How ERISA Litigators Strengthen Plan Compliance and Risk Management – One-on-One with Jeb Gerth [Video]
Strategic ERISA (Employee Retirement Income Security Act) plan design and administration require more than just technical compliance—they call for foresight into how plans will hold up under legal scrutiny.
In this one-on-one interview, Epstein Becker Green attorney Jeb Gerth, an experienced litigator in ERISA cases, joins George Whipple to explore the critical role a litigator plays in reinforcing plan integrity. Jeb explains how incorporating a litigation perspective into the planning and administration process acts as a “stress test,” helping to identify areas that might attract legal challenges or class action claims. He also discusses key vulnerabilities in ERISA plans, such as discretionary decision-making and inadequate documentation, and how addressing them proactively can reduce the risk of costly disputes.
With class actions often resulting in significant judgments and additional exposure through fee-shifting structures, Jeb provides practical, real-world guidance on preparing plans to withstand these challenges. From uncovering hidden risks during early plan administration to enhancing fairness and clarity in plan documents for both participants and courts, this conversation offers essential strategies for leaders looking to protect their organizations from potential litigation while fostering trust and compliance.
Trade Secret Law Evolution Podcast Episode 73: Year in Review [Podcast]
In this episode, Boston Shareholder Greg Bombard joins us for the annual year in review.
Investigations: Employers Can Avoid Getting in Their Own Way with Some Planning
At some point, every employer will need to investigate an employee’s complaint. An investigation is an important tool that employers can use to fix a workplace problem and minimize liability. Or, an investigation can create extra risk for employers over and above the risk of the original workplace issue. That extra risk arises when an employer makes mistakes, does not have or follow its own policies, or fails to follow through with an investigation.
Get a Checklist
To avoid increasing your risks, consider having an all-inclusive checklist you can use any time an investigation is needed. The checklist can include items such as:
Investigative plan
IT/litigation hold notice and/or preliminary steps
Issues list
To do list
Witness list
Documents reviewed list (including email or internet searches)
Witness scripts– examples:
Upjohn warning for lawyers to explain that the company lawyer does not represent individual employees and to explain attorney-client privilege
Johnnie’s Poultry warning for union settings to explain that participation is voluntary and there will be no retaliation for answers or refusal to answer
Interview notes
Witness statements
Call, email, and voice mail lists
Issue resolution list
Remedial action list
Draft of what will become the final report
Look at Policies
In addition to preparing a checklist, you should also review any policies that relate to investigations. First, do employees know how to report issues? Be sure your policies communicate the rules but are also clear about how employees should report complaints and other issues you want to know about. Further, as part of the complaint procedure, it should be very clear who is responsible for receiving reports of complaints or other wrongful conduct. But you should not stop there—train employees who receive complaints on what to do when they get one. They should also find opportunities to remind everyone how to make a report, and consider documenting these reminders so that employees cannot claim that they did not know how to report a problem in the workplace.
Second, consider whether you need an escalation policy—guidance for when the investigation should be escalated beyond the human resources department. You should think about whether to escalate a complaint that involves
an employee on the leadership team or a board member,
an employee in the human resources department,
a “bet the company” allegation,
an accusation that an internal investigation might be biased,
an allegation of criminal behavior, or
an issue that the employer already knows is leading to litigation.
In these cases, you want to think about whether you need an independent investigator from outside the company to avoid bias or fairness concerns. Having a policy regarding when to do so makes the decision even easier.
Before you Start the Investigation
After deciding to conduct an investigation, there are a number of additional decisions to make:
Who will the investigator be? This person will be the employer’s “star witness” if the matter ever reaches litigation. Has the investigator ever investigated anything else or been trained to investigate? It is worth considering whether a lawyer will be an ideal witness.
Will the investigation be conducted under attorney-client privilege? In many cases, an employer will want to use the investigation as an exhibit proving it was reasonable and to avoid liability, so this takes careful planning from the outset of the investigation.
If a lawyer is directing the investigation, what is considered attorney work product and what is not? Will the report be protected or will there be a separate memo with legal advice? Plan this out in advance.
How will potential conflicts of interest be handled during the investigation?
