YOU’VE GOT MAIL! NEW JERSEY SUPREME COURT ISSUES KEY RULING UPHOLDING THE USE OF ELECTRONIC ARBITRATION AGREEMENTS IN THE EMPLOYMENT CONTEXT
By Iman Wells, August 21, 2020
On August 18, 2020, the New Jersey Supreme Court issued a landmark 5-1 decision in Skuse v. Pfizer, Inc., No. 082509, 2020 WL 4760077 (N.J. Aug. 18, 2020), reversing the Appellate Division’s decision and holding that the electronic arbitration agreement at issue is enforceable under New Jersey contract law. This ruling not only blesses the use of electronic arbitration agreements in the employment context but also provides employers with guidance on how to obtain an employee’s agreement to arbitrate in today’s digital world.
In Skuse, a former Pfizer employee filed a complaint in the Superior Court of New Jersey alleging that she was terminated in violation of the New Jersey Law Against Discrimination for refusing to be vaccinated for yellow fever due to her religion. Pfizer then moved to compel arbitration according to an arbitration agreement Pfizer circulated to employees via email contained in a “training module”. The trial court granted Pfizer’s motion to compel arbitration.
The Appellate Division reversed, finding that Pfizer failed to show the employee agreed to arbitration. More specifically, the Appellate Division concluded that by disseminating the agreement by email, using a “training module” to explain the agreement and asking the employee to “acknowledge” the agreement rather than agree to its terms, Pfizer failed to demonstrate the employee “clearly and unmistakably” agreed to arbitrate – the standard set forth previously by the Court in Leodori v. CIGNA Corp., 175 N.J. 293, 814 A.2d 1098 (2003).
In reversing the Appellate Division, the New Jersey Supreme Court held that the arbitration agreement complied with New Jersey “waiver-of-rights case law”. Specifically, the Court found that the communications related to the agreement “clearly and unmistakably” informed the employee that continued employment past the sixty (60) days from the receipt of the agreement would establish assent and that certain claims would be resolved through arbitration. The Court also expressly noted that “delivery of the Agreement by e-mail did not warrant its invalidation” finding that “no principle of New Jersey contract law bars enforcement of a contract because that contract is communicated by e-mail, rather than by the transfer of a hard-copy document. If we were to adopt such a rule, it would invalidate contracts that have been negotiated and transmitted electronically for decades”.
This is yet another reminder that employers should review their arbitration agreements to ensure that they are not only drafted properly to clearly advise employees that they are waiving their right to pursue claims in Court but are also disseminated in a way that complies with the ever-evolving case law in New Jersey. The opinion is also timely as it reaffirms the use of email delivery for arbitration agreements during a time where many employees are working remotely due to COVID-19.
The case is Skuse v. Pfizer, Inc., No. 082509, 2020 WL 4760077 (N.J. Aug. 18, 2020). The full opinion is available here.