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NJ Appellate Court Rules against Emailed Employee Arbitration Agreement

On Behalf of | Feb 20, 2019 | Firm News

NJ Appellate Court Rules against Emailed Employee Arbitration Agreement

The New Jersey Appellate Division recently upheld limits on an employer’s ability to force employees into arbitration when employees have not expressly agreed to the arbitration process. Recently published in January 2019, the ruling in Skuse v. Pfizer, Incaddressed the sufficiency of email and online training modules to seek an employee’s agreement to arbitration and waiver of litigation rights.

The Court relied on long-standing precedent regarding the valid and enforceable arbitration agreements to find in favor of the employee in this matter. The ruling specifically noted this case “exemplifies an inadequate way for an employer to go about extracting its employees’ agreement to submit to binding arbitration for future claims and thereby waive their rights to sue the employer and seek a jury trial.” The following is an overview of the Court’s decision and its potential effects on employee-employer arbitration agreements.

The Facts Reviewed

The plaintiff was an employee of Pfizer, and the company required her to get a yellow fever vaccine for her job as a flight attendant. However, as a Buddhist, the plaintiff’s beliefs went against any injections that contained animal proteins, which the vaccine did. Pfizer gave her ultimatums, ignored letters from her physician and vaccination waiver cards, and denied her request for a religion-based accommodation. After medical leave due to an employment-related “breakdown,” another paid leave, and a denial of her internal HR appeal, Pfizer terminated the plaintiff. She then filed a lawsuit in New Jersey court alleging violations of New Jersey’s anti-discrimination laws.

Pfizer sought to have the lawsuit dismissed based on a so-called binding arbitration agreement it had with its employees. The previous year, Pfizer sent out a training module via email to its employees. The module had slides that described the arbitration agreement and the waiver of the employee’s statutory rights to litigation. At the end, the employees could click an “acknowledgement” box. If they did not click the box, the module stated that continued employment for 60 days would constitute an agreement to the policy. Because the plaintiff was employed for 13 months following the training module, Pfizer contended she agreed to arbitration.

Lower Court’s Decision

The trial court initially granted Pfizer’s motion to dismiss, claiming the emailed slides and acknowledgement request were sufficient to constitute a binding arbitration agreement. That court relied on a recent New Jersey case that also involved email communications, Jaworski v. Ernst & Young. In that case, an employee previously signed an arbitration agreement that stated he could be notified via email of amendments to or termination of the agreement in the future. He received an email notifying him of amendments to the agreement and continued working for the company for five years. He later argued in court that those amendments did not apply to him. The court disagreed and ruled that since he had signed the initial agreement, he was aware that notification of amendments could be sent by email and, by continuing his employment, he agreed to the amendments.

The trial court in Skuse relied on Jaworski in deciding that the email notification of the arbitration policy was sufficient and granted the motion to dismiss. The Appellate Court respectfully disagreed with the trial court’s assessment and reliance on Jaworski. Instead, the Court largely relied on a different case, Leodori v. Cigna, to identify the requirements for a binding arbitration agreement with employees.

Requirements for a Valid Arbitration Agreement

The court closely reviewed whether the email training module and acknowledgement box were enough to establish a binding arbitration agreement with its employees. First, the court acknowledges that state policy generally favors arbitration as an alternative dispute resolution process – only as long as both parties mutually choose to participate. As with any contract under New Jersey law, arbitration agreements require a “meeting of the minds,” and employers cannot force employees to arbitrate if the employee has not agreed to do so. This is particularly important because arbitration agreements require an employee to give up their statutory right to have their case heard in court.

When it comes to arbitration agreements specifically in employment relationships, the Appellate Court looked to the New Jersey Supreme Court’s decision in Leodori. In that case, the employer gave employees a handbook regarding company policies and an acknowledgement form, which did not specifically mention arbitration. There was another “agreement” form that did mention arbitration as a requirement for employment. The plaintiff signed the acknowledgement form but not the agreement form.

The Supreme Court found the plaintiff in Leodori did not enter into a binding arbitration agreement for the following reasons:

  • He did not convey “knowing and voluntary agreement”
  • He did not “sign or otherwise explicitly indicate his [] agreement”
  • He did not agree to “clearly and unambiguously” waive his rights to litigation and arbitrate disputes

The Court held that such a waiver of rights requires “an explicit affirmative agreement that unmistakably reflects the employee’s assent.” An acknowledgement did not constitute such an affirmative agreement to the policy.

Similarly, Pfizer only requested employees to check an “acknowledgement” box, not an agreement box. Moreover, unlike in Leodori, Pfizer did not even request a signature from its employees, but merely a click of a mouse. The Court also noted that many people in corporate settings receive many emails per day and tend to skim material instead of carefully reading and understanding the content.

The Court also stated that calling the email a “training module” was another sign that Pfizer was seeking its employees’ knowing and voluntary agreement. Seeking a waiver of rights is not a training exercise, and companies must do more than merely educate employees regarding arbitration policies, but must clearly seek to obtain their explicit agreement to the policies. Ultimately, Pfizer’s methods of seeking agreement were found to be insufficient to constitute a binding agreement to arbitration and voluntary waiver of rights.

Employers in the Technological Era

The Court in Skusedid note that in today’s day and age, companies often use email and other electronic transmissions to give large numbers of employees information about company policies. It would not be realistic to expect employers to sit down with thousands of employees individually to negotiate arbitration agreements. Therefore, the Court is not suggesting that electronic means are always insufficient for obtaining an employee’s assent.

However, companies may not mask the agreement as “training” and mere “acknowledgement.” Instead, they must use unmistakeable language and terminology when seeking such an agreement. They may also want to require an employee to electronically sign their name instead of simply checking a box, as that makes it clearer that the employee is agreeing to an important contract.

This case should remind employers that they may not enforce arbitration agreements without clear and unmistakable assent from employees. If an employer files a motion to dismiss based on an arbitration agreement, plaintiffs should always discuss the enforceability of the agreement with an experienced attorney.

Contact Our New Jersey Employment Law Firm for More Information

Employment lawsuits can have numerous complex issues arise, and plaintiffs should always have a highly experienced employment lawyer representing them throughout their case to ensure their rights are fully protected. If you have any questions or concerns regarding your employment relationship, please call Traub Law Employment Attorneys at 609-951-2204 or contact us online today.