In New Jersey Staffing Alliance v. Fais, — F.4th —- (3d. Cir. July 24, 2024), the Third Circuit affirmed the District Court’s denial of an injunction seeking to bar enforcement of the New Jersey Temporary Workers’ Bill of Rights and in doing so upheld the law. Specifically, the Staffing Alliance, the American Staffing Association, and the New Jersey Business and Industry Association (collectively referred to as the “Staffing Associations”) sought to enjoin the New Jersey Temporary Workers’ Bill of Rights (the Act). N.J. Stat. Ann. § 34:8D-1 et seq.
The law was enacted in 2022 and aimed to protect temporary workers by mandating recordkeeping and disclosure requirements, mandating disclosure of wage and benefit information, state certification procedures, equal pay provisions, and imposing joint and several liability on clients who hire staffing firms that provide temporary workers.
The law was challenged on the basis that it violated the dormant Commerce Clause in that it resulted in increased labor costs and the need for customers to disclose wage and benefits data will make New Jersey staffing firms less competitive. The Staffing Associations further claimed that claimed that the wage provision was an impermissible price-setting measure that, in practice, disadvantages out-of-state customers. The Staffing Associations further alleged that Section 7(b) is void for vagueness because it does not define “benefits” or “same or substantially similar work.” Finally, the Staffing Associations claimed that the Act was an unreasonable exercise of state police power.
The Third Circuit found that the District Court did not err by finding that the Staffing Associations were unlikely to succeed on their dormant Commerce Clause claim because the Act applies equally to in-state and out-of-state staffing firms and customers and nothing in the Act discriminates against out-of-state firms or consumers. In fact, the Third Circuit noted that the Act imposed “a less onerous burden on out-of state customers because they can simply hire out-of-state staffing firms that are not subject to the Act. In contrast, New Jersey customers cannot avoid the Act by utilizing out-of state firms because the Act applies to any staffing firm that does business in New Jersey. See N.J. Stat. Ann. § 34:8D-1. Thus, the Act did “not economically favor in-state firms or customers over their out-of-state counterparts.”
Further, the Third Circuit was not persuaded by the Staffing Associations; claim that the Act was void for vagueness as it did not define “benefits” or “same or substantially similar work.” Alternatively, the Third Circuit found that although, “civil statutes that regulate economic activities” must give businesses “fair notice” of the law’s requirements, the presence of “some ambiguities” does not prevent enforcement of an economic regulation; rather, it is void for vagueness only if it is “so vague as to be no rule or standard at all.”
Lastly, the Third Circuit determined that the District Court did not err in finding the Staffing Associations failed to show a likelihood of success on the merits of their police power challenge as the provision of the Act were rationally related to the State’s interest in protecting temporary workers.
Given that the Third Circuit upheld the Act as constitutional and valid, covered staffing agencies and employers should make sure that they comply.
This summary is for informational purposes only and is not intended to constitute legal advice. This information should not be reused without permission.
