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Alexander v. Celgene Corp.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION
Mar 26, 2013
DOCKET NO. A-3008-11T2 (App. Div. Mar. 26, 2013)

Opinion

DOCKET NO. A-3008-11T2

03-26-2013

DONNA ALEXANDER, Plaintiff-Appellant, v. CELGENE CORPORATION, a corporation of the State of New Jersey, MATTHEW MEHALICK and KEVIN KENWORTHY, individually, Defendants-Respondents.

Michelle Joy Munsat argued the cause for appellant. Carmine A. Iannaccone argued the cause for respondents (Epstein, Becker & Green, P.C., attorneys; Mr. Iannaccone, of counsel and on the brief; Mr. Daniel R. Levy, on the brief).


NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

Before Judges Axelrad and Sapp-Peterson.

On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-4900-10.

Michelle Joy Munsat argued the cause for appellant.

Carmine A. Iannaccone argued the cause for respondents (Epstein, Becker & Green, P.C., attorneys; Mr. Iannaccone, of counsel and on the brief; Mr. Daniel R. Levy, on the brief). PER CURIAM

Plaintiff, Donna Alexander, appeals from the trial court order granting summary judgment to defendants, Celgene Corporation (Celgene), Matthew Mehalick, and Kevin Kenworthy (collectively "defendants"), and dismissing her complaint without prejudice to her assertion of any claims for relief against defendants through arbitration. We affirm.

According to the allegations in the complaint, Celgene employed plaintiff as a buyer. On November 21, 2008, after returning to work from a four-week bereavement leave as a result of her mother's death, Mehalick, Director of Procurement, and Kenworthy, Human Resources Manager, advised plaintiff that her department and her position were being reorganized and she would have to apply to be hired into a new position.

During the meeting, defendants presented plaintiff with a "Separation Agreement and Release" (Agreement). The Agreement's provisions included that she would receive: (1) $7843.85, as well as the cash value ($348.62) of two unused vacation days; (2) her prorated 2009 annual bonus; (3) continued health coverage, as well as continued health coverage for her qualified beneficiaries at the "active employee rates" through April 2009; and (4) the opportunity to participate in a three-month outplacement employment program. Further, under the Agreement, if plaintiff agreed to its terms and executed the Agreement, she would be acknowledging that the benefits received under the Agreement exceeded those to which she would ordinarily be entitled as a Celgene employee, as well as evidencing her understanding that the enhanced benefits were "conditioned upon her release of all claims against CELGENE and her compliance with all the terms and conditions of [the] Agreement."

Paragraph 17 of the Agreement addressed controversies or disputes and provided that "[a]ny controversy or dispute arising out of or relating to this . . . [Agreement], or the interpretation thereof, shall be settled exclusively by arbitration . . . ." The Agreement afforded plaintiff twenty-one days to review its terms and conditions and provided that if it was not executed by the twenty-first day, the Agreement would automatically expire on the twenty-second day following plaintiff's receipt of the Agreement. Finally the Agreement provided that it "shall not become effective until the eighth day following the date on which [plaintiff] signs it . . . ."

On December 12, 2008, the twenty-first day after she had received the proposed Agreement, plaintiff alleges Kenworthy "summoned" her to his office where he informed her she had not executed the Agreement. Plaintiff told Kenworthy she had not yet read the Agreement. She contends "she felt compelled by what Defendant Kevin [Kenworthy] had told her[,] to sign the proposed Separation Agreement and Release."

The complaint does not set forth what Kenworthy purportedly told her at that time.
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She applied for a newly created position as an Accounts Payable Specialist, a position which involved the same duties she performed when first hired by Celgene seven years earlier. She was told the candidate for this position would have to hold a degree or be actively pursuing a degree. A younger person with fewer qualifications than plaintiff eventually filled the position. Likewise, another position for which plaintiff believed she was qualified, Procurement Analyst, became available, but she did not submit an application. Plaintiff claims she was told the position also required a degree. According to plaintiff, the title for the position was later changed to Associate Procurement Analyst to accommodate the person hired for the position, who did not have a degree.

