Search form

Bill Would Revise New Jersey Law Against Discrimination to Limit Employment Agreements

By Robyn L. Aversa, Richard J. Cino and James M. McDonnell
  • December 6, 2017

A bill in the New Jersey State Senate would effectively prohibit jury waivers, arbitration clauses, and non-disclosure provisions related to claims under the New Jersey Law Against Discrimination, N.J.S.A. § 10:5-1, et seq. (LAD).

S-3581, introduced in the Senate on December 4, 2017, declares, in no uncertain terms, that provisions in an employment contract that waive “any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment” are contrary to public policy and would be unenforceable. Furthermore, S-3581 would prohibit any prospective waiver of rights or remedies (e.g., a jury trial) under the LAD. If passed, the enforceability of arbitration clauses with respect to LAD claims would be questionable.

S-3581 also contains a #MeToo provision designed to eliminate non-disclosure provisions in agreements resolving claims under the LAD. It provides as follows:

A provision in any employment contract or agreement which has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment shall be deemed against public policy and unenforceable.

Clearly, an employer that seeks to resolve a claim under the LAD would be unable to enforce any confidentiality or non-disclosure provisions in settlement agreements whether as part of a litigation or pre-suit negotiation.

Additional protections are provided to individuals who refuse to enter into an agreement with provisions contrary to the legislation. The bill prohibits an employer from taking retaliatory action (e.g., refusal to hire, discharge, suspension, demotion, and so on) on the grounds that an individual refuses to enter into an agreement with terms contrary to S-3581.

Lastly, to the extent an employer seeks to enforce an agreement contrary to the bill, the employee may collect costs and reasonable attorney’s fees for defending against any such suit.

The bill would affect agreements prospectively. It expressly does not apply to the terms of collective bargaining agreements.

If passed, S-3581 likely would drastically affect LAD litigation and strategy. The inability of an employer to utilize arbitration procedures or insist upon confidentiality in settlement agreements may result in fewer out-of-court resolutions and more protracted and costly litigation.

If you have any questions, please reach out to a Jackson Lewis attorney. We will keep you apprised of developments.

©2017 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

Reproduction of this material in whole or in part is prohibited without the express prior written consent of Jackson Lewis P.C., a law firm that built its reputation on providing workplace law representation to management. Founded in 1958, the firm has grown to more than 900 attorneys in major cities nationwide serving clients across a wide range of practices and industries including government relations, healthcare and sports law. More information about Jackson Lewis can be found at www.jacksonlewis.com.

See AllRelated Articles You May Like

August 22, 2019

Illinois Expands State Human Rights Act to Include Employers with One or More Employees

August 22, 2019

An amendment to the Illinois Human Rights Act (IHRA) expands the definition of “employer” from employers with at least 15 employees to those with one or more employees. The legislation, House Bill 252, was signed by Governor J.B. Pritzker on August 21, 2019, and enacted as Illinois Public Act 101-0430. The new law will become... Read More

August 20, 2019

Supreme Court’s Epic Systems Decision on Arbitration Interpreted Broadly by Labor Board

August 20, 2019

An employer may lawfully issue to its employees a new or revised mandatory arbitration agreement containing a class- and collective-action waiver specifying that employment disputes are to be resolved by individualized arbitration, even if it was in response to employees opting into a collective action (such as a wage lawsuit), the... Read More

August 13, 2019

New York Expands Harassment Laws, Protections of Religious Attire, Clothing, or Facial Hair

August 13, 2019

New York state has enacted sweeping new workplace harassment protections for employees, including lowering the standard for when harassment is actionable. It also has adopted new law prohibiting employment discrimination based on religious attire, clothing, or facial hair. Workplace Sexual Harassment On August 12, 2019, Governor... Read More

Related Practices