While there is less than a nautical mile between New York and New Jersey, from the coastline of Manhattan to the friendly confines of Bergen and Hudson Counties, the breadth of the Hudson River should not be minimized. It is, after all, procedurally and substantively, the grand separator between two drastically different employment-law arenas.

Substantive Anti-discrimination Laws in NJ and NY

Pursuant to New York State Executive Law, Art. 15, §296, it shall be an unlawful discriminatory practice for an employer because of an individual’s age, race, creed, color, national origin, sexual orientation, military status, sex, disability, predisposing genetic characteristics, marital status or domestic-violence victim status, to refuse to hire or employ or to bar or to discharge from employment such individual, or to discriminate against such individual in compensation or in terms, conditions or privileges of employment.

Under New Jersey’s Law Against Discrimination (LAD), the protected categories include: race, creed, color, national origin, nationality, ancestry, age, sex (including pregnancy and sexual harassment), marital status, domestic partnership or civil union status, affectional or sexual orientation, gender identity or expression, atypical hereditary cellular or blood trait, genetic information, liability for military service, or mental or physical disability, including AIDS and HIV-related illnesses.

While the laws appear similar, they are vastly different — although that difference grew smaller in 2003 when sexual orientation was adopted by New York as a protected class. In contrast, New Jersey adopted sexual orientation as a protected class in 1991. In New York, before 2003, one could be terminated or harassed on account of sexual orientation and have no claim against the employer. However, as New York City has an administrative code, which is discussed in more detail below, that same individual would have been protected from discrimination based on sexual orientation, so long as the discrimination occurred in New York City. See NYC Admin. Code 8-107(1). The Administrative Code added sexual orientation as a protected class in 1986. At that time, it was unique in the United States. Currently, transgender or gender identity is considered a protected class in New Jersey and New York City, but is not considered a protected class in New York state.

Procedures Regarding the Employment Laws in NJ and NY

For New York’s law to apply, the employer must employ a minimum of four employees. Moreover, punitive damages are not permitted. Additionally, attorney fees are not available. Attorneys on the defense side, as well as their business-owner clients, clearly prefer the limited exposure and liability that New York’s law provides. For attorneys in New Jersey, as well as their business-owner clients, the law is completely inverted. The New Jersey business owner need only employ one individual. Moreover, attorney fees as well as uncapped punitive damages are available. Clearly, for the business owner, the apple tastes a lot better than salt-water taffy. There is, however, an extremely important exception which many inexperienced attorneys forget, or of which they are simply unaware. Article 8 of the NYC Administrative Code (8-107), which protects those who are employed in New York City, and also requires a minimum of four employees, allows for uncapped punitive damages and reasonable attorney fees. In essence, a business owner in Westchester or Nassau County, or anywhere else in New York state, may have significantly less liability and exposure than a business owner in one of the five boroughs.

Impact of Federal Law

Title VII of the Civil Rights Act of 1964, as amended, prohibits discrimination on the basis of race, color, religion, sex and national origin. Exempted from Title VII protection is discrimination based on alienage and sexual orientation. Title VII offers better remedies than New York state law, as Title VII allows for attorney fees and, albeit capped, punitive damages. Title VII’s popularity grew stronger following its 1991 amendment, which added punitive damages and attorney fees. Punitive damages are capped on a sliding scale from $50,000 to $300,000, depending on the number of employees. For Title VII to apply, however, the business must employ 15 or more employees. Assuming an employer meets that threshold, an aggrieved employee would generally prefer to file under Title VII, as opposed to New York state law, and would thus file in federal court. On the other side of the Hudson, the scenario is completely different. Assuming similar circumstances, the aggrieved employee in New Jersey would generally file in state court, as the LAD has no minimum number of employees and allows for uncapped punitive damages. They both allow for reasonable attorney fees.

Administrative Hurdles

While one is not mandated to file an administrative claim pursuant to either New York or New Jersey law, administrative hurdles are an important consideration for litigants. In New York, one can file directly in state court, but parties rarely do because of the lack of available fees and damages. Instead, if the employer does not have the requisite number of employees for Title VII to apply, employees, usually those of the pro se variety, first file with the State Division of Human Rights (SDHR). As the SDHR is restricted in the damages it can provide, and is extremely slow in its procedures, the savvy attorney, who may be retained on a matter after an SDHR matter was filed, should attempt to obtain a dismissal of administrative convenience, so that the matter can be filed in court. This is important, as once the SDHR investigates and renders a decision, the complaining party will generally be restricted from filing in court due to election of remedy provisions. For a party seeking to bring a matter to federal court, such party must first file with the EEOC within 300 days of the alleged discrimination. Thereafter, unless resolved through the EEOC’s mediation program, such party will generally be provided a right-to-sue letter, regardless of whether the EEOC finds probable cause of discrimination. The letter mandates a strict 90-day period from its receipt, during which the party must file in federal court.

On the flip side, litigants in New Jersey have no requirement to first file an administrative claim (although they can if they wish, with the N.J. Division of Civil Rights), and they enjoy a period of two years from the complained-of activity, during which they must file a complaint in state court. To underscore the significant substantive differences between Title VII and the LAD, a number of employment law attorneys in New Jersey believe that filing a New Jersey employment discrimination action in federal court is akin to malpractice. That belief would never hold true in New York. Rather, if the matter occurred outside of New York City, the opposite may be true.

Whistleblower Laws in New York and New Jersey

Another important consideration when distinguishing laws in New York and New Jersey are the employment related whistleblower laws. This battle pits New York’s Labor Law §740 against New Jersey’s Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 et seq. Under the New York law, which carries a one-year statute of limitations, a matter is actionable when an employee discloses, or threatens to disclose, a policy or practice of the employer which is in violation of law, and which violation creates and presents a substantial and specific danger to the public health or safety. Absent such a showing, dismissal of the claim is mandated. See Vail-Ballou Press v. Tomasky, 266 A.D.2d 662 (3rd Dept. 1999) (§740 claim rejected where alleged wrongdoing, while perhaps presenting a danger to the health of plaintiff’s employees, did not pose a substantial and specific danger to the public health or safety). Moreover, pursuant to the law, an employee’s belief, even where it is a good faith and reasonable one, is insufficient to sustain a claim. Rather, an actual violation must be established. See Bordell v. General Electric, 88 N.Y.2d 869 (1996). Additionally, even if one successfully sustains a claim, neither jury trials nor punitive damages are available.

Heading across the Hudson, the terrain dramatically changes. Pursuant to CEPA, which has been described as one of the most far-reaching whistleblower protection laws in the country, New Jersey law prohibits an employer from taking any retaliatory action against an employee because the employee: (1) discloses, or threatens to disclose, an activity, policy or practice of the employer that the employee reasonably believes is in violation of law; (2) provides information to, or testifies before, any public body conducting an investigation into any violation of law; or (3) objects to, or refuses to participate in, any activity, policy or practice which the employee reasonably believes: (a) is in violation of law; (b) is fraudulent or criminal; or (c) is incompatible with a clear mandate of public policy. In essence, if an employee discloses a reasonable belief that her employer is violating the law, or she objects to or refuses to participate in an activity which she reasonably believes is in violation of the law or against public policy, and then the employee is retaliated against, such employee may have a claim pursuant to CEPA. New York’s restrictive language (substantial and specific danger to the public health or safety) is completely absent from the New Jersey statute. Moreover, while the courts interpreting New York’s law 211 N.J.L.J. 230 NEW JERSEY LAW JOURNAL, JANUARY 28, 2013 2 hold that an employee’s belief, even if good-faith and reasonable, is irrelevant, New Jersey’s law repeatedly stresses the employee’s reasonable belief. Although CEPA carries a one-year statute of limitation, it comes packaged with a jury trial, punitive damages and attorney fees, making it extremely palatable to New Jersey employees and their attorneys.

Conclusion and Light Attempt at Humor

Advise your New York City business clients to move their businesses to the New York ‘burbs and to stay as far away from New Jersey as possible! Your clients are better off attempting to fish for mahi-mahi in the Hudson River than they are, as employers, dealing with an employment matter in New Jersey.

About the Author

EMPLOYMENT LAW: A River Runs Through It A primer on the perplexing differences between N.J. and N.Y. employment law

Reprinted with permission from the JANUARY 28, 2013 edition of New Jersey Law Journal. © 2013 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited.

Marc Garber is a partner with Brandon J. Broderick, Attorney at Law, and has been practicing in the area of employment law in New York and New Jersey since 1996.