On December 10, 2010, two years following her termination, plaintiff filed a two-count complaint against defendants alleging violation of the Law Against Discrimination, N.J.S.A. 10:5-1 to -42 (LAD), and negligent infliction of emotional distress. The January 6, 2012 order dismissing plaintiff's complaint pursuant to Rule 4:6-2(e) notes that Count Two "is dismissed by consent of plaintiff." In lieu of filing an answer, defendants moved for dismissal of the complaint for failure to state a claim upon which relief may be granted pursuant to Rule 4:6-2(e).

Judge Frederic S. Kessler conducted oral argument, during which defendants argued the facts were not disputed, and under those facts, both the release and arbitration clause were enforceable against plaintiff. Defendants also argued plaintiff asserted no facts in her complaint that would rise to the level of legal duress in the sense of a wrongdoing on the part of defendants. In response, plaintiff urged that she had put forth sufficient facts in the pleadings to support the allegations and she was not required, at the pleading stage of the litigation, as defendants urged, to bring forward certifications to prove her facts. Plaintiff's counsel, however, conceded that in pleading duress, she was "not claiming that . . . she was threatened in any way, there was no proverbial gun smoking or otherwise." Rather, she explained plaintiff was alleging it was her psychological and emotional state of mind at that time which gave rise to her duress claim. At the conclusion of oral argument, the judge reserved decision and later requested further briefing on whether the United States Supreme Court's holding in Prima Paint Corp. v. Flood & Conklin Manufacturing Co., 388 U.S. 395, 87 S. Ct. 1801, 18 L. Ed. 2d 1270 (1967), was applicable.

On January 6, 2012, the court entered an order dismissing plaintiff's complaint in its entirety without prejudice to her right to commence arbitration before the American Arbitration Association. In a written opinion accompanying the order, Judge Kessler concluded the arbitration provision was valid because it "clearly and unambiguously encompasses any disputes pertaining to the release." He rejected plaintiff's contention that the Agreement's single-space format and ten-point font size, as well as the location of the arbitration provision on the last page, would not afford any reasonable person the opportunity to understand the terms of the Agreement. The judge emphasized that it is an employee's opportunity to review clauses, rather than the prominence of the clause, which was critical. He found plaintiff had ample time to review the document but failed to do so without good cause. This, Judge Kessler opined, was the reason plaintiff was ignorant of the arbitration clause, not because of the small typeface or alleged ambiguity in the language.

Finally, the judge disagreed with plaintiff's assertion that her fraudulent inducement claim should be resolved by the court. Relying upon Prima Paint, supra, 388 U.S. at 403-04, 87 S. Ct. at 1806, 18 L. Ed. 2d at 1277, and New Jersey cases adopting the "separability" doctrine set forth in that decision, the judge concluded the fraudulent inducement claim "is directed to the entire Agreement" rather than the arbitration provision and was therefore appropriate for disposition before the arbitrator. The present appeal ensued.

Plaintiff raises the following points on appeal:

POINT ONE
THE MOTION JUDGE ERRED AS A MATTER OF LAW IN CONCLUDING THAT PLAINTIFF'S CLAIM THAT SHE HAD NOT SIGNED THE SEPARATION AGREEMENT AND RELEASE KNOWINGLY AND VOLUNTARILY WAS TO BE DETERMINED BY AN ARBITRATOR AND NOT A COURT OF LAW.
A. PLAINTIFF'S EMOTIONAL STATE, AS KNOWN BY DEFENDANTS, AND DEFENDANTS' PURPOSEFUL WITHHOLDING OF INFORMATION PERTAINING TO THE RIGHTS WHICH PLAINTIFF WAS GIVING UP BY SIGNING THE AGREEMENT PRECLUDED HER FROM KNOWINGLY AND VOLUNTARILY SIGNING THE AGREEMENT.
B. THE FACTS AND CIRCUMSTANCES OF THE LANGUAGE OF THE AGREEMENT ITSELF AND ITS SIGNING MANDATE A FINDING THAT IT WAS NOT ENTERED INTO KNOWINGLY AND VOLUNTARILY.

