In March 2012, in Gurung v. Malhotra, 10 Civ. 5086 (S.D.N.Y. Mar. 16, 2012), the U.S. District Court for the Southern District of New York (Marrero, J.) awarded, to a 22-year-old domestic worker, damages of $1,458,335 against the maid’s former employers — an Indian diplomat and her husband.  The diplomat and her husband, Neena and Jogesh Malhotra (“the Malhotras”), had brought the plaintiff, Shanti Gurung (“Ms. Gurung” or “the plaintiff”) from her native India to New York City, had made the plaintiff work for them as a maid 16 hours per day, seven days per week, for three years, and had refused to pay the plaintiff any wages, let alone any overtime compensation.

The Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §§ 201-219 (the “FLSA”), and its corresponding regulations, 29 C.F.R. § 510 et seq., mandate that most employees in the U.S. be paid not less than the federal minimum wage of $7.25 per hour for all hours worked and overtime pay at one-and-one-half times their regular rate of pay for all hours worked in excess of 40 hours in a workweek.

Similarly, the New York State Minimum Wage Act, N.Y. Labor Law § 650 et seq., and 12 N.Y.C.R.R. Part 142 mandate that employees in New York be paid not less than the New York minimum wage of $7.25 per hour for all hours worked.  Covered employees who work overtime must be compensated at a rate that is one-and-one-half times their regular, “straight-time” hourly rate of pay.

The Gurung Court awarded to the plaintiff domestic employee, against the Malhotras, more than $600,000, under the FLSA and New York law, representing unpaid wages, unpaid overtime compensation, liquidated damages, and attorneys’ fees.  The U.S. District Court for the Southern District of New York also levied, in Ms. Gurung’s favor against the Malhotras, punitive damages of $300,000 .

Further, the Gurung Court awarded, to the plaintiff maid, damages of $500,000 for emotional distress under several federal statutes prohibiting human trafficking and forced servitude.  See 18 U.S.C. §§ 1584, 1589, 1590, 1592, 1595; Gurung v. Malhotra, 10 Civ. 5086, slip op. at 17-19.  The Gurung Court explained:

[18 U.S.C. §§ 1589 and 1595] authorize[] the recovery authorizes the recovery of damages [for emotional distress] from an individual who “knowingly provides or obtains the labor or services of a person . . . by means of any scheme, plan, or pattern intended to cause the person to believe that, if that person did not perform such labor or services, that person or another person would suffer serious harm or physical restraint. . . .”  In this case, Gurung has unquestionably established that the Malhotras induced her to work without pay by seizing her passport and visa, restricting her ability to leave their apartment, and constantly warning her that if she traveled on her own without their permission, she would be arrested, beaten, raped, and sent back to India as “cargo.”

Take-Away

Federal law and New York law each prohibit employers from discharging or in any other manner retaliating against any employee because such employee has filed any complaint or instituted any proceeding to recover unpaid overtime compensation or minimum wages, or has testified or is about to testify in any such proceeding.  See 29 U.S.C. § 215(a)(3); N.Y. Labor Law § 215(1)(a).  Should employers in New York require yet another reason to refrain from retaliating against workers who seek to recover unpaid overtime compensation or minimum wages, the Gurung Court has provided such a reason.

Specifically, within the Southern District of New York, an employer who coerces workers, by threat of serious harm, to work overtime hours without being paid time-and-a-half may be liable, under federal law, for substantial damages for emotional distress.

On a personal note, this blog post is the one hundredth post published on this blog!  We thank all the visitors who have frequented this blog since its January 2010 launch.

Call the Law Offices of David S. Rich, LLC at (212) 209-3972 to speak with a knowledgeable labor and employment lawyer about ensuring that your company complies with overtime pay and other wage and hour laws, or to retain a skilled overtime attorney to defend your company in unpaid overtime lawsuits or other wage and hour litigation.

In several civil lawsuits (not bankruptcy proceedings) in which this author represented the creditor, the debtor — usually without its attorney’s involvement — has tendered to the creditor a check, in the amount of only a portion of the debt owed, marked “payment in full,” “paid in full,” “full payment,” or the like.

In such a scenario, the creditor typically asks this author: “Can I deposit the debtor’s check and still pursue my claim against the debtor for the remainder owed to me?”  Alternatively, the creditor may ask: “Can I still pursue my cause of action against the debtor for the remainder owed to me if (i) I endorse the check ‘without prejudice,’ ‘under protest,’ or the like before depositing it and (ii) I notify the debtor that, in the lawsuit, I’ll continue to seek the remainder owed?”

In New Jersey, the answer to both of these questions is “no.”

Specifically, in New Jersey, “where a check bearing a notation that is offered in full settlement of a disputed claim is offered to a creditor, who then retains the check and makes use thereof, an accord and satisfaction may be found.”  In re Lifestyle 80′s Inc., 187 B.R. 156, 158 (Bankr. D.N.J.) (quoting Loizeaux Builders Supply Co. v. Ludwig, 144 N.J. Super. 556, 564, 386 A.2d 721 (N.J. Super. Ct. Law Div. 1976)).   “The tender having been made upon the condition that it be accepted in full satisfaction or not at all, the creditor is deemed to have accepted the condition by depositing the check for collection.”  In re Lifestyle 80′s Inc., 187 B.R. at 158 (quoting Loizeaux Builders Supply Co., 144 N.J. Super. at 564).

Similarly, in the Garden State, “the acceptance by the creditor of a check offered by the debtor in full payment of a disputed debt is an accord and satisfaction of the debt and no condition of protest or attempted reservation of rights” — such as endorsing the check ‘without prejudice,’ ‘under protest,’ or the like — can affect the legal quality of this action.”  Chancellor, Inc. v. Hamilton Appliance Co., 175 N.J. Super. 345, 352, 418 A.2d 1326 (N.J. Super. Ct. Passaic County Small Claims Div. 1980); see also Loizeaux Builders Supply Co., 144 N.J. Super. at 564.

New Jersey’s rule — that a disputed claim is extinguished by the creditor’s deposit of a check tendered by the debtor and marked “paid in full” — applies whether or not the transaction from which the debt arose was a transaction in goods governed by the New Jersey Uniform Commercial Code, N.J.S.A. §§ 12A:1-101 et seq.  See Chancellor, Inc., 175 N.J. Super. at 348-352.

Take-Away

If a purchaser owes, to your company in New Jersey, a contested debt, beware of any check tendered by the purchaser, in the amount of only part of the debt owed, marked “payment in full” or the like.  By depositing the purchaser’s check, your business is extinguishing its right to sue for the remainder of the debt that the purchaser owes to your business, even if your business purports to reserve its right to seek the remainder.

If your company wants to bring, or needs a lawyer to defend it in, business litigation and you are located in the New York City area, call Attorney David S. Rich at (212) 209-3972.

No.  In New York, a company may not deduct from an employee’s paycheck, charge against an employee’s wages, or require an employee to reimburse the company for, monetary losses to the company, even if the employee’s carelessness caused the losses.  For example, if an employee loses or damages a laptop computer or other property belonging to the company, the company may not deduct the cost of replacing or repairing the computer or other property from the employee’s paycheck.

Likewise, an employer may not withhold, from a cashier employee’s paycheck, a shortage in a cash register.  That said, in the absence of a contract, a company may fire employees for causing the company a loss, carelessly or otherwise.

In New York State, an employer may not deduct monetary losses to the company, for which an employee was arguably at fault, from the employee’s paycheck.  See N.Y Labor Law § 193(1).  Similarly, in New York, an employer may not make any charge against wages, or require an employee to reimburse the employer for, monetary losses to the company for which the employee was arguably at fault.  See N.Y Labor Law § 193(2).  So, as stated, an employer cannot lawfully deduct from an employee’s paycheck, charge against an employee’s wages, or require an employee to reimburse the employer for, lost or damaged company computers or other company property (even if the employee’s negligence caused the loss or damage), or for a shortage in a cashier employee’s cash register.

In New York, the only deductions from or charges against an employee’s wages which an employer may make, and the only reimbursements which an employer may require from employees, are (i) those required by law, such as deductions for social security contributions or for income taxes, and (ii) those which are “for the benefit of the employee” and are expressly authorized in writing by the employee, such as payments for insurance premiums, pension or medical benefits, charitable contributions, U.S. bonds, union dues, and the like.  See N.Y. Labor Law § 193(1), 193(2).

Requiring employees to reimburse the employer, in whole or in part, for the costs of repairing or replacing company property which the employees carelessly lost or damaged, or for a shortage in a cashier employee’s cash register, is not “for the benefit of the employee.”  Accordingly, section 193 of the New York Labor Law bars a company from requiring employees to reimburse the company for such costs.

However, in the absence of a contract, a company may fire an employee in New York for causing the company a loss, carelessly or otherwise.  So, for example, an employer may fire a worker for losing or damaging company property, negligently or otherwise.

A company has this autonomy because, in the absence of a contract, employment in New York is at-will.  In New York, an at-will employee is subject to termination for any reason or no reason, unless (i) the discharge is for a reason prohibited by statute or (ii) the discharge is prohibited by public policy.

If your company needs assistance or guidance on a labor or employment law issue and your company is located in the New York City area, call Attorney David S. Rich at (212) 209-3972.

In February 2012, the New York Court of Appeals — New York State’s court of last resort  — held that where individuals, with an intent to blackmail or extort from a wrongdoer, truthfully report, to governmental officials, wrongdoing that is of public interest, no absolute privilege shields those individuals from liability to the wrongdoer for prima facie tort and tortious interference with prospective contractual rights.  Posner v. Lewis, 2012 N.Y. Slip Op. 01323 (N.Y. Feb. 21, 2012) (Graffeo, J.) (7-0 decision, with three Justices concurring only in result).

In Posner, the plaintiff individual alleged as follows.  The plaintiff was employed as a nontenured, public elementary school teacher.  The defendant individuals, who were the plaintiff’s father-in-law and brother-in-law, wrote letters to the State Department of Education, to the superintendent of the local board of education, and to each member of the local board of education truthfully stating, and attaching materials documenting, that the plaintiff engaged in a sexual relationship with the parent of one of his students, and that the plaintiff recommended this paramour to be a substitute teacher in the plaintiff’s class.  In their letters, the defendants (also referred to in this post as “the defendant in-laws”) demanded that school officials severely discipline the plaintiff and revoke his teaching license.

Further, after the defendants dispatched these letters, the plaintiff teacher’s brother-in-law, who was a lawyer, purportedly telephoned the school district superintendent ” ‘demanding to know what was going on in the investigation [of the plaintiff] and what disciplinary actions were being taken.’ “  Because of the defendant in-laws’ actions, the local department of education informed the plaintiff that it intended to deny his application for tenure.  As a result, before the final vote on his application for tenure, the plaintiff resigned from his employment.

The plaintiff in Posner alleged that the defendant in-laws made the above-mentioned (truthful) communications to school officials, “designed to effectuate the denial of [the plaintiff teacher's] tenure and the revocation of his teaching license,” as part of a coercive scheme to compel the plaintiff to relinquish all parental rights to the newborn daughter of the plaintiff and his estranged wife.  The plaintiff’s estranged wife was one defendant’s daughter and the other defendant’s sister.  The plaintiff’s wife had sued the plaintiff for a divorce.

Specifically, the plaintiff teacher in Posner charged that, when he refused to accede to the defendant in-laws’ demand that he give up his parental rights to his and his estranged wife’s infant daughter, the defendants made good on their threat to reveal the plaintiff’s adulterous relationship with a co-worker to school authorities to ensure that he was denied tenure.

In Posner, the New York Court of Appeals affirmed the Appellate Division’s order affirming the Supreme Court’s order denying the defendants’ motion to dismiss, for failure to state a claim, the plaintiff’s complaint’s causes of action for prima facie tort and tortious interference with prospective contractual rights.  The Posner Court found that the matters the defendants truthfully disclosed to school officials — that the plaintiff engaged in an adulterous affair with the mother of one of his students, and that the plaintiff recommended this paramour to be a substitute teacher in the plaintiff’s class — were “matter[s] of public interest.”

Moreover, the Posner Court acknowledged its holding, in Brandt v. Winchell, 3 N.Y. 628 (N.Y. 1958), that people “are immune from civil liability for instigating official action . . . , regardless of whether they possessed a malicious intent.”  See Brandt, 3 N.Y.2d at 634-636.

The Posner Court, however, distinguished its Brandt decision on the ground that here, “[the plaintiff teacher's] complaint does not merely allege a malicious motive; rather, it asserts what is essence a blackmail scheme.”  The New York Court of Appeals observed, “To the extent defendants claim that [their truthful disclosures to governmental officials are] entitled to immunity under the First Amendment [to the U.S. Constitution], we note that it has been consistently held that blackmail and extortion are not protected speech.”

If your company wants to bring, or needs a lawyer to defend it in, business litigation and you are located in the New York City area, call Attorney David S. Rich at (212) 209-3972.

New York State, like the federal government, does not require any particular order or form for the records that an employer must maintain concerning employees’ wages and hours.  Cf. 29 C.F.R. § 516.1(a) (“No particular order or form of records is prescribed by” 29 C.F.R. Part 516 (Records To Be Kept By Employers)).  An employer in New York may use any timekeeping method it chooses.  Cf. 29 C.F.R. § 785.48 (“Time clocks are not required” by the federal Fair Labor Standards Act, 29 U.S.C. §§ 201-219 (the “FLSA”)).  For example, an employer may use a time clock, have a timekeeper keep track of employees’ work hours, or instruct its workers to write their own times on the records.  Cf. 29 C.F.R. § 785.48.  Any timekeeping plan is acceptable as long as it is complete and accurate.  Cf. 29 C.F.R. § 785.48.

That said, effective April 12, 2011, the New York Wage Theft Prevention Act, A. 11726/S. 8380 (“the Wage Theft Prevention Act”), substantially increased the obligations of employers in New York State to maintain certain records concerning employees’ wages and hours.  This author’s December 2010 post on the passage of the New York Wage Theft Prevention Act is linked here.  This author’s March 2010 post on the (then-pending) Wage Theft Prevention Act is linked here.

Sections 195 and 661 of the New York Labor Law, as amended by the Wage Theft Prevention Act, require employers in New York to establish, maintain and preserve for not less than six years contemporaneous, true, and accurate payroll records.  N.Y. Labor Law §§ 195, 195(4), 661.  These payroll records must contain “for each employee”:

• “[F]or each week worked the hours worked”;
• The rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or other basis;
• Gross wages;
• Deductions;
• Allowances, if any, claimed as part of the minimum wage; and
• Net wages.

N.Y. Labor Law §§ 195, 195(4), 661.

In addition, a regulation promulgated under the New York Labor Law requires employers within this State to establish, maintain and preserve for not less than six years, weekly payroll records which show “for each employee”:

1. name and address;
2. social security number;
3. wage rate;
4. the number of hours worked daily and weekly, including the time of arrival and departure of each employee working a split shift or spread of hours exceeding 10;
5. when a piece-rate method of payment is used, the number of units produced daily and weekly;
6. the amount of gross wages;
7. deductions from gross wages;
8. allowances, if any, claimed as part of the minimum wage;
9. net wages paid; and
10. student classification.

12 N.Y.C.R.R. § 142-2.6.  By regulation, covered employees who work overtime in New York must be paid at a rate that is 1½ times their regular, “straight-time” hourly rate of pay.  12 N.Y.C.R.R. § 142-2.2.  For all employees who are not exempt from overtime compensation requirements, an employer’s payroll records further must contain:

• The regular hourly rate or rates of pay;
• The overtime rate or rates of pay;
• The number of regular hours worked; and
• The number of overtime hours worked.

N.Y. Labor Law §§ 195, 195(4), 661.

By New York State regulation, for each employee who is an executive employee, an administrative employee, or a professional employee within the meaning of these ‘white collar’ exemptions from the FLSA’s and New York’s overtime compensation requirements, an employer’s records must show:

1. name and address;
2. social security number;
3. description of occupation; and
4. for individuals working in an executive or administrative capacity, total wages, and the value of allowances, if any, for each payroll period.

12 N.Y.C.R.R. § 142-2.6.

An employer must make its records containing the information required by section 142-2.6 of Title 12 of the New York Code of Rules and Regulations, or sworn certified copies of these records, available upon request of the New York State Commissioner of Labor (“the Commissioner”) “at the place of employment.”  12 N.Y.C.R.R. § 142-2.6(d).  The employer must make these records available upon request of the Commissioner even if the employer maintains the records “at a place outside of New York State.”  12 N.Y.C.R.R. § 142-2.6(d).

Section 161 of the New York Labor Law mandates that every employer operating, among other establishments, a factory, mercantile establishment, hotel or restaurant allow every person employed in such establishment at least twenty-four consecutive hours of rest in any calendar week.  N.Y. Labor Law § 161(1).  In order for an employer to document its compliance with New York’s statute requiring one day of rest in seven, the employer must keep a time book showing the names and addresses of its employees and the hours worked “by each of them in each day.”   N.Y. Labor Law § 161(4).

Call the Law Offices of David S. Rich, LLC at (212) 209-3972 to speak with a knowledgeable labor and employment lawyer about ensuring that your company complies with overtime pay and other wage and hour laws, or to retain a skilled overtime attorney to defend your company in unpaid overtime lawsuits or other wage and hour litigation.

Random testing means choosing workers for tests at random, without suspicion, and without advance notice of when the test will take place.  Random testing may also encompass the testing of all employees in a company (or a given division of a company) when the date of the testing is not announced, and is more properly called “suspicionless” testing.

In New York State and New York City, a non-governmental employer lawfully may conduct random or suspicionless drug testing of its workers.  Further, in New York, a company in the private sector lawfully may fire employees who test positive for illegal drugs or who refuse to submit to a random drug test, at least where the company has a written policy, communicated to all employees, providing that the company may randomly test employees for drugs, that refusal to submit to a random drug test may result in termination of employment, and that under certain circumstances an employee may be terminated for substance abuse.

In New York, a business in the private sector is permitted to conduct random or suspicionless drug testing of its employees.  See 9 N.Y.C.R.R. § 466.11(h)(6)(ii) (“Nothing in these regulations [promulgated under the New York State Human Rights Law, N.Y. Exec. Law §§ 290-301 (the "State Human Rights Law")] is to be construed to. . . prohibit . . . the conducting of drug tests for the illegal use of drugs by job applicants or employees, or the making of employment decisions based on the test results”); N.Y. City Human Rights Law, N.Y. City Admin. Code § 8-107(14)(c) (Use of drugs or alcohol) (“Nothing in this chapter shall be construed to prohibit a covered entity from (i) prohibiting the illegal use of drugs or the use of alcohol at the workplace or on duty impairment from the illegal use of drugs or the use of alcohol, or (ii) conducting drug testing which is otherwise lawful”).

So, too, in New York, a company in the private sector lawfully may fire employees who test positive for illegal drugs or who refuse to undergo a random drug test, at least where the company has a written policy, communicated to all employees, stating that the company may subject employees to random drug testing, that refusal to undergo a random drug test may result in discharge from employment, and “that  . . . under certain circumstances an employee may be terminated for substance abuse.”  See 29 C.F.R. § 825.119(b) (pursuant to an established policy warning that an employee may be fired for substance abuse, “the employee may be terminated whether or not the employee is presently taking . . . leave” under the Family and Medical Leave Act, 29 U.S.C. §§ 2601 et seq.)

Firing non-governmental workers who fail, or refuse to submit to, a random drug test is lawful because, absent a written agreement of employment, employment in New York State is at will.

It is true that the New York State Human Rights Law prohibits employers from firing an individual because of the individual’s  disability; and that the New York City Human Rights Law, N.Y. City Admin. Code §§ 8-101 – 8-131 (the “City Human Rights Law”) bars employers  from firing an individual because of the individual’s actual or perceived disability.

However, “current drug users are not protected by” either the State Human Rights Law or the City Human Rights Law.  See Gilmore v. University of Rochester Strong Memorial Hosp. Div., 384 F. Supp.2d 602, 611 n.8 (W.D.N.Y. 2005); see also 9 N.Y.C.R.R. § 466.11(h)(1) (“[A]n individual who is currently using drugs illegally . . . is not protected [from employment discrimination] . . . by the [State] Human Rights Law”); 9 N.Y.C.R.R. § 466.11(h)(4) (“Where the employer has knowledge of the current illegal use of drugs, the employee is not entitled by law to accommodation, and may be terminated”); N.Y. City Human Rights Law, N.Y. City Admin. Code § 8-107(14)(c).

Not only may a business in the private sector in New York fire an employee who tests positive for illegal drugs or who refuses to undergo a random drug test, the employee’s positive test result or refusal to submit to the random drug test is “misconduct” which, if it is the basis for the employee’s discharge, disqualifies the employee from receiving unemployment insurance benefits, at least where the business has a written policy, conveyed to all employees, stating that the business may randomly test employees for drugs and that refusal to submit to a random drug test may result in termination of employment.  See N.Y. Labor Law § 593(3); Matter of Gordon, 278 A.D.2d 579, 580, 718 N.Y.S.2d 228 (3rd Dep’t 2000); Matter of Grover, 233 A.D.2d 809, 809-810, 650 N.Y.S.2d 392 (3rd Dep’t 1996); Matter of Atkinson, 185 A.D.2d 415, 415-417 (3rd Dep’t 1992).

If your company needs assistance or guidance on a labor or employment law issue and your company is located in the New York City area, call Attorney David S. Rich at (212) 209-3972.

The First Amendment to the U.S. Constitution states in part: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof . . . .”  The first of these two quoted clauses is known as the Establishment Clause.  The second of these two quoted clauses is termed the Free Exercise Clause.

In January 2012, in Hosanna-Tabor Evangelical Lutheran Church and School v. Equal Employment Opportunity Commission, No. 10-553, 565 U.S. ___ (U.S. Jan. 11, 2012) (Roberts, C.J.), a unanimous U.S. Supreme Court held that the Establishment and Free Exercise Clauses of the First Amendment prohibit a minister who is employed by a religious institution from suing his employer for terminating him in violation of a statute prohibiting discrimination or retaliation in employment.  Such a lawsuit is barred, the Hosanna-Tabor Court held, whether the minister’s lawsuit seeks reinstatement or, instead, damages.

The Hosanna-Tabor decision is a major victory for private educational institutions — including elementary, junior high, and high schools as well as universities and graduate schools — which are affiliated with particular religious denominations.

In the Hosanna-Tabor decision, the U.S. Supreme Court held, for the first time, that there exists a judge-made ” ‘ministerial exception, ‘  grounded in the First Amendment, that precludes application of [employment discrimination] legislation to claims concerning the employment relationship between a religious institution and its ministers.”  Hosanna-Tabor Evangelical Lutheran Church & School, No. 10-553, slip op. at 13.

As the Hosanna-Tabor Court observed, each of the twelve U.S. Courts of Appeals had already recognized the ministerial exception to employment discrimination laws.  See Hosanna-Tabor, No. 10-553, slip op. at 13 & n.2.  (So, too, New York’s Appellate Division, First Department, had applied the ministerial exception.  See O’Connor v. Church of St. Ignatius Loyola, 8 A.D.3d 125, 779 N.Y.S.2d 31 (N.Y. App. Div. 1st Dep’t 2004.)

In Hosanna-Tabor, the U.S. Supreme Court “concluded that the ministerial exception is not limited to the head of a religious congregation.”  However, the Court declined “to adopt a rigid formula for deciding when an employee qualifies as a minister” who is unprotected by statutes prohibiting discriminatory or retaliatory termination of employment.  Hosanna-Tabor, No. 10-553, slip op. at 13 & n.2.

The Hosanna-Tabor Court reinstated the federal district court’s order granting summary judgment dismissing the claims of the intervenor, a kindergarten and elementary school teacher, that the defendant church and school, a member congregation of the Lutheran Church-Missouri Synod, fired her in retaliation for threatening to file a lawsuit against the church and school under the Americans with Disabilities Act, 42 U.S.C. §§ 12101 et seq. (the “ADA”).  In so ruling, the U.S. Supreme Court made clear that, however broad the definition of a “minister” is for purposes of the ministerial exception to employment discrimination laws, that definition is considerably broader than the appellate courts of New York to date have acknowledged.

Specifically, in Hosanna-Tabor, the intervenor individual was a ” ‘called teacher’ ” at the defendant church and school, meaning that the congregation “regarded [her] . . . as having been called to her vocation by God through [the] congregation.”  Hosanna-Tabor, No. 10-553, slip op. at 2.  To become a ” ‘called’ ” teacher, the intervenor had to, and did, complete eight college level courses, some of which concerned Lutheran church doctrine; obtain the endorsement of her local Synod district; and pass an oral examination by a faculty committee at a Lutheran college.  Id. at 16.  However, the intervenor spent only 45 minutes of each workday teaching religious subjects or otherwise performing religious duties.  Id. at 18.  “[T]he rest of her day was devoted to teaching secular subjects.”  Id.

The U.S. Supreme Court held that the intervenor “was a minister covered by the ministerial exception” to employment discrimination laws.  Hosanna-Tabor, No. 10-553, slip op. at 18.

By contrast, in the only New York appellate opinion recognizing the doctrine to date, New York’s Appellate Division, First Department, relying on a more narrow ” ‘ministerial exception,’ ” affirmed the dismissal of an “employment discrimination” lawsuit brought by the plaintiff, “a pastoral associate and chaplain whose primary function served the spiritual and pastoral mission of the church.”   O’Connor v. Church of St. Ignatius Loyola, 8 A.D.3d 125, 779 N.Y.S.2d 31 (N.Y. App. Div. 1st Dep’t 2004).

Take-Aways

After Hosanna-Tabor, private educational institutions which are affiliated with particular religious denominations have carte blanche to fire the heads of the institutions for reasons which, if a non-religious institution utilized them to fire an employee, would constitute prohibited discriminatory or retaliatory termination of employment.  Sectarian educational institutions’ authority lawfully to terminate “ministers” for reasons that would otherwise be deemed discriminatory or retaliatory extends down these institutions’ hierarchies to some extent.  That extent will be explored by the federal and state courts on a case-to-case basis.

In New Jersey, the rate of interest upon the loan or forbearance of any money, wares, merchandise, goods or chattels may not exceed 6% per year, or when there is a written contract specifying a rate of interest, 16% per year.  N.J.S.A. § 31:1-1.

That is, in New Jersey, when the agreement is oral, charging interest of more than 6% per year is civil usury.  In New Jersey, when there is a written agreement and the agreement specifies the interest rate, charging interest of more than 16% per year is civil usury.

