Arbitration Clause Covering Employment Discrimination Must be Clear and Unambiguous
Description The New Jersey high court held that a general arbitration clause in an employment contract that required all employment disputes to go to arbitration was not effective as to the rights of employees to file employment discrimination suits. Waivers that affect statutory rights must be clear and unmistakable to the employee as to their consequence.
Topic Alternate Dispute Resolution
Key Words Arbitration; Employment Discrimination
C A S E   S U M M A R Y
Facts Garfinkle was employed as a physician by Morristown Obstetrics. His employment agreement included a clause that any disputes related to employment would be settled by arbitration. After he was fired, Garfinkle sued, contending that his dismissal was because of his gender, a violation of the New Jersey Law Against Discrimination. The trial court dismissed the suit, holding that the complaint must go to arbitration. The appeals court agreed; Garfinkle appealed.
Decision Reversed. Courts will not assume that employees intend to waive their statutory rights, such as those under the Law Against Discrimination, unless their arbitration agreements so provide in unambiguous terms. To be effective, a waiver-of-rights provision, requiring a party to go to arbitration rather than pursue the legal remedy established by the discrimination statute, must be clear and unambiguous. The employee must have clearly understood the waiver and the implications of signing it. Employees do not surrender their litigation rights unless their intent to accept arbitration is clear and unmistakable.
Citation Garfinkle v. Morristown Obstetrics & Gynecology Associates, P.A., C A.2d C (2001 WL 649859, Sup. Ct., N.J., 2001)

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