Opinion
DOCKET NO. A-4583-11T1
07-26-2013
RITA WALL, LINDA PROCTOR, and JANICE BOWMAN, Plaintiffs-Appellants, v. UNITED PARCEL SERVICE, INC., TOM FINN, ROBERT REGAN, and MICHELLE HUG, Individually, Defendants-Respondents.
Lueddeke Law Firm, attorneys for appellants (Karri Lueddeke, on the brief). Day Pitney, LLP, attorneys for respondents (Michael T. Bissinger and Bisha A. Nurse, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Grall and Accurso.
On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-7143-11.
Lueddeke Law Firm, attorneys for appellants (Karri Lueddeke, on the brief).
Day Pitney, LLP, attorneys for respondents (Michael T. Bissinger and Bisha A. Nurse, on the brief). PER CURIAM
Plaintiffs Rita Wall, Linda Proctor and Janice Bowman appeal from a March 30, 2012 final order dismissing their complaint without prejudice in favor of arbitration. We affirm
Plaintiffs were long-time employees of defendant United Postal Service (defendant or UPS). They worked in defendant's Bound Brook office as senior administrative support staff. In March 2010, UPS advised plaintiffs, along with other employees in its Bound Brook office, that the company would shortly implement a reduction in force that would eliminate their positions. UPS management advised these employees that they could apply for other available positions in the company or accept the separation package UPS was offering affected employees.
The individual defendants hold management positions at UPS.
Plaintiffs were interested in applying for other positions in the company in order to protect their retirement benefits. Plaintiffs claim, however, that UPS provided them a "bogus" list of other jobs within the company and represented that these less-desirable jobs were the only ones available. They contend that the company provided an accurate list of other more-desirable available positions to younger employees in the Bound Brook office whose jobs were also being eliminated. Doing so allowed those younger employees to obtain the more-desirable positions plaintiffs could have secured because of their seniority. In this manner, UPS pressured and fraudulently induced plaintiffs to accept separation packages on the basis of deliberately false information with the goal of forcing plaintiffs out of the company and retaining younger workers. Plaintiffs also contend that the individual defendants made comments about plaintiffs' ages.
UPS paid each plaintiff between $26,364 and $34,498.40 on departure and plaintiffs, in return, released UPS from all claims arising out of their employment or separation. Specifically, the release plaintiffs signed included the following paragraph encaptioned "Claims Released."
I irrevocably and unconditionally release the Company, its parent, subsidiaries, its current or former affiliates, and their employees or agents (collectively, the Released Parties), from all known or unknown claims, promises, causes of action, or similar rights of any type that I presently may have arising out of my employment with, or separation from, the Company (Claims). The Claims I am releasing include, without limitation, claims under the WARN Act, which requires that advance notice be given of certain workforce reductions; the Age Discrimination in Employment Act, the Older Workers' Benefit Protection Act, and Executive Order 11,141, which prohibit age discrimination in employment; Title VII of the Civil Rights Act of 1964, as amended, Section 1981 of the Civil Rights Act of 1866, and Executive Order 11,246, which prohibit discrimination based on race, color, national origin, religion, or sex; the Equal Pay Act, which prohibits paying men and women unequal pay for equal work; the Americans with Disabilities Act and Sections 503 and 504 of the Rehabilitation Act of 1973, which prohibit discrimination based on disability; the Family and Medical
Leave Act of 1993, which provides for leaves of absence under certain circumstances, the Employee Retirement Income Security Act of 1974, which, among other things, protects employee benefits; the Fair Labor Standards Act of 1938 and state laws which regulate wage and hour matters, including but not limited to the New Jersey Law Against Discrimination; the New Jersey Conscientious Employee Protection Act, the New Jersey Civil Rights Act, the New Jersey Wage and Hour Laws, the New Jersey Domestic Partnership Act, the New Jersey Civil Union Law, and New Jersey Family Leave Act, or any other federal, state, or local law, common law, statute, regulation, or law of any other type.
The releases also contained identical arbitration clauses which provided in their entirety:
The Company and I agree that any dispute arising in connection with, or relating to this Release, to the maximum extent allowed by applicable law, shall be subject to resolution through informal methods and, failing such efforts, through arbitration. I further agree that any such arbitration shall proceed in accordance with the terms of the Federal Arbitration Act and the rules and procedures of the American Arbitration Association in Atlanta, Georgia and that a single experienced employment arbitrator licensed to practice law in Georgia shall be appointed through the American Arbitration Association's procedures to resolve the dispute. I also agree that in the event arbitration is necessary, the laws of the State of Georgia and any applicable federal law shall apply. I recognize and understand that the award of the arbitrator shall be binding and conclusive and that the prevailing party shall have the right to have the award made
the judgment of a court of competent jurisdiction in the State of Georgia.
