A paycheck is one benefit that comes from a job and, thankfully, the New Jersey Law Against Discrimination (LAD) prohibits employment discrimination as it relates to that compensation.
This expansive law allows an individual to seek remedies when they are discriminated against. This protection against discrimination and bias-based harassment is one of the most comprehensive in the country—but it does not extend to all employment benefits like pension, insurance, or retirement plans. Because of this exception, if a pension plan discriminates against a NJ resident, then these victims of discrimination are unable to seek relief through LAD.
Why? After the original LAD was passed in 1945, the Legislature added an amendment in 1962 seeking to provide balance to entities accused of engaging in discrimination. In doing so, the 1962 amendment added an exception to LAD that states its protections shall not “interfere with the operation of the terms or conditions and administration of any bona fide retirement, pension, employee benefit or insurance plan or program.” N.J.S.A. 10:5–2.1.
Upon initial glance, one would not understand this amendment to exclude benefits from discrimination protection. It simply means that nothing in LAD could “interfere” with “bona fide” (i.e., good faith) benefits.
Thankfully, rooting out the blight of discrimination would not interfere with a legitimate, good-faith employee benefit. LAD is designed to do the opposite of that as it provides a way for people to enforce the benefits they would otherwise be entitled to by seeking remedies when they are unlawfully discriminated against.
LAD gives individuals a way to ensure they are treated equally with things like pay by allowing them to bring a lawsuit. For example, if an individual is paid less at work because of a protected class (like their gender or race) that person is able to bring a claim against employer for being treated unequally.
And, if appropriately applied, LAD could be used to prohibit discrimination from interfering with a duly-earned retirement, pension, employee benefit, or insurance plan.
Unfortunately, that is not how the amendment has been interpreted by New Jersey courts. The amendment, instead, has been read to exclude LAD’s protections from applying to these employee benefits altogether.
In practice, this means your health insurance could be denied due to discriminatory reasons such as racial- or sex-based discrimination and LAD would not apply.
This is exactly what the New Jersey courts held in Rutgers Council of AAUP Chapters v. Rutgers, The State Univ., 298 N.J. Super. 442, 451 (App. Div. 1997). In that case, five Rutgers employees sued the New Jersey State Health Benefits Commission because the employee’s same-sex domestic partners were denied health insurance coverage.
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