Arbitration agreements have now become the norm with many companies when hiring new employees. This means that an aggrieved employee who desires to sue the company in court, and before a judge or jury, may be prevented from doing so if such a written agreement is in effect. Rather, the aggrieved employee, who for example claims wrongful termination, or sexual harassment, will be compelled to bring the case before an arbitrator.
- In a recent appellate decision, the court held that such an agreement between a company and an employee to settle any such dispute by way of an arbitrator might be invalid if the specific arbitration forum – such as AAA Arbitration – is not specified in the agreement. In the recent case of Franzman v. Jenny Craig, Inc., the Appellate Division ruled that an 82-year old employee who alleged she was being phased out of the company because of her age – an age discrimination claim – could sue in court because the agreement she entered into with Jenny Craig was not specific enough as to the terms of arbitration.
- In the recent 2018 case of Roman v Bergen Logistics, the plaintiff brought a claim for sexual harassment and retaliation. She alleges that she was sexually harassed and then terminated after she objected to her supervisor’s advances.She filed suit in the Superior Court but the case was dismissed because she had signed an “arbitration agreement” upon her hiring, mandating that she arbitrate her claims, thereby waiving her right to have the matter tried in court before a jury. The court upheld the arbitration agreement, finding that the employee intelligently and knowingly executed this agreement where she had acknowledged that she had read and understood it, again meaning that she would have to arbitrate her claim.
The court, in support of the employee’s case, however, noted that the employer’s effort to dismiss the claim for punitive – or punishment – damages was barred. In other words, even though the agreement read that the plaintiff/employee had agreed not to assert a claim for punitive damages, such damages were a “substantive right” under the NJ Law Against Discrimination and the employee could not be prevented from bringing such a claim.