New Jersey Appellate Court Rules Arbitration Agreement in Employee Handbook Unenforceable

In C.M. v. Maiden Re Insurance Services, LLC, No. L-3622-13 (App. Div. Sept. 18, 2015), the New Jersey Appellate Division held that an employee was not compelled to arbitrate her employment discrimination claims, notwithstanding her confirmed receipt of a handbook containing an arbitration agreement. Electronic confirmation that the employee received the handbook was not enough to constitute a knowing waiver of her constitutional rights to have her claims under the New Jersey Law Against Discrimination (NJLAD) decided by a jury, as

1. the handbook contained an unambiguous disclaimer in which the company expressly stated that the handbook did not create contractual obligations,
2. the arbitration provision in the handbook did not refer to the plaintiff’s statutory rights, and
3. the provision did not explain the nature of an arbitration proceeding or plainly state that the plaintiff was relinquishing her right to seek redress in a court of law before a judge and a jury.

Earlier in September, the Appellate Division held in an unpublished opinion (Milloul v. Knight Capital Group, Inc.) that mandatory employment arbitration agreements must include an express waiver of an employee’s “right to a trial.”