Will the interviews be conducted in person or remotely? Do you want to record them?
Will the investigator ask witnesses to sign witness statements or will the investigator write up memos of interview summaries?
Closing Out the Investigation
After the investigator completes the investigation and goes back through the checklist to make sure that they have resolved all of the issues on the list and checked off all of the to-do items, the final steps are to (1) take appropriate action, (2) notify the complaining employee and the employee who has been accused of wrongful conduct of the results, and (3) document the investigation with the final report. Often, employers take care of step one and then skip over steps two and three. These steps each play an important role in winding up the investigation.
Step One: Appropriate Action
If the investigation found a policy violation, who determines the appropriate action and who will make sure it is implemented? Not every policy violation merits termination but the punishment should send the message that this behavior is not okay. If the investigation found no policy violation, you may not need disciplinary action. You may, however, want to retrain employees or supervisors about policies. You also may want to reassign employees to avoid future conflicts (assuming you can do so without it looking like retaliation). You may want to calendar a follow up with the complainant in a few weeks to make sure there are no further issues and no perceived retaliation.
Step Two: Notify Employees of the Results
Following up and notifying employees of an investigation’s results can make an employee feel heard, and increase trust of the employer. When an employer does not circle back with the complainant or waits a long time to do so, employees tend to look outside for help. Not surprisingly, plaintiffs’ lawyers often raise lack of follow up and closure during litigation. The EEOC’s 2024 Enforcement Guidance on Harassment in the Workplace recommends that, following an effective investigation, both the complainant and the alleged harasser are informed about the employer’s conclusions and any actions it plans to take as a result of the investigation. If an employer has conducted a reasonable investigation and then taken remedial action, why not tell the employee who made the complaint that the employer has taken these actions? If the employee files a lawsuit, they will find out anyway.
Step Three: Document the Investigation
This is the most important step employers can take to protect themselves from liability if you end up in litigation. The final report should be any employer’s Exhibit A in a lawsuit. The report should describe the allegations, summarize the interviews, documents, and other evidence, and discuss the employer’s policies. The report should also identify the facts that are consistent and that conflict among the witnesses’ statements and/or the documents. Finally, the report should draw a conclusion about what happened based on the credible evidence. Do you want the investigator to decide whether a policy was violated or just provide the facts to someone who will make that decision? Do you want the investigator to recommend action (and risk having the company not follow it)?. The report or the investigative file should reflect Steps One and Two.
It’s not hard to find legal opinions describing investigations gone wrong. Employers that take some time to put together a consistent method for conducting investigations, review and remind employees of their policies, and make some important decisions at the outset of each investigation will reap the benefits later of such careful planning.
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What Employers Need to Know About President Trump’s Removal of NLRB Member Gwynne Wilcox and Two EEOC Commissioners
In a significant move, President Donald Trump has fired a member of the National Labor Relations Board (“NLRB” or “Board”) without reference to the statutory protections that typically shield Board members from being removed without cause. While incoming administrations, regardless of party, have historically taken steps to populate federal appointments with individuals aligned with their goals and policies, the Trump Administration is doing so at a pace and intensity rarely, if ever, seen before. President Trump’s removal of NLRB member Gwynne Wilcox (“Wilcox”) has immediate impact on employers, unions, and workers, as it leaves the Board without the quorum needed to issue decisions in labor cases. The President’s authority to remove Board members will be tested in court and could impact the future of the NLRB and the landscape of U.S. labor law.
Background
In September 2023, the Senate confirmed Wilcox to a second five-year term through the end of August 2028. Former Chairman and Democrat appointee Lauren McFerran’s (“McFerran”) term expired on December 16, 2024, after the Senate voted not to advance her nomination, signaling the Republican-led Senate’s intention to change the Board’s composition. At the time of McFerran’s non-renewal, there was already a vacancy on the Board, leaving two possible spots for President Trump to fill upon taking office. President Trump’s removal of Wilcox on January 27, 2025, now leaves three of the five seats for NLRB members vacant and eliminates what would have otherwise been a Democratic majority on the Board. The only current members (for now) are Republican appointee Marvin Kaplan, who the President named the Chair of the NLRB on Inauguration Day, and Democrat appointee David Prouty, whose term is set to end in August 2025.
