New Jersey Court Rules that Plaintiff in Age Discrimination Suit Cannot Be Compelled to Arbitrate

Many New Jersey employers include provisions for arbitration of disputes in written contracts with new employees. In order for an arbitration agreement to be legally enforceable, it must, among other criteria, contain enough information to demonstrate a “meeting of the minds” between the parties. The New Jersey Appellate Division recently ruled that an arbitration agreement, signed decades after the plaintiff began working for the defendant, was not enforceable because there was no “meeting of the minds” in evidence. Flanzman V. Jenny Craig, Inc., No. A-2580-17T1, slip op. (N.J. App., Nov. 13, 2018).

The plaintiff in Flanzman is alleging age discrimination under the New Jersey Law Against Discrimination (NJLAD). This statute prohibits employers from discriminating against employees on the basis of numerous factors, including age. Whereas the federal statute addressing age discrimination expressly states that it only applies to individuals who are forty years of age or older, 29 U.S.C. § 631(a), the NJLAD does not set a minimum age. It does, however, state that an employer does not automatically violate the law if they “refus[e] to accept for employment or to promote any person over 70 years of age.” N.J. Rev. Stat. § 10:5-12(a). This exception only covers two specific discriminatory acts: refusal to hire and refusal to promote. It does not mention other acts, such as termination or unequal pay.

In order for a contract to be enforceable, the party seeking enforcement must demonstrate that the other party knowingly assented to the agreement. Courts are particularly strict about this requirement when the contractual term at issue involves a waiver of legal rights. An arbitration agreement waives the right to seek redress in court. If the agreement provides for binding arbitration, the parties may have no recourse in the court system at all. New Jersey courts therefore require evidence that an employee “clearly and unambiguously agree[d] to waive his or her statutory rights.” Flanzman, slip op. at 8, quoting Leodori v. Cigna Corp., 175 N.J. 293, 302 (2003).

The defendant, according to the court’s ruling, terminated the plaintiff after twenty-six years of employment, when she was eighty-two years old. The termination reportedly occurred after a period of time when the defendant “gradually reduced plaintiff’s full-time hours to only three hours per week.” Id. at 3. The plaintiff filed suit under the NJLAD for age discrimination, harassment, and aiding and abetting unlawful employment practices. The defendant filed a motion to compel arbitration, which the trial court granted.

In its ruling reversing the trial court, the Appellate Division agreed with the plaintiff’s argument that no “meeting of the minds” had occurred, as evidenced by the lack of detail in the agreement. Specifically, it fails to make “any reference…as to the process for generally selecting an arbitration forum.” Id. at 5. The parties could not agree on a forum for arbitration, such as the AAA or JAMS. The agreement provided no guidance to help them determine which forum would replace the court system. New Jersey law, the court noted, provides a mechanism allowing the court to appoint a specific arbitrator when the parties cannot agree on someone, but this arbitration agreement did not even enable them to get to that point.

The Resnick Law Group’s knowledgeable and experienced team of employment lawyers are available to help you in your dispute with an employer in New Jersey or New York. To schedule a confidential consultation to discuss your case, please contact us today online, at 973-781-1204, or at 646-867-7997.

More Blog Posts:

Major Technology Companies No Longer Require Arbitration in Sexual Harassment Cases, The New Jersey Employment Law Firm Blog, December 14, 2018

New Jersey Court Rules on Mandatory Arbitration in Whistleblower Case, The New Jersey Employment Law Firm Blog, November 30, 2018

New Jersey Court Denies Two Motions to Compel Arbitration by Employer in Wrongful Termination Lawsuit, The New Jersey Employment Law Firm Blog, July 6, 2018

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