Following up on a recent post about the intricacies of mandatory arbitration agreements in the workplace, the New Jersey Appellate Division recently held that an arbitration clause that employees did not explicitly agree to was unenforceable. The arbitration clause was presented in a training module that was sent to employees, which the employees were then required to acknowledge.
The key fact for the Appellate Division in finding the arbitration agreement unenforceable was that the employees were not required to explicitly and affirmatively assent to the arbitration policy when they acknowledged the training module. In other words, while the employees acknowledged the existence of the arbitration agreement when acknowledging the training module, the court held that the employees did not accept the terms contained within it because there was not an explicit waiver of rights.
Notably, Judge Sabatino stated that the arbitration agreement would likely have been enforceable if the employer had made a few minor changes, such as framing the presentation as an “agreement” and “waiver” of rights rather than as a “training.” He also suggested that adding the words “agree” or “agreement” to the box that the employees clicked would have strengthened the enforceability of the agreement.
As recent blog posts highlight, employers need to be wary of the various pitfalls they face when attempting to bind employees to mandatory arbitration. It is important to follow individual state laws, and ensure that arbitration agreements are expressly agreed to by employees, rather than merely acknowledged. The Hogan Lovells employment team has extensive experience crafting employment policies, including arbitration agreements. If your employment policies need to be reviewed in light of the proliferation of new laws and court decisions across the country, we are ready and able to assist.
The case is Amy Skuse v. Pfizer Inc. et al., case number A-3027-17T4, in the Superior Court of New Jersey Appellate Division.