A decision issued earlier this year may cause school boards to think twice about offering to settle employment disputes. The Commissioner of Education upheld an Administrative Law decision enforcing a settlement though is was never formally executed by the parties. See Renee Pollack v. The Board of Educaton of the South Orange/Maplewook School District, Essex County, Agency DKT. NO. 354-11/07.

Ms. Pollack argued that South Orange’s August 29, 2006, letter was a counteroffer and therefore a rejection to her August 18 offer. The formal settlement agreement that was sent to Ms. Pollack was never executed.
Nonetheless, the Administrative Law Judge (ALJ) held that the August 29 letter was an acceptance seeking “clarification for what ultimately were minor aspects of the agreement.” Relying on Kupper v. Barger, 33 N.J. 491 (App. Div. 1955) the ALJ held that “Although a settlement agreement should not be enforced in the absence of a mutuality of accord between the parties or their attorney, if the disagreement involves matters not material to the more substantial issues that could be resolved, the agreement should be enforced.”

Following this decision, both employees and management should think very carefully before offering to resolve matters by way of settlement lest they be trapped by unwanted obligations.

A recent decision by the Supreme Court of New Jersey may strengthen the judicial preference for both resolution by arbitration and confirmation of arbitration awards.

In the recent case of Linden Board of Education v. Linden Education Association o/b/o Mizichko, decided by the State’s Highest Court on June 8, 2010, the parties entered into binding arbitration as per the collective bargaining agreement between the labor association and board. The arbitrator found no just cause for the employee’s termination and instead imposed the lesser penalty of a suspension. He found that a type of progressive and corrective discipline should be imposed to satisfy just cause, and that the employee’s misconduct was not so egregious to support just cause to terminate him.

The board sought to vacate the award in the Superior Court, Law Division and the award was confirmed. On appeal, the Appellate Division reversed, finding that there was just cause to terminate the employee and that the arbitrator had exceeded his authority by considering other remedies. Because there was a dissenting judge at the appellate level, the labor association was able to appeal to the Supreme Court as of right.

Writing for the majority of the Court, Justice Wallace held that the fair and reasonable interpretation of the arbitrator’s decision is that he found no just cause to terminate the employee and that he imposed an appropriate, lesser sanction, which satisfied the reasonably debatable standard of review and did not exceed the limits of his authority.

Employers, labor associations and employees should take note that the court favored both the use of arbitration to resolve labor disputes and the preference for judicial confirmation of arbitration awards. Courts also have limited review of arbitration awards, especially in the public sector where such awards will be confirmed so long as they are reasonably debatable. With this in mind, all parties should focus on the importance of the arbitration proceeding, which is likely to be binding absent a showing of fraud, undue procurement or other misconduct.

When entering into collective bargaining agreements that include arbitration provisions, boards of education and labor associations should remember the court’s explanation of what arbitration really is – a vehicle by which meaning and content are given to a collective bargaining agreement. Hence, the arbitrator’s construction of the agreement becomes the actual bargain between the parties.

In the Mizichko case, the court was persuaded that the issue for arbitration was framed such that the arbitrator was within his purview to determine the appropriate remedy if termination was not found to be the proper remedy. The collective bargaining agreement at issue did not define just cause, which according to the court gave the arbitrator the authority to properly fill in the gap and give meaning to the term.

While every case is determined by its own the specific facts and circumstances, the Mizichko decision also provides a general word of caution: parties that engage in arbitration will face an uphill battle if they attempt to vacate an arbitration award. Hence, parties should be mindful of the importance of zealous advocacy at the arbitration level. This case may strengthen the judicial preference for both resolution by arbitration and confirmation of arbitration awards in the future.

Stengart’s employer provided her with a company laptop to conduct company business. Stengart also could use her laptop to access the Internet via the company’s server. Unbeknownst to Stengart, the laptop contained software that copied each web page she viewed and saved this information on the computer’s hard drive in a “cache” folder of temporary Internet files. The temporary files remained on the laptop’s hard drive, unless deleted and overwritten with new data. On several occasions, Stengart used her laptop to access her personal password-protected yahoo email account to communicate with her attorney.

The employer hired a computer forensic expert to recover all files stored on the laptop, including emails. Counsel for the employer proceeded to review Stengart’s emails to her attorney and use the information in the emails in the course of litigation.

