The New Jersey Civil Justice Institute will be testifying against three bills on Monday.
The Senate Budget and Appropriations Committee has scheduled a hearing on S799, which would require all businesses in the state to offer their employees paid sick leave. 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 even 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.
Please contact the following members of the Senate Budget and Appropriations Committee and tell them to VOTE NO on S799:
Also on Monday, the Assembly State and Local Government Committee will be taking up two equal pay-related bills that NJCJI has concerns with.
A2750/S992 has been described as a measure that would strengthen protections against employment discrimination and promote equal pay for women by codifying existing federal law. The myth that this bill is not that big of a change from current practices, but that it will make a big difference, is probably why it passed the New Jersey Senate by a vote of 28-4 on February 11.
In fact, the bill provides for three distinct policy elements, each of which would significantly increase the risk of unwarranted litigation and introduce considerable uncertainty into New Jersey’s civil justice system.
The bill would do three things:
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.
A883 would require bidders on state contracts to “submit a report to the [Division of Purchase and Property in the State Department of the Treasury] that measures the extent to which men and women employed by that bidder perform the same or comparable work at different rates of pay and the extent to which job titles within that entity may be predominately held by members of the same gender.” In addition to being tasked with helping bidders correct reported disparities, the Department will rate bidders based on the information submitted, and use that information in awarding certain bids.
NJCJI is concerned that this bill, which is being sponsored by Assemblywomen Muoio (D-Trenton), Lampitt (D- Voorhees), and Mosquera (D- Turnersville), has the likely unintentional consequence of creating a treasure-trove of data on employers doing business that the state, which 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.
The costs of both compliance and risk are always factored into pricing, so if this bill were passed, bids on projects would rise as public entities adjusted their bids to account for the cost of both supplying the service or product desired and the risk of being sued.
Please contact the following members of the Assembly State and Local Government Committee and tell them to VOTE NO on A2750/S992 and A883: