Expanding Discrimination Claims Under New Jersey LAD - From Employment Practices to Business Models

December 11, 2008

Issues of alleged discrimination can venture far outside the traditional realm of employer-employee disputes under the New Jersey Law Against Discrimination. Last month, an online match-making company settled a matter with the New Jersey Division on Civil Rights (“DCR”) in which the Company’s business model, and the services (or lack of services) provided by the Company, were the basis for the discrimination claim. 

The original complaint, filed in 2005 by an individual described in a statement from the DCR’s Director as a “gay match-seeker from New Jersey”, alleged that the Company violated the New Jersey Law Against Discrimination by failing to offer same-sex matching services.  The Company denied the allegations of the complaint.  Following a DCR investigation, on July 23, 2007, the DCR’s Director issued a finding of Probable Cause as to the allegations.  The Company filed a motion for reconsideration of the finding in October 2007, which remained undecided at the time of the November 2008 settlement. 

Under the terms of the settlement agreement, although the Company continued to deny that it violated the law, it agreed:

• To provide same-sex matching services to all users by March of 2009.  Specifically, the settlement provides that the Company “shall provide options for users to identify themselves as a male seeking a male or a female seeking a female, with accessibility, registration procedures and subscription flow substantially similar to that provided to users seeking opposite sex matches.” 

• To provide the same or equivalent technology and service quality for same-sex matching as those provided to opposite-sex matching services, although the Company reserves the right to post a disclaimer noting that its compatibility-based matching system was developed solely on the basis of research focused on married heterosexual couples. 

• To provide the complainant with free membership for one year, along with free membership to the first 10,000 users registering for same-sex matching services for a six-month period. 

• To post pictures of same-sex couples in the Diversity section of its website as successful same-sex matches occur.

• To post pictures of same-sex couples in Company advertising.

• Within thirty days of the initiation of the same-sex matching service, to amend the anti-discrimination statements located on the Company’s websites, handbooks, and publications to indicate specifically that it does not discriminate, among other things, on the basis of sexual orientation.

• To pay $50,000 to the DCR for administrative expenses accrued throughout the duration of the investigation.

• To pay $5,000 to the complainant.

In essence, the settlement requires the Company to expand its business from catering solely to opposite-sex match seekers to the inclusion of same-sex match seekers.  The settlement also requires the Company to change its advertising significantly.

The pursuit and settlement of a claim like this one against a company whose business was focused on a certain target audience (in this case, heterosexual match-seekers) serves as a clear warning to all employers that compliance with state and federal anti-discrimination regulations extends beyond interactions within a company.  Certainly, while a company must ensure that its equal employment opportunity and anti-harassment policies are fully compliant with applicable laws, employers should think even more broadly.   Advertising and marketing campaigns, as well as a company’s core business model, can be the basis for a discrimination claim.  Companies that rely heavily on Internet advertising, and interactive web tools, may be particularly at risk, as such advertising and web tools presumably appear, and can be utilized, in a variety of jurisdictions with differing laws.

Jackson Lewis attorneys are available to answer questions regarding this settlement and assist employers in all areas of workplace law.