Impact on the NLRB and Employers
The immediate consequence of Wilcox’s removal is the NLRB’s lack of a quorum, meaning it cannot issue decisions and will leave many pending cases in limbo. The Board’s authority to issue decisions will be halted until a quorum is restored, either through the Senate confirming a new member appointed by President Trump or Wilcox being reinstated.
For employers, this development could be a double-edged sword. On one hand, the freeze in NLRB decisions may delay rulings that could have been unfavorable to employers with pending cases before the Board. On the other hand, during the Biden administration, the Board issued a number of decisions that were favorable for unions and expanded protections for employee rights under the National Labor Relations Act. Without any further rulings, those decisions will remain the law for now. It is widely expected that a Trump NLRB would look to overturn much of that precedent and issue pro-employer decisions. The Board’s ability to do that is now hindered until the member seats are filled.
President Trump’s Constitutional Justifications
President Trump’s legal justification for the removal of Wilcox hinges on a 2020 Supreme Court decision in Seila Law LLC v. CFPB. In Seila Law, the Supreme Court held the executive authority did not extend to removal of members of multi-member agency boards that are: 1) balanced on partisan lines; and 2) perform legislative and judicial functions but not executive functions. Such a “removal shield” prohibits the president from exercising executive authority to remove members from agency boards if meeting these conditions. In firing Wilcox, President Trump specifically cited Seila Law, claiming the NLRB does not qualify for the exception because it is not balanced on partisan lines and because it exercises executive powers, such as issuing regulations and pursuing enforcement actions in federal court.
President Trump’s interpretation will be challenged in federal court. Wilcox has already indicated her intention to pursue “all legal avenues” to contest her removal, citing long-standing Supreme Court precedent that protects NLRB members from being fired without cause. In addition to addressing the extent of presidential powers to remove NLRB members, the legal fight over Wilcox’s firing ultimately may provide a precedent for companies and the numerous lawsuits that have been filed over the past year pursuing constitutional challenges against the NLRB, including on the basis that the Board’s members and administrative law judges are unconstitutionally shielded from removal by the president.
Simultaneous Overhauls at the EEOC
President Trump’s recent actions are not limited to the NLRB. On January 28, 2025, President Trump also fired Jocelyn Samuels and Charlotte Burrows, two Democratic commissioners of the Equal Employment Opportunity Commission (“EEOC”), along with the EEOC’s general counsel, Karla Gilbride. This move eliminates the Democratic majority on the EEOC. By dismissing the EEOC commissioners, President Trump has taken steps to advance his second-term civil rights law agenda.
Conclusion
President Trump’s removal of an NLRB member and two EEOC commissioners reflects the administration’s broader strategy to reshape independent agencies to align with the administration’s policy goals. President Trump’s assertion of power to remove NLRB members and EEOC commissioners marks a pivotal moment in labor relations and regulatory oversight of employers. The legal battles and policy shifts that follow are expected to shape the landscape for employers, creating a period of uncertainty. Attorneys in the Labor & Employment practice group at Blank Rome are prepared to assist as potential changes in labor law enforcement and agency operations arise.
Federal Appeals Court Holds New Jersey’s Cannabis Law Provides No Private Right of Action
The Third Circuit Court of Appeals has held that the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (“CREAMMA”) does not permit a private citizen to bring a civil action for enforcement of the provisions prohibiting discrimination against cannabis users. Erick Zanetich v. Wal-Mart Stores East, Inc. et al., Docket No. 23-1996 (3d Cir. Dec. 9, 2024).
CREAMMA was passed to control and legalize cannabis in a similar fashion to the regulation of alcohol for adults, including preventing the sale or distribution of cannabis to people under the age of 21. The law also provides certain protections to current and prospective employees, including preventing employers from refusing to hire a job applicant because of the applicant’s use or non-use of cannabis, as well as from taking an adverse employment action against an employee based solely on a positive cannabis drug test. However, CREAMMA does not expressly allow citizens to bring a private cause of action, such as a civil action, to remedy alleged employment discrimination suffered because of an individual’s use of cannabis. This conclusion recently was challenged and the Third Circuit confirmed that CREAMMA does not confer a private right of action.
Zanetich applied for an asset protection position at a Walmart facility in Swedesboro, New Jersey. Zanetich was offered the job, subject to taking and passing a drug test. After Zanetich tested positive for cannabis, the job offer was rescinded. He subsequently filed a two-count Complaint against Walmart alleging Walmart discriminated against him for his use of cannabis in violation of CREAMMA and that Walmart wrongfully rescinded his job offer in violation of public policy. Walmart removed the case to federal court and moved to dismiss. The District Court granted Walmart’s motion, with prejudice, dismissing the case and finding that CREAMMA does not contain an implied remedy for violations of its employment-related protections, nor does the public policy exception to the recission of a job offer based on a positive drug test for cannabis apply to Zanetich’s claims. As the case was dismissed with prejudice, Zanetich did not have the opportunity to cure any defects in the Complaint by filing an amended Complaint.
Zanetich appealed this decision to the Third Circuit Court of Appeals, which affirmed the District Court’s decision to dismiss the Complaint.
There was no dispute CREAMMA does not expressly provide for a private right of action, and, the Third Circuit ultimately held that CREAMMA did not imply a private right of action either. Specifically, the Court held CREAMMA protects both cannabis and non-cannabis users and, therefore, Zanetich could not establish the statute provided him with any special benefit. The Court further noted that if the Legislature wanted to include a private right of action for citizens, it would have done so explicitly. Finally, the Third Circuit held the CREAMMA’s explicitly-stated underlying purposes concerned the use and distribution of cannabis, which does not support a private right of action to enforce the employment-related provisions. Therefore, the Court upheld the District Court’s dismissal of Zanetich’s first claim.
The Court also analyzed the applicability of Pierce v. Ortho Pharm. Corp, which creates an exception to the at-will employment doctrine for employees who were terminated in violation of public policy. Ultimately, the Third Circuit held this exception only applies to former employees terminated from their position because of their complaints about a suspected violation of a clear mandate of public policy. As Zanetich was not a former employee, but instead was a prospective applicant, the Third Circuit upheld the District Court’s dismissal of this claim as well.
What Employers Need to Know About the California Transparency in Supply Chains Act
In an era where consumers are increasingly concerned about ethical sourcing and labor practices, the California Transparency in Supply Chains Act (CTSCA) stands as a significant piece of legislation.
Enacted in 2010, the CTSCA aims to combat human trafficking and slavery in global supply chains, promoting greater transparency and accountability among businesses operating in California.
The CTSCA requires large retailers and manufacturers doing business in California to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains. Specifically, the Act applies to companies with annual worldwide gross receipts exceeding $100 million.
These businesses must provide detailed information on their websites about their supply chain practices, including:
Verification: The extent to which the company engages in the verification of product supply chains to evaluate and address risks of human trafficking and slavery.
Audits: Whether the company conducts audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains.
Certification: The requirement for direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business.
Internal Accountability: The maintenance of internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.
Training: Describe the provided training on human trafficking and slavery, particularly with respect to mitigating risks within the supply chains of products.
To assist with compliance, the state has published a Resource Guide and Frequently Asked Questions.
To ensure compliance employers should first, undertake thorough verification processes to identify and address any risks related to human trafficking and slavery in their supply chains. Second, conduct regular audits of suppliers to ensure adherence to company standards. Third, require direct suppliers to certify the legality of their practices concerning human trafficking and slavery. Fourth, establish and maintain robust internal accountability standards for employees and contractors. Lastly, provide comprehensive staff training, focusing on identifying and mitigating risks of human trafficking and slavery in supply chains. By implementing these action items, businesses can not only comply with the CTSCA but also contribute to the global fight against human trafficking and slavery.
This is not the only state or federal law that requires such disclosures. California passed a law last year to require website disclosures when employers conduct social compliance audits. And there are numerous others from the California Consumer Privacy Law to HIPAA, that businesses need to be aware of.
