New Jersey Appellate Court Upholds Restrictions on Employer Job Postings

In a case of first impression, the New Jersey Appellate Division recently upheld the constitutionality of a New Jersey statute that bars employers from publishing job postings requiring that applicants be currently employed elsewhere.

In the case of New Jersey Department of Labor and Workforce Development v. Crest Ultrasonics [opinion available here], the Appellate Division analyzed the constitutionality of N.J.S.A. 34:8B-1 (the “Statute”), which was enacted in 2011.  The Statute, entitled “Restrictions upon use of employment as qualification for position vacancies,” explicitly bars employers from “knowingly or purposefully” publishing job advertisements stating, amongst other things, “that the qualifications for a job include current employment.”  [The full text of N.J.S.A. 34:8B-1 is available here]  The court determined that the Statute was borne out of legislative concerns in the midst of the national recession where New Jersey’s unemployment rate was climbing, businesses were downsizing, and new job opportunities were becoming increasingly scarce.  The Statute seeks to protect the increasing number of unemployed New Jersey residents, many of whom were unfortunate victims of the difficult financial times, from having an insurmountable initial hurdle when trying to rebuild their careers.

Claiming an unawareness of the Statute, Crest Ultrasonics placed an employment advertisement in the Burlington County Times in August 2011, seeking applicants who, amongst other prerequisites, “must be currently employed”.  After receiving a modest $1,000 fine by the New Jersey Department of Labor and Workforce Development that was affirmed on appeal, a three-judge New Jersey Appellate Division panel was presented with Crest Ultrasonic’s challenge to the Statute on grounds that, among other things, it infringes on employers’ First Amendment rights to free speech under the New Jersey and United States Constitutions.

The appellate panel applied the United States Supreme Court’s long-standing intermediate scrutiny four-prong test established in Central Hudson Gas & Electric Corporation v. Public Service Commission, 447 U.S. 557 (1980), to assess the constitutionality of the Statute’s restrictions over commercial speech (i.e. advertising job openings).  That test essentially asks whether the restricted speech involves lawful activity that is not misleading, whether there is a substantial governmental interest, whether the regulation advances said governmental interest, and whether the restriction is sufficiently narrowly tailored to serve its intended purpose.

Under the Central Hudson analysis, the Court held that the Statute’s restrictions on employers is constitutionally sound and does not violate any First Amendment rights.  Of particular note, the Court acknowledged that the advertising restrictions merely limit employers’ publicly-stated position as to applicants’ current job status.  By contrast, nothing in the Statute further restricts or compels employers’ hiring decisions and, “in fact, explicitly allows employers to restrict potential candidates based on other criteria”, including holding certain professional licenses or having a particular number of years of experience/training in a given field.

The Crest Electronics opinion offers clarity to the Statute’s restrictions for employers across the State of New Jersey.  While employers are strictly prohibited from posting job advertisements that explicitly require candidates to be currently employed elsewhere, employers remain free to establish their own hiring criteria and ultimately select whoever they choose for the job, even if that decision is dependent in part upon an applicant’s current job status.  Employers concerned about running afoul of the Statute’s restrictions should consult with an employment attorney for further analysis.

As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

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