New Jersey Employment Law Update — March 2019

Nondisclosure Provisions and Discrimination

On March 18, 2019, New Jersey Governor Phil Murphy signed legislation (S.B. 121) barring provisions in employment contracts that waive rights, remedies, or agreements that conceal details relating to discrimination claims.

Specifically, the law detailed the following:

• Any provision in any employment contract or settlement agreement that conceals the details about a claim of discrimination, retaliation, or harassment (nondisclosure provision) is against public policy and unenforceable against a current or former employee (employee) who is a party to the contract or settlement. However, if the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable, then the nondisclosure provision is unenforceable against the employer.
• Every settlement agreement resolving a discrimination, retaliation, or harassment claim by an employee against an employer must include a bold, prominently placed notice that although the parties may have agreed to keep the settlement and underlying facts confidential, the provision is unenforceable against the employer if the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable.

However, the law does not prohibit employers from requiring that employees sign a noncompete agreement (during and after employment) or a nondisclosure of proprietary information (which only includes nonpublic trade secrets, business plans, and customer information) agreement.

The law became effective March 18, 2019.

Read NJ S.B. 121

Pre-Tax Transportation Fringe Benefits

On March 1, 2019, New Jersey Governor Phil Murphy signed legislation (S.B. 1567) requiring every employer in the state with at least 20 employees to offer all its employees the opportunity to utilize a pre-tax transportation fringe benefit. A pre-tax transportation fringe benefit is a pre-tax election that provides commuter highway vehicle and transit benefits, consistent with the provisions and limits of I.R.C. § 132(f)(1) at the maximum benefit levels allowable under federal law, to be deducted for those programs from an employee’s gross income. However, this fringe benefit is not required to be provided to employees who are covered by a collective-bargaining agreement, until the agreement expires.

Employers that violate these provisions are liable for a civil penalty of between $100 and $250 for a first violation; however, employers have 90 days to offer a pre-tax transportation fringe benefit before the civil penalty is imposed. After 90 days, each additional 30-day period in which an employer fails to offer the benefit constitutes a subsequent violation, and an additional civil penalty of $250 will be imposed. A civil penalty will not be imposed on any individual employer more than once in any 30-day period. Moreover, any penalty so incurred may be recovered with costs, and, if applicable, interest charges, in a summary proceeding pursuant to the state’s Penalty Enforcement Law.

The law became effective on March 1, 2019.

Read NJ S.B. 1567