President Trump’s Executive Orders and The Impact to Environmental Rules and Regulations
President Donald Trump began his first week in office by signing a multitude of Executive Orders “Orders,” some of which impact federal environmental laws or policies. Here is a partial list of the laws affected by the Orders:
Freeze funding from the Inflation Reduction Act and Infrastructure Investment and Jobs Act
Certain funding disbursements from the two laws are pending a 90-day review of spending recommendations. Certain funds may be released after consultation with the Office of Management and Budget.
60-Day Moratorium on New Rules
All agencies and departments must refrain from proposing or issuing new rules not yet published in the Federal Register.
Agencies must also postpone for 60 days the effective date for rules that have been published but haven’t yet taken effect.
Declare a National Energy Emergency
A groundbreaking measure that could unlock new powers to suspend certain environmental rules or expedite permitting of certain mining projects.
Offshore Drilling
Attempt to reverse Biden’s ban on offshore drilling for 625 million acres of federal waters.
Repeal of Tailpipe Pollution Regulations
Begin the repeal of Biden-era regulations on tailpipe pollution from cars and light trucks, which have encouraged automakers to manufacture more electric vehicles.
Rollback Energy Efficiency Regulations
Roll back energy-efficiency regulations for dishwashers, shower heads, and gas stoves.
Open the Alaska wilderness to more oil and gas drilling.
Restart reviews of new export terminals for liquefied natural gas (“LNG”).
This was paused by the Biden Administration in early 2024 to study the environmental impacts of LNG exports.
Offshore Wind Farms
Halt the leasing of federal waters for offshore wind farms.
Eliminate Environmental Justice Programs
Across the federal government. These programs were aimed at protecting poor communities from excess pollution.
PFAS Rule No Longer Listed as Under Review
A Pending Rule meant to set discharge limits on certain PFAS is no longer listed as being under review on the government’s regulatory calendar site.
The Review of Energy-Related Regulations and Rules
All agencies must conduct an “immediate review” of actions believed to “impose an undue burden” on the development and use of certain energy sources. The order calls for identification of any regulations, policies, guidance documents, or other materials that would negatively impact the development or use of oil, gas, coal, hydropower, biofuels, nuclear energy, or critical minerals.
Paris Agreement Withdrawal
Federal agencies, including the EPA, will need to submit a plan for how to “revoke or rescind policies” related to budgeting for or implementing aspects of the Paris Agreement.
Greenhouse Gas Working Group Disbanded
The Interagency Working Group on the Social Cost of Greenhouse Gases created during the Obama administration will cease operations.
Federal Hiring Freeze
Vacant federal civilian positions won’t be filled, and no new positions will be created. The freeze includes the United States Environmental Protection Agency. This Order also ends remote work for federal employees.
The NLRB-Harmonic: Labor Board GC Issues Memo on Balancing EEO and Labor Laws
Given some rulings by the National Labor Relations Board (NLRB) in recent years – such as rulings invalidating civility policies or finding employers liable for disciplining employees acting in a harassing manner – many employers have struggled with how to balance National Labor Relations Act (NLRA) considerations with competing equal employment opportunity (EEO) laws. Perhaps in recognition of this tension, on Jan. 16, the NLRB’s top lawyer issued a memo entitled Harmonization of the NLRA and EEO Laws.
According to a press release on the memo issued by NLRB General Counsel Jennifer Abruzzo, “The memorandum emphasizes the importance of complying with all requirements of the NLRA and the EEO laws and offers suggestions in certain key areas on how to effectuate compliance and ensure that employees receive full protections under the laws. Specifically, it addresses and provides examples for complying with both bodies of law in three key areas – workplace civility rules, investigative confidentiality policies, and employee speech or conduct in the context of NLRA-protected activity that could potentially implicate federal EEO law.”
The bulk of the memo is aimed at addressing employee conduct and comments made in the course of engaging in National Labor Relations Acit (NLRA)-protected activity, such as an employee addressing workplace concerns during a grievance meeting or contract negotiations. There can be tensions between an employer’s obligations under EEO laws (such asTitle VII) in prohibiting unlawful harassment and discrimination while at the same time allowing employees to use insults, obscenities, or other vulgar language in the course of otherwise protected conduct.
