More Positive Change For Employees Looking to Litigate Their Claims in Court Rather Than Through Forced Arbitration

May 22, 2018

Jennifer Vorih, Esq., Ty Hyderally, Esq., and Chantal Guerriero

The next proposed bill prohibits employers from forcing employees to waive their statutory right to sue in court, which would effectively prohibit forced arbitration agreements for New Jersey employers. The language of the proposed bill broadly states that:

“1.  a.  [a] provision in any employment contract that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment shall be deemed against public policy and unenforceable.”

In addition, the bill provides that “[n]o right or remedy under the “Law Against Discrimination,” P.L.1945, c.169 (C.10:5-1 et seq.) or any other statute or case law shall be prospectively waived.” The bill also prohibits employment agreements from concealing details relating to claims of discrimination, retaliation, or harassment, and prohibits employers from retaliating against employees who refuse to enter into such prohibited agreements.

The bill proposal followed the proposal of a similar federal law, entitled the “Ending Forced Arbitration of Sexual Harassment Act of 2017.”  The federal law states that: “[i]n [g]eneral….no pre-dispute arbitration agreement shall be valid or enforceable if it requires arbitration of a sex discrimination dispute.” Both bills promote public policy and employee protection, in that they seek to allow employees who have been unlawfully discriminated against or harassed to pursue their claims in the most appropriate forum.

Forced arbitration agreements have had a negative impact on employees in the past, because, while they are more convenient and less costly for employers, they discourage attorneys from taking on plaintiff claims because the expected recovery is lower than in court. In addition, employers often have greater bargaining power over employees in the arbitration setting, because employers are more experienced in arbitration and are often responsible for paying the arbitrators. Thus, for New Jersey employees, the proposed new law would eliminate the issues associated with forced arbitration agreements in employment contracts and allow for the maximum amount of relief for employees who experience discrimination, retaliation, or harassment in the workplace.

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