I agree that each party shall pay the fees of his, her or its attorneys, the expenses of his, her or its witnesses, and any other expenses that party incurs in connection with the arbitration, but all costs of the arbitration itself, including the fees of the arbitrator, the cost of any record or transcript of the arbitration, administrative fees, and other fees and costs shall be paid in equal shares by the plaintiff(s) and defendant(s). At my written request and on a showing of substantial hardship, the Company shall advance all or a portion of my share of those arbitration costs to the extent they would exceed the out-of-pocket costs I would have incurred in a lawsuit. The party losing the arbitration shall reimburse the party who prevailed for all attorneys' fees and expenses the prevailing party paid pursuant to this subsection, except to the extent prohibited by a statute under which the dispute has been brought.
Fifteen months after executing the releases, plaintiffs filed suit in the Law Division alleging that UPS discriminated against them in violation of the Law Against Discrimination (LAD) and fraudulently induced them to enter into separation agreements with the company. UPS moved to dismiss the complaint pursuant to Rule 4:6-2 and force the plaintiffs to arbitration in accordance with the release.
Because the parties had relied on matters beyond the complaint, Judge Currier treated the motion as one for summary judgment. The parties agreed the facts were undisputed and that the only question before the court was whether plaintiffs were required to arbitrate their fraudulent inducement claim. Judge Currier determined that the issue was "whether the release is enforceable, and whether the plaintiffs' claims may be brought against the defendants at all." Reasoning that the enforceability of the release was a question for the arbitrator, Judge Currier granted the motion, ordered the parties to arbitration and dismissed the complaint without prejudice.
On appeal, plaintiffs concede that their fraudulent inducement claim would ordinarily be arbitrated. See Rent-A-Center, W., Inc. v. Jackson, _ U.S. _, 130 S. Ct. 2772, 2778, 177 L. Ed. 2d 403, 411-12 (2010) (holding that a fraudulent inducement claim challenges the contract as a whole, as opposed to the validity of the arbitration clause, and thus must be resolved in arbitration). They argue, however, that because the arbitration clause only mandates arbitration for disputes "arising in connection with, or relating to this Release," it does not encompass the substantive merits of their LAD claims. They contend that requiring them to go to arbitration in Georgia and then return to New Jersey to litigate their LAD claim in the Law Division should they succeed in arbitration, fragments their claims and is contrary to the Court's holding in Garfinkel v. Morristown Obstetrics & Gynecology Assocs. P.A., 168 N.J 124 (2001).
In Garfinkel, the Court addressed a situation in which the arbitration clause covered an employee's common law claims but not his claims arising under the LAD. Because bifurcating the proceedings meant litigating the same facts in different fora with the attendant risks of inconsistent findings, the Court held that all claims, even those covered by the arbitration clause, should be joined in a single action in the Law Division. Id. at 137.
Garfinkel, however, is readily distinguishable from this case. Here, if plaintiffs are not successful in arbitration, they may not litigate their LAD claims in any forum. Thus, there exists the distinct possibility that arbitration will finally conclude this matter. As there is no threat of simultaneous proceedings having divergent outcomes, Garfinkel is not applicable and Judge Currier correctly dismissed plaintiffs' complaint without prejudice.
Further, as we have recently noted, the Court in Garfinkel was not tasked with considering the facts in that matter under the Federal Arbitration Act (FAA). See Waskevich v. Herold Law, P.A., _ N.J. Super. _, _ (App. Div. 2013). Here, as UPS conducts its business in interstate commerce, the FAA undoubtedly applies, 9 U.S.C.A. § 2, and "requires piecemeal resolution when necessary to give effect to an arbitration agreement." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 20, 103 S. Ct. 927, 939, 74 L. Ed. 2d 765, 782 (1983).
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We decline to consider plaintiffs' alternate claim that the provision of the arbitration clause requiring arbitration in Georgia is unconscionable. This argument was not raised in the trial court. See Pressler & Verniero, Current N.J. Court Rules, comment 2 on R. 2:6-2 (2013). Further, plaintiffs have not briefed the factors a court must consider in determining whether a contractual term is unconscionable. See Rudbart v. N. Jersey Dist. Water Supply Comm'n, 238 N.J. Super. 41, 47-48 (App. Div. 1990), rev'd, 127 N.J. 344 (1992). Accordingly, the issue is not appropriate for appellate review.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION