A VICTORY AGAINST FORCED ARBITRATION, a/k/a Another Kind of “Black Friday” for Best Buy
A VICTORY AGAINST FORCED ARBITRATION, a/k/a Another Kind of “Black Friday” for Best Buy
December 5, 2017
Sexually harassed at work? Sorry, you can’t take your case to court and have it heard by a jury. Terminated from your job because the Company thought you “too old” to adapt to new technology? Again, too bad. You can’t take your discrimination case to court and present it to a jury for their decision.
Unfortunately, as a result of large corporations forcing “agreements” on their employees requiring their cases to be heard only in arbitration – a secret, private proceeding, heard by a single arbitrator, not a jury of peers – this is becoming the reality for more and more employees here in New Jersey and around the country.
A recent study conducted on behalf of the Employee Rights Advocacy Institute for Law and Policy, found the following:
The ability to access courts is disappearing for workers in America because arbitration clauses have permeated the majority of the leading companies in America. Personal injury claims, wage claims, civil rights claims, sexual assault claims, and other claims involving the workplace and vulnerable workers may never be heard in a public court, with broad procedural protections for employees, because of the use of arbitration clauses. Further, through the use of class waivers, it is impossible for employees to join together in a class or collective action against their more powerful and far better-resourced employers. Access to courts has become increasingly more difficult for workers, and the vast majority of America’s top companies have tried to block workers from entering the courthouse door.
The key findings of this study are as follows:
• 80% of the companies in the Fortune 100, including subsidiaries or related affiliates, have used arbitration agreements in connection with workplace-related disputes since 2010.
• Of the 80 companies with arbitration agreements in the workplace, 39 have used arbitration clauses containing class waivers.
Here at Schall & Barasch, we are happy to report our recent victory upending Best Buy’s attempt to force arbitration down the throats of its employees. In late February, 2016, Best Buy informed all of its employees that as of March 15, 2016, they would be bound to arbitrate all disputes with the Company, including claims of employment discrimination. As many companies do, Best Buy tried to sell the arbitration policy to their employees as a better way to resolve claims than by going to court as part of the Company’s commitment to creating a “welcome, inclusive environment where employees come to work every day to do what they enjoy doing.”
But the Company’s sales pitch came with a “kicker.” As an employee, you had no choice: the Company was considering you bound by the arbitration policy whether you agreed to it or not.
Three weeks after implementing its forced arbitration policy, Best Buy fired our client, Kevin Dugan, one of its store managers, after 16 years of employment. As soon as we filed suit in state court in New Jersey, the Company attempted to get the court to dismiss the case and order Mr. Dugan to arbitration. We argued that, under New Jersey law, an employer cannnot bind its employees to an arbitration policy without getting some indication from them of their agreement to be bound –a choice that Best Buy did not give its employees.
After the trial court agreed with Best Buy and ordered the case to arbitration, we appealed that decision to the Appellate Division of the New Jersey Superior Court, where a two-judge panel found Best Buy’s arbitration policy unenforceable on the ground that the Company had never obtained any agreement from its employees to be covered by the policy.
In rejecting Best Buy’s argument that by “continuing their employment” its employees had indicated their agreement to be bound by the policy, one of the Appellate Division judge’s wrote as follows:
Plaintiff, by remaining employed for three weeks after [the policy’s] effective date did not indicate his assent to the policy; employment for that brief period does not establish an unambiguous waiver of plaintiff’s right to sue. . . . The policy was offered on a take-it-or-leave-it basis. . . . Plaintiff had worked for defendant for almost sixteen years. The choice given by defendant to ‘leave it’ if an employee did not agree with the policy amounted to no choice at all. It is unreasonable to expect an established employee to walk away from a career, without any prospects, when an employer unilaterally presents a new agreement.”
The second judge on the Appellate Division panel likewise found grounds to strike down Best Buy’s arbitration policy, finding that the Company had failed to ever make clear to its employees that by continuing their employment they had “agreed” to be bound by the arbitration policy, and that the Company had instead stated only that it was “considering” their employees to be bound, whether they agreed with the policy or not.
Best Buy, unwilling to live with the decision of the Appellate Division, sought to review of the decision with the New Jersey Supreme Court. On Friday, November 17, 2016 – one week before the actual “Black Friday,” the Supreme Court turned down Best Buy’s request for review. So, Best Buy’s arbitration policy has been found void and unenforceable by the New Jersey courts, and Mr. Dugan, along with all Best Buy employees in the State, is now free to pursue his case in court and have it decided by a jury of his peers.
The full study can be downloaded at http://employeerightsadvocacy.org/publications/widespread-use-of-workplace-arbitration/.
