United States: Trends In New Jersey Employment Law - August 2014

LAD Roundup

In recent weeks, New Jersey's primary employment discrimination statute—the Law Against Discrimination (LAD)—has been the focus of judicial scrutiny.

  • In Smith v. Millville Rescue Squad, No. A-1717-12T3, 2014 WL 2894924 (App. Div. June 27, 2014), New Jersey's Appellate Division for the first time defined the scope of "marital status" protection under LAD to encompass the "state of being divorced."
  • In Vargas v. INX International, Inc., No. A-3993-12T3, 2014 WL 3407245 (App. Div. July 15, 2014), the Appellate Division required the plaintiff to arbitrate his LAD claims against his former employer pursuant to a mandatory arbitration agreement, but refused to compel arbitration of the same claims brought against an "intertwined" entity who was not a signatory to the agreement.
  • In State v. Saavedra, 217 N.J. 289 (2014), the New Jersey Supreme Court granted certification on the issue of whether employees who steal confidential documents from their employers to support discrimination suits under the LAD can face criminal indictment.

This newsletter summarizes these three cases and examines their implications for New Jersey employers.

Smith v. Millville Rescue Squad


The plaintiff, Robert Smith, worked for the defendant, Millville Rescue Squad (MRS), for nearly two decades, first as a certified emergency medical technician and later as director of operations. The plaintiff's wife also was a long-term employee at MRS. In January of 2006, the plaintiff and his wife separated after eight years of marriage shortly after she discovered her husband's alleged extramarital affair.

Allegedly, MRS' executive director informed the plaintiff that the company terminated his employment "because he and his wife were going to go through an ugly divorce." MRS denied these allegations, countering that the plaintiff was terminated for performance reasons.

The plaintiff ultimately filed suit in state court alleging that his termination constituted discrimination based on marital status and gender under LAD. After the trial court granted MRS' motion for dismissal, the Appellate Division reversed as to plaintiff's marital status discrimination claim.


The LAD does not expressly define the term marital status. "In the absence of a narrow definition," the Appellate Division "accorded LAD a liberal reading in view of its remedial purpose" and, thus, "interpret[ed] 'marital status' to encompass the state of being divorced." Although recognizing that the "LAD does not bar an employer from taking employment action against a divorcing employee who actually demonstrates antagonism, incivility, or lack of professionalism," here the Appellate Division held that MRS unlawfully terminated the plaintiff "because of stereotypes about divorcing persons" (i.e., "to avoid the feared impact of an 'ugly divorce' on the workplace"). As such, the court held that the plaintiff had established a prima facie case of discrimination based on marital status.  

It is worth nothing that the court affirmed the dismissal of the plaintiff's gender-based discrimination claim on the grounds that his duties were reassigned to a man as well as a woman, his wife.


Subject to an appeal before the New Jersey Supreme Court, the Appellate Division's ruling should prompt employers to interpret the term "marital status" in their anti-discrimination policies to include the "state of being divorced." Employers should note, however, that, as the Appellate Division recognized, enforcing an equally-applied anti-nepotism policy, for instance, "do[es] not run afoul of LAD's proscription against marital-status-based discrimination." As the court stressed, "an employer may terminate an employee because of a family relationship to another employee," so long as the "employer [does] not disparately treat employees who engage in the same behavior."

Vargas v. INX International, Inc.


Plaintiff Angel Vargas was hired to work for defendant INX International, Inc. ("INX") after INX had contracted with defendant DG3 Diversified Global Graphics ("DG3") to provide it with ink and printing services. The plaintiff claimed that he was employed by both INX and DG3.

Among the documents that INX included in the plaintiff's new hire package was a four-page "Mutual Agreement to Arbitrate Claims," which stated in relevant part:

The Company and I mutually consent to the resolution by arbitration of all claims or controversies ("claims"), whether or not arising out of my employment (or its termination), that the Company may have against me or that I may have against the Company or against its officers, directors, employees or agents in their capacity as such or otherwise. The claims covered by this Agreement include, but are not limited to . . . claims for discrimination. . . .

The agreement defined the Company to include INX and its "officers, directors, employees and agents, its parent companies, all subsidiary and affiliated entities . . . and all successors and assigns of any of them."

The plaintiff signed the agreement, acknowledged that he read it carefully, and returned it to INX. About three months later, INX terminated the plaintiff for poor performance and attitude. Nearly a year and a half following his termination, the plaintiff filed suit against INX and DG3 in New Jersey state court under LAD.

INX filed a motion to dismiss and to compel arbitration, which DG3 joined. The plaintiff opposed, arguing that he had not received all four pages of the arbitration agreement. After conducting a hearing on the issue, the Court determined that the plaintiff had received the entire agreement and accordingly granted INX's and DG3's motions. The Appellate Division affirmed the trial court's decision to compel arbitration of the claims against INX, but reversed as to DG3.


Even though the arbitration agreement expressly covered all "affiliated entities" of INX, the Appellate Division concluded that the agreement did not apply to non-signatory DG3 based on the New Jersey Supreme Court decision—Hirsch v. Amper Financial Services, LLC, 215 N.J. 174 (2013). According to the Appellate Division, "although plaintiff allege[d] that he was employed by both parties DG3 and INX, and his claims against both entities may be intertwined, Hirsch makes clear this is not a sufficient basis to compel arbitration of the claims against DG3." The Court stressed that the "plaintiff never agreed in writing to submit his claims against DG3 to arbitration." It also emphasized that DG3 could not avail itself of the doctrine of equitable estoppel, as the "plaintiff never orally agreed to arbitrate his claims against DG3 and there is no claim that DG3 detrimentally relied upon such an agreement by plaintiff to arbitrate his claims."

Yet, as to INX, the Court stressed that the agreement was "clear and unmistakable" and "prominently set forth in a separate document." The Court rejected the plaintiff's argument that the agreement needed to "explicitly state that he is waiving his right to a jury trial or specifically mention the NJLAD." The Court also dismissed the notion that the plaintiff did not "knowingly and voluntarily" execute the agreement.


Subject to an appeal before the New Jersey Supreme Court, the Appellate Division's decision should serve as a warning that employers may not be covered by the mandatory arbitration agreements of employers with whom they have contractual or other relationships, if they are not expressly covered by the agreement. As such, employers who seek to avoid litigation in court (including as to LAD claims) should consider becoming signatories to (or otherwise covered by) the arbitration agreements prepared by employers with whom they have contractual or other relationships, or, in the alternative, consider crafting their own agreements.

State v. Saavedra

In State v. Saavedra, 433 N.J. Super. 501 (App. Div. 2013), the Appellate Division affirmed that a public employee could be indicted for stealing confidential documents from her employer, despite the New Jersey Supreme Court's holding in Quinlan v. Curtiss-Wright Corp., 204 N.J. 239 (2010), which allowed the employee in that case to use confidential documents that she had taken from her employer to support her discrimination and whistleblower claims under the LAD and Conscientious Employee Protection Act (CEPA). Stay tuned for the Supreme Court's decision on this significant matter (for more on Saavedra see our prior newsletter).

Trends In New Jersey Employment Law - August 2014

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.