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Constitutionality of state law upheld prohibiting employers from advertising that unemployed workers need not apply

By Brandi O. Brown, J.D.

A New Jersey law that prohibits an employer from knowingly publishing a job advertisement indicating that currently unemployed workers need not apply is constitutional, a state appeals court held, upholding a fine levied against an employer for violating the provision. Although the appeals court rejected the employer’s assertion that the state law was an unconstitutional infringement on its free speech rights, it remanded the penalty imposed for further consideration (New Jersey Department of Labor and Workforce Development v Crest Ultrasonics, January 7, 2014, Sabatino, J).

In the midst of a national recession, the New Jersey legislature in 2011 passed a measure restricting the use of employment as a qualification in job vacancies. One of the bill’s sponsors noted the importance of promoting the ability of currently unemployed persons to be considered for vacant positions. The bill was conditionally vetoed previously by Governor Christie, who noted that it was vague and confusing as originally written, and who recommended 12 changes to the bill. After the governor’s changes were adopted, the final version of the bill was enacted into law and became effective on June 1, 2011.

Specifically, NJSA 34:8B-1 prohibits an employer from knowingly publishing a job advertisement containing any provisions stating that the qualifications include current employment or that the employer would not consider or review an application submitted by a currently unemployed applicant, or would only consider the application of an applicant who was currently employed. The penalty provision, NJSA 34:8B-2, states that an employer who violated the act would be subject to a civil penalty not to exceed $1,000 for a first violation, $5,000 for a second violation, and $10,000 for each subsequent violation. The penalty was collectible by the state Commission of Labor and Workforce Development.

Advertisement and investigation. Crest Ultrasonics published a job ad for a service manager in a county newspaper. Included in the announcement was the requirement that the applicant “must be currently employed.” A concerned individual called the labor department about the ad and followed that call up with a letter inquiring whether it was legal for Crest to place an ad listing that qualification. The labor department visited Crest’s offices twice to review records and, upon completion of the investigation, notified the employer that their ad violated NJSA 34:8B-1 and that it was being fined $1,000 pursuant to NJSA 34:8B-2. When Crest did not respond, the department issued an administrative order reiterating the penalty. Crest filed an administrative appeal with the department, claiming the law was unconstitutional and that the fine was improper.

Seeking to avoid the cost and delay, the parties agreed upon a stipulation of facts and the matter proceeded to the commissioner, who issued a final administrative decision upholding the penalty, but declined to address Crest’s assertion that the law was unconstitutional, noting that the final responsibility of passing on the constitutionality of legislation rested with the courts. Crest appealed.

Commercial speech. After reviewing the legislative history of the statute, as well as similar provisions recently enacted in other jurisdictions, the court turned to the merits of Crest’s constitutional argument. First, it was undisputed that Crest’s classified ad was a form of commercial speech, rather than political speech. Equally clear was that the prohibitions in NJSA 34:8B-1 were content-based, not content-neutral. Accordingly, the intermediate scrutiny framework found in the U.S. Supreme Court’s Central Hudson Gas & Electric Corp. v. Public Service Commission decision applied.

In applying the Central Hudson test, the court noted that it was “mindful” of the U.S. Supreme Court’s 2011 decision in Sorrell v. IMS Health Inc., in which a majority of the justices indicated they believed that a more rigorous test of heightened judicial scrutiny should be applied to certain forms of restrictions on commercial speech. However, the New Jersey court noted that Sorrell was distinguishable in several respects. Unlike the state law considered in that case, the New Jersey statute did not favor one type of speaker of another. The court also noted that the U.S. Supreme Court had not yet issued an opinion applying Sorrell’s heightened scrutiny test, nor had it clearly articulated what that heightened scrutiny might entail.

Application of Central Hudson. Applying the four Central Hudson prongs, therefore, the New Jersey court concluded that the law met the requirements for constitutionality under that analysis. First, NJSA 34:8B-1 regulated a job advertisement that was about a lawful activity and was not inherently misleading. This prong merited little discussion. Second, the governmental interest underlying the statute was substantial. With regards to this factor, the government did not have a heavy burden to satisfy. Although the texts of the two provisions did not explicitly articulate the substantial government interest the legislature sought to address, the court was nevertheless persuaded that the legislative objective associated with it was substantial.

The “modest aim” of the statutes, to maximize the ability of unemployed people to present their qualifications to potential employers, was evident to the court. The employer was not required to read the applications or to interview those applicants or even to hire those persons. The court noted, with interest, that if the statutes had gone to such extra lengths, they “probably” would be evaluated under the constitutional standards applicable to economic regulations, which were “fairly lenient,” and it would be “ironic indeed” if the less expansive statute was “more constitutionally vulnerable than a more aggressive measure.” The “inescapably clear premise” of the legislation was that some currently unemployed applicants would stand out to the employer, and the court noted that the recession and downsizing and migration of businesses from the state had caused innumerable talented and skilled workers to be out of work. Moreover, the court was satisfied that the third Central Hudson prong was met, i.e., that the statute directly advanced the governmental interest asserted. A “logical nexus” existed between the terms of the statute and its desired goals. The statute was simply a measure to get more resumes into employers’ hands and it was “surely crafted to advance that goal.”

Narrowly tailored. The final prong of Central Hudson, that the provision be narrowly tailored to serve the state’s asserted interest, was also satisfied. The court agreed with the labor department’s assertion that the means employed by the statute were “quite narrowly tailored” because employers were only prohibited from excluding unemployed workers from job advertising or, in other words, from stating in ads that current employment was a prerequisite to acceptance of the applicant’s materials. Employers were allowed to restrict potential candidates based on other criteria. Indeed, Governor Christie’s amendments further clarified the employer’s ability in that regard, and included in the statute was the ability of the employer to include minimum qualifications such as professional licensure or certification, particular degrees or backgrounds, or a certain amount of training. Nor were employers prohibited from making jobs available only to internal candidates.

The court only briefly touched upon the other constitutional arguments raised by Crest, e.g., substantive due process claims and claims based specifically on the New Jersey state constitution, finding they were equally without merit. However, although Crest did not succeed on the merits of its constitutional claim, the court did find cause for concern in the penalty imposed. The court noted that the penalty provision, NJSA 34:8B-2, did not require the imposition of the full $1,000 penalty for a first violation and that Crest’s constitutional arguments, although not successful, were not frivolous or in bad faith. Thus, the court remanded the penalty matter to the commissioner for further consideration.