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In an era where it seems that the breadth of the New Jersey Law Against Discrimination is ever expanding, the Appellate Division has issued a decision limiting the scope of this statute with respect to at least one common employment practice: nepotism. While nepotism may be an undesirable practice, it is not illegal. Thus, although employers should strive to eliminate this objectionable, but all too common, workplace phenomenon, they are not violating the law simply because they favor a family member over a complete stranger. All “Mom and Pop” companies can now breathe a sigh of relief — they cannot be sued simply for hiring their son and daughter to work in the family business, even though a nonrelative may be more qualified for the position. The scope of the Appellate Division’s decision in Bumbaca v. Township of Edison, 373 N.J. Super. 239 (Nov. 19, 2004) (appeal for certif. pending), however, is much more far reaching than simply small, family-run businesses. It stands for the proposition that an employer cannot be held liable for engaging in nepotism, no matter how large or small the company, and even if the employer is a public entity. The Appellate Division’s decision makes sense. There is a long and time-honored tradition, particularly in public employment, of family members following in the footsteps of their parents and grandparents when choosing their careers. This practice can be seen predominantly in the area of law enforcement, where it is not uncommon for several generations of family members to work for the same public entity. Indeed, it is not unusual for parents and siblings to work side-by-side as public safety officers. While no employer should be condoned for hiring or evaluating employees on the basis of anything other than merit, the converse is that employees should not be penalized simply because they desire to work in the same industry or for the same employer as their family members. A decision that concluded nepotism was illegal would have the effect of doing just that. It would chill employers from hiring employees of family members, even if these individuals were well qualified for the position, for fear of liability due to the appearance of nepotism. The Appellate Division’s decision thus preserves the status quo and places appropriate boundaries on the reach of the LAD. In Bumbaca, the Appellate Division held that preferential treatment for family members does not violate the LAD, nor is it a violation of New Jersey public policy. Significantly, this case involved a public employer, the Township of Edison, and an applicant for a paid firefighter position. Bumbaca alleged he was intentionally passed over for employment so the Township could promote the relatives of employees whose names appeared after his on the hiring list. He claimed that the Township’s actions violated the LAD’s prohibition of discrimination based on familial status and New Jersey public policy. The Township naturally disputed Bumbaca’s version of events and claimed that Bumbaca was disqualified not because of his familial relations, but because he failed a mandatory pre-employment psychological evaluation. The Township argued that, even if Bumbaca could prove that the Township favored applicants related to other employees, his allegations failed to establish a cognizable cause of action as a matter of law. The Appellate Division agreed. First, the plain meaning of the LAD does not prohibit nepotism. Although familial status is generally recognized as a protected category under the LAD, it is specifically omitted from those provisions of the statute that set forth what constitutes an unlawful employment practice. See N.J.S.A. 10:5-12(a) and (c). This omission plainly evidenced that discrimination against an individual based on his familial status, or lack thereof — known in lay terms as nepotism — played no role in the statutory definition of a prohibited employment practice. The Appellate Division rightly declined to expand the reaches of the LAD any further than its already broad coverage when the lain language of the statute suggested otherwise. Additionally, the definition of “familial status” under the LAD does not evince any intent on the part of the legislature to prohibit nepotism in employment. Familial status is defined as:
being the natural parent of a child, the adoptive parent of a child, the foster parent of a child, having a ‘parent and child’ relationship as defined by State law, or having sole or joint legal or physical custody, care, guardianship, or visitation with a child, or any person who is pregnant or is in the process of securing legal custody of any individual who has not attained the age of 18 years. [N.J.S.A. 10:5-5(11).]

As is plainly evident, the definition does not include the concept of nepotism and, even if it did, Bumbaca did not fall within the statutory definition, since he claimed mistreatment not due to his familial status, but his lack thereof. Finally, the legislative history behind the amendment of the LAD to add familial status as a protected category did not support Bumbaca’s theory that nepotism was illegal. Familial status was added as protected category solely for the purpose of eradicating discrimination in housing, and rendering the LAD consistent with the Federal Fair Housing Act. See N.J.S.A. 10:5-9.2. The amendment of the LAD was intended to prohibit, for example, a landlord from refusing to lease an apartment to a single mother. Its goal was not to terminate the longstanding societal tradition of family members working together. The Appellate Division also dismissed Bumbaca’s argument that nepotism was illegal under New Jersey public policy in violation of Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58 (1980) and its progeny. This claim requires a showing that the act violated a clear mandate of public policy as expressed in legislation, administrative rules, regulations or decisions, or judicial decisions. See id. at 72. No such public policy existed in support of Bumbaca’s radical theory. To the contrary, public policy in this state would appear to support family members working together, with the obvious caveat that employees should always be evaluated based on their qualifications, not their connections. For this reason, the Appellate Division made clear that, although nepotism is not illegal, the court “does not endorse nepotism to the extent that it promotes hiring on a basis other than merit. … “ The Bumbaca decision suggests that employers take voluntary measures to ensure that employees are hired, evaluated and compensated based solely on merit and fitness, and not on whom they know. While such “no nepotism” policies are obviously not mandatory, taking at least some minimal measures are encouraged. There are several options available to employers. The most radical approach is to flatly prohibit the employment of family members. A more reasonable policy is to prohibit one family member from interviewing, evaluating or directly supervising another family member. A policy with even less teeth might simply express, in broad terms, the employer’s requirement that family members of employees not be given preferential treatment. These measures could reassure employees that that employment decisions are being based on merit, an ideal that all employers should strive to achieve. Stacey D. Adams is a partner with DeCotiis, FitzPatrick, Cole & Wisler of Teaneck, N.J., practicing in the area of labor and employment law. Adams represented the defendants in Bumbaca v. Township of Edison. If you are interested in submitting an article to Law.com, please click here for our submission guidelines.

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