For example, if in a heated exchange during a bargaining session, an employee starts shouting racial slurs, can an employer discipline this employee pursuant to its anti-harassment and discrimination policies to avoid liability under Title VII?
The memo also sheds some light on the factors the NLRB will consider in determining whether an employee’s offensive conduct made in the course of protected conduct loses its protections under the NLRA. For example, the board will consider whether the conduct implicated a protected characteristic, such as race, sex, national origin, disability, etc.; the proportionality of the discipline compared to the severity of the conduct; and whether the employer has routinely and consistently disciplined employees for similar behavior in the past.
This last factor, whether the employer has disciplined other employees for engaging in similar conduct in the past, seems especially important to the NLRB’s analysis.
While the memo is not binding precedent, it at least provides some guidance for companies to consider in these sticky situations. In light of the fact a new NLRB is likely to take shape in the near future, more clarity on this issue may be on its way as well. Stay tuned.
OFCCP Welcomes New Acting Director Amidst Policy Shift
In a significant move, the Office of Federal Contract Compliance Programs (OFCCP) has appointed Michael Schloss as the new acting director and deputy director of policy. This appointment comes as part of the Trump administration’s broader strategy to reshape the agency’s mission following the issuance of executive order (EO) Ending Illegal Discrimination and Restoring Merit-Based Opportunity, which revoked EO 11246. Schloss is tasked with guiding OFCCP as it shifts focus toward enforcing Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA).
Quick Hits
OFCCP has appointed Michael Schloss as the new acting director and deputy director of policy, as part of the new administration’s overall strategy to reshape the agency.
Schloss previously served as director of the Office of Field Administration at the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA).
Schloss will now guide OFCCP’s focus on enforcing Section 503 of the Rehabilitation Act and VEVRAA.
Acting Director Schloss transitions to OFCCP from the U.S. Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA), where he served as Director of the Office of Field Administration. In that role he oversaw EBSA’s ten regional offices and three district offices, ensuring the execution of enforcement, outreach, education, and assistance programs related to Employee Retirement Income Security Act (ERISA) requirements. His responsibilities included overseeing fiduciary standards, prohibited transactions, and group health plan requirements, as well as coordinating efforts across EBSA’s regions and other DOL program offices. Acting Director Schloss’s background in benefits law and EBSA operations suggests he is new to OFCCP policy.
Stay tuned for further updates as the OFCCP navigates this transition under Schloss’s leadership.
2025 New Jersey Employment Law Updates
The start of a new year is a great time for New Jersey employers to review their employee handbooks and policies and consider revisions based on changes in the law or best practices. This GT Alert summarizes some recent legal updates and changes on the horizon to help focus employers as they evaluate the compliance of their policies.
Pay Transparency
As set forth in a November 2024 GT Alert, New Jersey, like a number of other states, will soon enforce pay transparency requirements and mandate certain job posting disclosures. Effective June 1, 2025, New Jersey employers with 10 or more employees over 20 calendar weeks doing business or taking applications for employment within the state must disclose the hourly wage or annual salary range and general benefit information in all job postings for new positions and transfer opportunities. Covered employers must also post promotion opportunities to the entire affected department, with certain exceptions.
Remote Workers
The New Jersey Attorney General and New Jersey Division on Civil Rights (DCR) issued guidance on existing legal requirements applicable to workers employed with New Jersey companies who reside and work outside the state. The DCR published this update in the wake of recent case law holding that “a court would not apply New Jersey law to a multi-state dispute.” The DCR took the position that “[b]y its terms, the [New Jersey Law Against Discrimination (LAD)] does not protect only New Jersey residents. For instance, the LAD provides that ‘all persons shall have the opportunity to obtain employment . . . without discrimination.’” Thus, according to the DCR, the LAD protects all employees who work for a New Jersey employer “regardless of their residency or where they physically work, including those who work remotely full-time or part-time on a hybrid schedule.”
The DCR stated that it was providing guidance “to clarify and explain DCR’s understanding of existing legal requirements in order to facilitate compliance with the LAD.” However, it acknowledged that “[t]his guidance document does not impose any new or additional requirements that are not included in the LAD, does not establish any rights or obligations for any person, and will not be enforced by DCR as a substitute for enforcement of the LAD.” Although not law, employers should be aware of the DCR’s position to the extent it may impact decisions on charges of discrimination filed with the agency and potentially be viewed as persuasive by the courts.
