Oct 9, 2020

New Jersey Supreme Court Compels Arbitration of N.J.L.A.D. Lawsuit Based Upon "Employee's Assent" to Mandatory Arbitration

By Michael K. Mullen, Esq.

On August 18, 2020, the New Jersey Supreme Court issued an important opinion in the matter of Amy Skuse v. Pfizer, Inc.


While commentators have identified the State Supreme Court’s opinion as an important, if not precedential, opinion, it is important to keep in mind that the decision was rendered by a divided court. In a concurring opinion and a dissenting opinion, Justice Albin and Chief Justice Rabner warned that potentially more significant issues lurked in the context of arbitration agreements within the employment context. 


In the case at hand, Pfizer’s Human Resources Department sent an e-mail to Pfizer employees at their corporate e-mail addresses announcing Pfizer’s new, five-page Mutual Arbitration & Class Waiver Agreement and included a link to that particular document. The following language appeared in bold font on the final page of the Agreement:


You understand that your acknowledgement of this Agreement is not required for the Agreement to be enforced. If you begin or continue working for the company sixty (60) days after the receipt of this Agreement, even without acknowledging this Agreement, this Agreement will be effective, and you will be deemed to have consented to, ratified and accepted this Agreement through your acceptance of and/or continued employment with the Company.


The e-mail also included a link to a document that listed “Frequently Asked Questions,” including “Do I have to agree to this?” to which the response indicated “The Arbitration Agreement is a condition of continued employment with the Company. If you begin or continue working for the Company, sixty (60) days after receipt of this Agreement, it will be a contractual agreement that binds both you and the Company.”


Pfizer wound up terminating the employment of the plaintiff a number of months after her receipt of the subject e-mails. Thereafter, she filed suit claiming that Pfizer had discriminated against her on the basis of her religious objection to be vaccinated for Yellow Fever. 


The trial court dismissed the Complaint, thereby compelling arbitration. The Appellate Division, while criticizing the delivery of the Agreement by e-mail and the repetition of the arbitration requirement through a “training module,” reversed. 


The matter then proceeded to the State Supreme Court where special interest groups were active through the filing of amicus briefs.


The divided Supreme Court reversed the Appellate Division and reinstated the trial court’s order dismissing the case on the basis of a binding arbitration agreement. 


In his concurrence, Justice Albin noted that despite any displeasure he might have with the on-line waiver-of-rights procedure used by the employer in this instance, the totality of the evidence persuaded him that the plaintiff clearly and unmistakably understood she was agreeing to submit any disputed employment issue to an arbitrator rather than a court. Justice Albin noted arbitration cases that have come before the State Supreme Court have generally addressed whether employees or consumers had clearly and unmistakably waived their right to seek relief in a judicial forum for breach of contract or some sort of statutory violation. Judge Albin seemed to lament that such provisions have hardly been perfect, but he projected that soon employers and corporations will develop the perfect, unassailable arbitration clause. Justice Albin noted that when every employment and consumer contract contains such a clause across an entire profession or industry, when employees and consumers have no choice but to waive their rights to resolve their disputes in a judicial form in order to get a job or buy a good, a more fundamental and profound question will arise as to whether such contracts of adhesion are contrary to New Jersey’s most fundamental public policy -- the constitutional right of a jury trial -- and therefore, somehow unconscionable and unenforceable under the Federal Arbitration Act and its state counterpart.


Chief Justice Rabner dissented from the majority’s opinion in that he disagreed as to whether there was a clear and unmistakable proof that Pfizer’s employees assented or agreed to arbitration. He asserted that neither the “acknowledgement” of the Company policy that Pfizer elicited from its employees, nor a one-sided declaration that consent would be deemed by default, met that standard.


The comments of these two Justices certainly raise issues as to how precedential the Pfizer decision might ultimately be. In the meantime, however, employers would be well-served to huddle with their attorney in order to measure where their own arbitration clauses may stand given the Pfizer opinion.


Subsequent to the Pfizer decision, the State Supreme Court dealt with a challenge to an arbitration agreement in the context of a dispute between an employee and the Jenny Craig weight-loss business. Interestingly, a less-than-perfectly worded and organized arbitration agreement was upheld, leading many commentators to proclaim that New Jersey was officially a “pro-arbitration” state, even despite the reservations expressed by Justices Rabner and Albin in the Pfizer matter.


For more information, contact Michael K. Mullen, Esq. at mkm@spsk.com or 973-540-7307.