We are pleased to announce that Richard Schall was honored last month in Best Lawyers Magazine as having been recognized as a 2018 “Lawyer of the Year” in the practice area of Employment Law-Individuals in the South Jersey area. Selection is based on peer-review surveys conducted by Best Lawyers. Only three lawyers in the state of New Jersey were so recognized this year in the field of employment law representing individuals.
Wednesday, March 29, 2017
“You Can’t Take It With You:” Another Lesson in the World of Non-Compete Agreements
We have cautioned before in our blogs and on our website that one of the worst mistakes an employee can make when leaving a job is to email information of any sort from a work computer to a home computer in the weeks leading up to the last day of employment. If you do so, even if you think the information you’re sending home is purely personal, your employer will inevitably suspect that you are attempting to steal a trade secret, customer lists, product information, or some other kind of information the employer may label as “proprietary or confidential.” And the result, particularly if you’ve signed a non-compete or confidentiality agreement, can be very ugly.
This lesson was recently highlighted in news reports about a Pfizer marketing executive against whom a Pennsylvania federal court issued a “temporary restraining order,” in the days immediately after she left her job with Pfizer. In the legal action brought by Pfizer against this employee, it accused her of having sent “at least 42 emails containing confidential information to her personal email account and copied 600 files to a USB drive before her departure, violating an existing employee agreement she signed regarding sensitive company information,” according to a March 1, 2017 report by Law360.
Upon being presented with these accusations, presumably supported with some evidence of the electronic transmissions and downloading by the employee, a Pennsylvania federal judge, without giving the employee notice that he was doing so, entered a temporary restraining order against her, finding that, “there is a real danger that, if given advance notice, defendant will either disclose or destroy the confidential information and trade secrets at issue.”
Employees should also be forewarned that employers will often leave no stone unturned – and spend enormous amounts of money –in searching for every potential communication containing company information that a departing employee may have sent to herself or others prior to leaving employment. In a case we recently handled for an employee, his employer undoubtedly spent far more than $100,000 in retaining attorneys, filing suit, and hiring a very expensive “forensic” computer search firm to search every email, text message, and phone message our client sent in the months preceding his leaving the company. While it ultimately found nothing and had to dismiss its case, it was a harrowing and expensive procedure for our client who had to defend himself against the company’s legal action and turn over access to all of his personal computers, cell phones, iPads, etc. to be searched by the forensic experts in order to be vindicated.
In fact, just as this blog was about to be published, I learned, again from Law360, that this Pfizer employee’s case had been settled as a result of an agreement reached that would allow Pfizer to bring in an independent computer forensic specialist to examine all of the employee’s computer and other electronic devices. The agreement also provides that the judge in the case will retain jurisdiction over it for the next three years to resolve any disputes that may arise. While this Pfizer employee was able to “settle” this dispute, I am sure that she has incurred and will likely continue to incur substantial legal fees and costs in conjunction with the litigation and its ongoing resolution.
So, if you are contemplating leaving your employer and seeking alternate employment, a word to the wise: think twice before hitting that “send” key.
Richard M. Schall, Esq.
Schall & Barasch LLC
110 Marter Ave, Ste 302
Moorestown, NJ 08057
On March 15, 2016, I had the pleasure of appearing before the New Jersey Supreme Court on behalf of the National Employment Lawyers Association of New Jersey in the case of Cuevas v. Wentworth Group. The case involved two brothers, Ramon and Jeffrey Cuevas, who alleged that they had been subjected to a hostile work environment on account of their national origin and then were terminated from their employment when they raised complaints about how they were being treated. This past month, on September 19, 2016, the Supreme Court issued its decision – upholding a $1.4 million award of emotional distress damages to the two brothers.
The New Jersey Supreme Court’s decision, written by Justice Barry Albin, constitutes not only a terrific vindication for the Cuevas brothers but also a sweeping victory for all employees in the State of New Jersey, as the Court recognized not only the grievous harm that can be caused by employment discrimination, but also the essential role of juries, not judges, in determining the fair amount of damages to be awarded in these cases.
In recognizing the harms caused to New Jersey employees by discrimination, the Supreme Court wrote as follows:
The Legislature intended victims of discrimination to obtain redress for mental anguish [and] embarrassment,” even when their emotional and physical ailments cannot be characterized as severe. Because of the special harm caused by willful discrimination in the workplace, “compensatory damages for emotional distress, including humiliation and indignity . . . , are remedies that require a far less stringent standard of proof than that required for a tort-based emotional distress cause of action.” Specifically, in a [Law Against Discrimination] case, a plaintiff is not required to provide “expert testimony or independent corroborative evidence . . . to support [an] award of emotional distress damages.” Plaintiffs in this case were entitled to “recover all natural consequences of [defendants’] wrongful conduct, including emotional distress and mental anguish damages arising out of embarrassment, humiliation, and other intangible injuries.”