Dress Codes (Employees and Patrons)
The New Jersey Attorney General and the DCR issued a consent decree stemming from a charge of discrimination against a New Jersey restaurant involving a gender-binary dress code for employees and patrons. The DCR’s press release stated that a non-binary individual was denied service because they purportedly failed to adhere to rules for men’s attire. The DCR took the position that the restaurant’s dress code policy violated the law because “New Jersey’s civil rights laws make it unlawful to discriminate based on gender identity. Those protections mean that places open to the public, including restaurants, can’t maintain gender-binary dress codes that exclude LGBTQ+ people.” Employers with dress code requirements for employees and/or the public should review their policies to ensure compliance.
The New Jersey Data Protection Act
Effective Jan. 15, 2025, the New Jersey Data Protection Act (NJDPA) imposes new protections for New Jersey consumers regarding personal data released to businesses. Personal data is defined as “information that is linked or reasonably linkable to an identified or identifiable person.” New Jersey residents now have the right to limit whether and how their personal data may be collected and used, the right to correct inaccuracies in their personal data, and the right to delete their personal data. The NJDPA also imposes new compliance obligations on businesses, including, but not limited to, responding to consumer requests not later than 45 days after receipt and providing certain information free of charge.
The NJDPA’s compliance obligations apply to New Jersey companies that operate as either “controllers” or “processors.” “Controllers” are individuals or legal entities that determine the purpose and means of processing personal data; processors are individuals or entities that collect, modify, and otherwise process personal data on behalf of a controller. The NJDPA applies to controllers conducting business in New Jersey or producing products or services targeted to the state’s consumers and that, during a calendar year, either (1) control or process personal data of at least 100,000 consumers, with certain exceptions; or (2) control or process the personal data of at least 25,000 consumers while deriving revenue, or receiving a discount on the price of any goods or services, from selling personal data.
The NJDPA also directs the Director of the Division of Consumer Affairs to promulgate regulations necessary to effectuate the purpose of this new law.
Retirement Plan Requirements
RetireReady NJ requires all New Jersey employers with 25 or more employees that do not offer a qualifying retirement plan for their employees to provide certain retirement benefits. Covered employers were required to register with the state by Sept. 15, 2024 (if 40 or more employees) or Nov. 15, 2024 (if between 25-39 employees), but the RetireReady NJ webpage appears to still be accepting registrations. Additionally, exempt employers that already provide retirement benefits must certify their exemption on the webpage. Employers who fail to comply with RetireReady NJ may be subject to penalties, ranging from a warning to monetary fines.
Employment Law Regulations Impacting New Jersey Residents
Private households in New Jersey employing domestic workers may now be considered employers and have important obligations under the Domestic Workers’ Bill of Rights (DWBR). The DWBR gives certain workers providing in-home services to private households—i.e., childcare, house cleaning, care for disabled or elderly individuals, and/or cooking—with the right to a contract, the right to minimum wage, as well as overtime compensation, break time, and privacy, safety, and discrimination protections. The law took effect July 1, 2024, and applies regardless of the immigration status of the worker.
Immigration Status Protections
Pursuant to S2869, signed into law in August 2024, employers may not coerce or attempt to coerce an employee based on the employee’s immigration status for the purpose of concealing purported violations of state wage, benefit, or tax laws. “Any employer that coerces or attempts to coerce an employee based on the employee’s immigration status, and in furtherance of violating the State’s labor laws, will be subject to penalties in addition to any penalties to which the employer may be subject due to employment violations.”
Wage and Hour
As previously announced by the New Jersey Department of Labor, effective Jan. 1, 2025, the minimum wage applicable to most employees increased to $15.49 per hour.
Employers should also consider reviewing other pay practices (such as timing of payment, calculation of premium pay, and commission plans), as well as employee exemption classifications.
