Workers' Compensation: Court Upholds NJ Temporary Workers’ Rights Act

The Third Circuit affirmed the District Court’s decision, holding that The Temporary Workers' Rights Act ["Act"] was found to be a permissible exercise of New Jersey’s police power, not in violation of the dormant Commerce Clause, and sufficiently clear to meet constitutional standards.

Background and Key Issues

The United States Court of Appeals for the Third Circuit addressed an interlocutory appeal brought by the New Jersey Staffing Alliance, the American Staffing Association, and the New Jersey Business & Industry Association (collectively, the "Staffing Associations"). The appellants sought to enjoin the enforcement of New Jersey’s Temporary Workers’ Bill of Rights ["Act"], arguing it violated the dormant Commerce Clause, was unconstitutionally vague, and was an unreasonable exercise of state police power. The District Court denied the preliminary injunction, and the Staffing Associations appealed.

Court's Reasoning and Decision

1. Dormant Commerce Clause

The court evaluated the claim under the dormant Commerce Clause, which prohibits states from enacting legislation that discriminates against or excessively burdens interstate commerce. The Supreme Court's decision in *National Pork Producers Council v. Ross* was central to this analysis, emphasizing that economic antidiscrimination is the core principle of the dormant Commerce Clause.

The Act was scrutinized to determine if it discriminated against out-of-state businesses. The court found that the Act imposed equal burdens on both in-state and out-of-state staffing firms, with no evidence of protectionist intent or effect. The Act’s requirements were uniformly applied regardless of the firm's location, and the imposition of joint and several liability did not favor in-state economic interests over out-of-state competitors.

2. Void for Vagueness

The Staffing Associations argued that Section 7(b) of the Act was void for vagueness because it did not define terms like “benefits” or “same or substantially similar work.” The court rejected this claim, noting that economic regulations are held to a lower vagueness standard than criminal laws. Businesses are expected to plan their behavior carefully and consult relevant legislation in advance. The court concluded that the Act provided sufficient guidance to the regulated entities and was not so vague as to be unenforceable.

3. State Police Power

The Act was challenged as an unreasonable exercise of state police power. The court applied rational basis review, which requires that the law be rationally related to a legitimate state interest. The court found that New Jersey had a legitimate interest in protecting temporary workers, and the Act’s provisions were reasonably related to this goal. The mandates on wage equality, transparency, and working conditions were considered appropriate measures to further the state's interest in the well-being of temporary workers.

Deference to the State

This decision underscores the court’s deference to state legislation aimed at protecting workers and clarifies the application of the dormant Commerce Clause in the context of labor protections. It emphasizes that state laws when uniformly applied and without protectionist motives, can regulate economic activities within their jurisdictions even if they have extraterritorial effects.

New Jersey Staffing Alliance v. Cari Fais, 23-2419, (3rd Cir.) 2024

Oral Arguments June 4, 2024

Recommended Citation: Gelman, Jon L., NJ’s COVID-19 Response: Key Lessons and Future Steps, www.gelmans.com (08/02/2024) https://workers-compensation.blogspot.com/2024/08/njs-covid-19-response-key-lessons-and.html

......

ORDER NOW

....

*Jon L. Gelman of Wayne, NJ, is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise Modern Workers’ Compensation Law (West-Thomson-Reuters). For over five decades, the Law Offices of Jon Gelman 1.973.696.7900
jon@gelmans.com has represented injured workers and their families who have suffered occupational illnesses and diseases.