New Jersey courts are not antagonistic to the arbitration of employment disputes. However, as the New Jersey Appellate Division made abundantly clear in a July 18, 2016 decision, an arbitration clause will not be enforced where its language does not indicate the employee is clearly and expressly waiving his right to a jury trial. SeeAnthony v. Eleison Pharmaceuticals LLC, Docket No. A-932-15T4 (App. Div. July 18, 2016).

In Anthony, the employee filed a lawsuit against his former employer under the New Jersey Wage Payment Act, alleging that the company failed to pay him minimum wages, overtime compensation, and wages that were due to him following the termination of his employment.   The employer filed a motion to dismiss the lawsuit and order arbitration pursuant to a clause in the employment agreement which stated, among other things, that “The parties agree that should any dispute arise out of this Agreement, a phased dispute resolution process shall resolve the dispute,” ending in binding arbitration. The trial court granted the employer’s motion, stating among other things, that the arbitration clause constituted a clear waiver by the employee of his right to pursue his claims in a judicial forum.

Anthony appealed and the Appellate Division properly reversed, because, as anyone familiar with New Jersey case law knows, after the New Jersey Supreme Court's 2014 decision in Atalese v. U.S. Legal Services Group LP, 219 N.J. 430 (2014), arbitration clauses in New Jersey will not be enforced absent language clearly indicating that the employee was giving up his right to go to court. Here, there was no such language. Accordingly, the court held: “In the case before us, the arbitration clause included no reference to a waiver of plaintiff's statutory rights or a jury trial. Consequently, it did not constitute a valid waiver of plaintiff's right to have his claims decided in a judicial forum.” See Anthony, Docket No. A-932-15T4, slip op. at 11.

The Bottom Line.  New Jersey courts will enforce arbitration agreements if it contains the right language, including language specifying what disputes will be arbitrated and clearing indicating that the employee is waiving his or her right to a jury trial.  Therefore, if you have arbitration agreements, please review them to make sure that they contain the necessary language. If they do not, revise the agreement and redistribute. Please call us if you have any questions.

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