NJCJI Successfully Advocates Against a Private Right of Action Under New Jersey’s New Data Privacy Law
During the lame duck season following New Jersey’s recent legislative elections, NJCJI fought back against last-minute floor amendments to New Jersey’s recently adopted data privacy law (“DPL”). By way of background, in 2022, NJCJI, alongside a coalition of other business groups, successfully advocated for the inclusion of provisions in the then-pending DPL to grant the New Jersey Attorney General sole enforcement authority and to explicitly prohibit a private right of action for data privacy violations. However, on December 21, 2023, floor amendments were introduced in the State Senate that undermined that prohibition.
NJCJI quickly ascertained that the practical effect of the floor amendments would be to leave open the door to private lawsuits and advocated against the floor amendments to both legislative stakeholders and the Governor’s office. As a result of this work, in his signing statement for the DPL, Governor Murphy expressly stated his understanding that “this bill does not create a private right of action under this law or under any other law.” (Emphasis added). Accordingly, businesses and litigants will be able to rely on this important piece of legislative history in defending against attempts at private enforcement of the DPL.
A link to the Governor’s Signing Statement for the DPL can be found here.
Governor Murphy Signs Union Wage Claim Bill into Law
On January 8, 2024, Governor Murphy signed into law Assembly Bill 5794/Senate Bill 1438 (“A5794/S1438”), which authorizes labor unions to file civil suits on behalf workers who are unaffiliated with the union against their employers for unpaid wages. The new law, however, only applies to construction trades within the State.
NJCJI previously submitted written comments to the Legislature, as well as the Governor’s Office, expressing concerns that the proposed law created a “backdoor” for bringing wage and hour class actions against construction businesses. NJCJI further argued that the legislation would invite an unlimited universe of unions to jockey for influence through such litigation without any guardrails on their joint participation, fee splitting, or settlement authority.
In response to NJCJI’s stated concerns, the Legislature introduced two sets of amendments to A5794/S1438. The first set of amendments prohibited unions from filing wage and hour lawsuits on behalf of workers if a collective bargaining agreement was in place between the workers and their employer. The second set of amendments required that workers provide written consent to the filing of such suits on their behalf. Although these amendments did not address all NJCJI’s concerns regarding this legislation, they were ultimately a positive development in reducing strain on the civil justice system.
NJCJI’s written comment to the Senate Labor Committee can be found here. A copy of NJCJI’s written comment to the Assembly Labor Committee can be found here. A copy of the NJCJI’s written comment to the Governor’s Office can be found here. A recording of NJCJI’s committee testimony can be found here, beginning at the 2:24:59 minute mark.
Controversial Bills Concerning Workers’ Compensation and Mass Arbitration Fail to Advance out of the Legislature During the Lame Duck Session
Two bills opposed by NJCJI failed to advance out of the Legislature during the lame duck legislative session. The first bill, titled “Establishes 21st Century Injured Workers’ Access to Justice Act,” (“A5659/S4059”), sought to amend the New Jersey Workers’ Compensation Act to impose a de facto, mandatory award of attorneys’ fees to prevailing claimants equal to 25 percent of any recovery. Despite purporting to preserve judicial discretion in setting fee awards, A5659/S4059 would have stripped judges from considering the number of hours worked or an attorneys’ hourly rate in assessing the reasonableness of fee awards. By prohibiting judges from considering these two factors, any grant of judicial discretion would be illusory.
Alongside a coalition of advocacy groups, NJCJI opposed A5659/S4059 before the Assembly and Senate Labor Committees. NJCJI also submitted written opposition to the entire Senate before a floor vote. Ultimately, A5659/S4059 failed to advance out of the Legislature. A copy of NJCJI’s memorandum to the Assembly Labor Committee opposing A5659 can be found here. A copy of NJCJI’s memorandum to the Senate Labor Committee on the bill can be found here. A copy of NJCJI’s memorandum to the entire Senate can be found here. A recording of NJCJI’s testimony before the Assembly Labor Committee can be found here, with testimony beginning at the 1:18:18 minute mark. A recording of NJCJI’s testimony before the Senate Labor Committee can be found here, with testimony beginning at the 16:54 minute mark.
The second piece of legislation, A4961/S3572, sought to provide legislative sanction to the problematic litigation tactic known as “mass arbitration.” In recent years, the plaintiffs’ bar developed mass arbitration in response to federal and state court decisions upholding class-action waivers in arbitration agreements. As part of mass arbitration, attorneys recruit large numbers of consumers—sometimes numbering in the tens of thousands—to file identical arbitrations against a business. Leading arbitration providers often charge thousands of dollars in upfront fees to arbitrate individual cases, and businesses typically volunteer to pay these fees as part of their arbitration agreements. As a result, plaintiffs’ lawyers can leverage the threat of millions of dollars in cumulative arbitration initiation fees to extract large settlements from businesses before even a single arbitrator has weighed the merits of the consumers’ claims. To counter this tactic, some businesses now include bellwether clauses in their arbitration agreements to limit the number of arbitrations that can be brought at a single time by an attorney. Bellwether clauses effectively prevent plaintiffs’ attorneys’ use of initiation fees for settlement leverage. A4961/S3572 seeks to preserve the mass arbitration tactic by outlawing bellwether clauses in consumer contracts.
In opposition to the mass arbitration bill, NJCJI previously submitted written comments and provided oral testimony to the Senate Commerce Committee, Assembly Consumer Affairs Committee and Assembly Judiciary Committee. NJCJI also submitted a coalition letter to the Legislature, alongside the New Jersey Business and Industry Association, the New Jersey Chamber of Commerce, the Commerce and Industry Association of New Jersey and the Chamber of Commerce of South Jersey. NJCJI argued, among other things, that mass arbitration unfairly extracts massive settlements from businesses without any consideration of the merits, and that the Legislature should not sanction the tactic. NJCJI’s committee testimony in opposition to A4961/S3572 can be found here at time marker 1:03:50, hereat the 28:49 mark, and here at 1:09. NJCJI’s written comment on the bill to the committees can be found here. NJCJI’s coalition letter to the Legislature can be found here.
Although these bills failed to become law during the 2022-2023 legislative session, NJCJI will continue to track and oppose any measure to reintroduce similar legislation during the new legislative session.