Onerous Restrictive Covenant Legislation To Be Considered

On Thursday, September 29 the Senate Labor Committee will consider S-1410 (Cryan/Johnson), which would limit certain provisions in restrictive covenants, as well as their enforceability. The CCSNJ strongly opposes this measure.

Restrictive covenants, which are often included in employment contracts, can include non-compete agreements, non-solicitation agreements, severance agreements, and confidentiality/non-disclosure agreements.

As currently written, S-1410 (Cryan/Johnson) would:

• Not allow restrictive covenants to be enforced against a broad range of workers, including, but not limited to:
• non-exempt employees
• seasonal or temporary employees
• employees terminated without a determination of misconduct or who are laid off
• employees determined to be “low wage employees” 
• Impose strict requirements and limitations regarding the use and scope of restrictive covenants by employers including:
• disclosing the terms of the restrictive covenant a minimum of 30 days before the start of employment
• non-competes/non-solicitation agreements can be no longer than one year after termination and cannot prohibit works outside of New Jersey
• the inability to penalize an employee for violation of terms
• prospective employees are provided a right to have counsel review of restrictive covenant language before signing an employment contract
• Prohibit no-poach language
• Mandate the payment of salary and full benefits of an employee during period when they are still technically employed, but prohibited from working/interacting with the company, before moving on to new employment

The Assembly version of this bill, A-3715 (Moriarty/Wimberly), passed the Assembly Labor Committee by a vote of 6-3 in May and has been second referenced to the Assembly Oversight, Reform and Federal Relations Committee. There is no hearing date set for the Assembly version at this time, but the consideration of the Senate version indicates a desire for the Legislature to move this bill through both Houses in the coming months.

The CCSNJ will be opposing this measure on Thursday in the Senate Labor Committee. If you have thoughts, feedback or other comments on S-1410 (Cryan/Johnson), please contact Christina Renna at crenna@chambersnj.com.

HR professionals are welcome to join us for our upcoming HR Council meeting, which will take place on October 11. The subject of that program is “Restrictive Covenants and Employee Mobility in the Age of Remote Working.” Please contact MacKenzie Wildermuth at mwildermuth@chambersnj.com to register.

Bill to Establish Protections for Service Workers During Change of Ownership Posted

On Thursday, September 29 the Senate Labor Committee will also consider S-2389 (Singleton/Zwicker), which would establish employment protections for certain service employees during a change of ownership.

The CCSNJ opposes this measure and believes it ties the hands of a new owner or successor, restricting them from making certain necessary organizational changes for 90 days after new leadership is in place. Additionally, there are concerns that this legislation may be in direct conflict with federal labor laws as it relates to a unionized workforce, which allows a new employer to set new terms of employment, as well as make the best decisions as it relates to the size of the workforce (new hires/laying off of workers).

The types of service workers covered under this bill include:

• Workers in connection with the care or maintenance of a building or property
• Passenger related security services, cargo related and ramp services, in-terminal and passenger handling and cleaning services at an airport
• Food preparation services at a primary or secondary school, or at a tertiary educational institution

S-2389 (Singleton/Zwicker) covers any type of facility that includes, but is not limited to:

• Hospital, nursing care facility, senior care centers or other health care provider location
• Warehouse or distribution center
• A commercial center or complex or an office building or complex occupying more than 100,000   square feet
• Airports and train stations
• Primary and secondary school, tertiary educational institution
• Cultural center or complex
• Industrial site or pharmaceutical lab

The CCSNJ will be opposing this measure on Thursday in the Senate Labor Committee. If you have thoughts, feedback or other comments on S-2389 (Singleton/Zwicker), please contact Christina Renna at crenna@chambersnj.com.

Governor Murphy CVs Temporary Worker Bill

On September 22, Governor Murphy conditionally vetoed the controversial “Temporary Worker Bill of Rights” legislation, A-1474 (Lopez/Cryan). The CCSNJ opposed this bill, which was sent to Governor Murphy for action at the end of June.

As sent to the Governor, A-1474 (Lopez/Cryan) would require that temporary workers receive the same compensation level and benefit level as their non-temp counterparts. The CCSNJ argued that it would also result in burdensome requirements and lawsuits for temporary staffing agencies, as well as potentially for the third-party companies that use them.

In the Governor’s conditional veto message, he states his strong support for the intent of the bill but made changes that include narrowing and defining the number of professions that would be considered temporary workers, and changing how temp agencies would register with the state. He also wants to add $1 million in funding to help the state enforce the new rules.

Although pleased to see Governor Murphy CV the legislation, the CCSNJ remains opposed to legislation as the changes to not go far enough to protect New Jersey temporary agencies, who continue to recover from the pandemic and are critically important to help place unemployed residents in secure job opportunities.

The bill’s primary sponsor in the Senate, Senator Joe Cryan, has committed to reconsidering the Governor’s changes to A-1474 (Lopez/Cryan) quickly. The CCSNJ will continue to make its opposition known as the bill moves back through the Legislature.

To read the Governor’s CV language, click here.

If you have thoughts, feedback or other comments, please contact Christina Renna at crenna@chambersnj.com.

Minimum Wage to Increase (More Than Expected)

On January 1, 2023, New Jersey’s minimum wage rate will increase to $14.13 per hour, 13 cents higher than the rate legislated in 2019 when the state passed the $15 minimum wage law.

In 2019, state government outlined gradual increases in the minimum wage rate, which would annually increase the rate by $1 each year (for most employers) until reaching a $15 minimum wage in 2024. However, written in the legislation was a larger increase if there is a significant increase in the Consumer Price Index (CPI), the most widely used measure of inflation in the United States. As inflation rates continue to climb, it triggered the increase in the initial legislation making the 2023 rate $14.13.

In contrast to this provision in the $15 minimum wage law, business groups, including the CCSNJ, actively lobbied for a similar provision should the economy see a downturn, much like the one seen over the past two and a half years due to the COVID-19 pandemic. However, those efforts fell on deaf ears with the Legislature refusing to include this language in the final version of the bill.

To read the New Jersey Department of Labor & Workforce Developments press release, click here.