OVERVIEW OF EMPLOYMENT ISSUES

EQUAL OPPORTUNITY

To refuse to hire or to discharge any individual, or otherwise to discriminate against any individual as to the terms and conditions of employment because of such person's race, color, religion, national origin, sex (including pregnancy), or age is prohibited by federal law. The Americans With Disabilities Act prohibits discrimination on the basis of disability, including AIDS and AIDS-related conditions, and may require employers to make reasonable accommodations for disabled individuals. Non-exempt federal government contractors and subcontractors are also prohibited from discriminating against the handicapped and Vietnam-era and special disabled veterans. Under federal law, persons 40 years of age or older are also protected from discrimination, and certain state statutes protect all persons from age discrimination, regardless of age. Many states have added to the list of protected classifications including, for example, marital status or political affiliation. Several jurisdictions also prohibit discrimination based on sexual orientation. Illegal discrimination may be found where a neutral practice or policy has, albeit unintentionally, an adverse impact on a particular class of employees.

Sex-based wage discrimination for equal work is prohibited. Differences in wages are permitted, however, where determination of wages is made pursuant to a bona fide seniority or merit system, or a system that measures earnings by quality or quantity of production.

SEXUAL HARASSMENT

Unlawful sexual harassment can arise where a superior requests submission to sexual advances as a condition for favorable treatment in the workplace or penalizes workers for spurning advances. In addition, an employer that permits a hostile atmosphere in the workplace may be liable to affected employees whether or not they are specific or intended victims of harassment. An employer that has in place well-publicized anti-harassment policies and training programs can defend against sexual harassment claims by taking prompt action to investigate and resolve concerns raised by an employee in accordance with such policies.

EMPLOYEES WITH DISABILITIES ("ADA")

The Americans With Disabilities Act (“ ADA ”) and New Jersey State law make it unlawful to discriminate against a qualified individual with a disability and require covered employers to make reasonable accommodations for qualified disabled applicants and employees. "Qualified" is defined in the ADA as being able to perform essential job functions with or without an accommodation. The definition of "disabled" includes not only persons with disabilities, with a record of having been disabled, or perceived as being disabled, but also individuals related to or associated with persons in one of those three categories. The ADA covers employers with 15 or more employees.

EMPLOYMENT-AT-WILL

Under the traditional "employment-at-will" rule, employees may quit or be dismissed from employment with or without notice for any (or no) reason not prohibited by statute. The rule applies to employees who are not covered by collective bargaining agreements or who do not have individual employment contracts. In New Jersey the courts have limited the at-will rule, holding that in certain circumstances employees may not be terminated contrary to the terms of employment manuals or other employer policy statements, in violation of "public policy," without good cause, or for other reasons.

RETALIATION

Various federal and state statutes provide that an employer may not take certain types of retaliatory personnel action against an employee who discloses or threatens to disclose an employer's policy or practice that violates a particular statute or, more generally, presents substantial dangers to public health or safety. Such disclosure may include giving information to, or testimony before, any public body investigating an employer's violations of law. Certain statutes require that an employee first present concerns to appropriate officials of the employer before taking the grievance public. Anti-discrimination statutes prohibit retaliation against an employee who asserts claims of discrimination or assists others in pursuing such claims, whether or not such claims are meritorious. Workers' compensation statutes prohibit retaliation against persons who file claims or testify on behalf of claimants. New Jersey makes it illegal to retaliate against a Whistleblower under its Conscientious Employee Protection Act ("CEPA".)

JURY DUTY

Federal law (as to federal courts) and many state laws prohibit discharging or taking adverse action against employees summoned for jury duty. Absent specific statutes, courts have held that taking adverse action constitutes wrongful employer conduct. An employer's obligation to pay its employees' salaries for time spent on jury duty varies by jurisdiction.

LIE DETECTOR TESTS

Use of polygraph tests to screen most job applicants or to randomly test employees is generally prohibited by federal law. Although federal law permits polygraphs to be used under strictly controlled conditions during investigations of thefts or losses, adverse employment decisions may not be based solely on the test result. New Jersey law entirely prohibits use of polygraphs or other devices.

