On Thursday, the full Senate is taking a vote on two bills the NJCJI is opposing because they open New Jersey businesses up to excessive liability. If you have questions or comments about either of these bills, please contact Alida Kass, NJCJI’s chief counsel.
Wage Discrimination Bill Does More than Codify Existing Law
S992 has been described as a measure that would strengthen protections against employment discrimination and promote equal pay for women. 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 the 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.
Each of these elements is troubling enough on its own, but together they compound the risk to employers.
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.
Paid Sick Leave Bill Is A Big Liability
The New Jersey Senate has also scheduled a vote 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.