January 19, 2016

Arbitration agreements in employee handbooks not enforceable.

In a recent decision, the New Jersey Appellate division held that a clause in an employee handbook requiring arbitration of job disputes is unenforceable where the handbook also provides that it is not a binding employment contract. The opinion in Morgan v. Raymours Furniture Company Inc. 2016 N.J. Super. LEXIS 1 also held that an employee’s acknowledgment that he received and understood the contents of the handbook does not constitute a waiver of the right to sue.

Employers can address this issue by having arbitration agreements in separate forms, distinct from the employee handbook.