DRUG TESTING

Private employers generally are permitted to conduct pre-employment post-offer drug screening and may require current employees to take a test for use of controlled substances. A number of states have enacted or are in the process of enacting statutes and regulations restricting such tests. The NLRB has ruled that drug testing is a term or condition of employment that must be bargained for before union members may be subjected to testing. Drug testing may be a violation of New Jersey public policy.

ARRESTS AND CONVICTIONS

Inquiry into arrest records is generally prohibited. Federal and state laws vary considerably as to the conditions under which inquiry concerning convictions may be made. Most jurisdictions allow inquiry into the subject of convictions but limit the use of the information.

SMOKING

A growing number of jurisdictions, including cities and counties, have recognized the rights of non-smokers. These jurisdictions have designated certain public areas, including restaurants, as non-smoking areas and have required that employers limit smoking in the workplace and address the rights of non-smokers.

SAFE WORKPLACES

An employer must furnish to each of its employees a place of employment free from recognized hazards that are causing or are likely to cause death or serious physical harm. This also often includes an environment free from workplace violence.

TOXIC SUBSTANCES

A number of states have enacted statutes requiring employers to notify employees of their right to obtain certain information regarding toxic substances found in the workplace. Some states require employers to maintain a description of the toxic effects of substances to which an employee might be exposed. Various states require employers to maintain a central file that contains a workplace survey for the facility, appropriate hazardous substance facts sheets, and if applicable, an environmental survey for the facility.

ILLEGAL ALIENS

Federal law prohibits an employer from hiring or recruiting an individual without verifying that the individual is authorized to work in the United States , or continuing the employment of an employee hired after November 6, 1986, knowing that the employee is or has become an unauthorized alien. Employers must verify each individual's identity and authorization on form I-9 (including U.S. citizens) and are required to maintain records for at least 3 years, or one year after the employment concludes, whichever is longer.

PAY

Under federal law, employers must pay each of their employees no less than the established statutory minimum wage. In New Jersey , the minimum wage is higher. Generally, employees other than executives, professionals, administrators and outside salesmen are entitled to overtime pay. Most states require that wages must be paid periodically depending on the employee's classification, or on regular paydays designated in advance. In addition, employees in most states must receive a statement showing gross pay, deductions, and net pay on each payday. City, state, federal, and Social Security taxes must be deducted irrespective of the nationality of the employee or the employer. Many jurisdictions limit the type of deductions employers can make from employees' wages.

EMPLOYEE'S FINANCIAL MATTERS

Federal and state laws protect an employee who has had his or her salary or wages garnished from dismissal or other adverse actions. Federal law prohibits termination of or discrimination against employees who have filed for bankruptcy protections or who have been adjudicated bankrupt. Employers are required to disclose in writing to a job applicant that it intends to procure an investigative consumer report from a consumer reporting agency concerning the applicant's general character and reputation, or mode of living, and divulge the nature and scope of the investigation upon written request of the applicant. The employer must advise the applicant if employment is denied in whole or in part because of the information received, and identify the consumer reporting agency to the applicant.

SEPARATION BENEFITS (or "OBRA")

Federal law and the majority of states require employers to offer employees and their dependents the right to continue any health plan coverages offered by the employer (including HMO, flexible benefits, EAP, vision, dental, and prescription plans). Coverage continues for an extended period after a "triggering event" such as a separation from employment (other than due to gross misconduct), reduction in hours, loss of dependent coverage, divorce or legal separation, or death. Employers must provide notice of these rights to employees and their dependents.