At the outset, the standard of review for dismissal of a complaint under Rule 4:6-2(e) for failure to state a claim upon which relief may be granted, is whether the pleadings even "suggest[]" a basis for the requested relief. Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989). As a reviewing court, we assess only the legal sufficiency of the claim. Sickles v. Cabot Corp. , 379 N.J. Super. 100, 106 (App. Div.), certif. denied, 185 N.J. 297 (2005). Consequently, "[a]t this preliminary stage of the litigation [we are] not concerned with the ability of plaintiffs to prove the allegation contained in the complaint." Printing Mart, supra, 116 N.J. at 746. Rather, we accept the factual allegations as true, Sickles, supra, 379 N.J. Super. at 106, and "'search[] the complaint in depth and with liberality to ascertain whether the fundament of a cause of action may be gleaned even from an obscure statement of claim[.]'" Printing Mart, supra, 116 N.J. at 746 (internal quotations and citation omitted). "However, we have also cautioned that legal sufficiency requires allegation of all the facts that the cause of action requires." Cornett v. Johnson & Johnson, 414 N.J. Super. 365, 385 (App. Div. 2010), aff'd and modified, 211 N.J. 362 (2012). In the absence of such allegations, the claim must be dismissed. Ibid. (citing Sickles, supra, 379 N.J. Super. at 106).

Defendants advanced two theories before the trial court which, they claim, supported dismissal of the complaint: (1) the release provision in the Agreement; or (2) the requirement that any disputes arising under the Agreement be resolved through arbitration. Judge Kessler determined that he would first address whether the arbitration clause governed the resolution of disputes and, if so, he reasoned that the enforceability of the release would be subject to resolution by the arbitrator. We review the judge's approach and ultimate determination of this issue de novo without any deference to his legal conclusions. State v. Gandhi, 201 N.J. 161, 176 (2010); Manalapan Realty v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995); Botis v. Estate of Kudrick, 421 N.J. Super. 107, 114-15 (App. Div. 2011). We agree, however, with this approach and his legal conclusion.

An agreement to submit disputes to arbitration "is a contract and is subject, in general, to the legal rules governing the construction of contracts." Fawzy v. Fawzy, 199 N.J. 456, 469 (2009) (quoting McKeeby v. Arthur, 7 N.J. 174, 181 (1951)). The public policy in this state favors arbitration. See, e.g., Martindale v. Sandvik, Inc., 173 N.J. 76, 84-85 (2002); Barcon Assocs. v. Tri-Cnty. Asphalt Corp., 86 N.J. 179, 186 (1981). The Legislature has endorsed arbitration through its enactment of the Uniform Arbitration Act of 2003 (UAA), N.J.S.A. 2A:23B-1 to -32, which authorizes courts to recognize and enforce arbitration agreements. Similar to its federal counterpart, the Act provides that agreements to arbitrate shall be valid except "upon a ground that exists at law or in equity for the revocation of a contract." N.J.S.A. 2A:2B-6.

However, "[a] clause depriving a citizen of access to the courts should clearly state its purpose. The point is to assure that the parties know that in electing arbitration as the exclusive remedy, they are waiving their time-honored right to sue." Marchak v. Claridge Commons, Inc., 134 N.J. 275, 282 (1993). In Swarts v. Sherwin-Williams Co., 244 N.J. Super. 170, 177 (App. Div. 1990), we devised a multi-prong test in determining whether a plaintiff knowingly and voluntarily executed a valid waiver of his or her rights:

1) The plaintiff's education and business experience, 2) the amount of time the plaintiff had possession of or access to the agreement before signing it, 3) the role of plaintiff in deciding the terms of the agreement, 4) the clarity of the agreement, 5) whether the plaintiff was represented by or consulted with an attorney, 6) whether the consideration given in exchange for the waiver exceeds employee benefits to which the employee was already entitled by contract or law.

We are guided by these factors here. Under Paragraph 17 of the Agreement, plaintiff agreed that "[a]ny controversy or dispute arising out of or relating to this Separation Agreement, or the interpretation thereof, shall be settled exclusively by arbitration . . . ." The pleadings do not reflect plaintiff's education and business experience beyond the fact that she had worked for defendants for seven years. It is undisputed, however, that she was given three weeks to review the Agreement and, after executing it, another eight days during which she could revoke the Agreement. Although she was not represented by counsel, the Agreement expressly recommended that "she should consult independent counsel before executing this [A]greement[.]" It is also undisputed that in executing the Agreement, she acknowledged the benefits she received, by waiving her right to pursue remedies under the Agreement, exceeded employee benefits to which she was entitled. Thus, the record unquestionably reflects the parties' intent, under the Agreement, to resolve their disputes through arbitration.

