Strike Three for Waivers in New Jersey!!!

March 19, 2019

By Francine Foner, Esq. and Ty Hyderally, Esq.

On March 18, 2019, Governor Philip D. Murphy signed into law Bill S-121 (the “Act”), which will positively impact New Jersey employees significantly by amending the New Jersey Law Against Discrimination, N.J.S.A. §10:5-1 et seq. (“NJLAD”) to prohibit employers from requiring their employees to prospectively waive statutory rights and remedies for claims of discrimination, retaliation or harassment.

The Act provides that, “[a] provision in any employment contract that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment shall be deemed against public policy and unenforceable.”  In addition, “[n]o right or remedy under the [NJLAD] or any other statute or case law shall be prospectively waived.” (However, this provision does not apply in the context of collective bargaining agreements.)

So what does this mean? The NJLAD, which protects employees from discrimination and sexual harassment, allows for a person to file a lawsuit in state or federal court and request a jury to hear his/her claims. Employers have for years been trying to deprive New Jersey employees of access to the courts and access to juries. Thus, many employers have required, as a condition of employment or continued employment, that the employee sign a document where they would waive their rights to file lawsuits against the company in the courts and/or waive their rights to seek a jury trial. These employers often require that the employee submit their case to mandatory arbitration where the employer hopes the award would be more favorable to the employer. Employers have also required employees to waive their right to attorney’s fees and costs, or to punitive damages for such claims.

However, due to this new law, such waiver provisions are invalid and unenforceable, with respect to employment claims of discrimination, retaliation or harassment.

If an employer tries to enforce such a waiver provision or retaliates against you for opposing such a waiver provision, you could have substantial rights and remedies under this new law. Such retaliation by the employer could be a legal violation which could lead to money damages, and the employer could be required to pay your reasonable attorney’s fees and costs.

In addition, although the new law is an amendment to the NJLAD, the clear terms of the law reflect that it is not limited to a prohibition against prospectively waiving rights or remedies under the NJLAD. Rather, by its express terms, the Act applies to rights and remedies for claims of discrimination, retaliation or harassment “under the NJLAD, or any other statute or case law.” (emphasis added). Thus, any attempt by an employer to have an employee prospectively waive rights or remedies available under other statutes governing employee retaliation, discrimination or harassment claims should also be prohibited by the Act. For example, an employer requiring an employee to waive a jury trial and compelling arbitration of claims of retaliation for whistleblowing under the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 et seq. (“CEPA”), should be prohibited under the Act, since CEPA provides for the right to a jury trial.

Further, the Act provides a separate cause of action for an employee who is retaliated against for refusing to enter into any agreement or contract which waives statutory rights or remedies, relating to a claim of discrimination, retaliation, or harassment. Further, a prevailing plaintiff who brings such a claim shall be awarded reasonable attorney fees and costs.

The Act states that it takes effect immediately and applies to all contracts and agreements entered into, renewed, modified, or amended on or after the effective date. Thus, employment contracts and agreements entered into prior to the effective date would not be impacted, unless they are renewed, modified or amended thereafter.

This blog is for informational purposes only.  It does not constitute legal advice, and may not reasonably be relied upon as such.  If you face a legal issue, you should consult a qualified attorney for independent legal advice with regard to your particular set of facts.  This blog may constitute attorney advertising.  This blog is not intended to communicate with anyone in a state or other jurisdiction where such a blog may fail to comply with all laws and ethical rules of that state of jurisdiction.