then moved to compel arbitration, relying on an arbitration agreement signed by the plaintiff several years before in order to maintain her employment.  The broadly worded arbitration clause unmistakably provided that the parties agreed that “in lieu of a jury or civil trial,” they would settle any disputes between them – whether based upon statute or common law, contract or tort – “by final and binding arbitration.”  The agreement did not, however, identify a forum for the arbitration.

The trial court granted the motion to compel arbitration based upon the arbitration clause, but, on appeal, the Appellate Division reversed.  The court reasoned that, where an arbitration agreement does not select an “arbitral institution,” such as the American Arbitration Association (“AAA”) or Judicial Arbitration and Mediation Services (“JAMS”), the parties will not know basic information concerning the rights and procedures that would replace judicial adjudication, and thus, the parties will not have had the requisite “meeting of the minds” for enforcement of the agreement.   The court further explained that institutions like the AAA or JAMS have well-established arbitration rules and procedures for different types of disputes, and by specifically selecting one of these arbitral institutions, the parties are informed about the rights and procedures that will replace the rights that they have waived by agreeing to arbitration.

The court took pains to clarify that it was not imposing any special requirements on the type of language parties must use (as such requirements would violate the Federal Arbitration Act, which has been interpreted to prohibit courts from subjecting arbitration agreements to more burdensome requirements than other types of contracts).  To that end, the court cited, as an example, an out-of-state decision upholding an arbitration agreement where the agreement identified a forum and thereafter a process for selecting a forum should the named forum become unavailable.

It remains to be seen whether the Flanzman decision will be reviewed by the Supreme Court of New Jersey.  It is, however, consistent with a recent trend whereby New Jersey courts carefully scrutinize arbitration agreements, particularly in the employment context.  New Jersey-based employers are therefore well-served to remain abreast of these legal developments to ensure the enforceability of arbitration agreements.  And, following Flanzman, such agreements should identify an arbitral institution such as JAMS or AAA for the forum of the arbitration or, alternatively, should describe the method of and rules (or the process for selecting the method and rules) for any subsequent arbitration.

As we previously reported, New York State launched the Combating Sexual Harassment in the Workplace website in August 2018 to host resources for employers and employees about the new legal obligations arising from the New York State Budget.  The website originally contained draft model sexual harassment prevention training and policy materials, but New York State has just issued the final versions of the documents, which are now publicly available through the website.  In addition, the website contains finalized FAQs and additional guidance on the new laws, including an “Employer Toolkit”, which provides employers with “step-by-step guidance” to implement the required policy and training program.

The final documents come only several days in advance of the October 9, 2018 deadline by which all New York State employers must adopt written sexual harassment policies and begin to implement annual sexual harassment training for employees.

Model Sexual Harassment Prevention Policy

By the October 9, 2018 deadline, New York employers must adopt written sexual harassment policies that meet the new legal requirements under the New York State Budget.  Employers have a choice in either adopting the State’s model policy and complaint form or implementing their own policy and complaint form, which must meet or exceed the minimum standards set forth by the new law.  Notably, all employees must be given a copy of the policy and it is suggested that the policy should be written in a language spoken by the employees.

To aid employers that would like to craft their own policies, the State issued guidance outlining the minimum standards to which the policy must adhere.  Specifically, the policy must:

  • Prohibit sexual harassment consistent with guidance issued by the Department of Labor in consultation with the Division of Human Rights;
  • Provide examples of prohibited conduct that would constitute unlawful harassment;
  • Include information concerning the federal and state statutory provisions concerning sexual harassment, remedies available to victims of sexual harassment, and a statement that there may be applicable local laws;
  • Include reference to a complaint form;
  • Include a procedure for the timely and confidential investigation of complaints that ensures due process for all parties;
  • Inform employees of their rights of redress and all available forums for adjudicating sexual harassment complaints administratively and judicially;
  • Clearly state that sexual harassment is considered a form of employee misconduct and that sanctions will be enforced against individuals engaging in sexual harassment and against supervisory and managerial personnel who knowingly allow such behavior to continue; and
  • Clearly state that retaliation against individuals who complain of sexual harassment or who testify or assist in any investigation or proceeding involving sexual harassment is unlawful.

As noted above, an employer that adopts their own policy must provide an overview of their investigative procedures within their policy.  The final FAQs note that an employer need not adopt the investigative procedures set forth in the State model policy as long as the procedures meet the minimum standards listed above.  Moreover, a complaint form is not required to be included in the policy itself, but employees must be notified where the form may be found.

