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New Jersey Supreme Court Gives Employers a One-Two Combo Punch

04 Jul



Update Applicable to:Effective date
All employers with at least 1 worker in New JerseySee Details Below

What happened?

The New Jersey Supreme Court has weighed in twice this month on important employment issues.

What are the details?

(1). Nondisparagement provisions in settlement agreements.

  • On May 7, 2024, the New Jersey Supreme Court ruled in Savage v. Township of Neptune that non-disparagement clauses in agreements that hide discrimination, retaliation, or harassment details cannot be enforced.
  • This decision clarified the 2019 Amendment to the NJLAD.
  • The court did not completely ban non-disparagement clauses, but stated they must be specific and not related to an employee’s discrimination, retaliation, or harassment claims to be enforceable.

For a good breakdown of the case click here.

(2). Wage and hour amendments are not retroactive.

  • On May 15, 2024, the New Jersey Supreme Court ruled in Christopher Maia v. IEW Construction Group that the 2019 amendments to the state’s Wage and Hour Law and Wage Payment Law apply only to conduct after their effective date.
  • The court recognized the legislature’s intent for prospective application, as indicated by the phrase “shall take effect immediately.” It found no justification for retroactive application, as none of the three conditions—explicit legislative intent, curative amendment, or parties’ expectations—were met. Therefore, claims for damages or remedies under the Act can only be made for conduct after August 6, 2019.
  • This clarified that Chapter 212 amendments apply prospectively, not retroactively, protecting employers from liability for conduct prior to the law’s effective date.

For a good breakdown of the case click here.

Business Considerations

  • Employers should consider reviewing their standard agreements, including settlement and separation agreements, to ensure compliance with this new ruling.
  • Employers should self-audit their payroll and record-keeping, and verify worker classifications due to their impact on compensation. The Supreme Court’s ruling does not nullify the Wage Theft Act’s amendments but restricts its use to actions post-August 6, 2019.

Source References

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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