Potential Developments for 2025
Employers should also be aware of the following pending legislation:
A.B. 3854 would regulate the use of automated employment decision tools (AEDTs) in hiring to “minimize employment discrimination that may result from the use of the tools.” Under this proposed legislation, employers using AEDTs would be subject to a number of requirements. This bill was referred to the Assembly Labor Committee in May 2024.
A.B. 3911 would require employers that use artificial intelligence to analyze applicant-submitted videos to abide by specific procedural requirements to safeguard the interview process. This bill was referred to the Assembly Science, Innovation and Technology Committee.
A.B. 3816 would provide bereavement leave for reproductive loss, such as miscarriage or stillbirth. This bill was referred to the Assembly Labor Committee in April 2024.
A.B. 3505 would allow employees to use paid family leave and/or paid sick leave for bereavement following the death of a family member. This bill was referred to the Senate Budget and Appropriations Committee.
ICE Raids in the Workplace – Preparation and Response
With the Trump Administration’s renewed focus on immigration, many companies are asking what to expect, and how to respond to a potential raid on their facilities by Immigration and Customs Enforcement (“ICE”). As enforcement activities continue to unfold, employers should take proactive steps to prepare for possible ICE visits or audits.
ICE is charged with the arrest, detention and removal of certain non-citizens. Most employers are already aware that ICE conducts occasional I-9 audits. But the new administration signals an increased likelihood of ICE visiting worksites to arrest non-citizens who are subject to removal from the U.S. These actions are typically based on a civil administrative warrant, although occasionally they arise from a judicial criminal warrant. Most likely though, the Enforcement & Removal Operations (“ERO”) division of ICE will focus on non-citizens with serious criminal convictions and those who were ordered removed by an Immigration Judge but have failed to depart the U.S.
Additionally, we anticipate an increase in I-9 audits in the coming years. However, due to limited agency resources and the likely economic impact, we do not expect mass raids. While some I-9 audits will be randomly selected, others will be based on a broader investigation that ICE may be conducting of that company.
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Time Is Money: A Quick Wage-Hour Tip on … DOL Confirms Managers Are Blocked from Tip Pool Even When Working in Non-Supervisory Capacity
Section 3(m)(2)(B) of the FLSA prohibits employers, including managers or supervisors, from keeping any portion of an employee’s tips.
Accordingly, the law has been clear that a manager or supervisor cannot participate in a general employee tip pool, since tip pools including tips of other employees.
Although this appears clear at first blush, the blurred lines of restaurant staffing creates ambiguity as to who is exactly a manager or supervisor. Non-exempt employees often work in a certain supervisory capacity as team or shift leads. Conversely, it is also common for managers and supervisors in restaurants to perform a certain amount of non-supervisory duties. So, when are employees with minor supervisory responsibilities treated as managers for tip pooling? And can managers participate in tip pools when they perform non-supervisory duties?
To answer these questions, the DOL reiterated its position that the definition of a manager or supervisor is an employee that meets the executive employee duties test at 29 C.F.R. §§ 541.100(a)(2)-(4). Therefore, in order to be considered a manager or supervisor, an individual must meet several standards, including having the ability to customarily and regularly direct the work of at least two or more other full-time employees, etc.
The upshot of this analysis is two-fold.
First, it is unlikely that non-exempt employees would be considered managers if they have very limited supervisory capacity. Therefore, employers do not have to be overly concerned about shift leads errantly becoming managers and therefore ineligible to participate in tip pools.
Second, managers and supervisors can, effectively, never participate in a tip pool. In order to be able to participate in a tip pool, the managers would have to perform a high quantity of non-supervisory work that would essentially convert them to a non-exempt employee. Shift-to-shift variations are immaterial and such deviations would need to occur on at least a workweek basis.
So what is a restaurant to do? Practical guidelines include:
Err on the side of caution and keep anyone who is arguably a manager or supervisor out of any tip pooling or sharing arrangement.
Do not create a separate tip pool of just managers and supervisors. This would continue to run afoul of tip-pooling prohibitions.
Managers can contribute to employee tip pools, but they cannot receive any monies from a tip pool, even if they have contributed to it.
Managers and supervisors can keep their personal tips. However, this must be limited to tips received directly from customers based on the service the manger or supervisor directly and solely provides.