On October 5, 2021, Governor Phil Murphy signed into law amendments to the New Jersey Law Against Discrimination (NJLAD) that significantly expand causes of action available to older workers. While NJLAD has always prohibited age-based discrimination in employment, the new amendments create a new private right of action for forced retirement claims and eliminates a safe harbor provision which limited damages and gave small businesses more flexibility to manage their workforces.
Private Right of Action for Forced Retirement Claims
Prior to the amendments, NJLAD provided no private right of action for forced retirement claims. Instead, plaintiff-employees were only permitted to bring forced retirement claims by submitting a complaint to the Office of the Attorney General. Following the amendments, plaintiff-employees may now either bring standalone forced retirement lawsuits, or include forced retirement causes of action with other discrimination claims under NJLAD. This portion of the amendments will likely significantly increase claims brought against businesses, both in the number of age discrimination lawsuits and the scope of other discrimination claims.
Removal of Damages Limits for Forced Retirement Claims
Prior to the amendments, employees who prevailed on a claim of discriminatory forced retirement were limited to seeking reinstatement and back pay to cover the period between a forced retirement and reinstatement. The amendments have removed this limitation, and employees who prevail on forced retirement claims may now seek all forms of damages available under NJLAD, which include: (a) injunctive relief, including reinstatement; (b) back pay; (c) compensatory damages for emotional distress; (d) punitive damages; (e) interest; and (f) attorneys’ fees. This portion of the amendments will likely lead to a further increase in claims brought against businesses, both in number and scope.
Expansion of NJLAD’s Age Discrimination Provisions
Businesses in New Jersey were previously permitted to refuse to hire or promote any applicant or employee over 70 years old. The new amendments strike this limitation from NJLAD, and NJLAD now prohibits discrimination on the basis of age for any applicant or employee age 18 or older. This will have a substantial impact on small businesses in New Jersey.
While the federal Age Discrimination in Employment Act (ADEA) prohibits age discrimination against applicants or employees aged 40 or older, it is only applicable to businesses with 20 or more employees. NJLAD, on the other hand, applies to all businesses, regardless of the number of employees.
Impact on Businesses
Ultimately, the amendments continue a pattern of expanding the scope of NJLAD, while putting additional strains and requirements on New Jersey businesses. To ensure compliance and protect against the likely increase in lawsuits that may result from these amendments, New Jersey businesses will once again need to review and overhaul their handbooks, policies, and training. Depending on the circumstances, severance or retirement offers to older employees will need to be more strictly scrutinized to protect against the possibility of NJLAD claims. Employers should expect an increase in the number and scope of NJLAD age discrimination claims, as well as increased severance and retirement costs.