In a newly published decision, the New Jersey Appellate Division has reversed a lower court ruling that denied an employee’s right to take his breach of contract case to court.  In recent back-to-back rulings, the New Jersey Supreme Court and the Appellate Division have declared certain arbitration clauses problematic and unenforceable due to vague language.  These decisions state that employees are entitled to explicit notice that arbitration rights will substitute for court and jury trial rights.  The most recent decision involved Eleison Pharmaceuticals, LLC, and their Vice President, Forrest Anthony.

Anthony claimed the company owed him a large sum of money as part of his contractual agreement, and he filed a lawsuit to collect the unpaid portion. Eleison filed a motion to force Anthony to resolve the matter in arbitration, based on a purported arbitration clause in his employment contract.

The Appellate Division ruled in favor of Anthony because:

• New Jersey public policy discourages employers from compelling arbitration with employees based upon vague, hidden waivers;
• The contract described  “phased dispute resolution process,” which did not clearly or specifically say “arbitration”; and
• The waiver did not specify that signing the contract indicated that Anthony waived his right to pursue his claims in a judicial forum.

In general, employees are better off having their cases heard by a judge and jury than by a single arbitrator. The goal of arbitration is not necessarily to uphold the law, but to resolve the dispute. This could leave a wronged employee with limited legal protection, including no right of appellate review. For the company, arbitration offers the advantage of a third party neutral who may not be as empathetic towards the plaintiff as a jury of one’s peers, especially when it comes to awarding front pay, back pay, compensatory damages, and punitive damages.  Research has shown that arbitration awards tend to be much lower than jury verdicts in workers’ rights cases, including discrimination, sexual harassment, whistleblower, and retaliation cases, among others.

The new line of cases, including Anthony vs. Eleison Pharmaceuticals, LLC, will affect the enforceability of thousands of New Jersey employment contracts containing this type of waiver.  Importantly, the U.S. Supreme Court has refused to review several of the recent New Jersey arbitration law decisions, which means the New Jersey appellate courts are also in line with federal arbitration law and policy.  This is an uplifting example of the high courts stepping in to protect workers from corporate interests’ possible misuse of power.

If you face a workplace crisis or concern, consult with an experienced legal team that puts your interests first. The employment law attorneys at Hanan M. Isaacs, P. C., will fight for your rights. Contact our Central New Jersey Office by calling 609-683-7400 or contact us online to set up a near term appointment.  We will listen to your facts, explain the law, and advise you as to the best approach to take, which could involve negotiations, mediation, arbitration, or a jury trial.  Call today.  You will be glad you did.