Week Ending 8/11/17: Dugan v. Best Buy

Schorr & Associates’ Employment Case of The Week ending August 11, 2017

Dugan v. Best Buy, 2017 N.J. Super. Unpub. LEXIS 2053 (N.J. App. Div. (Unpublished) August 11, 2017)

The Appellate Division continued a line of New Jersey cases refusing to enforce arbitration agreements that do not clearly and unambiguously evidence the employee's assent to waive his right to a jury trial and instead agree to arbitrate. As with other arbitration agreements found to be unenforceable, this case reflects a situation where the employer could have easily made it clear that the employee agreed to waive his rights, but instead chose to mislead the employee instead.

Kevin Dugan was a general manager with Best Buy. In 2016, after six years of employment, Best Buy rolled out a new arbitration policy and required its employees to view an eLearning program. As the opinion points out, the language of the policy suggested that the arbitration process was more favorable than court proceedings. The employee is then asked to click a box stating, “I have read and understand the Best Buy Arbitration Policy that takes effect on March 15, 2016.” Mr. Dugan clicked the box. Just three weeks later he was terminated. In September, he filed an age discrimination lawsuit in Burlington County State Court. Best Buy moved to enforce the arbitration program and Judge Claypoole granted the motion to dismiss the lawsuit in favor of arbitration. This appeal followed.

The Appellate Division reversed. The Court pointed out that Best Buy’s policy did not express that employees were “waiving” their right to sue. The policy states that employees are bound by the policy “by becoming or remaining employed after the effective date of the policy”. Perhaps most importantly, the box that is clicked only provided that Mr. Dugan “read and understood” the policy. It never expressly states that Mr. Dugan agreed to waive his right to a jury trial nor to arbitrate all claims. The Court followed this firm’s case of Morgan v. Raymours Furniture Co., holding that simply agreeing that the employee received and read a policy does not constitute an agreement. The Court reiterated that an employer, with minimal effort, can provide language that unambiguously advises the employee that he or she is waiving the right to a jury trial.

The two judge panel had a disagreement regarding one key element in the decision. Judge Moynihan, who wrote the opinion, commented that, because Mr. Dugan’s employment only continued for three weeks, it was not long enough to establish an unambiguous waiver. This inferred that there is, at some point longer than three weeks, a duration of time that could constitute assent. It was ultimately upon this basis that Judge Moynihan concluded that the agreement was unenforceable.

Judge Vernoia wrote a concurring opinion, something exceedingly rare in a two judge opinion. The concurring opinion disagreed that the length of employment following the adoption of the policy could be dispositive of the enforceability of the policy. Rather, Judge Vernoia opined that the agreement was unenforceable because it did not constitute an unambiguous notice that continued employment would create an enforceable agreement.

There are two additional important points that I want to highlight. First, in a footnote, the Court stressed that we should not conflate the issue of whether continued employment constitutes adequate consideration for an enforceable agreement with whether continued employment constitutes assent to an agreement. In other words, even though Courts have held that continued employment is adequate consideration for the enforceability of an agreement, the continuation of employment alone cannot create an enforceable agreement to waive the right to sue absent an unambiguous assent.

I also want to vent a little about the Appellate Division’s illogical policy of not ever approving for publication opinions written by two judges instead of three. Generally, two judges are assigned for oral argument and opinion where the issues are clear-cut and the judges are in agreement. Here, the issues were not clear cut, and the concurring opinion makes it clear that the judges were not in agreement. Obviously, a third judge should have been invited to join. This is sometimes done after oral argument, when a third judge is invited to listen to the oral argument and join in the opinion. Nevertheless, this is an important opinion and I hope that the Appellate Division revisits its unwritten rule to decline publication of two-judge opinions.

Motion Judge: Susan Claypoole, J.S.C., Burlington County.

Appellate Judges: Vernoia and Moynihan.

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