Employee Misconduct Claims In New Jersey: Separating Fact From Fiction

Wednesday, September 1, 2010

Employment in New Jersey is generally on an “at will” basis. This means the employee is free to quit at any time and the employer may fire the employee at any time for any reason – except for unlawful discrimination. When the employer offers an explicit employment contract or modifies “at will” status through an employer’s handbook, then employee rights and responsibilities are governed by the terms of those documents.

Employer handbooks are treated like contracts, unless the handbook states (and some do) that employees cannot rely on it. New Jersey courts have said: “The manual will constitute, in effect, a unilateral offer to contract that an employee may accept through continued employment.”

For the manual to be binding, the duties and obligations of the parties must be specific enough to allow both parties to know what is expected of them. Vague or general statements will not likely persuade a court to interpret them as contractual terms.

Unemployment Compensation

Under the law prior to July 1, 2010, if an employee was fired for insubordination, s/he most likely would have remained eligible for unemployment compensation. However, if an employee was fired for theft or some other criminal activity, s/he almost certainly would have been ineligible to receive unemployment benefits.

As of July 1, 2010, however, the New Jersey Legislature significantly tightened unemployment disqualification rules, as follows:

For those partially disqualified from benefits, the waiting period increased from five to seven weeks. For those disqualified due to “severe misconduct”, which is not well defined, this will now result in a permanent disqualification from benefits. Examples of “severe misconduct” include but are limited to repeated violations of the employer’s rules; repeated lateness or absence after a written warning; or misuse of sick time or benefits or abuse of leave. Under former law, permanent disqualification occurred only in cases of gross misconduct which primarily involved criminal activity.

How do Contract Rules Affect Disciplinary Proceedings?

The terms of the contract or handbook control disciplinary issues and procedures, especially if misconduct is defined and the procedures to terminate are described. Union contracts frequently define misconduct and contain explicit provisions detailing the type of hearings to which the employee is entitled (usually ending in binding arbitration rather than court) and the procedures the employer may use to seek termination.

“No Law Against Stupidity”

There is no federal or state law against foolish decisions by management. In a phrase, employers may be stupid, as long as they are not evil. They have the absolute right to make “dumb” decisions, as long as they do not violate Title VII of the Civil Rights Act of 1964 (prohibiting discrimination in public or private sector employment) or the New Jersey Law Against Discrimination (LAD), among other laws.

The difficult cases are those where the employer claims a legitimate and non-discriminatory basis for a suspension, termination, demotion, or refusal to promote, and the employee claims that the reason given is a “pretext” (a fancy name for a lie). Many cases turn on this distinction, and it is vital for the employee and his/her legal counsel to obtain proofs of pretext. This could consist of documentary evidence, letters, e-mails, employer handbook or other stated policies, and, most often, the testimony of co-workers or even management witnesses.

Faking Injuries or Abuse of Legal Process?

A client fell down at a warehouse and suffered a back injury. As 911 was responding, a manager yelled at the employee and told him to stop faking an injury. In fact, the employee sustained a serious injury in the fall. The manager was so incensed by this turn of events that he called the police and charged the employee with making a false report. The municipal court threw out the claim.

The employee had a claim against the employer for abuse of legal process (by falsely and maliciously accusing the employee of faking an injury). His personal physician was willing to be a witness in the case. Unfortunately, the client decided not to pursue the claim.


If you feel you have been unfairly accused of misconduct, demoted, suspended, denied a deserved promotion, or fired, you should contact one of our employment law attorneys as early in the process as possible and get specific advice as to how best to proceed. We will be happy to help you attain justice and fair treatment.