New Jersey Appeals Court Refuses to Enforce Arbitration Clause

In recent days, arbitration clauses have become one of the most controversial aspects of employment agreements. Many of the scandals that have arisen during the time of MeToo have revolved around employees disregarding their nondisclosure clauses and arbitration and refusing to participate in a process that they believe puts them at a disadvantage and their employer at an unjust advantage, and many courts are agreeing with victims. A recent example of this took place in New Jersey’s Appellate Division on October 17th, when the court published a decision, Flanzman v. Jenny Craig, in which they refused to enforce an arbitration clause in a case involving a violation of New Jersey’s Law Against Discrimination. The court ruled that the agreement’s failure to identify a specific forum for arbitration resulted in it being unenforceable.

The case in question involved a 26 year employee, 82-year-old Marilyn Flanzman, who sued Jenny Craig, Inc. for age discrimination, harassment and wrongful termination. The Jenny Craig moved to compel arbitration based upon the employment agreement that she had signed several years earlier. Though the trial court granted the employer’s motion to compel arbitration based on the contract, the Ms. Flanzman appealed that decision to the Appellate Division, which reversed the lower court’s decision because the agreement did not specify an “arbitral institution,” thus depriving her of information regarding the rights and procedures that would replace the rights waived by agreeing to arbitration.

Though the court was careful in indicating that employment agreements did not require special language to make the use of arbitration agreements more burdensome, they also were firm in their decision that employees need the basic information that specification of use of organization such as the American Arbitration Association or Judicial Arbitration and Mediation Services would equip them with.

When it comes to employment contracts, arbitration agreements are being subjected to increased scrutiny in New Jersey courts. This is important because the right to a jury trial is guaranteed by the United States Constitution and no employee should ever be forced, under threat of losing their job, to give up their right to sue and present their case to a jury of their peers. If you believe that you have been the victim of employment discrimination, harassment of retaliation, contact Schorr & Associates today to set up a consultation to discuss your situation. We are here to make sure that you get all of the employment law protections that New Jersey offers.

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