Notably, the final FAQs also state that employers must provide employees with a copy of the policy in writing or electronically.  If the policy is made available to employees electronically, employees must be able to print a copy for their records.

Model Sexual Harassment Prevention Training

Starting on October 9, 2018, the New York State Budget also requires employers to provide all employees with sexual harassment training on an annual basis.  While the draft materials previously indicated that all employees must complete the first round of training by January 1, 2019, the final State guidance extends that deadline to October 9, 2019.  Moreover, the final materials relaxed the training requirement for new employees.  Specifically, the draft guidance stated that new employees must complete their sexual harassment training within 30 calendar days of their start date.  Now, the final guidance requires new employees to receive training “as soon as possible” after their start date.

According to the final FAQs, employees who only “work[] a portion of their time in New York State, even if they’re based in another state” must also receive annual training.  This requirement is overall less burdensome than the original draft FAQs, which provided that any employee must receive training even if “someone just works for one day for the employer, or if someone works for just one day in NY.”

To comply with the new law, employers must either adopt the State’s model training slides, script, and/or case studies or implement live training or interactive online/video training that meets or exceeds the minimum standards set forth by the new law.  Specifically, at a minimum, the training must:

  • Be interactive;
  • Include an explanation of sexual harassment consistent with guidance issued by the Department of Labor in consultation with the Division of Human Rights;
  • Include examples of conduct that would constitute unlawful sexual harassment;
  • Include information concerning the federal and state statutory provisions concerning sexual harassment and remedies available to victims of sexual harassment;
  • Include information concerning employees’ rights of redress and all available forums for adjudicating complaints; and
  • Include information addressing conduct by supervisors and any additional responsibilities for such supervisors.

As denoted by the final FAQs, employers crafting their own training policy do not need to include the sections of the model training that are “not expressly required in the law[,]” but covering the information is still “strongly recommended.”

According to the State guidance, employers should provide employees with training in the language spoken by their employees.  State-issued Spanish, Chinese, Korean, Bengali, Russian, Italian, Polish, and Haitian-Creole versions of the final training materials are forthcoming.

Some additional significant changes that the State made to the draft training documents and related training FAQs include:

  • The final FAQs provide that there is no minimum number of hours an employer must spend training its employees.
  • The final FAQs make clear that while there is no duty to train third-party vendors, contractors, or other non-employees who provide services to the employer in the workplace (either on a one-time or regular basis), the State still encourages employers “to provide the policy and training to anyone providing services in the workplace.”
  • The final FAQs clearly state that employers must make all of their employees aware of the additional requirements for those in managerial/supervisory roles.
  • Employers are permitted to “take appropriate administrative remedies” when faced with an employee who fails to complete the training.
  • The final FAQs further elaborate upon the meaning of “interactive training” by stating that merely watching a training video or reading a document, with no feedback mechanism or interaction, is not “interactive.” Instead, the guidance provides the following examples of interactive trainings:
    • If the training is web-based, it has questions at the end of a section and the employee must select the right answer;
    • If the training is web-based, the employees have an option to submit a question online and receive an answer immediately or in a timely manner;
    • In an in-person or live training, the presenter asks the employees questions or gives them time throughout the presentation to ask questions; or
    • Web-based or in-person trainings that provide a feedback survey for employees to turn in after they have completed the training.
  • While a live trainer is not required under the New York State Budget, the final State guidance emphasizes bringing in a live trainer is “a best practice for effective and engaging trainings[.]”

The website also provides additional clarifying information about laws regarding mandatory arbitration and nondisclosure provisions.

Concluding Employer Considerations

The October 9, 2018 deadline is quickly approaching and employers should take immediate action to ensure that their sexual harassment policies are in compliance with the new legal obligations or alternatively choose to adopt the State’s model policy.  Further, although the first training deadline is not until October 9, 2019, employers should begin deciding how they will fulfill their training obligations.  Employers should particularly consider whether to retain counsel to serve as live trainers for their workforces to ensure compliance with the new training requirement.

Further, as previously reported, New York City employers must also comply with the new Stop Sexual Harassment in NYC Act, which imposes its own set of specific training requirements for employers with 15 or more employees beginning on April 1, 2019.  The New York City Commission on Human Rights is in the process of creating an online module that employers may use at no charge to comply with the new law, but it is unclear when this module will be ready.  Employers should consult with counsel to ensure compliance with both laws.

Non-competition agreements—or non-competes as they are routinely referred to—are common and are regularly enforced and upheld by Florida courts.  A non-compete is designed to limit what an employee can or cannot do both while employed by a business and after the employment relationship ends although non-competes can apply to persons other than those merely defined as employees.

In a nutshell and in its most basic form, a non-compete prevents an employee of a business from working for a competitor of  his employer both during the time he is employed by that employer and for a certain period of time after the employment ends.  Florida Statutes Sec. 542.335 governs non-competes in Florida that were entered into after July 1, 1996.  Amongst other things, it requires that the non-compete be in writing and signed by the person to whom the non-compete applies and that there be a legitimate business reason for the non-compete.  Legitimate business reasons, under Sec. 542.335, include but are not limited to trade secrets defined in Florida Statutes Sec. 688.002(4); customer or client goodwill; substantial relationships with  specific customers, whether those customers are existing or even prospective; and valuable confidential business information that does not necessarily rise to the level of being a trade secret.

If a court finds that a non-compete is not supported by a legitimate business interest that non-compete will be deemed unlawful.  Simply put, under those circumstances, the non-compete is void and unenforceable

Whether the period of time that a person is prohibited from competing, after the employment or business relationship ends, is ultimately considered reasonable depends upon the nature of that relationship.  Florida Statutes Sec. 542.335 provides for the following presumptively reasonable periods:

  • when the non-compete is against a former employer, agent or independent contractor and is not part of the sale of a business, the court presumes that a restrictive period of six months or less is reasonable and a period of more than two years is unreasonable;
  • when the non-compete is against a former distributor, franchisee, dealer or licensee of either a trademark or service mark and that is also not part of the sale of a business, the court presumes that a restrictive period of one year or less is reasonable and a period of more than three years is unreasonable;
  • when the non-compete is against the seller of all or part of a business, the court presumes that a restrictive period of three years or less is reasonable and a period of more than seven years is unreasonable.

The presumptions laid out in Florida Statutes Sec. 542.335 are rebuttable presumptions.

This means that the person subject to the non-compete can bring forward evidence as to why the restrictive period should not be enforced even if that restrictive period falls within the confines of Sec. 542.335.

On August 23, 2018, New Jersey’s intermediate appellate court in Roman v. Bergen Logistics, LLC et al., ruled that employers could not contractually limit the remedies available for successful employment discrimination claims.  In that case, the plaintiff-employee and defendant-employer had signed an arbitration agreement at the time of the employee’s hiring.  The agreement provided that all employment-related claims, including statutory claims, would be resolved exclusively by final and binding arbitration.  Further, the agreement waived the plaintiff-employee’s right to collect punitive damages.

Subsequently, the plaintiff-employee sued her employer alleging claims for sexual harassment under New Jersey’s Law Against Discrimination (“LAD”).   In the trial court, the defendant-employer successfully obtained dismissal of the action based upon the arbitration agreement.  However, on appeal, the court ruled that the portion of the agreement purporting to limit the employee’s ability to recover punitive damages was unenforceable, reasoning that the availability of punitive damages served important public policy interests under the LAD: to deter misconduct and punish the wrongdoer. The appellate court therefore dismissed the action based upon the employee’s agreement to arbitrate any dispute, but invalidated the damages limitation as to the employee’s LAD-based claims so that, in any subsequent arbitration, the employee would be able to recover punitive damages.

The court’s ruling is consistent with a notable trend in New Jersey law, whereby courts uphold the parties’ freedom of contract but limit or invalidate portions of arbitration agreements on public policy grounds to the extent they impinge upon statutorily-granted rights under the LAD.  For example, in Rodriguez v. Raymours Furniture Co., 225 N.J. 343 (2006), the State’s highest court concluded that a provision in an employment application, purporting to require the employee to file any employment-based claim within six-months, was unenforceable as to the employee’s LAD-based claim.  The Court explained that, supplanting the applicable two-year statute of limitations for LAD claims with a mere six-month window effectively denied the employee important substantive rights provided by the statute.

New Jersey-based employers should review and potentially modify their current employment contracts to ensure that they are consistent with this current trend in the law.  While agreements to submit disputes to binding arbitration – including employment discrimination claims – will generally be upheld, limitations on substantive rights and remedies conferred by the LAD will likely be deemed unenforceable.