Schorr & Associates Scores an Appellate Win in Mandatory Arbitration Case

Employment attorneys Alan H. Schorr and Jenelle L. Hubbard secured significant Appellate victory on behalf of two former Raymour & Flanigan employees wrongly subjected to the terms of a mandatory arbitration clause in their employment contracts. Nearly four months after Schorr argued the case before the Superior Court of New Jersey Appellate Division, the court affirmed a lower court’s refusal to compel arbitration and described the terms of the employment agreements “substantively unconscionable.”

The case was filed on behalf of Tiffany Guc and Tiffeny Carr, both former employees of Raymours who are residents of the state of New Jersey. Hired at different times, each of the women had signed an "Associate's Agreement & Consent" (Associate's Agreement) and an "Employment Arbitration Program" (Arbitration Agreement), with Guc signing in March of 2014 and Carr signing in 2018. Guc was subsequently fired in June of 2020 and Carr resigned in February 2021, with both women later that month filing claims under New Jersey’s Law Against Discrimination. They named the company and two of its managers, claiming disability discrimination, sexual harassment, retaliation, and unlawful termination of Guc.

In response to the lawsuit, Raymours moved to compel arbitration and stay the Law Division action, referring to terms of the agreements that both women had signed compelling that all claims go to arbitration and limiting claims to be arbitrated to those filed with the company’s arbitration administrator within 180 days. The agreements had specified that  explained that "claims" included "employment and compensation-related claims, disputes, controversies or allegations" between the employee and Raymours, including statutory claims claims under the "New Jersey Law Against Discrimination [LAD.]" The Superior Court of New Jersey, Law Division denied the company’s motion to compel arbitration, and the company appealed that decision to the Superior Court’s Appellate Division, which upheld the trial court’s decision.

When the lower court denied Raymours’ motion, it ruled that the terms of the employment agreements were “unconscionable and unenforceable” because they contained a time-limitation provision that our Supreme Court had invalidated. The case that had invalidated the time-limitation agreement also involved Raymours Furniture Company. Despite its loss in that case, Raymours not only proceeded to argue for a time limit, but never changed the terms of their company’s employment agreement in order to comply with the law. Carr’s agreement was signed in 2018, two years after the court handed down its precedential decision in an earlier case.

In its appeal of the lower court’s decision, Raymours conceded that the time limitation contained within its employment agreement was barred, but argued that the rest of the agreement’s terms were severable and should be upheld, thus permitting them to compel arbitration. The court rejected this argument, noting both that “contract terms should be given their plain and ordinary meaning” and that courts cannot “remake a better contract for the parties than they themselves have seen fit to enter into, or to alter it for the benefit of one party and to the detriment of the other.” Because Raymours “chose to link and intertwine the time-limitation concept with the agreement to arbitrate,” the court rejected Raymours’ argument in its entirety and remanded the case so that the women can continue pursuing their LAD claims in the Law Division.

Schorr & Associates is proud to represent Ms. Guc and Ms. Carr in their fight for their rights under the New Jersey Law Against Discrimination. If you need help navigating a challenging employment discrimination issue, contact us today to set up a time for a consultation

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