Last week, a New Jersey Appeals Court upheld an arbitration agreement signed by an employee as a precondition of employment with her employer, Raymour & Flanigan.  The employee sued the employer for race and sex discrimination.  The suit was dismissed by the trial court based upon the arbitration agreement, and the employee appealed.

In an unpublished opinion, the appellate court agreed with the trial court and rejected the employee’s argument that the arbitration agreement was unconscionable, unenforceable and a violation of public policy.  The appeals court also rejected the employee’s claim that the arbitration agreement was signed under duress.  Rather, the appeals court noted New Jersey’s long-standing public policy that strongly favors the use of arbitration to settle disputes rather than litigation.  The appeals court also recognized that New Jersey has long permitted employers to require prospective employees to sign an arbitration agreement as a precondition of employment.

However, as evidenced by this appeals court decision, these agreements will be enforced if they are properly drafted, offered and espoused by an employee as a precondition of employment. Please contact our Labor and Employment Law Practice Group if you have any questions concerning the use of arbitration agreements in the workplace.