Perhaps even more significantly, the Court in its Cuevas decision restored a fundamental precept of law in New Jersey that some of its prior decisions had begun to erode: that is the role of juries, not judges, to decide the amount of damages to be awarded to plaintiffs who are harmed by the conduct of a wrongdoer in all kinds of cases – not just employment cases – that come before the courts.
In this regard, under New Jersey law, a judge has always been permitted to reduce a jury award in the event he or she finds the award “shocking to the judicial conscience” or a “gross miscarriage of justice” – a very high standard that was intended to be used only sparingly. However, in recent years, it had become more and more common for judges to reduce large jury awards based either on their own “personal experience” or by comparing a jury’s award to other awards that had been issued in supposedly “comparable cases.”
In its Cuevas decision, the Supreme Court has now slammed the brakes on this trend and made clear that it is only in the very rare case – a truly “runaway jury” – that judges may interfere with a jury award. It wrote as follows:
The preeminent role that the jury plays in our civil justice system calls for judicial restraint in exercising the power to reduce a jury’s damages award. A court should not grant a remittitur except in the unusual case in which the jury’s award is so patently excessive, so pervaded by a sense of wrongness, that it shocks the judicial conscience. . . .
A judge’s personal knowledge of verdicts from experiences as a private practitioner or jurist is information outside the record and is not subject to the typical scrutiny evidence receives in the adversarial process. The cohort of cases within a judge’s personal knowledge may not be statistically relevant and the reliability of the judge’s knowledge cannot be easily tested. A judge therefore should not rely on personal knowledge of other verdicts. The standard is not whether a damages award shocks the judge’s personal conscience, but whether it shocks the judicial conscience.
We also disapprove of the comparative-verdict methodology that allows parties to present supposedly comparable verdicts based on case summaries. The singular facts and particular plaintiffs in different cases that lead to varying awards of damages are not easily susceptible to comparison. That is especially so because the information about other seemingly similar verdicts is very limited. A true comparative analysis would require a statistically satisfactory cohort of cases and detailed information about each case and each plaintiff. That information is unlikely to be available, and therefore any meaningful comparative approach would be impracticable to implement.
The Court’s decision in Cuevas constitutes a great victory for all the citizens of the State of New Jersey, and in particular, New Jersey’s employees. On behalf of the National Employment Lawyers Association of New Jersey, we are grateful that we at Schall & Barasch had opportunity to help bring about his wonderful result.
In 1963 Congress enacted the Equal Pay Act, which requires that women receive equal pay for equal work. While, over the past 50-some years, thousands of lawsuits have been filed alleging violations of the Act, with varying degrees of success, five members of the United States Women’s National Soccer Team, in filing their recent complaint with the Equal Employment Opportunity Commission (EEOC), have acted to bring this law back into the national spotlight. Although prior cases brought under the Act by female sports figures – most often coaches – have generally not fared well, there are good reasons why I think the Women’s National Soccer Team may well prevail in their case.
Congress enacted the Equal Pay Act “recognizing the weaker bargaining position of many women and believing that discrimination in wage rates represented unfair employer exploitation of this source of cheap labor.” In response to evidence of the many families dependent on the income of working women, Congress included in the Act’s statement of purpose a finding that “the existence . . . of wage differentials based on sex . . . depresses wages and living standards for employees necessary for their health and efficiency.” And Congress declared it to be the policy of the Act to correct this condition.
The Equal Pay Act prohibits an employer from paying different wages to employees of the opposite sex for equal work on jobs the performance of which requires “equal skill, effort, and responsibility” and which are performed under “similar working conditions.” Notably, to qualify as “equal work,” the work female employees perform need not be identical to that of their male comparators; rather the work must merely be “substantially equal.”
So when women are performing essentially the same job functions as men, under similar working conditions, and handling a similar amount of responsibility, the Equal Pay Act requires that their employer pay them equal amounts of compensation. At first blush then, when one compares the “job functions, working conditions, and responsibilities” of the women playing for the Women’s National Soccer Team with those of the men, playing on the men’s National Team, it seems clear that there is no difference, and that the women’s team should have an easy go of winning their case.
However, the Equal Pay Act does contain a major “escape clause” for employers: if an employer can show that the pay differential between what it is paying its female and male employees is based on a “factor other than sex,” then the pay differential is permissible. Acceptable factors “other than sex” include experience, prior salary, education, skills which the employer deems useful to the position, and “a proven ability to generate higher revenue for the employer’s business.”
It is the last of these factors – “the ability to generate higher revenue” — that has typically doomed the efforts of female coaches to obtain equal salaries to those of their male peers. One of the most frequently cited of such cases is that of the former women’s basketball coach at the University of Southern California, Marianne Stanley. who, in 1993, filed suit over the lesser compensation she was receiving compared to the coach of the men’s team. In finding against her, the court cited, among other reasons, the fact that the men’s basketball team, at that time, produced 90 times greater revenue than the women’s team.
But, in the case of the women playing soccer for the Women’s National Team, which has enjoyed incredible success and popularity in recent years, it may be difficult for their employer, U.S. Soccer, to argue that it is revenue generation that justifies the enormous disparity in pay received by these women, when compared to that paid to the men on the Men’s National Team. According to the figures filed with the EEOC by the five women players, the Women’s National Team, which won the World Cup in 2015, generated $20 million more in revenue than the men’s team in 2015. The 2015 women’s World Cup final was viewed by some 25 million television viewers – a record for a men’s or women’s soccer game on English language television in this country. The women’s team is favored to win its fifth Olympic Gold medal this summer in Brazil. Yet, despite the success – and the financial benefits that result — the women are paid only a fraction of what the men get paid. For each of the minimum of 20 “friendly” matches each team plays every year, the top five women are guaranteed only $72,000 per year, whereas the top five male players earn $406,000 from these games. If a male soccer player for the U.S. team were to win the World Cup, he would receive a bonus of $390,000. By contrast, for winning the 2015 World Cup, star player Carli Lloyd received a bonus of only $75,000. As Ms. Lloyd stated in her April 10, 2016 op-ed piece in the New York Times, “simply put, we’re sick of being treated like second-class citizens. It wears on you after a while. And we are done with it.”
My prediction: Not only will the women’s team win an Olympic gold medal in Brazil, but they will ultimately win their Equal Pay Act case.
Calling a waitress darlin’ and shamelessly flirting (and annoying) her for hours on end may be an amusing gimmick in films and television, but these days it just won’t fly in the workplace – or, at least, it shouldn’t. Unfortunately for many women, as well as men, in the food service industry, sexual harassment is a pervasive part of their work environment.
Under New Jersey employment law, what exactly constitutes sexual harassment? According to the New Jersey Supreme Court, in the leading case of Lehmann v. Toys ‘R Us, to successfully make out a hostile work environment claim, you must be able to show that (1) you were treated in a certain way on account of your gender; (2) the conduct that you were subjected to was “severe and pervasive;” and (3) that a reasonable person would find that, as a result of the unwanted conduct, his or her working conditions were altered.
While we often think of sexual harassment as involving explicit sexual references being made, the courts interpreting the New Jersey Law Against Discrimination have held that any sort of hostile conduct can constitute sexual harassment, as long as the reason you are being singled out for the treatment you are receiving is on account of your gender.
One of the key requirements that you must show, however, is that the conduct is either “severe” or “pervasive.” The question under New Jersey employment law becomes, “At what point is the line crossed” between a few innocuous comments that may reflect on a person’s dress or appearance and comments that become “severe or pervasive” harassment. Many employers, fearful of getting sued, adopt “zero tolerance” policies, and so employees generally should be very conscious of what they are saying, how they are saying it, and how the person hearing it might perceive the comment.
A recent report by several restaurant worker advocacy groups revealed that 90 percent of female employees in restaurant settings said they had been sexually harassed at work. This harassment can come from managers, co-workers and customers. Disturbingly, many female servers said they were required by their employers to wear more suggestive uniforms than their male co-workers in order to generate better sales.
In this day and age, you should not have to worry about hearing lewd comments, being propositioned by your customers or experiencing other behavior on the job that makes you feel uncomfortable or unsafe. In this regard, New Jersey employment law is very protective of your rights. If bringing your concerns to your manager does not make the situation any better, you fortunately have legal options. Talking to the New Jersey employment lawyer at Schall & Barasch LLC can give you a better idea on how to protect your rights and get the harassment to stop for good. Contact us today!
* In every year since 2014, the law firm of Schall & Barasch has been included in the Tier 1 list of best law firms in New Jersey practicing in the field of employment law on behalf of individuals. This list is compiled by U.S. News & World Report. A description of the selection methodology can be found at www.bestlawfirms.usnews.com/methodology.aspx.
** The methodology for the Avvo ratings of Richard Schall and Patricia Barasch can be found at www.avvo.com/support/avvo_rating.
*** In every year since 2009, Richard Schall has been chosen to be included on the list of Best Lawyers in New Jersey practicing in the field of labor and employment law. The Best Lawyers list is issued by Best Lawyers International. A description of the selection methodology can be found at www.bestlawyers.com/about/MethodologyBasic.aspx.
**** In every year since 2005, both Patricia Barasch and Richard Schall have been chosen to be included on the list of Super Lawyers in New Jersey practicing in the field of employment law on behalf of plaintiffs. The Super Lawyers list is issued by Thomson Reuters. A description of the selection methodology can be found at www.superlawyers.com/about/selection_process.html.
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