Has Your Employer Asked You to Sign an Arbitration Agreement? Here’s What You Need to Do

Increasingly, New Jersey employees are being asked to sign arbitration agreements that contractually obligate them to settle disputes out of court and which prevent them from taking legal action against their employer. These agreements may feel vague and their language may be confusing to anybody not trained in employment law, but not understanding the ramifications of what’s they’re being asked to sign does not eliminate its contractual nature. A case recently decided by the Supreme Court of New Jersey makes it painfully clear that employees need to act thoughtfully to protect themselves when asked to sign one of these documents, and that the best way to do this is to consult with an experienced employment attorney before doing so.

The case was filed by Marilyn Flanzman, a long-time employee of Jenny Craig, Inc. Ms. Flanzman was first employed by the weight loss and nutrition company in 1991. She was hired to provide weight-maintenance counseling to the company’s clients, and in doing so was expected to work approximately 35 hours per week. Approximately twenty years later she was asked to sign an arbitration agreement that committed her to final and binding arbitration in the event of any “claims or controversies arising out of or relating to [her] employment.” There were no details within the contractual language as to who, how or where the arbitration would take place. Ms. Flanzman signed this agreement. Six years later, when Ms. Flanzman was 82 years old, her hours were cut back over a period of half a year to just three hours per week. She interpreted this as having been constructively discharged and filed an age discrimination lawsuit against the company.  Jenny Craig filed to have her complaint dismissed and compel arbitration, and their motion was granted. 

Ms. Flanzman appealed the trial court’s decision, which had indicated that she had to comply with the arbitration agreement. The Appellate Division agreed with her and overturned the lower court’s decision, but in the final word on the case the Supreme Court of New Jersey agreed with the trial court’s decision. In upholding that order the judges of the Supreme Court indicated that even though the Agreement provided “only a general concept of the arbitration proceeding,” it “makes clear that the contemplated arbitration would be very different from a court proceeding.” 

The state Supreme Court’s decision makes clear that the arbitration agreement Ms. Flanzman signed met the standards imposed by New Jersey contract law and was valid and enforceable. That leaves the fate of her age discrimination concerns to the mercy of an arbitrator. In order to protect your own interests if  asked to sign any kind of employment agreement, it’s important to ask an employment attorney to review the language of the document to make sure that your interests are represented.

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