Schorr & Associates’ Employment Case of The Week ending December 30, 2016

Zieger v. Public Service Enterprise Group, Inc., 2016 N.J. Super. Unpub. LEXIS 2739 App. Div.  (Unpublished) (December 28, 2016)

The year 2016 ended the way it began (see Morgan v. Raymours Furniture) – with an important and useful case in which the Court refused to enforce mandatory arbitration for a new and important reason.  In this case, the Court refused to enforce arbitration because the defendant never signed or executed the agreement.

The underlying facts are not relevant to the appeal, but for those curious, the Plaintiff, Denita Zieger, was a nurse at a nuclear facility employed through an agency and working for a contractor. She alleges that she was terminated in retaliation for blowing the whistle on fraudulent medical record keeping.  She filed suit against five different corporate entities and an individual under the Conscientious Employee Protection Act.  One of the six defendants, Legacy Human Resources, Inc., filed a motion to compel arbitration based upon an arbitration agreement that was presented to Ms. Zieger by a different defendant.  Ms. Zieger signed the agreement, but it was never signed by anyone employed by Legacy.

The trial judge, Francine A. Schott in Essex County, granted Legacy’s motion to dismiss and compelled arbitration, finding that Ms. Zieger did not disavow her signature nor misunderstand what she was signing.  Legacy had also filed a motion for summary judgment, which was denied.  The plaintiff appealed the grant of the arbitration motion.

The Appellate Division reversed, holding that the arbitration agreement was between her and Legacy, and that although Ms. Zieger had signed the agreement, it was never signed by Legacy and therefore unenforceable.  The Appellate Division found no offer and acceptance because the plaintiff was never actually employed by Legacy.  The Appellate Division held that non-signatories cannot bind signatories to arbitrate claims unless (1) an agency agreement exists between a signatory and non-signatory against which arbitration is sought; or (2) equitable estoppel, which does not apply absent proof of detrimental reliance.

Unfortunately, the case is not published.  However, this law can be applied to a variety of situations in which an employer is attempting to compel arbitration absent the employer’s signature.  This may be applicable in employment application matters or where an employer attempts to enforce a policy manual and the employee argues that no agreement could exist because the employer never signed the agreement.  In any event, it is nice to bookend the year with significant hits on mandatory arbitration.

Trial Court Judge: Francine A. Schott

Appellate Judges: Rothstadt and Sumners (decision per curiam)