Mandatory Arbitration Takes a Blow – Court Rules Pfizer’s Plan’s a No Go!

Ty Hyderally, Esq., Jennifer Vorih, Esq.

January 16, 2019

In a decision issued today, the Appellate Division held that Pfizer’s current system of attempting to force employees to waive their rights to take Pfizer to court over any employment disputes is inadequate. As the Appellate Division stated, “This case exemplifies an inadequate way for an employer to go about extracting its employees’ agreement to submit to binding arbitration for future claims and thereby waive their rights to sue the employer and seek a jury trial.”

The plaintiff, Amy Skuse, worked for Pfizer as a flight attendant from 2012 to 2017. She was terminated by Pfizer on August 11, 2017, and thereafter filed suit against Pfizer for religious discrimination and failure to accommodate her religious beliefs. That suit stemmed from Pfizer’s requirement that its flight attendants be vaccinated against yellow fever. Skuse refused the vaccine — which apparently contained animal-derived ingredients — due to “philosophical reasons that are similar to a religious belief,” as documented by her physician.

Pfizer moved to dismiss the complaint and compel Skuse to submit the claims to binding arbitration. Pfizer claimed that Skuse had agreed to arbitrate all employment claims against Pfizer as the result of Pfizer’s emails to Skuse and its online “training” system regarding its arbitration policy. The trial court agreed that Skuse had given up her right to sue Pfizer in court, dismissed the complaint, and compelled arbitration.

The Appellate Division painstakingly reviewed the controlling New Jersey Supreme Court decision, Leodori v. CIGNA Corp., 175 N.J. 293 (2003), which provides that an employee’s valid waiver of statutory rights due to a binding arbitration policy, “results only from an explicit, affirmative agreement that unmistakably reflects the employee’s assent.” Id., at 303. Here, Pfizer had sent Skuse an email notifying her that it would be sending her an email to participate in an online training program regarding the company’s arbitration agreement, which training included the options of reading the agreement and reviewing the Frequently Asked Questions, and acknowledging the agreement. The promised email informed Skuse that she had been “assigned the activity Mutual Arbitration and Class Waiver Agreement and Acknowledgement,” and that agreeing to arbitration was a condition of her continued employment with Pfizer.  Skuse apparently participated in the “training module” and clicked a button at the end of the presentation, acknowledging that she had done so. Pfizer then sent Skuse an email confirming that she had completed the module.

The Appellate Division made clear in its opinion that Pfizer can force its employees to agree to binding arbitration as a condition of their continued employment, but that Pfizer had not gotten Skuse’s actual agreement here, as required by Leodori.

Pfizer also stated in its training materials that employees who do not acknowledge receipt of the agreement within 60 days will be deemed to have “consented to, ratified and accepted” it. The Court noted that the motion judge had relied on Jaworski v. Ernst & Young U.S. LLP, 441 N.J. Super. 464 (App. Div. 2015) in accepting the “deemer” provision as valid. The Appellate Division, however, not only disagreed with that analysis but went on to state that it could not reconcile Jaworski with Leodori, and explicitly declined to follow Jaworski.

The Court soundly rejected the idea that deeming an employee to have agreed to submit all employment-related claims to binding arbitration and waive their rights to trial could meet the requirement of Leodori, that the employer obtain the employee’s affirmative assent. Further, the Appellate Division stated that Pfizer’s “unilateral declaration” that employees who do not acknowledge the arbitration agreement within sixty days will be deemed to have done so, was “an attempt to bypass the evidential requirements of Leodori, so that employees who do not communicate their voluntary agreement to the arbitration policy will be imagined to have provided such agreement if they keep reporting to work for longer than two months.”  Beyond not following Jaworski, the Court also distinguished the present case from the situation of one of the Jaworski plaintiffs, Holewinski, who had signed an arbitration agreement previously, after which the employer revised the agreement and Holewinski was deemed to have agreed to it. In contrast, Amy Skuse, “never signed an agreement, or otherwise unmistakably agreed, at any time, to waive her rights to litigate discrimination claims in court.”

Throughout the opinion, the Appellate Division made clear that Pfizer can require its employees to agree to accept binding arbitration and waive their rights to take the company to court. Nonetheless, the Court here refused to allow Pfizer to cut corners in doing so. This opinion is clearly a victory for employee rights in the continued fight against forced arbitration.

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