Gov. Chris Christie has vetoed two wage discrimination bills opposed by NJCJI. Both bills would have increased the risk of litigation for employers in New Jersey, and contrary to what is being claimed by supporters and reported by the media, made our state law different from federal law governing the same topic. This is the second year in a row Gov. Christie has vetoed legislation of this sort.
A2345/S1038 – The Wage Transparency Act
While this bill appeared to be a mere matter of disclosure, it had the likely unintentional consequence of creating a treasure-trove of data on any employer doing business with any level of government. This data could unfortunately be put to good use by the trial bar to generate litigation, and prompt employers to think twice before doing business with the state.
To the extent employers choose to do so, the costs of both compliance and risk are always factored into pricing. If Gov. Christie had not absolute vetoed this legislation, public entities would essentially be contracting for both the supply of services and the risk of a lawsuit, as a package deal.
A2349/S783 – Unfair Wage Recovery Act
If it had not been conditionally vetoed, this bill would have upended a relatively settled area of law, creating uncertainty and incentivizing litigation.
The bill provided that an unlawful employment practice occurs with each affected paycheck, a point that is already well-established. The bill then invoked the “continuing violation” model, which was proposed and rejected in the New Jersey Supreme Court case Alexander v. Seton Hall University in 2010, and confirmed the court’s authority to apply the “continuing violation” doctrine to “any appropriate claim as that doctrine currently exists in New Jersey common law.” While not directing the court to apply the doctrine, the bill lacked the clarifying language found in the federal Lilly Ledbetter law which limits the duration of available back pay.
But for Gov. Christie’s conditional veto, the result would have been new confusion on a point where the law had been both stable and predictable. Christie acknowledges as much in his veto statement.
NJCJI applauds Gov. Christie for recognizing that New Jersey businesses do not need to face the risk of additional litigation, especially during this period of economic recovery. A state’s litigation climate is one of the top factors business leaders consider when deciding where to locate their business or whether to expand. States with predictable legal systems that discourage abuse allow businesses to more accurately project what future legal expenses will be, allowing them to free up capital for business expansion and job creation.
New Jersey must continue to work towards improving its legal climate rather than enacting bills like these that would further harm our reputation as a lawsuit haven.