Opinion
DOCKET NO. A-1840-14T2
08-01-2016
YAQUELIN HERNANDEZ, Plaintiff-Appellant, v. FANCY HEAT CORPORATION, Defendant-Respondent.
Heidi R. Weintraub argued the cause for appellant (Weintraub & Marone, LLC, attorneys; Ms. Weintraub and Lisa R. Marone, on the briefs). Walter F. Kawalec, III, argued the cause for respondent (Marshall Dennehey Warner Coleman & Goggin, attorneys; Mr. Kawalec, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Lihotz, Nugent and Higbee. On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-57-14. Heidi R. Weintraub argued the cause for appellant (Weintraub & Marone, LLC, attorneys; Ms. Weintraub and Lisa R. Marone, on the briefs). Walter F. Kawalec, III, argued the cause for respondent (Marshall Dennehey Warner Coleman & Goggin, attorneys; Mr. Kawalec, on the brief). PER CURIAM
Plaintiff Yaquelin Hernandez appeals from an order dated November 3, 2014, granting defendant Fancy Heat Corporation's motion to dismiss plaintiff's complaint based on an arbitration provision contained in an employment application. We reverse.
Plaintiff filled out and signed an application for employment to work for defendant. The application contained an arbitration provision, which stated:
I further understand that I will settle any and all previously unasserted claims, disputes or controversies arising out of or relating to my application or candidacy for employment, employment and/or cessation of employment with [defendant], or one of its affiliates, subsidiaries, etc., exclusively by final and binding arbitration before a neutral Arbitrator. By way of example only, such claims include claims under Federal, State, and local statutory or common law, such as Age Discrimination in Employment Act, Title VII of the Civil Rights Act, the law [of] contract and the law of tort.
Plaintiff was hired by defendant as an assembly line worker. During her employment, she claimed a co-worker sexually harassed her. During one particular episode, plaintiff alleged she threatened to throw a can at her co-worker in a desperate attempt to stop the harassment. Plaintiff allegedly reported the harassment to her supervisor with the help of a co-worker translator because plaintiff cannot speak or understand English.
Four days after reporting the harassment to her supervisor, plaintiff was terminated. Plaintiff claimed defendant stated she was terminated for threatening to throw a can at her co-worker and for taking unauthorized leave. Plaintiff was "dumbfounded" by these reasons because she allegedly never took unauthorized leave and threatened to throw the can in a desperate attempt to stop the harassment. A few days after her termination, plaintiff brought her son-in-law who spoke English to speak with her supervisor to discuss the departure. The supervisor explained plaintiff was terminated due to performance related issues. Plaintiff argued these allegations were pretextual as she always exceeded her daily minimum for her assigned job, but to no avail.
Plaintiff filed her complaint alleging discrimination under the New Jersey Law Against Discrimination (LAD), retaliation, common law negligence, and a violation of the New Jersey Conscientious Employee Protection Act (CEPA). Defendant filed its answer and a motion to dismiss the claim based on the arbitration provision in plaintiff's employment application. Plaintiff argued the motion should be denied because the application's arbitration clause was unenforceable and discovery had not yet been conducted. The trial judge heard oral argument on the motion on October 10, 2014, and in an order dated November 3, 2014, dismissed plaintiff's complaint with prejudice. He determined the arbitration clause was valid because it "broadly encompasse[d] any state or federal statutory actions as well as common law actions" and left the complaint's sufficiency up to the arbitrator to decide.
Plaintiff filed this appeal December 17, 2014. She argues the trial judge erred when he granted defendant's motion to dismiss because the language in the arbitration clause was unenforceable on its face and discovery needed to be conducted to determine whether plaintiff knowingly and voluntarily waived her right to a jury trial.
We review a contract interpretation de novo. Kieffer v. Best Buy, 205 N.J. 213, 222 (2011). The court's approach "in construing an arbitration provision of a contract is governed by the same de novo standard of review." Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 446 (2014), cert. denied, ___ U.S. ___, 135 S. Ct. 2804, 192 L. Ed. 2d 847 (2015).
In Atalese, the Court clarified what constitutes an effective arbitration waiver provision:
[W]hen a contract contains a waiver of rights — whether in an arbitration or other clause — the waiver "must be clearly and unmistakably established." [Garfinkel v. Morristown Obstretics & Gynecology Assocs., P.A., 168 N.J. 124, 132 (2001).] . . . Thus, a "clause depriving a citizen of access to the courts should clearly state its purpose." Ibid. . . . We have repeatedly stated that "[t]he 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." Ibid.
[Atalese, supra, 219 N.J. at 444.]While no particular set of words is required, the arbitration clause must explain "that arbitration is a substitute for the right to have one's claim adjudicated in a court of law." Id. at 442, 447; see id. at 444-45 (approving of an arbitration clause in Martindale v. Sandvik, Inc., 173 N.J. 76, 81 (2002), which stated plaintiff agreed to waive her right to a jury trial); see also Jaworski v. Ernst & Young U.S. LLP, 441 N.J. Super. 464, 480-81 (App. Div.) (an arbitration clause which unambiguously stated a party would be unable to sue in court under an anti-discrimination claim was enforceable), certif. denied, 223 N.J. 406 (2015).
We conclude preexisting arbitration clauses that fail to meet Atalese's requirements cannot be enforced. See Barr v. Bishop Rosen & Co., Inc., 442 N.J. Super. 599, 607-08 (App. Div. 2015), (holding 1997 and 2009 arbitration clauses unenforceable for failing "to clearly and unambiguously inform plaintiff of his waiver of the right to pursue his claims in a judicial forum"), certif. denied, 224 N.J. 244 (2016); Dispenziere v. Kushner Cos., 438 N.J. Super. 11, 12-14 (App. Div. 2014) (holding a 2004 arbitration clause unenforceable under Atalese because it failed to clearly and unambiguously inform the plaintiff she was waiving her right to sue). Here, the arbitration clause in the employment contract falls short of the Atalese standard. The clause fails to explain clearly and unmistakably that arbitration would be a substitute for a jury trial. The clause does enumerate certain causes of action that would be covered under the arbitration provision, but this enumeration is inadequate to establish arbitration as the exclusive remedy for plaintiff's claims.
We reverse and remand for reinstatement of plaintiff's complaint. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION