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Rising temperatures aren’t the only thing warming up the Garden State: The New Jersey Division on Civil Rights (“DCR”) recently issued two hot takes on the New Jersey Law Against Discrimination (“NJLAD”). On May 14, 2024, the DCR released guidance on the application of the NJLAD to out-of-state remote workers who are employed by New Jersey-based companies. Shortly thereafter, on June 3, 2024, the DCR issued a proposed rule that seeks to clarify the legal standard and burdens of proof required in disparate impact discrimination claims under the NJLAD. To keep the (legal) heat out of your workplace this summer, take a few minutes to review the highlights of these updates.

Guidance on Discrimination and Out-of-State Workers

On May 14, the DCR issued guidance to address one enduring change from the COVID-19 pandemic: The rise of telework. The guidance acknowledges the increase in employees who perform their full- or part-time jobs from a location different from their employer’s workplace and clarifies that protections under the NJLAD apply equally to all employees of New Jersey-based employers, regardless of whether the employees physically work in New Jersey or remotely from outside the State. 

The NJLAD prohibits employers from discriminating on the basis of protected characteristics and provides that “all persons shall have the opportunity to obtain employment . . . without discrimination.” As it pertains to remote workers, the DCR notes that the NJLAD’s definition of “persons” and its prohibition on discrimination against “any persons or group of persons” contain no geographic restriction on its scope. The guidance also confirms that similar provisions that prohibit employers from discriminating against “any individual” based on protected characteristics apply broadly, regardless of the employee’s location. 

To support its position, the DCR cites several cases where courts found that the NJLAD’s benefits and protections extend to out-of-state employees who work for a New Jersey employer. In other words, the NJLAD applies to all employees of New Jersey-based employers, regardless of the employee’s residency, physical work location, or full-time remote or hybrid status. The guidance does, however, provide some limitations on the NJLAD’s reach. Specifically, it notes that the NJLAD’s “broad protection against discrimination,” does not necessarily extend to New Jersey employees who work for an out-of-state employer.  “Rather, such employees must establish a nexus between their employer and New Jersey for the LAD to apply.”  Of course, federal laws and laws of other states may still provide protection against discrimination where the NJLAD does not apply.

The DCR’s Proposed Rule on Disparate Impact Discrimination

On June 3, the DCR issued a proposed rule which, if adopted, would codify existing state and federal case law to clarify the legal standard and burdens of proof required to establish or defend claims of “disparate impact discrimination” under the NJLAD. Disparate impact discrimination occurs when facially neutral practices or policies disproportionately impact individuals that share a protected characteristic under the NJLAD

Under the proposed rule, practices or policies that cause a disparate impact on individuals who share a protected characteristic are unlawful unless the employer can show that the practice or policy is necessary to achieve a “substantial, legitimate, nondiscriminatory interest.” To meet this burden, employers must demonstrate that the practice or policy is “job-related and consistent with a legitimate business necessity.”  Such a showing must be supported by empirical evidence, such as statistical data, applicant or employee files, criminal history records, and labor market data. If the employer meets this burden, an employee can still prevail on a discrimination claim under the NJLAD if the employee shows that there is a “less discriminatory, equally effective alternative means” to achieve the company’s interest. 

The proposed rule identifies certain practices and policies that may have a disparate impact on individuals that share a protected characteristic.  Except for those required under federal or state law, rule, or regulation, policies and practices that may be susceptible to disparate impact claims include:

  • Language restrictions;
  • Citizenship requirements;
  • Height or weight requirements;
  • Health or physical ability requirements;
  • Specific dress or appearance requirements;
  • Driver’s license requirements;
  • Excluding applicants based on criminal history information;
  • Practices or policies that have a discriminatory effect on the basis of pregnancy, breastfeeding, or chestfeeding;
  • “Word-of-mouth” advertising and recruitment practices by a mostly homogenous workforce; and
  • Automated employment decision tools that screen out applicants based on protected characteristics.

The proposed rule is open for public comment until August 2, 2024.


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