A lender who charges a rate of interest higher than the applicable rate which N.J.S.A. § 31:1-1 allows forfeits all interest and is entitled to recover only the principal of the loan.  N.J.S.A. § 31:1-3.  Further, if the borrower has paid interest in excess of the applicable rate which N.J.S.A. § 31:1-1 permits, that illegal interest is deducted from the principal of the loan owed to the usurer.  N.J.S.A. § 31:1-3.

N.J.S.A. § 2C:21-19 makes it a criminal offense to charge, take from, or receive, from any individual, interest at a rate exceeding 30% per year.  Further, N.J.S.A. § 2C:21-19 renders it a criminal offense to charge, take from, or receive, from any corporation, limited liability company (an “LLC”), or limited liability partnership (an “LLP”), interest at a rate exceeding 50% per year.

In other words, in New Jersey, charging, taking from, or receiving, from any individual, interest of more than 30% per year is criminal usury.  So, too, in New Jersey, charging, taking from, or receiving, from any corporation, LLC, or LLP, interest of more than 50% per year is criminal usury.

Criminal usury is a crime of the second degree if the rate of interest on the loan is more than 50% per year.  N.J.S.A. § 2C:21-19(a).  Criminal usury is a crime of the third degree if the interest rate on any loan made to any individual is more than 30% per year but less than 50% per year.  Id. § 2C:21-19(a).

There are numerous exemptions from New Jersey’s (6% or 16%) civil usury provisions, but few exemptions from the Garden State’s (30% or 50%) criminal usury provisions.  The below-discussed exemptions from New Jersey’s civil usury limitations are illustrative but not exhaustive.

Corporations, limited liability companies, and limited liability partnerships  borrowing money cannot interpose the defense of civil usury in a civil action.  N.J.S.A. § 31:1-6.

Loans or forbearances of $50,000 or more, except for loans secured by a first lien on residential real property, are exempt from the (6% or 16%) civil usury statute.  N.J.S.A. § 31:1-1(e)(1).

The New Jersey courts have held that purchases under revolving credit accounts, installment loan purchases, and purchases under credit card accounts are exempted from the State’s civil usury statute under what is termed the “time-price differential” doctrine.  See, e.g., Steffenauer v. Mytelka & Rose, Inc., 87 N.J. Super. 506, 510-517, 210 A.2d 88 (N.J. App. Div. 1965) (installment agreement and note, in the principal amount of $12,480, for purchase and sale of coin-operated dry cleaning equipment is exempted from New Jersey’s civil usury statute), aff’d per curiam, 46 N.J. 299, 216 A.2d 585 (N.J. 1966)

However, the interest rates charged in retail installment contracts for the purchase of goods having a cash price of $10,000 or less are regulated by the New Jersey Retail Installment Sales Act, N.J.S.A. §§ 17:16C-1 – 17:16C-61.  See N.J.S.A. §§ 17:16C-1(b), 17:16C-1(l), 17:16C-41.

For an explanation what rate of interest a company may lawfully charge in New York, see this author’s January 4, 2011 blog post.

If your company wants to bring, or needs a lawyer to defend it in, business litigation and you are located in the New York City area, call Attorney David S. Rich at (212) 209-3972.

The federal Fair Labor Standards Act, 29 U.S.C. §§ 201-219 (the “FLSA”), and its implementing regulations, 29 C.F.R. §§ 510 et seq., mandate that most workers in the U.S. be paid at least the federal minimum wage of $7.25 per hour for all hours worked and overtime compensation at 1½ times the regular rate of pay for all hours worked in excess of 40 hours in a workweek.

However, the FLSA sets forth exemptions from both minimum wage and overtime pay for domestic service employees employed “to provide companionship services for” the young, elderly, or infirm.  See FLSA § 13(a)(15), 29 U.S.C. § 213(a)(15).

So, too, the FLSA carves out an exemption from overtime pay for any employee, employed “in domestic service in a household,” “who resides in that household.”  FLSA § 13(b)(21), 29 U.S.C. § 213(b)(21).

In December 2011, the U.S. Department of Labor proposed regulations requiring third-party employers of domestic “companionship” employees, and third-party employers of live-in domestic employees, to pay the minimum wage and overtime compensation to these employees.

The U.S. Department of Labor’s proposed regulations cover, among other third-party employers, staffing agencies which employ home health aides.

The federal regulations under consideration provide that an individual or member of the family or household using the services of a domestic “companionship” employee remains entitled to raise the minimum wage and overtime exemptions under FLSA § 13(a)(15).  Proposed 29 C.F.R. § 552.109(a).  This is so even if the individual or member of the family or household is considered a joint employer.

