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Wednesday, June 26, 2019

In NJ, Can I Sue My Employer If I Signed an Arbitration Agreement?

Clients have sought my help when they signed, or thought they might have signed, an arbitration agreement given to them by their employer. Frequently, the employer did not provide them with a copy, and sometimes signing an arbitration agreement is part of the written job application process. Too often, employees only become fully cognizant of the agreement, when the employer produces it after a lawsuit is filed by the employee, in an attempt to get the employee’s case dismissed by the Court.

If you signed, or think you might have signed, an arbitration agreement, and believe that your employer illegally discriminated or retaliated against you, or committed other illegal acts against you, you should contact this law firm immediately. This law firm has a successful track record of recovering money for clients who signed arbitration agreements and then later filed lawsuits against the employer.

An Arbitration Agreement Is a Contract, and as Such must Have All the Elements of a Binding Contract

First, arbitration agreements, if properly drafted, are legally enforceable and prevent an employee from recovering money in a lawsuit. An employee should not assume his/her attorney could later be able to discredit it to the extent that a Court would not enforce it.

An arbitration agreement is a contract, and as such must have all the elements of a binding contract. There must be an offer; for example only, the offer could be that the employer offers to keep you in your employment position if you sign the agreement. There must be an acceptance of the offer. Most importantly, there must be a “meeting of the minds” and a “mutual assent” to the contract by both parties.

If the arbitration agreement does not sufficiently explain to the employee what rights the employee is relinquishing, such as the right to a trial by jury, and as to under which laws and statutes the employee is relinquishing his right to sue, such as rights given under the New Jersey Law Against Discrimination, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Conscientious Employee Act, etc., there may be no meeting of the minds as to what the employee is giving up in return for the offer of continued employment.

To be enforceable, the arbitration agreement also has to clearly state which arbitration forum will be used to resolve the dispute, in place of adjudication in a state or federal court. The parties must agree to the forum selection, such as JAMS, or AAA, and which rules will be applied, what discovery process is allowed, etc., during the arbitration, in place of the New Jersey Rules of Court. Arbitration forums such as JAMS or AAA have their own written rules they usually mandate when parties agree to use them as the forum. For an employee to waive his rights to sue his employer in Court, the arbitration agreement must be sufficiently definite in its terms that the performance rendered by each party can be ascertained with reasonable certainty.

Some arbitration forums will not accept clients for arbitration when their dispute arose before the signing of the arbitration agreement. In New Jersey, an arbitration agreement is unenforceable when there is no agreed upon arbitration forum. Kleine v. Emeritus at Emerson, 445 N.J. Super. 545. In Kleine, a case against a nursing home, the New Jersey Appellate Court held that because there was no agreed upon arbitration forum, the arbitration agreement was unenforceable. Kleine at 550. In Kleine, the forum of AAA was the stipulated forum in the arbitration agreement, but then subsequent to the dispute, AAA issued a statement that it would no longer accept arbitration agreements from nursing homes unless the agreement was signed post dispute. In Kleine, it was signed prior to dispute, so the AAA forum mentioned in the agreement was no longer available.  The court held that the arbitration could not be compelled because therefore there was no meeting of the minds and no agreed upon forum.

In Kleine, the court described the defendant nursing home’s position as:

"Defendant has argued the clause does not require AAA arbitration, only that the arbitration be administered pursuant to AAA's commercial arbitration rules; in other words, defendant contends that the provision does not limit the appointment of a substitute administrator so long as that administrator applies AAA's commercial arbitration rules."   

but the Court did not agree that the nursing home could substitute an arbitration administrator even if they applied the same AAA arbitration rules, and Court ruled the Arbitration Agreement was not enforceable.

Bill S-121

On March 18, 2019, Governor Phil Murphy signed into law S-121, sweeping legislation whose goal is to protect workers by nullifying any provision of an employment contract that mandates arbitration of claims of harassment, discrimination and retaliation in lieu of suing in court. This bill applies to all arbitration agreements and employment contracts entered into after March 18, 2019 but will not apply to such agreements signed prior to the enactment of that law.

Bill S-121 amends the NJLAD to provide other protections for employees as well, such as in the wake of the “#Metoo” movement, which opposes the silencing of victims of sexual harassment. Bill S-121 despoils the effectiveness of non-disclosure agreements in employment dispute settlement agreements by making them non-enforceable against employees.

However, because Bill S-121 has not yet been litigated and tested in the Courts, an employee who signs an arbitration agreement after the enactment of S-121, should not assume it will not be enforceable because a federal law may possibly override it. This is because assuming the arbitration agreement otherwise fulfills all the requirements of a contract to be binding and enforceable, i.e., offer, acceptance, definite terms, a meeting of the minds and mutual assent, etc., it may be ultimately decided by the Courts that a Federal law, the Federal Arbitration Act, “FAA” “preempts” or overrides this new state law. If so, the arbitration agreement will be enforceable, even if signed after the enactment of Bill S-121 under the legal doctrine of preemption.

If You Signed, or Think You Might Have Signed, an Arbitration Agreement with Your Employer, Do Not Resign.

If you signed or think you may have signed an arbitration agreement, and are experiencing discrimination or other illegal acts by your employer, you should contact this law office immediately.  If you are thinking of simply resigning because of race, age, disability discrimination, retaliation, harassment or other discrimination in your workplace and/or because you notified your employer about the harassment/discrimination and no action was taken, you should contact an attorney experienced in employment law and arbitration agreements before you do so.  This law firm has a successful track record of recovering money for clients who signed arbitration agreements and then later filed lawsuits against the employer.

What You Can Do

I am an aggressive and compassionate employment law attorney who is experienced in successfully representing persons who knowingly or unknowingly signed arbitration agreements and in recovering money for them. If you are being subjected to workplace discrimination, even if you signed an arbitration agreement, contact Hope A. Lang, Attorney at Law today for a free consultation.

Hope A. Lang, Attorney at Law serves clients throughout New Jersey, including Bergen, Middlesex, Essex, Hudson, Monmouth, Ocean, Union, Camden, Passaic, and Morris Counties with locations in southern, central, western and northern NJ to meet with clients.



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