Appellate Division Invalidates Arbitration Agreement for Failing to Identify a Forum

Oct 22, 2018

In a case involving an arbitration agreement, the Appellate Division recently invalidated the agreement because the parties had failed to select the arbitration forum.  Flanzman v. Jenny Craig, Inc., et al. – N.J. Super. – (App. Div. 2018).

Plaintiff, Marilyn Flanzman, was eighty-two-years-old when she was terminated by the defendant.  She filed a complaint under the New Jersey Law Against Discrimination (NJLAD) and the defendant filed a motion to compel arbitration. 

The arbitration agreement indicated nothing about what forum generally replaced the right of a jury trial.  The trial judge upheld the agreement and directed the plaintiff to select a forum, but the Appellate Division reversed.

The Appellate Division invalidated the arbitration agreement because it had failed to designate a forum for arbitration.  The court then noted that the arbitration agreement also failed to identify the general process for selecting an arbitration mechanism or setting and thus deprived the parties from knowing what rights replaced their right to a jury trial.  While the court declined to require specific magic language in an arbitration agreement, it noted that the parties to such an agreement should either identify an institution which will arbitrate claims or identify the process for selecting the alternate forum.