Under the Act, the court's duty is to decide "whether an agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate." N.J.S.A. 2A:23B-6(b). However, the arbitrator is to decide "whether a contract containing a valid agreement to arbitrate is enforceable." N.J.S.A. 2A:23B-6(c). Count One of plaintiff's complaint alleges age discrimination under the LAD, N.J.S.A. 10:5-1 to -49. Our Court has held that a clause in an agreement requiring arbitration of disputes arising under an agreement may include the duty to arbitrate statutory claims such as LAD claims, provided the parties' intention to do so is clearly and unambiguously set forth in the agreement. Garfinkel v. Morristown Obstetrics & Gynecology Assoc., P.A., 168 N.J. 124, 136 (2001) (citing Red Bank Reg'l Educ. Ass'n v. Red Bank Reg'l High Sch. Bd. of Educ, 7 8 N.J. 122, 140 (1978), where the Court observed that the "propriety of a contractual waiver of statutory rights is well-established"). In Martindale, supra, the Court stated that

there is no indication in the text or legislative histories of either the FLA or the LAD that restrict the use of an arbitral forum to pursue those claims. . . .
. . . Like the LAD, the FLA allows aggrieved persons to pursue their claims in an administrative proceeding. . . . [and] there is no suggestion in either the FLA or LAD that their . . . remedies would be unavailable in an arbitral forum.
[173 N.J. at 93-94 (internal citations omitted).]

Plaintiff's brief acknowledges that "the very existence of a valid agreement to arbitrate is a preliminary question to be determined by a [c]ourt," which is exactly the approach taken by Judge Kessler. He first determined whether the language of the agreement expressed the parties' intent to arbitrate their disputes. Finding that the Agreement's language clearly and unmistakably expressed the parties' intent to arbitrate, he dismissed the complaint without prejudice to plaintiff to pursue her claims before an arbitrator. The record supports this determination.

What the judge did not do and what plaintiff, in her brief, urges he was required to do was to then decide "whether there is a legal or equitable ground for revocation of the contract which contains an arbitration provision." We disagree.

Plaintiff's assertion that her signature on the Agreement was the product of fraud, overreaching duress and/or misrepresentation, for which revocation of the Agreement is the appropriate remedy, addresses the enforceability of the Agreement, a function statutorily assigned to the arbitrator. See N.J.S.A. 2A:23B-6(c) (stating "an arbitrator shall decide . . . whether a contract containing a valid agreement to arbitrate is enforceable"). In advancing this contention, however, plaintiff relies upon Muhammad v. County Bank of Rehoboth Beach, 189 N.J. 1, 12 (2006), cert. denied, 549 U.S. 1338, 127 S. Ct. 2032, 167 L. Ed. 2d 763 (2007). This reliance is misplaced.

The Court in Muhammad reiterated that "a challenge to a contract as a whole is for an arbitrator to decide." Id. at 14 (citing Prima Paint, supra, 388 U.S. at 395, 87 S. Ct. at 1801, 18 L. Ed. 2d at 1270, and Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 126 S. Ct. 1204, 163 L. Ed. 2d 1038 (2006)). It reasoned that because there were "distinct class arbitration waivers within the arbitration clauses[,]. . . [t]hese class arbitration waivers, based on their location and subject matter, are part of the arbitration agreements, and not part of the contracts as a whole." Ibid. Consequently, the court concluded it was "empowered to address the challenge." Ibid.

Such are not the circumstances here. Nor does plaintiff allege that her challenge of fraud in the inducement is limited to the arbitration clause. Rather, her claim is directed to the entire Agreement and is therefore subject to resolution before the arbitrator. Prima Paint, supra, 388 U.S. at 403-04, 87 S. Ct. at 1806, 18 L. Ed. 2d at 1277 (holding that a claim of fraud related solely to arbitration clause is an issue for resolution by the court as distinguished from a claim of fraud in the inducement related to an entire agreement, which is for resolution before an arbitrator).

