Alan Schorr’s Employment Case of The Week ending January 10, 2014

New Jersey Department of Labor and Workforce Development v. Crest Ultrasonics, __N.J. Super.__ (N.J. App. Div. January 7, 2014) (Approved for Publication)

This week’s Case of the Week highlights the issue of discrimination against the unemployed. The issue before the Appellate Division in this published decision was whether a recently-enacted statute, designed to protect against discrimination in hiring against unemployed workers, is unconstitutional. The Appellate Division found the statute constitutional. But in doing so, the Appellate Division also made this relatively toothless statute even more toothless, holding that a fine of $1,000 against a multi-billion international conglomerate is too much for deliberately and knowingly posting an ad telling prospective employees that they need not apply if they are unemployed.

At issue is N.J.S.A. 34:8B-1, which prohibits employers from posting advertisements for employment which requires an applicant to be currently employed, or stating that it will not consider applicants who are currently unemployed. The advertisement in question stated:

65K-75K. Must be currently employed.
Technically competent. Customer Friendly

A citizen, not identified in the opinion, complained to the Department of Labor, which investigated the complaint and issued a fine of $1,000, the maximum permitted by the statute for a first offense. Crest appealed, claiming that the statute was unconstitutional. The commissioner declined to address the constitutional issues and upheld the fine. This appeal followed.

The Legislative history of this statute is relevant. The Legislator behind the statute, Peter J. Barnes, III, originally wanted to add unemployed workers as a protected class under the Law Against Discrimination. When such jobless persons become discouraged from applying for work, Barnes asserted, both they and potential employers are harmed, through the elimination of a whole segment of the population that might otherwise be qualified to do the tasks required. Barnes eventually decided to pursue a less ambitious course and introduced a bill designed to prevent employers from posting advertisements that expressly require an applicant to be currently employed.

Nothing in this law prevents an employer from discarding applications from unemployed people, nor does it ban discrimination against the unemployed in any way. It expressly forbids any person injured by the violation of the statute from asserting a private cause of action. Yet, Crest argued that the law unconstitutionally limited its free speech rights. The Appellate Division found that the advertising was a classic example of commercial speech rather than political speech. Therefore, the statute was analyzed under intermediate scrutiny.

First, the Court found that the ad was about a lawful activity and was not inherently misleading. But there is a four part test for commercial speech defined by Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557, 561 (1980), and that was but the first prong. In a long analysis, the Court found that the second prong of governmental interest – maximizing the ability of jobless persons to simply present their qualifications to potential employers – was a substantial governmental interest. Third, the Court found that the statute directly advances the governmental interest asserted. Finally, the Court ruled that the statute was narrowly tailored to meet the governmental interest.

Whether or not the Court announced a “public policy” against discrimination against unemployed citizens remains questionable. The Court seemed to take great care to emphasize that the statute in question means that “employers are simply obligated to ‘refrain from excluding unemployed workers in job advertising.’”

Then, as if apologizing for possibly offending big business, the Appellate Division found that the $1,000 fine against this multi-billion international conglomerate, which spent 50 times the fine amount to fight for their right to discriminate against the unemployed, was excessive. The Appellate Division remanded for the Commissioner to reconsider the fine in light of the “substantial constitutional issues” involved in this litigation.

A victory for the unemployed, I guess.

Petitioner’s (NJ Dept. of Labor) Counsel: Robert M. Strang, Deputy Attorney General, John J. Hoffman, Acting Attorney General, Lewis A. Scheindkin, Assistant Attorney General.

Respondent’s (Crest Ultrasonics) Counsel: Richard W. Berg, Robin Kay Lord, The Law Office of Robin Kay Lord, LLC.

Commissoner, Department of Labor and Workforce Development: Harold J. Wirths.

Appellate Judges: Messano, Sabatino (on the opinion), and Hayden.