REPORTING/AFFIRMATIVE ACTION

All employers having 100 or more employees and federal government contractors or "subcontractors" (a term which includes any employer that provides goods or services essential to the performance of government contracts) with 50 or more employees must submit "EEO-1" reports to the federal government annually stating, inter alia, the number of minority and female employees in nine job categories. Additionally, government contractors and subcontractors doing more than a prescribed amount of business in government contracts or subcontracts and having 50 or more employees must develop for each of their establishments written affirmative actions plans ("AAPs") that state the employer's agreement to employ or advance in employment minorities, women, handicapped persons, and Vietnam-era and special disabled veterans. AAPs concerning minorities and women must contain certain statistical information relevant to workforce utilization of such groups and, where necessary, contain goals and timetables. These AAPs are subject to audit by the federal government. Since 1988, such employers have also been required to submit "Veterans 100" reports stating the number of Vietnam-era and special disabled veterans hired during the prior year and the total number of such veterans employed by them.

Certain employers doing business with some state or local governments may also be required to submit reports to local agencies.

WORKFORCE REDUCTION (or "LAYOFF")

Workforce reduction refers to the termination of a group of employees in a department, division or unit of the employer's workplace that is generally the result of reorganization, cost reduction or other business necessity. In implementing a workforce reduction, the employer should consult legal counsel to ensure compliance with various federal, state and local plant closing laws (e.g., "WARN"), and Title VII of the Civil Rights Act and the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit Protection Act. In a unionized workplace, workforce reductions generally must also be implemented pursuant to the terms of the collective bargaining agreement.

FAMILY AND MEDICAL LEAVE ("FMLA")

The Family and Medical Leave Act ("FMLA") requires employers (including public agencies) who employ 50 or more employees to provide up to 12 weeks of unpaid, job-protected leave to "eligible" employees for certain family and medical reasons. Employees are eligible if they have worked for a covered employer for at least one year, and for 1,250 hours over the previous 12 months. Unpaid leave must be granted for any of the following reasons:

To care for the employee's child after birth, or a placement for adoption or foster care;

To care for the employee's spouse, son or daughter, or parent who has a serious health condition; or

Due to the employee's own serious health condition that makes the employee unable to perform essential job requirements.

Upon return from FMLA leave, most employees must be restored to their original or equivalent position with equivalent pay, benefits, and other employment terms. FMLA leave cannot result in the loss of any employment benefit that accrued prior to the start of an employee's leave. The United States Department of Labor is authorized to investigate and resolve complaints of violations and eligible employees may bring a civil action against an employer for violations.

EMPLOYEE ASSISTANCE PROGRAMS ("EAP")

As a result of increased sensitivity on the part of employers regarding problems associated with alcoholism and drug use, including absences, tardiness and low productivity on the job, employers are increasingly establishing EAPs to deal with these and other concerns. EAPs are designed to assist employees with problems that affect job performance. Company EAPs vary with respect to the services that they offer to eligible employees and range from those that handle drug and alcohol abuse exclusively, to those that offer a wide array of services, such as marital and family counseling, and financial counseling. In some cases the EAP services are provided by an EAP counselor who is typically a member of the company's Human Resources Department or Medical Department.

Under the Americans With Disabilities Act (" ADA "), an employer is not required to provide an opportunity for rehabilitation in place of discipline or discharge. However, the ADA may require reasonable accommodation of a qualified employee who is a rehabilitated drug addict or alcoholic. Such accommodation may be a modified work schedule, to permit the employee to attend an ongoing self-help program.

RESTRICTIVE COVENANTS, TRADE SECRETS AND INTELLECTUAL PROPERTY

The enforcement of agreements that restrict employees from competing with their former employers, or subsequently utilizing confidential information obtained while on the job, varies widely from state to state. In states where restrictive covenants are enforceable, courts tend to disfavor them because they are thought to discourage competition and to curtail an individual's right to earn a living. In seeking to enforce restraints on a former employee's ability to compete, an employer must demonstrate that a particular geographic or temporal restriction is necessary to safeguard bona fide trade secrets or other protectable commercial information and that the restrictions are reasonable based on the totality of the circumstances.

In order to safeguard "protectable" information, such as detailed listings of customer information or other internal data, an employer should also be prepared to demonstrate the extent to which the information is known by or disclosed to others, the measures taken to safeguard the information, the cost of development and/or value of the information, and the difficulty of acquiring it (i.e., showing that it is not readily ascertainable from other sources). These steps should be documented and in place long before any enforcement action is contemplated.