The company’s written policy on electronic communications stated:

The company reserves and will exercise the right to review, audit, intercept, access and disclose all matters on the company’s media systems and services at any time with or without notice. …E-mail and voice mail messages, internet use and communication with computer files are considered part of the company’s business and client records. Such communications are not to be considered private or personal to any individual employee. The principal purpose of electronic mail (email) is for company business communications. Occasional personal use is permitted; however, the system should not be used to solicit for outside business ventures, charitable organizations, or for any political or religious purpose, unless authorized by the Director of Human Resources.

The New Jersey Supreme Court determined that the policy’s use of general language to refer to its “media systems and services” left unclear whether or not the use of personal, password protected, web-based e-mail accounts via company equipment were covered under the company’s policy. Additionally, the court noted that the company’s policy did not address personal accounts nor did it warn employees that the contents of their personal e-mail accounts are stored on a hard drive and can be retrieved by the company.

The court also found that the policy contained conflicting information. It stated e-mails “are not considered private or personal to any individual employee,” but then proceeds to state that “occasional personal use of e-mail is permitted”.

Under the circumstances, the Court found the policy “did not address the use of personal, web-based e-mail accounts accessed through company equipment” and, therefore, Stengart had a reasonable expectation of privacy in her e-mail exchange with her attorney on her company’s laptop via her password-protected yahoo e-mail account.

The New Jersey Supreme Court’s decision in this case is fact specific and suggests that under different circumstances, the outcome might be different. The court made specific note of the fact that Stengart never saved her Yahoo ID or password on the company laptop and acknowledged that courts might treat e-mails transmitted via an employer’s e-mail account differently. The court also acknowledged that a clear company policy banning personal e-mails may diminish the reasonableness of an employee’s claim to privacy.

Other Decisions

The Appellate Division previously has held that a defendant did not have a reasonable expectation of privacy in personal information stored on the employer’s computer under a separate password. The court also has held that there was no legitimate expectation of privacy where an employee used a company computer to access websites containing adult and child pornography.

Other jurisdictions have considered numerous factors that can impact the expectation of privacy. For example:

• An employee should have no reasonable expectation of privacy in unprofessional e-mails sent to a supervisor through internal corporate email.

• There is no expectation of privacy of confidentiality when company e-mail is used to send attorney-client messages.

• A company’s e-mail policy prohibiting personal use of computer eliminated any expectation of confidentiality.

• The location of the computer can determine expectation of privacy.

• E-mail messages that travel via the company’s server may be viewed differently by courts from e-mail messages that do not pass through a company’s server.

In light of the New Jersey Supreme Court decision, employers in New Jersey should proceed with caution, and would be wise to have their company computer use policy reviewed by counsel. Employees also should er on the side of caution, and avoid using an employer-provided computer to convey confidential information.

An employee who brings a Whistleblower action under New Jersey’s Conscientious Employee Protection Act (“CEPA”) may only collect lost pay by proving they were forced out of their job—they may not collect such damages if they leave voluntarily.

In Donelson, the employee was awarded $724,000 in economic damages by a jury. On appeal, however, the court vacated the award because the employee failed to prove that he had been constructively discharged or terminated. The employee voluntarily had taken a leave of absence, and then had retired. Thus, there was no proven constructive discharge or actual termination by the employer that entitled the employee to economic damages.

The employee’s $724,000 award of economic damages was reduced to $0.00 because he voluntarily left employment. This ruling means that in the context of CEPA actions, the circumstances under which an employee leaves his or her employment are particularly high.

A little-discussed but potentially important provision in the new health care reform bill, the Patient Protection and Affordable Care Act, provides immediate protections to mothers who return to work while breastfeeding.

Employers are not required to pay their employee for the time spent expressing milk. If an employer, however, provides its non-exempt employees with a paid break, an employee shall be permitted to use this time to express milk. This new legislation applies to all employers. Employers with fewer than 50 employees do not have to comply if they can establish that complying with the law would cause “an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer’s business.”

Stay tuned—the Department of Labor will issue its definitions of what constitutes “reasonable break time” and “significant difficult or expense,” and will establish rules for enforcement in the coming months. In the interim, this law is fully in effect, and employers need to take the necessary steps to comply, and accommodate breastfeeding moms.

NOTE: These new requirements do NOT preempt state law that provides greater protections to employees. Neither Pennsylvania nor New Jersey provide any type of protection to female employees who are breastfeeding.