Plaintiff also incorrectly claims this court's holding in Moore, supra, 416 N.J. Super. at 36, empowers an arbitrator to "make an initial determination only if the issue is whether or not a condition precedent to arbitrability has been met." We noted, however, that N.J.S.A. 2A:23B-6 is identical to Section 6 of the UAA, which is "not intended to limit the court's authority to determine questions of fraud, illegality, mutual mistake, duress or unconscionability relevant to the agreement to arbitrate." Id. at 34 n.l. Most importantly, we stated "[t]he language in section 6(c), 'whether a contract containing a valid agreement to arbitrate is enforceable,' is intended to follow the 'separability' doctrine outlined in [Prima Paint Corp.]." Ibid.

Next, plaintiff contends the Agreement "must be found unenforceable because of the facts and circumstances of its very language and its signing." Plaintiff argues the arbitration clause is ambiguous because it fails to "mention disputes arising from 'plaintiff's termination' or claims arising out of, and actionable under the New Jersey [LAD]." She also contends the language of the release did not clearly delineate the various rights plaintiff would waive by executing the Agreement. Lastly, she contends these factors, in conjunction with her emotional state at the time of the signing, deal a fatal blow to the Agreement. We find no merit to these contentions.

Judge Kessler found that plaintiff was given ample time to review the document before and after signing it, that she was advised to consult an attorney and/or independent advisor regarding the Agreement, that the terms of the Agreement were clear and unambiguous, and, finally, that plaintiff received benefits above and beyond that to which she would ordinarily be entitled. We agree with these findings.

While Section 17(a) of the Agreement does not, in fact, contain the words "termination" or refer to arbitration of any LAD claims, the Agreement was drafted in contemplation of and entirely in relation to the impending elimination of plaintiff's position at Celgene. The Agreement discusses both parties' rights and responsibilities upon plaintiff's departure from the company, such as the issuance of severance pay, non-competition and non-disclosure clauses, as well as releases from claims that generally arise from the termination of employment, including claims arising under the LAD. Therefore, it is clear that the entire purpose of the Agreement relates to the termination of plaintiff's employment. Hence, no ambiguity can be found based upon the omission of the word "termination" from the arbitration clause. As the Court stated in Garfinkel, supra, 168 N.J. at 135:

[W]e do not suggest that a party need refer specifically to the LAD or list every imaginable statute by name to effectuate a knowing and voluntary waiver of rights. To pass muster, however, a waiver-of-rights provision should at least provide that the employee agrees to arbitrate all statutory claims arising out of the employment relationship or its termination. It should also reflect the employee's general understanding of the type of claims included in the waiver, e.g., workplace discrimination claims.

Apart from the fact that the arbitration clause specifically stated that "[a]ny controversy or dispute arising out of or relating to this Separation Agreement, or the interpretation thereof, shall be settled exclusively by arbitration[,]" the release provision expressly stated the rights plaintiff was relinquishing under the Agreement included any claims

surrounding the circumstances relating to that termination, including but not limited to (i) any claim under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Family and Medical Leave Act, the Older Workers Benefit Protection Act, the False Claims Act, the New Jersey Law Against Discrimination, the New Jersey Conscientious Employee Protection Act, and any other federal, state or local law or ordinance prohibiting employment discrimination; (ii) any claim for breach of contract (express or implied), wrongful discharge, defamation, emotional distress or compensatory or punitive damages; (iii) any claim for attorney's fees, costs, disbursements and the like.

Use of terminology in a contract such as "arising out of" and "relating to" are "indicative of an 'extremely broad' agreement to arbitrate any dispute relating in any way to the contract.'" See Curtis v. Cellco P'ship, 413 N.J. Super. 26, 37-38 (App. Div.), certif. denied, 203 N.J. 94 (2010). Therefore, Judge Kessler correctly found that the arbitration provision "clearly and unambiguously encompass[ed] any dispute pertaining to the release."

Affirmed.

I hereby certify that the foregoing is a true copy of the original on file in my office.

CLERK OF THE APPELLATE DIVISION


Summaries of

Alexander v. Celgene Corp.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION
Mar 26, 2013
DOCKET NO. A-3008-11T2 (App. Div. Mar. 26, 2013)
Case details for

Alexander v. Celgene Corp.

Case Details

Full title:DONNA ALEXANDER, Plaintiff-Appellant, v. CELGENE CORPORATION, a…

Court:SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

Date published: Mar 26, 2013

Citations

DOCKET NO. A-3008-11T2 (App. Div. Mar. 26, 2013)