Arbitration agreements are useful tools for employers, but what can employers do if an employee refuses to sign the agreement? While some states permit employers to terminate employees for refusing to sign an arbitration agreement, New Jersey law is uncertain.
In a recent case, Cator v. WRDC Corp., the court considered whether an employee can be terminated for refusing to sign an arbitration agreement. The employer adopted a policy requiring both new and current employees to sign an arbitration agreement that mandated that all claims brought against the employer be brought in front of an arbitrator. The plaintiff refused to sign the agreement and was suspended from work as a result. The plaintiff filed a complaint against her employer, alleging violations of the New Jersey Law Against Discrimination (LAD). She specifically argued that the LAD gives her the right to file a discrimination claim in court and the agreement constituted a waiver of that statutory-protected right. She further argued that her employer prohibiting her from returning to work after her refusal to sign the agreement constituted unlawful retaliation under the LAD. The court agreed with the plaintiff, holding that the employer violated her right to a jury trial and retaliated against her when she refused to waive this right.
Cator is an unpublished law division case, which means its precedential value is very limited. As a result, another court hearing the same issue is not required to follow the Cator court’s reasoning. Nevertheless, Cator serves as a cautionary tale for employers, demonstrating that employers should exercise care when asking current employees to sign arbitration agreements.
Takeaway: Employers should proceed with caution when requesting current employees to sign arbitration agreements.
The postings on this blog were created for general informational purposes only and do not constitute legal advice or a solicitation to provide legal services. Although we attempt to ensure that the postings are complete, accurate, and current as of the date of publication, we assume no responsibility for their completeness, accuracy, or timeliness. The information in this blog is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional legal counsel.
This blog may contain links to independent third party websites and services, including social media. We provide these links for your convenience, and you access them at your own risk. We have no control over and do not monitor the content or policies (including privacy policies) of these third-party websites and have no responsibility for, and no liability with respect to, their content, accuracy, or reliability. Unless expressly stated, we do not endorse any of the linked websites or any product, service, or publication referenced herein or therein. We will remove a link to any site from this blog upon request of the linked entity.
We grant permission to readers to link to this blog so long as this blog is not misrepresented. This site is not sponsored or associated with any other site unless so identified.
If you wish for Wilentz, Goldman & Spitzer, P.A., to consider representing you, please obtain contact information from the Contact Us area of this blog or go to the firm’s website at www.wilentz.com. One of our lawyers will be happy to discuss the possibility of representation with you. However, the authors of Wilentz blogs are licensed only in New Jersey and/or New York and do not wish to represent anyone who viewed this site in a state where the site fails to comply with all laws and ethical rules of that state.