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Plaintiffs' Assent to Company Arbitration Policy By Continuing to Be Employed
Plaintiffs' Assent to Company Arbitration Policy By Continuing to Be Employed
By Thomas Paschos, Esq. of Thomas Paschos & Associates, P.C.
In
Jaworski v. Ernst & Young US LLP , ___ N.J. Super. ___, 2015 N.J. Super. LEXIS 120 (July 23, 2015), three Ernst & Young employees sued for age discrimination under the New Jersey Law Against Discrimination. Ernst & Young filed a motion to dismiss and compel arbitration, which was granted by the trial court. The employees appealed.
In 2002, Ernst & Young adopted its “Common Ground Program.” As part of the program, employment disputes were to be first handled through mediation and then, if that was not successful, through arbitration. The program barred employees from filing lawsuits. The program was amended several times in the following years. In these amendments the employees were not asked to affirmatively indicate their assent. Rather, the policy stated that by continuing employment, each employee understood and assented to the policy.
On appeal, plaintiffs challenged the enforceability of the mandatory arbitration policy on constitutional, statutory and common law grounds. The court was faced with the issue of whether, if the policy states assent is given by continued employment, remaining employed with the company indicates that the employee affirmatively has agreed to arbitrate his claims pursuant to the changed policy.
The Appellate Division reviewed well-established case law that provided that signed assent is required for the enforcement of an arbitration agreement. The panel held that the case did not control because there the employee was expected to sign in order to indicate agreement. In this matter, the employer did not seek a signature, but rather provided that the mere continuation of employment meant that the employee, read, understood and agreed with the policy, even if the employee did not actually read or understand the policy. As such, the court held that all of the plaintiffs had assented to the arbitration policy by continuing to be employed.
Plaintiffs made several other arguments: (1) the Program constituted an illusory agreement because Ernst & Young retained the right to unilaterally modify its terms; (2) plaintiffs never agreed to arbitrate claims relating to the termination of their employment; (3) the Program is not a valid waiver of plaintiffs' constitutional and statutory rights to a jury trial; and (4) the Program is unconscionable since it imposes substantial forum costs on plaintiffs they would not incur if proceeding in a court of law. The court rejected each of these arguments.
The court concluded that Ernst & Young’s ADR policy was valid and enforceable as to plaintiffs, and held the trial court properly dismissed the complaint in favor of mandatory arbitration.
For additional information, please contact Thomas at
TPaschos@paschoslaw.com or
856.354.1900 .
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