NJ Labor And Employment Law

The New Jersey Labor and Employment Law Blog is authored by Jay S. Becker and Joseph C. DeBlasio, shareholders in the Labor and Employment Law Practice Group, with support from the associates in the Group. It is dedicated to provide news and updates regarding all labor and employment matters throughout New Jersey.

Proposed New Jersey Bill Would Prohibit Use of Mandatory Arbitration Agreements

March 11, 2010 | No Comments
Posted by admin

Mandatory arbitration agreements in New Jersey have regularly been upheld as enforceable by the courts, including by the Supreme Court of New Jersey.  As a result, many employers require employees to sign such agreements as a condition of employment.  These agreements generally require employees to waive their rights to bring claims of harassment, discrimination, retaliation, and the like, in state or federal court.  Instead of a jury trial, these claims are brought before an arbitrator who presides over a hearing and then renders a decision that is binding upon all parties.  Arbitration often is quicker and less expensive than litigation in state or federal court.

However, on February 11, 2010, a bill was introduced that would prohibit the use of mandatory arbitration agreements in New Jersey, and would strike down current agreements as unenforceable.  The bill, if passed, would amend the New Jersey Law Against Discrimination and make it an unlawful employment practice to:  “require an employee or prospective employee to make the waiver of rights granted under this or any other statute, rule or regulation, including the right to a jury trial, …. a condition of hiring, continued employment or compensation or a term, condition or privilege of employment.”  The amendment would further prohibit an employer from requesting that an employee or prospective employee “waive any claims prior to the existence of an actual dispute.”

The amendment would not prohibit an employer and an employee or prospective employee from agreeing to arbitration or some other form of alternative dispute resolution, including the waiver of a jury trial, after an actual dispute arises.  Of course, such an agreement must be knowing and voluntary, and may not be used as a condition of employment or continued employment.

If your company uses or is considering using mandatory arbitration agreements in employment, please check back periodically for updates on this proposed bill.

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