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Appellate Division Revisits Arbitration Agreements in Ruling on New Jersey National Origin Discrimination Lawsuit

Arbitration is a form of alternative dispute resolution (ADR) that resembles a trial in numerous ways, but unlike a trial, there is neither a judge nor a jury. A neutral arbitrator (or panel of arbitrators) with dispute resolution training makes the final decision about the case. Courts all over the country welcome ADR as a way of relieving overburdened dockets. Employers frequently require workers to sign arbitration agreements stating that they will arbitrate any dispute that arises related to the employment instead of going to court. The New Jersey Appellate Division recently ruled that a plaintiff alleging national origin discrimination must submit his case to arbitration because of this kind of agreement.

National origin discrimination violates both Title VII of the Civil Rights Act of 1964 and the New Jersey Law Against Discrimination (NJLAD). According to the Equal Employment Opportunity Commission (EEOC), national origin discrimination includes discrimination because of:
– Actual national origin: A person, or their ancestors, came from a particular location; and
– Perceived national origin: The person has “physical, cultural, or linguistic characteristics” associated with people from that area.

The EEOC notes that the place of origin can be a country or former country, such as Mexico, Nigeria, or the Soviet Union. It could also be a region, such as Central America, Southeast Asia, or the Balkans. People from the United States may be subjected to national origin discrimination, too.

Courts tend to encourage various forms of ADR, including arbitration. State and federal law provide that arbitration agreements are enforceable under the general terms of contract law. The New Jersey Supreme Court has affirmed this view. Employment attorneys and other advocates for employee rights often view arbitration as tending to favor employers, who are in a better position to build relationships with arbitrators and direct business to them. That said, arbitration is not always bad news for an employee claiming discrimination or other unlawful employment practices. It just makes cases more challenging.

The plaintiff in the lawsuit mentioned above began working for the defendant as its Director of Human Resources in 2015. The offer letter that he received stated that he would have to sign a written agreement as a condition of employment. This agreement included a clause labeled “Arbitration,” which stated that any disputes would go to binding arbitration. When a contract specifies that arbitration will be “binding,” courts cannot vacate or modify the arbitrator’s decision without specific evidence of fraud or undue influence.

The defendant terminated the plaintiff in 2019, according to the Appellate Division’s ruling. At that time, it reportedly reminded the plaintiff about the written agreement with the arbitration clause. The plaintiff filed a lawsuit the following year alleging race and national origin discrimination and retaliation under the NJLAD.

The defendant moved to compel arbitration and dismiss the lawsuit. The trial court granted the motion. The Appellate Division affirmed that ruling. It found that the arbitration agreement was enforceable as a contract. It further found that its placement as a separate clause clearly labeled “Arbitration” gave the plaintiff sufficient notice of its terms. Arbitration agreements are not always enforceable in New Jersey, though, and should be carefully reviewed with counsel.

The employment lawyers at the Resnick Law Group advocate on behalf of employees, former employees, and job applicants in New Jersey and New York. To schedule a confidential consultation to see how we can help you with your case, please contact us today online, at 973-781-1204, or at 646-867-7997.

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