Insights Archives — Lindabury, McCormick, Estabrook & Cooper, P.C. Firm News & Events

SCOTUS Decision Makes it Easier for Employees of a Majority Group to Prove “Reverse Discrimination”

Published on: June 13, 2025 | by Gozde Celik and Joshua L. Weiner

On June 5, 2025, the United States Supreme Court in Ames v. Ohio Department of Youth Services unanimously held that plaintiffs from majority demographic groups do not have to satisfy a heightened burden to prove discrimination under Title VII. Although lower courts were split on the issue, the Court’s decision endorsed the view that was already in place in the Second and Third Circuit, under which plaintiffs do not have to show “background circumstances” as to why their employer was the “unusual employer who discriminates against the majority.”

The Court’s reasoning rested on the spirit behind Title VII, which, as the Court explained in its opinion, prohibits discrimination against any individual in a protected group and that requiring a heightened evidentiary standard against specific groups violated the language and the purpose of the statute.

Why This Matters

Proposed Regulations for Classification of Independent Contractors May Prove to be Problematic for Employers

Published on: May 22, 2025 | by Joshua L. Weiner and Lisa Gingeleskie

On April 3rd, 2025, the New Jersey Department of Labor and Workforce Development proposed new rules, which are designed to clarify the application of the “ABC test.” The ABC test is a legal standard used to determine whether a worker is an independent contractor or an employee for purposes of various New Jersey laws, including the Unemployment Compensation Law, the Wage Payment Law, and the Earned Sick Leave Law.

On May 5th, 2025, the proposed rules were published, triggering a 60-day review and comment period. This proposal is significant for businesses and independent contractors as it seeks to codify the department’s very broad application of the statutory ABC test.

Prongs of the ABC Test

New Jersey’s Pay Transparency Act Becomes Effective June 1st, 2025

Published on: May 15, 2025 | by Lisa Gingeleskie

On June 1st, 2025, New Jersey’s Pay Transparency Act (the “Act”) goes into effect, requiring New Jersey employers to identify certain wage or salary information in both internal and external job postings. The Act is another effort in a series of steps taken by the state of New Jersey to promote pay equity.

Posting Requirements

The Act applies to employers, with ten (10) or more employees over twenty (20) calendar weeks, who conduct business or accept applications for employment in the state of New Jersey. To meet this threshold, the Act does not specify whether the employer must have ten (10) or more employees who actually work in the state or whether employers must also count remote employees. Since the Act is silent on this point, we recommend that employers with ten (10) or more total employees prepare for compliance.

The Supreme Court Establishes Plaintiff-Friendly Pleading Standards Regarding ERISA Prohibited Transaction Claims

Published on: May 12, 2025 | by James K. Estabrook, Elizabeth Engert Manzo and Lisa Gingeleskie

On April 17th, 2025, the United States Supreme Court issued a unanimous opinion in Cunningham v. Cornell University establishing a plaintiff-friendly pleading standard applicable to prohibited transaction claims under the Employee Retirement Income Security Act (“ERISA”). The Court’s holding makes it significantly easier for plaintiffs to defeat early-stage motions to dismiss, engage in costly discovery, and extract a settlement as to an alleged prohibited transaction claim.

Background

ERISA bars certain prohibited transactions between a plan and a related party, i.e. a “party-in-interest,” to prevent conflicts of interest. However, there are several exemptions that allow plans to interact or conduct business with a party-in-interest if specific requirements are met. In Cunningham, the plaintiffs accused Cornell’s retirement plans of engaging in prohibited transactions by paying excessive fees for recordkeeping and other administrative services. The University responded that these transactions were exempt under ERISA Section 408(b)(2), which allows certain transactions with parties-in-interest if the following three (3) requirements are met: 1) the service is necessary for the establishment and operation of the plan, 2) such service is furnished under a reasonable contract or arrangement, and 3) compensation paid for the service is reasonable. The district court dismissed the participants’ transaction claims, and the Second Circuit affirmed the dismissal, ruling that the plaintiffs must plead and prove the absence of such exemptions in order to state a claim under ERISA Section 406(a)(1)(C).

Key Trends in New Jersey Corporate Law 2025

Published on: April 23, 2025 | by Robert W. Anderson

Businesses with operations in New Jersey face new legal requirements that affect how they manage hiring, taxes, data privacy, and investment strategy. This update outlines recent legislative and regulatory changes that impose new obligations and potential risks for employers, corporate taxpayers, and companies engaged in digital commerce or AI development. Understanding these developments is critical to maintaining compliance, controlling costs, and identifying available incentives.

Pay Transparency Law (Effective June 1st, 2025)

New Jersey employers with 10 or more employees over a period of 20 calendar weeks must include salary ranges and general benefit information in all job postings. This includes internal promotions and transfers. The law applies to any employer doing business in the state or accepting applications from New Jersey, regardless of the company’s location.

The New Jersey Supreme Court Rules: Commissions are Wages

Published on: March 21, 2025 | by Lisa Gingeleskie

On March 17, 2025, the New Jersey Supreme Court issued a unanimous decision finding that commissions are wages under the New Jersey Wage Payment Law (“WPL”) because they are “direct monetary compensation for labor or services rendered by an employee.” There are no exceptions – compensating an employee by paying a commission for a labor or service always constitutes a wage under the law.

The Underlying Dispute

Plaintiff, Rosalyn Musker (“Musker”), worked as a sales manager for the Defendant company, Sukhi, Inc. (“Suuchi”), which provided a proprietary software platform for apparel manufacturers and primarily generated revenue from subscriptions to its services. Musker earned a base salary of $80,000 and was entitled to receive commissions based on different tiers of sales that she reached in accordance with Suuchi’s Sales Commission Plan (the “SCP”), which included language intended to “cover all sales situations.”

The New Jersey Data Protection Act is in Effect

Published on: February 24, 2025 | by Lisa Gingeleskie

On January 16, 2025, New Jersey’s Data Protection Act (“NJDPA” or the “Act”) went into effect, making New Jersey the nineteenth state to adopt a comprehensive data privacy law. The opportunity to cure any defects under the law will sunset on July 1, 2026. Therefore, it is critical that covered entities, or “controllers” of personal data, act now to ensure compliance with the law’s requirements as outlined more fully in this article.

To Whom Does the Law Apply?

The NJDPA applies to companies that:

New Jersey Employment Law: What to Expect in 2025

Published on: February 13, 2025 | by Lisa Gingeleskie

As we are already a few weeks into the new year, now is a good time for employers to review their employee handbooks and policies to ensure compliance with the following changes in New Jersey employment law or best practices.

The Pay Transparency Act

Effective June 1, 2025, New Jersey employers with ten (10) or more employees over twenty (20) calendar weeks doing business or taking applications for employment in the State of New Jersey must disclose “the hourly wage or salary, or a range of the hourly wage or salary, and a listing of benefits and other compensation programs for which the employee would be eligible within the employee’s first 12 months of employment.” Notably, this requirement does not prohibit an employer from increasing the wages, benefits, and compensation identified in the job posting at the time of making an offer for employment to an applicant.

Umbrella Liability Insurance

Published on: January 17, 2025 | by Elizabeth Candido Petite

Clients often ask about ways to protect their assets and limit liability in the event of future creditors. Transferring assets to trusts, limited liability companies, or into the names of others (for example, a spouse or child) may work in some instances but all have their drawbacks. Some states allow a grantor to create a self-settled asset protection trust, which safeguards assets from creditors and keeps the assets available to the grantor. However, New Jersey law does not allow such trusts. Limited liability companies provide protection for legitimate business or income-producing endeavors, such as a rental property, but not for personal assets. And spouses may be liable for their partner’s debts in certain circumstances. What, then, can be done?

One option to consider is purchasing umbrella liability insurance. An umbrella policy provides additional coverage beyond the limits of homeowners or auto insurance policies. An umbrella policy typically covers the following:

Personal injury

Charitable Residuary Beneficiaries Under a Will

Published on: January 17, 2025 | by James K. Estabrook and Gozde Celik

For many, designating a portion of one’s estate to charities and charitable purposes is an essential and significant part of their Last Will and Testament. Those seeking to make contributions to causes and organizations they are passionate about should be wary of the costs entailed in how such contributions are distributed. Under New Jersey law, when such contributions are designated in the form of a residuary bequest, the State Attorney General is required to exercise its power to protect the public’s interest in charitable gifts and seek costly accounting and lengthy review services, which ultimately drain the estate of funds it could have extended to the aforementioned charitable causes and organizations.

Under N.J. Ct. R. 4:80-6 and R. 4:28-4, the New Jersey State Attorney General is required to review and approve the accounting and administration of an estate when the estate leaves a residuary, or percentage, amount to a charitable organization. The Office of the Attorney General will require the filing of: (1) intermediate and/or final Accounting; (2) statement and calculations of any commissions paid to trustees or executors; (3) final distribution and disbursement schedule of bequests; (4) affidavit of any attorney’s and accountant’s rendered services; and (5) Refunding Bond and Releases executed by the charitable beneficiaries.

After receiving such documentation, the Attorney General’s office must approve the amount the charitable beneficiaries are being given, and such approvals could face backlogs and other administrative delays. Further, a thorough examination into the charitable organization could jeopardize its ability to receive its bequest and could even result in a court redirecting the bequest to a different charity under the cy pres doctrine, as a recent decision in the Appellate Division revealed. See Matter of Estate of Heinecke, No. A-3604-21, 2024 WL 1125186 (N.J. Super. Ct. App. Div. March 15, 2024).