On Monday, two important bills working their way through the legislature, the paid sick leave bill and the equal pay bill, will be voted on. If enacted, these bills would presume employers are guilty when a lawsuit is brought against them unless they can prove their innocence. This is an unprecedented change to our legal system.
Equal Pay Bill Up for a Vote in the Assembly
On Monday, the Assembly is scheduled to vote on A2750, which has been described as a state-level Lilly Ledbetter Fair Pay Act. The New Jersey Civil Justice Institute is opposing this legislation because it goes much further than the federal law and makes changes to the fundamental underpinnings of our legal system.
The bill does three things, each of which would significantly increase the risk of unwarranted litigation and introduce considerable uncertainty into New Jersey’s civil justice system:
1. Create an employment information database to facilitate litigation based on statistical disparities.
2. Add additional factors to gender parity calculations. This would increase uncertainty over whether existing bargained-for employment relationships can be defended in court.
3. Disrupt the existing, stable, state and federal law on the appropriate period for allowable back pay arising out of gender discrimination litigation. Right now there is a two year statute of limitations in place, but it is not clear that limit would remain intact under this bill.
Each of these elements is troubling enough on its own, but together they compound the risk to employers.
For example, under the proposed law, an employee could begin a job out of college earning a competitive market wage for her chosen profession and remain with the same employer for her entire career. At the moment of her retirement, she could use the database of wage data to argue that her salary reflected a sex-based differential, and that her paychecks from the point of initial hire reflected one, long, continuing violation for which the statute of limitations had never begun to run, entitling her to compensatory damages for the entirety of her career.
In order to defend themselves against such a complaint, the business would have to prove their innocence since this legislation would shift the burden of proof from the employee to the employer. If a case were brought against them, a business would be assumed to be guilty unless they could prove their innocence. This is a radical, unprecedented change.
On March 7, the Assembly State and Local Government Committee held a lengthy hearing on this bill that explored many of the concerns NJCJI has with this legislation (click here to listen to an audio recording of that hearing). Yet, the committee ultimately voted to send the bill to the full Assembly for a vote. It is now scheduled for a vote on Monday, March 14.
If passed, this bill will inspire lots of litigation, but there is no reason to believe it will do anything to solve the problem of unequal pay. Click here to contact your Assembly members and tell them to VOTE NO on A2750.
It is critical that we act now, because this bill has already been passed by the Senate.
Paid Sick Leave Legislation Scheduled for a Vote in the Senate
S799, which would require all businesses in the state to offer their employees paid sick leave, is up for a vote in the Senate on Monday. NJCJI has joined a slew of pro-business groups opposing this legislation, which is being sponsored by Sen. Weinberg (D – Teaneck).
While other organizations focus on the broader implications this bill will have on the state’s economy (see information on this from NJBIA), NJCJI is focused on how the highly prescriptive structure of the bill, compounded by the incentivized litigation enforcement mechanism, would deprive employers of the necessary flexibility to manage their business and respond to suspected abuse.
Under this legislation, an employer who does almost anything related to paid sick leave, including simply informing any person about the availability of paid sick leave, gets a 90 day window during which any adverse employment action they take is presumed to be retaliatory. If an employee files suit during that 90 day window, the burden is on the employer to prove in court that the action was unrelated to the employees’ sick leave-related activity.
It is not clear that reassignments to meet business demands would be lawful under this legislation, since “retaliatory action” is defined to include even an unfavorable work assignments. Under these conditions, employers would have difficulty effectively managing their employees without generating a lawsuit.
The expansive scope of potential liability is compounded by the severe penalties that attach to violations of this legislation. Plaintiffs are entitled to actual damages, plus an equal amount of punitive damages, plus attorney fees and court costs.
The high cost of litigation, and the financial risk of losing the case, mean many claims would settle immediately, regardless of their merit. These costs are all passed on to consumers.