New Jersey’s employees won a huge victory on March 18, 2019. Governor Murphy signed into law Senate Bill No. 121. The new law bars provisions in employment contracts that waive rights or remedies under New Jersey’s Law Against Discrimination (LAD). The law also bars agreements that conceal details relating to discrimination claims.

What Rights to New Jersey Employees Have under the LAD?

An employee suing under the LAD has a right to a trial by jury. A successful claimant may also obtain reasonable attorney fees, damages for emotional distress and in an appropriate case, where the conduct is outrageous or malicious, punitive damages. There is also a two-year period of time in which an individual may sue.

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What Does the New Law Provide?

The new law provides that you can’t be forced to waive your LAD rights just to get hired or to stay employed. In the words of the newly enacted statute, “A provision in any employment contract that waives any substantive or procedural remedy relating to a claim of discrimination, retaliation, or harassment shall be deemed against public policy and unenforceable.” Senate Bill No. 121.

What Does This Mean?

Your employer cannot retaliate against you on the grounds that you would not sign an agreement waiving your rights.  Retaliation can include the failure to hire, discharge, suspension, demotion or other discrimination or adverse action. The law forbids forcing an employee to arbitrate. Many employers here in New Jersey and elsewhere require employees to sign arbitration agreements as a condition of being hired or staying employed. As of now, new hires and current employees will not be forced to sign these agreements.

How Significant is this Change?

There are many thousands of employees impacted by this change. Under arbitration you do not enjoy the same rights as under the LAD.  In arbitration, there is no right to a jury and more limited discovery, that is the process where you exchange information with your employer relevant to your case. Likewise, arbitrations rarely provide a two-year window to sue or allow for attorney fees if you prevail. The new law also applies to all forms of discrimination under the LAD including age, pregnancy, gender, race, sexual orientation familial status, or disability discrimination.

Studies have shown that in consumer and employment cases win rates and damage awards lag far behind those in state court. Employees faced with arbitration, especially those unrepresented by an attorney, prevail as infrequently as 5 to 10% of the time. This compares with win rates of 50% or better in state court.

How Does the Law Affect Agreements Which Conceal Details of Discrimination?

Under the new law an employee can reach a settlement with a provision requiring that the parties not disclose details of the discrimination case. However, such an agreement is unenforceable against the employee. If the employee does decide to disclose details to others so that the employer is identified, the non-disclosure provision will also not be enforceable against the employer.

Why the Change?

The You Too Movement has empowered discrimination and sexual harassment victims to speak up. Silencing harassment victims, either through confidential arbitration proceedings or non-disclosure agreements, only perpetuates harassment.  Non-disclosure agreements involving public figures such as that President Trump, Harvey Weinstein and others have dramatically highlighted this problem.  

Are there Exceptions?

The new law does not apply to collective bargaining agreements or agreements made before March 18, 2018. However, employees faced with harassment should speak to an attorney. When an arbitration agreement is unclear or misleading, an employee may still have the right to be heard by a jury of her peers. 

Will There Be Legal Challenges Ahead?

The Federal Arbitration Act has been interpreted to preempt certain state laws which disfavor arbitration. There will likely be legal challenges from employers ahead. Congress may also get into the picture to amend the Federal Arbitration Act at some point in the future as well.

Conclusion:

For now, the legal landscape has changed dramatically. New Jersey has strengthened its commitment to eradicate the cancer of discrimination and to preserve the time-honored right of citizens to heard by a jury of their peers.

The information contained in this article is not intended to create an attorney client relationship. If you need help with a specific legal problem, contact a qualified attorney.  If you have a question about your rights or responsibilities in the workplace please feel free to contact David Rostan or Fred Shahrooz Scampato, attorneys who focus their practice in employment law for over twenty years. David can be reached at 973-520-8301, by email at rostanlaw@aol.com, or by visiting his web site www.davidrostanlaw.com. Fred can be reached at 908-301-9095, by email at Scampato@njlaborlaw.com or by visiting his website www.njlaborlaw.com.