Articles Posted in Employment Contracts

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The New Jersey Supreme Court recently held that an employer may not require an employee to agree to shorten the amount of time he has to bring a claim against the employer for violations of New Jersey’s Law Against Discrimination (LAD).  In the case, the employer had included language in its job application form which said, in essence, that if it hired the applicant and then violated his rights, he had to bring any claim against the employer within six months even though the LAD gives workers two years to file their claims.

New Jersey’s LAD has a two-tiered enforcement system with both an administrative agency that accepts complaints and a right for workers to bring claims in court.  If workers in New Jersey want to file a claim with the administrative agency that enforces the LAD, which is called the Division on Civil Rights, they must do so within six months.  The Division on Civil Rights investigates complaints of discrimination, enforces the LAD, and attempts to resolve complaints through conciliation.  However, if the Division on Civil Rights does not act as quickly as the worker would like, he has the option of withdrawing his complaint and proceeding to court.

The New Jersey Supreme Court held that it was particularly important to the LAD that workers have the option to file with the Division on Civil Rights and then, subsequently, withdraw that complaint and file in court.  In this case, the employer’s application language would essentially force workers to choose between filing in court or proceeding before the Division on Civil Rights, instead of having both options.  The court believed this would significantly undermine the purpose of the LAD, which is to eradicate discrimination not only because discrimination hurts individual workers but also because it “menaces the institutions and foundation of a free democratic state.”

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The case of Cossart v. United Excel Corp. involves facts that are becoming more and more common these days because of technological advances that make remote workplaces more affordable and easier to use. Mr. Cossart first entered into an employment contract with United Excel in 2010. United Excel is a design/build company that provides architectural and construction management services to hospitals. Mr. Cossart worked for United Excel as a salesperson. United Excel established a sales office for Mr. Cossart in his home state of Massachusetts. United Excel provided Mr. Cossart with a phone, computer, printer, and videoconference equipment.

In 2013, in connection with his employment with United Excel, Mr. Cossart negotiated a deal with a California hospital. He negotiated the deal from his Massachusetts office and also in California. Under the terms of the employment contract that Mr. Cossart had with United Excel at the time, Mr. Cossart would have been owed a commission once the deal with the California hospital became finalized. When finalization of the deal was imminent, Mr. Cossart informed the President of United Excel, Ky Hornbaker, that he would expect United Excel to pay him a commission of $219,000 once the deal was finalized. According to Mr. Cossart, Mr. Hornbaker balked at paying a commission that high and insisted that Mr. Cossart accept a commission of $62,000. When Mr. Cossart refused to back down, Mr. Hornbaker allegedly scuttled the deal with the California hospital and, consequently, Mr. Cossart received no commission for his work in negotiating the deal. Mr. Hornbaker then also fired Mr. Cossart.

The legal issue that the First Circuit considered in this case was whether Mr. Cossart, an employee who worked in Massachusetts, could sue United Excel, a Kansas company, in Massachusetts. United Excel argued that it did not have sufficient ties to Massachusetts for the Massachusetts courts to have jurisdiction, or authority, over it. The First Circuit rejected United Excel’s argument and held that Massachusetts courts could exercise jurisdiction over United Excel for the purposes of Mr. Cossart’s lawsuit against it.