Courts in New Jersey will compel the arbitration of discrimination and other employment statutes, but only if the underlying arbitration agreement “clearly and unmistakably” shows that the agreement covers these discrimination and statutory claims and the employee understands that he is waiving his or her right to a jury trial. As the Appellate Division demonstrated in Milloul v. Knight Capital Group, Inc., et al., [1] even if the agreement covers statutory discrimination claims, it will fail if it does not expressly state that the employee is waiving his or her right to a jury trial.

Plaintiff signed a dispute resolution agreement (DRA) which read as follows:

I agree that I will settle any and all previously unasserted claims, disputes or controversies arising out of or relating to my application for employment, my employment or the cessation of my employment with Knight Capital Group, Inc. or any of its affiliates exclusively by final and binding arbitration pursuant to the rules of the American Arbitration Association. Such claims include but are not limited to claims under federal, state and local statutory law or common law, such as the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, including the amendments of the Civil Rights Act of 1991, the Americans with Disabilities Act, the law of contract and the law of tort. [2]

The employment relationship between the plaintiff and his employer ended as so many do, with the firing of plaintiff. Believing that he was fired in violation of the New Jersey Law Against Discrimination (”NJLAD”), plaintiff filed his lawsuit and his former employer moved to compel arbitration. The trial court granting the motion, finding that plaintiff read and understood the DRA and that the DRA’s waiver language was a sufficient waiver of plaintiff’s right to a trial for any LAD claim.

The Appellate Division reversed. Although the scope of the DRA was broad enough to include statutory claims, the DRA did not include a “clear and unmistakable” waiver of plaintiff’s right to a jury trial. Relying on the N.J. Supreme Court’s ruling in Atalese v. US Legal Services Group LP, [3] the Appellate Division held that to be enforceable, an arbitration agreement must explain that an individual is giving up his or her right to bring claims before a court or jury.

The Bottom Line.  Courts in New Jersey favor the arbitration of employment claims and will enforce properly drafted arbitration agreements. There is no mystery here; Milloul simply holds that arbitration agreements must clearly and unequivocally include language informing the employee that he or she is waiving a right to a jury trial. Therefore, if you have arbitration agreements, review them to ensure that they contain the necessary language to repel any attacks in court. If you are thinking of implementing an arbitration policy, make sure that the agreements you intend to use are drafted or reviewed by experienced counsel.