Never heard of any such NJ law. Doesn't say it doesn't exist.
Now some organizations pass anti nepotism policies or policies designed to prevent one from supervising ones spouse (but not ones lover!) .
In my school either a tenure issue or the collective bargaining agreement could well trump any attempt to retroactively apply some anti nepotism policy --but trust me we may squeeze out white coaches to make room for others!
We hire board member's kids who are not qualified but we prevent folks from being free volunteer weight coaches if own kid would be in weight room .
I doubt a coach is a tenured slot--but I don't know with state related colleges.