Amendments to the LAD May Be on the Way

New Jersey employers should be aware that a variety of amendments to the New Jersey Law Against Discrimination, 10 N.J.S.A. § 10:5-1 et seq. (“the LAD”) may be enacted early in the coming year. Sponsored by Senators John Adler and Wayne Bryant, Senate Bill No. 2522 (“2522”) passed in the Senate by a vote of 37-0 on June 23, 2005. Ten days earlier the Assembly Judiciary Committee reported favorably on an identical bill. On December 12, 2005 the Assembly passed a minor amendment to 2522.

The more significant amendments to the LAD made by 2522 are as follows:

Arbitration Agreements

Section 7 of 2522 makes it an unlawful employment practice for an employer to condition employment or continued employment on a waiver of the right to a jury trial provided by the LAD. Many employers require their employees as a condition of employment to agree to arbitrate any employment related claims. The New Jersey Supreme Court in Martindale v. Sandvick, Inc., 173 N.J. 76 (2002), involving claims brought under the LAD and the Family Leave Act, N.J.S.A. § 34:11B-1 et seq., rejected a contention that the arbitration agreement at issue was an unlawful contract of adhesion. It is important to note that in so ruling the Supreme Court observed that “it is firmly established that the FAA preempts state laws that invalidate arbitration agreements….” 173 N.J. at 85. It is thus highly questionable that Section 7 will be able to withstand a challenge on federal preemption grounds insofar as it purports to render arbitration agreements unlawful.

Statute of Limitations

Section 7 also declares unlawful agreements to change the applicable statute of limitations. The statute of limitations for LAD claims is 2 years, subject to the application of the “continuing violation doctrine” where appropriate. See generally Shepherd v. Hunterdon Developmental Center, 174 N.J. 1 (2002). Although the New Jersey courts have not yet ruled on the issue, other courts have upheld agreements to shorten the limitations period for employment discrimination claims. See, e.g., Thurman v. DaimlerChrysler, Inc. , 397 F.3d 352 (6th Cir. 2004). Section 7 if enacted, will prohibit such agreements.

Other LAD Rights

Section 7 also contains catchall language prohibiting agreements requiring employees to waive “any rights” granted by the LAD. The significance of the catchall is unclear, given that any agreement purporting to waive the rights, procedures and damages available under the LAD would, in any event, likely be challenged as void as against public policy.

Section 8 of 2522 limits the ability of an employer to adopt or enforce “English-only” policies. The provision is a response to the Appellate Division’s decision in Rosario v. Cacace, 337 N.J. Super. 578 (App. Div. 2001), in which the plaintiff claimed she was fired because she spoke Spanish with a co-worker. Dismissing the case on summary judgment, the Rosario court found that the plaintiff had not established a prima facie case of national origin discrimination. The court observed that “the LAD contains no per se rule that the use of one’s own commonly spoken language is protected by the statute’s national origin or ancestry provisions.” Id. at 586.

If Section 8 is enacted, unless “business necessity” justifies the restriction, an “English-only” rule will constitute an unlawful employment practice. To qualify as a business necessity, the restriction must have an overriding legitimate purpose necessary to safely and efficiently continue business operations. Furthermore, an “English-only” rule will be valid only if there is no equally effective, less discriminatory alternative. If a business necessity can be established, the employer must detail the circumstances and the times when the restriction is effective as well as the consequences for violations. Concepts such as “business necessity” and “less discriminatory alternative” will obviously require court interpretation.

Although the LAD declares that all persons shall have the opportunity to obtain employment regardless of familial status, see N.J.S.A. § 10:5-4, the statute does not presently expressly make discrimination in employment based on familial status an unlawful employment practice, see N.J.S.A. § 10:5-3. (The LAD does presently proscribe discrimination based on familial status with regard to housing and credit.) What was probably an oversight is corrected by Section 3 of 2522, which adds discrimination in employment based on familial status to the list of unlawful employment practices set forth in N.J.S.A. § 10:5-3. The LAD defines familial status as

being the natural parent of a child, the adoptive parent of a child, the resource family parent of a child, having a “parent and child relationship” with a child as defined by State law, or having sole or joint legal or physical custody, care, guardianship, or visitation with a child, or any person who is pregnant or is in the process of securing legal custody of any individual who has not attained the age of 18 years.

N.J.S.A. § 10:5-5(ll). In Bumbaca v. Township of Edison, 373 N.J. Super. 239 (App. Div. 2004), the court held that a plaintiff who lost his job due to alleged nepotism did not have a cognizable claim under the LAD. The court noted that the LAD did not make discrimination in employment because of familial status an unlawful employment practice and that, even if it did, the plaintiff’s status did not meet the above-quoted statutory definition. As 2522 does not alter the LAD’s current definition of familial status, Bumbaca’s holding that nepotism is not proscribed by the LAD would not appear to be affected by the proposed legislation.

Section 2 of 2522 requires that employers provide reasonable accommodations for disabled individuals and for pregnancy or pregnancy related conditions unless such accommodations would result in undue hardship. It remains to be seen whether this provision will add significantly to employee protection under the LAD. The New Jersey courts have already determined that handicap discrimination under the LAD includes the concept of reasonable accommodation for employees with disabilities, see, e.g., Viscik v. Fowler Equipment Co., 173 N.J. 1 (2002), and protects pregnant women, see, e.g., Gerety v. Atlantic City Hilton Casino Resort, 184 N.J. 391 (2005).

With regard to pregnancy discrimination, it should be noted that Section 9 of 2522 directs the Attorney General to “promulgate guidelines to assist employers in adopting written employment policies prohibiting discrimination on the basis of pregnancy.” The scope of any such guidelines and the impact they will have on judicial interpretation of the LAD will be subjects of interest if 2522 is enacted.

Of course, we will keep our readers advised as to the status of 2522 and any related developments.