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Carino v. Allstate Financial Services, LLC

A-3278-02T3 (N.J. Super. App. Div. 2003) (Unpublished)

EMPLOYER-EMPLOYEE; ARBITRATION—If a job applicant submits, as part of the job application, a form that calls for arbitration of all disputes for which the employer is obligated to arbitrate, the applicant is bound to the arbitration agreement even if never hired.

A woman applied for employment. As part of her employment application, she executed a Form U-4, which is a “Uniform Application for Securities Industry Registration or Transfer.” That form contained an agreement to arbitrate “any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person that is required to be arbitrated under the rules, constitutions or by-laws of” NASD. She did not get the job and then she sued based upon the way in which her application was handled. The lower court dismissed the suit on the ground that the woman was required to arbitrate the dispute in accordance with her agreement to do so as set forth in the Form U-4. On appeal, the woman argued that becoming an employee “was an ‘implied condition’ of her agreement to arbitrate disputes.” She also argued that arbitration should not have been mandated because her claims “did not arise in connection with either [the prospective employer’s] business or employment with [the prospective employer].” The Appellate Division agreed with the lower court. It stated that: “An agreement relating to arbitration should be read liberally in favor of arbitrability in light of our settled public policy favoring enforcement of arbitration agreements, with all doubts to be resolved in favor of arbitration.” The rules of the NASD “require arbitration of all suits arising out of or in connection with the business of an NASD member.” Here, the woman’s “claims arose out of her potential employment with [the NASD member] and the pre-employment Form U-4 agreement.” Therefore, the Court held that the claim must be arbitrated.


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