Similarly, the proposed federal rules state that an individual or member of the family or household using the services of a live-in domestic employee is still entitled to assert the overtime pay exemption under FLSA § 13(b)(21).  Proposed 29 C.F.R. § 552.109(c).  This is the case even if the individual or member of the family or household is considered a joint employer.

For 60 days, the U.S. Department of Labor is seeking, from interested parties, written comments on the proposed rules.

The proposed federal regulations would increase, beyond the strictures of New York law, the number of hours in a workweek worked by live-in domestic workers for which such workers are entitled to be paid overtime.  Because the proposed federal rules would give rise to a difference between federal law and New York law, the law more beneficial to the worker (that is, federal law) would govern employers in New York.

Specifically, under New York law, most domestic workers are entitled to be paid overtime compensation at a rate that is 1½ times their regular, “straight-time” hourly rate of pay for all time in excess of 40 hours in a payroll week, except that live-in domestic workers are entitled to receive overtime pay for all time in excess of 44 hours in a week.  See N.Y. Labor Law §§ 2(16), 170; 12 N.Y.C.R.R. § 142-2-2.

Call the Law Offices of David S. Rich, LLC at (212) 209-3972 to speak with a knowledgeable labor and employment lawyer about ensuring that your company complies with overtime pay and other wage and hour laws, or to retain a skilled overtime attorney to defend your company in unpaid overtime lawsuits or other wage and hour litigation.

With certain exceptions, a business in New Jersey may fire or refuse to hire a person because of his or her lawful, off-duty, political or recreational activities.

Specifically, in New Jersey, employers may not refuse to hire or employ any individual and may not discharge from employment or take any adverse action against any employee with respect to compensation, terms, conditions or other privileges of employment because that individual does or does not smoke or use other tobacco products, unless the employer has a rational basis for doing so which is reasonably related to the employment, including the responsibilities of the employee or prospective employee.  N.J.S.A. § 34:6B-1; see N.J.S.A. §§ 34:6B-2 – 34:6B-4.

Further, under New Jersey’s public policy exception to at-will employment, “an employee has a cause of action [in tort or contract or both] for wrongful discharge when the discharge is contrary to a clear mandate of public policy.”  Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 72 (N.J. 1980).  Research reveals only two court decisions addressing the extent to which, under New Jersey law, firing an employee because of his or her lawful, off-duty conduct violates a clear mandate of public policy.  In particular:

• In Slohoda v. United Parcel Service, Inc., 193 N.J. Super. 586 (N.J. App. Div. 1984), later opinion, 297 N.J. Super. 145 (N.J. App. Div. 1986), New Jersey’s Appellate Division, reversing an order granting summary judgment for the defendant employer, remanded the case to the Superior Court for a determination of whether the employer’s termination of the plaintiff employee, a married man, for having sexual relations with a female co-worker who was not his wife “is violative of any right of privacy of the plaintiff and contrary to public policy.”  Slohoda, 193 N.J. Super. at 593-594.  The Slohoda Court observed that “Neither adultery nor fornication are any longer criminal offenses in the State of New Jersey.”  Slohoda, 193 N.J. Super. at 591 n.1.
• In Wiegand v. Motiva Enterprises, LLC, 295 F. Supp.2d 465 (D.N.J. 2003), the U.S. District Court for the District of New Jersey, granting the defendant employer’s motion for summary judgment dismissing the plaintiff employee’s wrongful termination claim, held that the defendant employer did not violate a clear mandate of public policy by terminating the plaintiff, the manager of a gas station convenience store, for owning and operating an online business which “sells racist hate music and items for commercial gain.”  Wiegand, 295 F.Supp.2d at 466-478.

The broad authority of employers in New Jersey to discharge or refuse to hire an individual because of his of her legal, off-the-job, political or recreational activities contrasts with the more limited ability of employers in a significant number of other states to terminate or refuse to hire a person for such reasons.  For example, this author’s November 22, 2010 blog post explains that, with certain exceptions, a business in New York State may neither terminate nor refuse to hire a person because of his or her lawful, off-duty, political or recreational activities.

See here for a summary, prepared by the National Conference of State Legislatures, of statutes, if any, enacted by each of the 50 states and by the District of Columbia restricting employers’ rights to fire or refuse to hire an individual because of his or her off-duty conduct.

If your company needs assistance or guidance on a labor or employment law issue and your company is located in the New York City area, call Attorney David S. Rich at (212) 209-3972.