Is Your Company’s Mandatory Arbitration Provision Enforceable?

While many employers feel confident that their written agreements with employees are enforceable, the drafting or method of delivery of those agreements may ultimately render them unenforceable, leaving the employee without the benefit of its bargain.

Employers seeking to have employment disputes resolved by way of mandatory arbitration may once again need to await the Supreme Court’s ruling. The enforceability of mandatory arbitration agreements is before the New Jersey Supreme Court in the case of Skuse v. Pfizer. The plaintiff, a former Pfizer flight attendant, sued her employer, Pfizer, alleging that she was discriminated against in violation of the New Jersey Law Against Discrimination. Pfizer sought dismissal of the lawsuit based on a waiver that Plaintiff acknowledged, wherein she agreed to have any dispute resolved by arbitration, not by a lawsuit. At issue before the Supreme Court, is whether the waiver is enforceable. According to Plaintiff, the waiver was contained within a web-based “training module” and did not sufficiently alert Plaintiff that she was agreeing to waive her right to bring a lawsuit in Court and have a jury decide her case. The Appellate Division already determined that Pfizer did not obtain Plaintiff’s knowing and explicit assent, concluding that the inclusion of the waiver within the training platform was not adequate to alert the employees of what they were actually giving up. It is now up to the Supreme Court to determine if the Appellate Division ruling will stand.

Employers frequently utilize arbitration as a more efficient and private alternative to the Court. Employers may require employees to waive their right to sue in court and consent to arbitration as a condition of employment. However, courts have taken a protectionist approach to enforcing arbitration clauses against employees. Agreements to arbitrate must be executed in a manner that obtains the employee’s “explicit, affirmative agreement” and “unmistakably reflects the employee’s assent.” Put another way, the words of an arbitration agreement “must be clear and unambiguous that a [person] is choosing to arbitrate disputes rather than have them resolved in a court of law.”

How Frier Levitt Can Help
Employers looking to benefit from written agreements, including mandatory arbitration policies, must be conscientious about the language of the agreement, and the manner in which they obtain their employees’ consent. Frier Levitt attorneys have considerable experience with tailoring employment agreements and arbitration policies to each client’s unique situation. If your practice or business has not recently updated its employment contracts or employee handbook, or if your practice is growing and does not have these important documents, contact Frier Levitt to discuss your employment-related issues.

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