Author: Joseph E. Santanasto

New Jersey Supreme Court Confirms Enforceability of Arbitration Agreements Concerning Transportation Workers Under the NJAA

In Colon v. Strategic Delivery Solutions, LLC and Arafa v. Health Express. Corp., plaintiffs contracted with corporate defendants to provide transportation and delivery services as independent contractors and signed arbitration agreements governing the terms and conditions under which they were to provide services. The agreements at issue explicitly referenced the Federal Arbitration Act (“FAA”), but neither referenced the New Jersey Arbitration Act (“NJAA”). In both cases, plaintiffs brought claims in New Jersey Superior Court asserting they were misclassified as independent contractors and alleging violations of wage payment and wage hour laws, and in both cases, defendants sought to compel arbitration and dismiss the lawsuits. Both trial courts granted the respective employers’ motions to dismiss the claims and compel arbitration, and plaintiffs appealed these decision to the Appellate Division of the New Jersey Superior Court. As detailed in a prior blog post, in June 2019, different panels of the Appellate Division issued divergent holdings concerning the appeals. The Colon panel observed that both the FAA and NJAA “favor arbitration” as a way to resolve disputes, and that the NJAA “governs all agreements to arbitrate” entered into on or after January 1, 2003 (with limited exceptions that did not apply). It further found that the FAA “does not occupy the entire field of arbitration” and, therefore, the...

New Jersey Further Expands Family Leave and Temporary Disability Benefits in the Wake of COVID-19

On April 14, 2020, Governor Phil Murphy signed into law Senate Bill S2374, which further amends the New Jersey Family Leave Act (FLA) and the New Jersey Temporary Disability Benefits Law (TDBL), including the Family Leave Insurance program (FLI), expanding on prior amendments signed into law on March 25, 2020 (included in Senate Bill 2304), as part of the state’s initial response to the early stages of the COVID-19 pandemic. These amendments are effective immediately and apply retroactively to leave taken on or after March 25, 2020. As the pandemic has continued, so too have the Legislature’s attempts to address its impact on New Jersey citizens, which have included efforts to protect New Jersey employees who are in need of temporary leave and/or income replacement benefits as a result of circumstances caused by COVID-19. Prior to the COVID-19 related amendments, eligible employees working for covered employers could, under the FLA, take up to 12 weeks of job-protected leave in any 24-month period for the following three reasons: The birth of a child, including a child born pursuant to a valid written agreement between the employee and a gestational carrier The adoption or foster care placement of a child Caretaking for a family member with a serious health condition As discussed in our prior blog post,...

New Jersey Enacts and Expands Laws Providing Employees With Enhanced Benefits and Protections Resulting From COVID-19

New Jersey Governor Phil Murphy has recently signed into law two important bills – one (AB 3848) providing job protection to certain employees impacted by COVID-19 (“the COVID-19 Act” or “Act”), and the other (S2304) expanding the scope of the New Jersey Earned Sick Leave Law (ESLL), the New Jersey Family Leave Act (FLA), and the New Jersey Temporary Disability Law (“TDBL”). The Act, along with the amendments to the existing laws referenced above, are discussed below and are intended to increase protection and benefits to employees as a result of COVID-19. Job Protection for Certain Employees Who Take Time Off Due to Infectious Disease Under the COVID-19 Act, during the Public Health Emergency and State of Emergency declared by Governor Murphy concerning the coronavirus, employers are prohibited from terminating or refusing to reinstate an employee who requests or takes time off from work, for a specified time period, at the recommendation of a licensed New Jersey medical professional because the employee has or is likely to have an infectious disease that could infect others in the employee’s workplace. Upon the employee’s return from time off, he or she must be reinstated to the same position held when leave began, with no reduction in seniority, status, employment benefits, pay, or other terms and conditions of...

New Jersey Appellate Panels Disagree on Enforceability of Arbitration Agreements Concerning Transportation Workers

On June 4 and June 5, 2019, separate panels of the Appellate Division of the New Jersey Superior Court issued diametrically opposed decisions calling into question the enforceability of arbitration agreements involving employees and independent contractors who provide transportation services. In Colon v. Strategic Delivery Solutions, LLC and Arafa v. Health Express Corporation, two Appellate Division panels considered the same legal question: are arbitration agreements enforceable under New Jersey law where one of the signatories is exempt from arbitration under the Federal Arbitration Act (FAA)? Despite the uniformity of the issue considered, the respective holdings stand in stark contrast to one another, creating confusion as to how to interpret arbitration agreements moving forward. Colon and Arafa involved strikingly similar facts. Both the Colon and Arafa plaintiffs contracted with the respective corporate defendants to provide transportation and delivery services on their behalf with regard to pharmaceutical products. Both defendants classified the plaintiffs as independent contractors; and both plaintiffs executed arbitration agreements governing the terms and conditions under which they were to provide transportation services. Most significantly, in both cases the arbitration agreements at issue explicitly stated that they were to be governed pursuant to the FAA (The Arafa agreement stated that it “is governed by the Federal Arbitration Act,” while the Colon agreement stated that the...

United States DOL Proposed Update to FLSA Overtime Rules

On March 7, 2019, The United States Department of Labor (DOL), announced a proposal to update the overtime rules under the Fair Labor Standards Act (FLSA). Under the FLSA, employers are required to pay employees at least the minimum wage for all hours worked, and overtime pay (at 1 ½ times an employee’s regular rate) for all hours worked in excess of 40 in a workweek. To be exempt from these requirements, an employee must be paid on a salary basis, at or above a set minimum weekly salary level, and meet certain specific requirements concerning their job duties. In March 2014, President Obama directed the DOL to update and modernize regulations under the FLSA governing overtime exemptions for “white collar” employees (i.e., executive, administrative and professional employees). After receiving more than 270,000 comments, in May 2016, the DOL issued a final rule, substantially increasing the minimum salary levels for the overtime-exempt classifications, from $455 per week ($23,660 per year) to $913 per week ($47,476 per year), and incorporating mechanisms to adjust the salary level in the future (“2016 Rule”). Under the 2016 Rule, the salary level needed to satisfy the highly compensated employee (HCE) exemption (which includes a less stringent “duties” test), was set at $134,004 (increased from the $100,000 threshold in effect since...

Recent NLRB Decision Helps Employees, Hurts Unions

On March 1, 2019, the National Labor Relations Board (NLRB) issued a decision in United Nurses and Allied Professionals (Kent Hosp.), 367 NLRB No. 94 (2019) addressing the rights of individuals in collective-bargaining units who are subject to union-security requirements and elect not to be union members. The Board held that unions cannot charge these individuals for lobbying activities because such activities are not needed for unions to perform their statutory representational duties (i.e., collective-bargaining, contract administration, and grievance adjustment). Additionally, the NLRB held that unions must provide these individuals with independent verification that the financial information it shares with them about union expenditures to justify their non-member charges has been properly audited. The decision came on the heels of a memorandum issued by the Board’s General Counsel, which addressed unions’ duties to notify employees in collective-bargaining units of their right to be non-members, pay reduced charges, and revoke dues authorization checkoffs on their specific anniversary and/or contract expiration dates. The union in Kent Hosp. represented a group of registered nurses. Some of those nurses resigned their union membership and objected to the union charging them for lobbying activities. Such individuals are sometimes referred to as Beck objectors in light of a decision by the Supreme Court of the United States in Commc’ns Workers v....