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NJ Appeals Court Voids Jury Trial Waiver and $2MM Counsel Fees/Costs Award in Whistleblower Suit

New Jersey public policy is undergoing a period of significant retrenchment on employer-employee contract interpretation, producing seismic effects in day-to-day negotiation, litigation, and arbitration of employment law cases in our State.

You may recall our blog post dated October 11, 2016, regarding the New Jersey appellate courts’ insistence that, for employers to enforce contract provisions, asserted waivers of constitutional or statutory rights in our State must be clear, unambiguous, and the product of informed consent.  If those elements are missing, say the courts, the employee will not be held to the letter of the improper agreement.  In the earlier case, Anthony vs. Eleison Pharmaceuticals, LLC, the court refused to enforce a binding arbitration provision in the plaintiff’s employment contract, because

  • New Jersey public policy discourages employers from compelling arbitration with employees based upon vague, hidden waivers;
  • The contract described  “phased dispute resolution process,” which did not clearly or specifically say “arbitration”; and
  • The waiver did not specify that signing the contract indicated that Anthony waived his right to pursue his claims in a judicial forum.

On February 6, 2017, continuing in that vein, the New Jersey Appellate Division published its opinion in Noren vs. Heartland Payment Systems, Inc.  In that case, a whistleblower successfully and dramatically challenged the propriety of an anti-jury provision in his employment contract, and an imposed $2MM counsel fees/costs award in favor of the employer that won a bench trial.  It is a precedential case.

Plaintiff Greg Noren, a 7-year employee of Heartland, brought suit against his former employer alleging breach of contract and violation of the Conscientious Employee Protection Act (CEPA).  Because Noren’s employment contract contained a jury waiver, the trial judge denied his demand for trial by jury. Following a non-jury trial, the judge entered a verdict for the company, and awarded the company over $2 million in legal fees and costs. Noren then challenged on appeal the propriety of the jury waiver provision as to the CEPA claim, asked for reversal and remand to the trial court for a jury trial, and argued the company was not entitled to legal fees and costs related to the improper bench trial of his CEPA claim. The Appellate Division did exactly what Mr. Noren asked:  it concluded the jury waiver provision was not legally enforceable on the CEPA claim, reversed the judgment and fee award on that claim, and remanded for a jury trial on the CEPA claim.

The right to a trial by jury is guaranteed by the New Jersey Constitution, and, in the case of Noren’s CEPA claim, explicitly established by state statute. The right of a CEPA claimant to trial by jury is considered fundamental, part of New Jersey’s public policy, and the court so found:

“[W]hen a contract contains a waiver of rights . . . the waiver ‘must be clearly and unmistakably established.’  The contractual waiver of rights provision “must reflect that [the party] has agreed clearly and unambiguously to its terms.” Because “[w]aiver is the voluntary and intentional relinquishment of a known right,” there cannot be a clear and unambiguous agreement to waive without a “mutual understanding” of the terms of the waiver. To be effective, a party must “have full knowledge of his legal rights and intent to surrender those rights.” [Citations omitted].

In other words, while no magic language is required to effect a valid waiver of an employee’s rights, the provision must be grounded in plain language that would be clear and understandable to the average person.  It must clearly explain (1) what right is being surrendered and (2) the nature of the claims covered by the waiver.

Contract or handbook language that fails to meet that standard will be struck, and both parties will have the benefit of whatever constitutional and statutory rights the law affords them.

CONCLUSION

If you have a crisis or concern about a workplace problem; face enforcement of an alleged waiver of your rights in arbitration or in court; or are the victim of unethical or illegal practices at your workplace, including discrimination, wrongful discharge, and/or retaliation; then you should call the experienced employment law attorneys at Hanan M. Isaacs, P.C.  Call us at 609-683-7400, or contact us online, to schedule a near-term reduced fee initial consultation at our Central Jersey law offices in Kingston.  We will listen to your facts, explain the law, evaluate your claims, and assist you in forging a path to social and economic justice that is just right for you.  We are compassionate counsel and tough advocates — and we want to help. Call us today.  You will be glad you did.

Hanan M. Isaacs, P.C.
4499 NJ-27
Kingston, NJ 08528

Phone: 609-683-7400
Fax: 609-921-8982
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