“EVERY KISS BEGINS WITH KAY”: SEXUAL HARASSMENT ALLEGATIONS COME TO LIGHT AFTER YEARS OF SECRET, FORCED ARBITRATION

We have written before about the many perils of “forced arbitration agreements” that are imposed by corporations on their employees in order to deprive them of their Constitutional right to trial by jury and to require instead that all disputes be taken to private, secret proceedings before individual arbitrators.

Everything that is wrong with forced arbitration was glaringly highlighted in a story just broken by the Washington Post on Monday, February 27, 2017.   The Post article revealed the existence of a huge class action, now covering some 69,000 female employees, alleging sexual harassment and sex discrimination, brought against Sterling Jewelers, the multibillion-dollar parent corporation of both Kay Jewelers and Jared the Galleria of Jewelry – a case that had been going on for years, hidden from public view behind the cloak of forced arbitration.

The allegations of sexual harassment, if proven, are alarming. In the sworn statements just released, women managers reported on the details of conduct occurring at the company’s annual meetings, described by one employee as a “sex fest” and by another as an event where male executives “prowled around the (resort) like dogs that were let out of their cage,” according to the Post article.   The papers filed in the arbitration proceeding also contain allegations of top executives of the company having sex with female employees and promoting women based upon how they responded to sexual demands.

Even though this case was initially filed back in 2008, the female employees’ sworn statements – many of which were written years ago — were only just brought to light as the result of an agreement reached in the arbitration proceeding to allow the employees’ lawyers to release them publicly.   How or why just an agreement was finally reached was not revealed in the Post article.

The complaints of sexual harassment provide the context for the principal allegations in the case: the disparity in pay given to female store managers compared to the higher salaries paid to men.

But whether the issues involve sexual harassment or discrimination in pay, these are issues that need to be brought to the attention of the public, not hidden in a secret arbitration proceeding.   Moreover, it is critical that employees like the ones here be afforded their Constitutional right to have the merits of their cases decided by a jury of their peers, and not by privately retained arbitrators. Unlike juries, arbitrators do not represent the “conscience of the community,” but instead decide cases based on their own individual viewpoints – ones that unfortunately often slant in favor of corporations.

Because of the threat posed by forced arbitration, we again encourage you to take whatever opportunities may be afforded you to speak out on this critical issue. For more information about forced arbitration and what can be done to oppose it, we encourage you to visit the website of the Employee Rights Advocacy Institute for Law and Policy at www.http://employeerightsadvocacy.org. Since its inception in 2008, the Institute has been working to end forced arbitration of workplace disputes, one of the most significant obstacles to the protection, enforcement, and vindication of employee rights.

 

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.

Written by:

Richard M. Schall, Esq.

Schall & Barasch LLC

110 Marter Ave, Ste 302

Moorestown, NJ 08057

(p) 856-914-9200

www.SchallandBarasch.com

A cancer patient is suing the New Jersey Motor Vehicle Commission for discrimination. Read the article here: Giordano 7-27-17News Article

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.

Richard Schall
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/.

November 1, 2018

We are proud to announce that U.S. News & World Report has just recognized Schall & Barasch, LLC on its 2019 list of  Tier 1 New Jersey “Best Law Firms: Employment-Individual.”

U.S. News & World Report states that, “its rankings are based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in field, and review of additional information provided by law firms as part of the formal submission process.”

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