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Johnson v. Pinkerton, Inc.

A-4824-02T2 (N.J. Super. App. Div. 2004) (Unpublished)

EMPLOYER-EMPLOYEE; ARBITRATION—An employee is not obligated to arbitrate a Law Against Discrimination claim if nowhere in written materials supplied by the employer is the employee advised of the right to consult an attorney before agreeing to the arbitration provision or that, under contract law or the Law Against Discrimination, the employee would have had a right to a jury trial but for agreeing to be limited to arbitration.

An employee brought a Law Against Discrimination (LAD) claim against her employer alleging sexual harassment, discrimination, retaliation, breach of contract, and several related common law torts. The lower court dismissed the claim without prejudice and compelled her to arbitrate her claims. Its decision was based on several documents prepared by the employer and allegedly signed by the employee when she began her employment. The lower court accepted the employer’s contention that these documents evidenced the employee’s knowing waiver of her right to a jury trial on her LAD claims, as well as her acceptance of binding arbitration as the sole means for resolving such claims. One such document was the employee handbook which stated that any claims or controversies must be resolved by arbitration. Another was a sixteen-page brochure describing the employer’s arbitration program. There was also an acknowledgment form, signed by the employee, acknowledging that she received the handbook, and that she would comply with its policies and terms.

The arbitration section of the handbook concluded with a paragraph stating that the terms of the employer’s arbitration were contained in another brochure provided to all employees. This employee never received this separate brochure. Had she received it, she would have seen that the brochure stated that an arbitrator, rather than a judge or jury, would resolve disputes.

On appeal, the Appellate Division found that nowhere in any of these written materials was the employee informed that under LAD, or under contract law, she would have had a right to a jury trial but for her agreement to be limited to arbitration. Therefore, the Court held that the employee did not knowingly waive her right to a jury trial. Furthermore, none of the documents advised the employee that she had a right to consult an attorney before agreeing to the arbitration provision. For those reasons, the Appellate Division reversed the lower court’s decision and held that the employee was not bound by the arbitration agreement.

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