Opinion
DOCKET NO. A—4061—14T1
09-20-2016
VERDELLE BOWMAN, Plaintiff—Appellant, v. RAYMOURS FURNITURE COMPANY, INC., d/b/a RAYMOUR & FLANIGAN FURNITURE, and RALPH HUNSINGER, Defendants—Respondents.
Neil Mullin argued the cause for appellant (Smith Mullin, P.C., attorneys; Mr. Mullin and James E. Burden, on the briefs). Ivan R. Novich argued the cause for respondents (Littler Mendelson, P.C., attorneys; Mr. Novich and Alison B. Andolena, on the briefs).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is only binding on the parties in the case and its use in other cases is limited. R.1:36—3. Argued January 12, 2016 — Decided March 1, 2016
Remanded by the Supreme Court June 27, 2016
Resubmitted August 29, 2016 — Decided September 20, 2016 Before Judges Yannotti and St. John. On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-1281-15. Neil Mullin argued the cause for appellant (Smith Mullin, P.C., attorneys; Mr. Mullin and James E. Burden, on the briefs). Ivan R. Novich argued the cause for respondents (Littler Mendelson, P.C., attorneys; Mr. Novich and Alison B. Andolena, on the briefs). PER CURIAM
In this matter, plaintiff Verdelle Bowman appeals from an order of the Law Division, which compelled her to arbitrate her claim and stayed trial court proceedings pending the outcome of the arbitration proceedings. We affirmed the trial court's order. Bowman v. Raymours Furniture Co., Inc., Docket No. A-4061-14 (App. Div. Mar. 1, 2016).
Plaintiff thereafter filed a petition for certification with the Supreme Court. The Court granted the petition and summarily remanded the matter to this court for reconsideration in light of its opinion in Rodriguez v. Raymours Furniture, 225 N.J. 343 (2016). We directed the parties to file supplemental briefs. We have reconsidered our decision and affirm the trial court's order compelling arbitration, as modified, to reflect the Court's opinion in Rodriguez.
I.
As we noted in our previous opinion, plaintiff is employed by defendant Raymours Furniture Company, Inc. (RF) as a customer-care coordinator. Plaintiff claims she was subjected to unlawful discrimination and retaliation in her employment. RF has an Employment Arbitration Program (Program), which requires employees to arbitrate all claims between RF and the employee that arise from or relate to employment or the termination of employment and are based on a "legally protected right." The Program defines "legally protected right" to include "any right protected by statute, regulation, ordinance, constitution, contract or common law," including state and federal anti-discrimination laws.
The Program states that RF and the employee waive "all rights" to have a claim decided by a court, judge, jury or, when permitted by law, an administrative agency. The Program excludes certain "claims" including claims for workers' compensation or unemployment compensation benefits, employee welfare claims, claims for retirement benefits, unfair labor practice charges, and any claim RF may have against the employee for unpaid debts owed to the company. The Program also excludes "disputes about the validity, enforceability or scope of this Program or any part thereof."
The Program defines the term "Adminstrator" to mean the American Arbitration Association (AAA), JAMS, "or any other administrator on which [the employee] and [RF] agree." The Plan states that if AAA and JAMS "cannot or will not serve" and RF and the employee do not agree upon the administrator, the court will select the administrator.
In addition, RF requires its employees to execute the "Associate's Agreement [and] Consent," which states in pertinent part that:
I agree to arbitrate all Claims against [RF] regarding my employment under the terms of and within the deadline set forth in the Program. Such Claims must be filed with the arbitration Administrator defined in the Program. I release and waive all rights I may have to file such Claims in court and further release and waive all rights I may have to have such Claims heard before and by a jury (and, where permitted by law, an administrative agency and/or and administrative law judge).
. . . .
I also agree, hereby and under the Program, to file an arbitration demand with the Administrator no later than 180 days after such Claims arise . . . . I waive any statute of limitations and administrative filing periods that might provide a longer period of time to file or seek relief for such Claims.
It is undisputed that plaintiff executed an electronic acknowledgement of the Program in 2012 and 2013. It is also undisputed that after she retained counsel, plaintiff executed the "Associate's Agreement [and] Consent" form on September 24, 2014.
As indicated in our previous opinion, on September 26, 2014, plaintiff filed her demand for arbitration with JAMS. Thereafter, a dispute arose concerning the list of proposed arbitrators that JAMS had provided. Plaintiff objected to the list and asked JAMS to provide "a more diverse panel" from which to choose the arbitrators.
In addition, a question arose as to whether the 180-day limitations period for claims in the Program was consistent with JAMS's Minimum Standards. JAMS informed the parties that RF's Program did not conform to those standards and it would not arbitrate the case. RF then filed a demand for arbitration with AAA, which agreed to administer the case in accordance with the Program's terms.
Plaintiff thereafter filed a complaint in the Law Division, asserting claims of unlawful discrimination and retaliation in violation of the New Jersey Law Against Discrimination (NJLAD), N.J.S.A. 10:5-1 to -49. Plaintiff named RF and Ralph Hunsinger, a supervisor at RF, as defendants.
Defendants filed a motion to compel arbitration before AAA and to stay further trial court proceedings in the case. Plaintiff opposed the motion, arguing that she could not be compelled to arbitrate her claims because RF had breached the terms of the agreement.
According to plaintiff, RF breached the agreement by refusing to arbitrate the matter in accordance with JAMS Minimum Standards. The trial court granted defendants' motion.
Plaintiff appealed and argued that the trial court erred by compelling arbitration. She maintained the agreement to arbitrate was not enforceable. She asserted that the issue of whether RF breached the agreement should be decided by the court, not an arbitrator.
Plaintiff argued that the Program allowed her to choose the "Administrator" and she chose JAMS. She claims that RF acted in bad faith to avoid a racially diverse panel and application of JAMS's Minimum Standards. She claimed that, by doing so, RF waived its rights to compel arbitration under the agreement.
We concluded that the issue of whether RF violated the agreement and waived its right to arbitration was a claim within the scope of the arbitration agreement, and that claim should be decided by the arbitrator, not the court. We rejected plaintiff's contention that RF's arbitration agreement violated public policy. Accordingly, we affirmed the trial court's order compelling arbitration.
II.
As noted, the Supreme Court remanded this matter to this court for reconsideration of our decision in light of Rodriguez. In that case, the plaintiff sought employment with RF, and in his employment application, agreed that any claim or lawsuit relating to his service with RF must be filed no later than six months after the date of the employment action that is the subject of the claim or lawsuit. Rodriguez, supra, 225 N.J. at 348. The plaintiff also agreed to waive a trial by jury in any litigation arising out of or relating to his employment with RF. Ibid.
The plaintiff was hired as a helper and later promoted to the position of driver. Id. at 349. He injured his knee in a work-related accident, ceased working, and had surgery on his knee. Ibid. The injury was determined to be compensable, and the plaintiff received workers' compensation benefits. Ibid. The plaintiff was later cleared to return to light-duty work, and two days after he resumed full-duty work, he was terminated. Ibid. RF asserted that the plaintiff was laid off as part of a company-wide reduction in force. Ibid. The plaintiff alleged that he was terminated while others with "less seniority or distinguishing features" had been retained. Ibid.
The plaintiff filed an action in the Law Division, claiming he was subject to unlawful discrimination on the basis of an actual or perceived disability in violation of the NJLAD. Id. at 350. The plaintiff also claimed he was subjected to unlawful retaliation for obtaining workers' compensation benefits in violation of the Workers' Compensation Act, N.J.S.A. 34:15-1 to -69.3.
The Court held that the provision of RF's employment application form, which required prospective employees to assert claims within 180 days after the alleged wrongful employment action, was unenforceable as applied to the NJLAD claims. Id. at 362. The Court noted that under the NJLAD claims, a complainant had two years in which to file an action in the Superior Court and during that time, the claimant had the option to seek relief through the Division on Civil Rights (DCR) or the court. Id. at 358. The Court stated that shortening the limitations period "undermines and thwarts the legislative scheme that includes the DCR remedy as a meaningful option." Id. at 362.
Thus, Rodriguez indicates that, in this case, RF may not enforce the 180-day limitation period in the arbitration agreement with regard to plaintiff's NJLAD claims. RF argues that the court should sever the unenforceable provision of the Program as it relates to plaintiff's NJLAD claims and reaffirm the prior decision compelling arbitration with AAA. We agree.
It is well established that a court may sever an invalid provision of a contract and enforce its other provisions, even if the agreement does not include a severability clause, unless striking the illegal provision "defeats the primary purpose of the contract." Jacob v. Norris, McLaughlin & Marcus, 128 N.J. 10, 33 (1992). Here, the primary purpose of the parties' agreement is to have employment-related claims submitted to arbitration. Striking the 180-day limitations period as it relates to plaintiff's NJLAD claims will not defeat the central purpose of the agreement.
Plaintiff argues, however, that Rodriguez requires reversal of the order compelling arbitration. Plaintiff contends RF defaulted in the arbitration proceeding by asking JAMS to close its file and seeking arbitration with AAA. Plaintiff argues that RF had no legal basis to insist that JAMS apply the contractually-shortened statute of limitations for NJLAD claims, and therefore waived its right to arbitration pursuant to 9 U.S.C.A. § 3. The statute provides
If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.
[Ibid.]
We are convinced that RF did not waive its contractual right to arbitrate or take any action inconsistent with that right. RF merely insisted that JAMS enforce the terms of RF's arbitration policy, which included the shortened limitations period for claims covered by the Program. At the time RF took that position, the Law Division and this court had upheld the 180-day limitations period in RF's Program, as it pertained to NJLAD claims. Rodriguez, supra, 225 N.J. at 350 (citing Rodriguez v. Raymours Furniture Co., 436 N.J. Super. 305, 311-12 (App. Div. 2014)).
Thus, the actions RF took to enforce the 180-day contractual limitations period, which was later invalidated by the Supreme Court as to NJLAD claims, did not constitute a waiver of RF's right to arbitrate under the Program, nor were RF's actions inconsistent with that right. We therefore conclude that RF's actions in seeking to enforce the 180-day limitations period did not constitute a "default in proceeding with" the arbitration under 9 U.S.C.A. § 3.
Accordingly, we affirm the trial court's order compelling arbitration with AAA, but modify that order to preclude RF from enforcing the 180-day contractual limitations period with regard to plaintiff's NJLAD claims.
Affirmed as modified. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION