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Scott I. Unger is a Shareholder and member of Stark & Stark’s Litigation Group, where he concentrates his practice on litigation arising out of business and commercial disputes. Mr. Unger regularly counsels business owners on the prosecution and defense of minority oppression litigation (corporate divorces), breach of contract cases, uniform commercial code (U.C.C.) litigation, consumer fraud claims, appellate practice, employment, and estate litigation. He has extensive experience litigating cases in a variety of jurisdictions, including, New Jersey, New York, Pennsylvania, Ohio, Massachusetts, Texas, and Maryland.

On February 18, 2020, New Jersey Governor Phil Murphy unveiled a sweeping proposal that significantly strengthens the New Jersey Law Against Discrimination. The proposed legislation was the result of a two year study of workplace employment discrimination and sexual harassment conducted by the New Jersey Division on Civil Rights. It also mirrors the current societal shift in attitudes about workplace discrimination and sexual harassment. Employers need to be cognizant of these proposed changes and the current climate.

If enacted, New Jersey would require all employers to provide anti-discrimination and anti-harassment training. The New Jersey Supreme Court held that trial court should consider whether or not an employer made training available to supervisors and all employees when deciding whether or not an employer has been negligent in preventing sexual harassment. This proposed change would require training.


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Over the past decade, the Equal Employment Opportunity Commission (“EEOC”) has reported that retaliation is the most common issue alleged by federal employees and the most common discrimination finding in federal sector cases. Nearly half of all claims made to the EEOC are retaliation claims.

The EEOC found that other employers retaliated in violation of the law in greater than 40% of the reported claims, a fact which employers must be aware of. The same is likely true under the anti-retaliation provisions as set forth in the New Jersey Law Against Discrimination. Hence, it is essential that employers take affirmative remedial steps to prevent retaliation. Moreover, employers must immediately and effectively address retaliation if it is reported.


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An Erie County, New York Supreme Court Justice recently held that the disrespectful and unfair dispropriate treatment of a female shareholder based upon her gender in a closely held corporation constituted oppression. In re Matter of Diane M. Straka, Index No. 807308-2017 (citing, Bus. Law. §1104(a)-(1).

In that case, the Plaintiff, Ms. Straka (a 25% shareholder in a closely held New York corporation) was able to prove at trial that she was subjected to disrespectful treatment based upon her gender. The other three shareholders were men. The Court found among other things, that:

  • When she first met one of the other shareholders, he asked Ms. Straka “…are you the one who makes the coffee;”
  • One of the shareholder’s posted a cartoon on his door that was deeming to women;
  • The Plaintiff stopped eating in the lunchroom because she was subjected to offensive comments; and,
  • One of the male shareholder asked if he could sit in her lap.


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Pursuant to New Jersey corporate law, directors are trustees for the entire body of the owners. Directors owe loyalties to all shareholders. If they disregard the rights of the majority shareholders, minority shareholders, or the corporation itself they could be liable for a breach of fiduciary obligations or duties.

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New York Courts do not have the power to order the dissolution of a corporate entity that operates in the State of New York, but was formed under the laws of another state. In Re Matter of Raharney Capital, LLC v. Capital Stock, LLC, 138 A.D. 3d 83 (1st Dept. 2016).

In that case, Plaintiff, Raharney Capital, LLC, (“Raharney”) a Delaware limited liability company with a principal place of business located in the State of New York filed an action against Capital Stock, LLC, (“Capital Stock”) in the State of New York seeking juridical dissolution pursuant to Section 18-802 of Delaware’s Limited Liability Act of a Delaware entity formed by Raharney and Capital Stock. That entity, Daily Funder was a Delaware Limited Liability Company, with a principal place of business in New York City. Raharney and Capital Stock each owned 50% of Daily Funder.


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Effective February, 1, 2020, New Jersey will join other 16 states (AL, CA, CO, CT, DE, HI, IL, ME, MA, MI, NY, NC, OR, PA, VT, WA, & WI) and 17 local governments (San Francisco, Atlanta, Chicago, Louisville, New Orleans, Jackson, MS, Kansas City, MO, New York City, Albany County, NY, Suffolk County, NY, Westchester County, NY, Cincinnati, Philadelphia, Pittsburgh, Richland County, SC, & Salt Lake City) in prohibiting employers from requesting salary history from job applicants.

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Last week, the NFL sought to end the political controversy surrounding some players kneeling during the national anthem by enacting a policy fining teams if players kneeled during the Star-Spangled Banner.

Under the new policy, players could stay in the locker room while the national anthem of the United States is played. Shortly, thereafter, players wrongfully asserted that the new policy violates their First Amendment protection of “freedom of speech.”

The problem with the players’ constitutional argument is that the Constitution only applies to “State actors.” The state action requirement stems from the fact that the constitutional amendments protecting individual rights are mostly phrased as prohibitions against government action. The First Amendment to the United States Constitution sets forth, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof, or abridging the freedom of speech, or the press, or the right of the people peacefully to assemble, and to petition the Government for a redress of grievances.” The Fourteenth Amendment, which was ratified after the Civil War, made most of the liberties set forth in the Bill of Rights applicable to the States.


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The termination of a shareholder’s employment may constitute oppression under N.J.S.A. 14A:12-7(b)(1)(c). That is because a person who holds a share in a closely held corporation often does so “for the assurance of employment in a closely-held corporation in the business.” Muellenberg v. Bilkon Corp., 143 N.J. 168, 180-181 (1996). That is because, a shareholder may have a “reasonable expectation” of continued employment. See, Brenner v. Berkowitz, 134 N.J. 488, 508 (1993).

When representing the minority, it is important to develop why the employee/shareholder had a reasonable expectation of continued employment. Of course, when representing the corporation or majority, counsel should present evidence that the employee/shareholder did not have a reasonable expectation of continued employment.


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On July 5, 2016, the United States District Court of Appeals for the Ninth Circuit issued a decision in the case entitled United States v. Nosal. The case involved a former employer and others using the password of another employee to hack into his former employer’s database in order to access and take information which belonged to his former employer.

The decision has gained a lot of attention and press because Mr. Nosal’s criminal conviction was based upon his use of another employee’s passwords. There are a large number of articles and blog posts warning that the holding in the case could result in the criminal prosecution of an individual who uses a friend’s Netflix or HBO GO password to access those sites. While that could be one result of the decision, I believe the holding in the Nosal case does not currently go that far. Per the Ninth Circuit, “this appeal is not about password sharing. Nor is it about violating a company’s internal computer use policies.” Rather, the case revolves around accessing a protected computer with the intent to defraud as defined in the Computer Fraud & Abuse Act (CFAA), 18 U.S.C. § 1030.


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Several months ago, I blogged about the Rodriguez v. Raymours Furniture Co., 436 N.J. Super. 305 (Super. Ct. 2014)case. The case addressed an important issue – whether or not an employee’s could enter an agreement to shorten the statute of limitations period from 2 years to six months to assert an employment discrimination claim pursuant to New Jersey’s Law Against Discrimination (LAD). Yesterday, the New Jersey Supreme Court held that the statute of limitations period could not be reduced by agreement.
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