Title: Garfinkel v. Morristown Obstetrics and Gynecology Associates, P.A.

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). VERNIERO, J., writing for a unanimous Court. The primary issue in this appeal is whether plaintiff, David A. Garfinkel, M.D., waived his right to sue in court the medical practice that had employed and subsequently discharged him for reasons that Garfinkel claims violated the New Jersey Law Against Discrimination, N.J.S.A. 10:51-1 to -42 (LAD). Garfinkel and defendant Morristown Obstetrics & Gynecology Associates, P.A. (MOGA), entered into an employment agreement on August 9, 1996. Among other aspects of the employment relationship, the agreement addressed the circumstances under which either party could terminate the relationship and compensation Garfinkel would receive in the event of termination. The employment agreement contained a provision that any controversy or claim arising out of, or relating to, this Agreement or the breach thereof, shall be settled by arbitration[.] The arbitration clause expressly excepted from its scope matters relating to post-termination restrictions (paragraph fourteen) and pension benefits (paragraph fifteen), but it is likely that the reference to the paragraph regarding pension benefits was in error and that the parties intended to exclude from the arbitration requirement issues pertaining to severance pay (paragraph thirteen), for that paragraph contemplates action by a court of competent jurisdiction in the event of discharge. In January 1998, MOGA allegedly informed Garfinkel that he would not be allowed to exercise his option to become a shareholder in the practice because he was born the wrong sex. Two months later, a MOGA shareholder told Garfinkel he was being terminated. Another shareholder told him the reason for his termination was that he did not attract patients well because he was male[.] Garfinkel filed suit in the Law Division in September 1998 against MOGA, its two shareholders, and Lifeline Medical Associates, identified as a successor in interest to MOGA. Garfinkel alleged in his complaint that defendants breached the employment agreement, violated the implied covenant of good faith and fair dealing, tortiously interfered with his prospective economic advantage, violated the LAD, and defamed him. After filing an answer and counterclaim to the complaint, defendants moved to dismiss the complaint on the basis of the arbitration clause of the employment agreement (paragraph eighteen). The trial court granted defendants' motion to dismiss, ruling that the arbitration provision was binding as to all claims, including those asserted under the LAD. The court concluded that the parties had chosen knowingly and voluntarily to arbitrate their disputes and that in this setting public policy favored arbitration. Garfinkel appealed and the Appellate Division affirmed the judgment of the Law Division. The court also concluded that Garfinkel's common-law claims against defendants must be resolved by arbitration. The Supreme Court granted Garfinkel's petition for certification and permitted the New Jersey Division on Civil Rights (DCR) to participate in the appeal as amicus curiae. The DCR opposes compulsory, binding arbitration based on a vaguely worded clause or where a waiver of rights is not voluntary. The DCR believes the arbitration clause in this case is ambiguous on its face. HELD: The language of the arbitration clause in the agreement between Peter Garfinkel, M.D., and Morristown Obstetrics & Gynecology Associates, P.A., is ambiguous and does not constitute a waiver of Garfinkel's statutory rights under the Law Against Discrimination. Garfinkel may proceed with his employment discrimination action, and the related common-law claims, in the Law Division. 1. The LAD provides a mechanism by which victims of discrimination in the workplace may seeks redress for their injuries. Under the LAD, an aggrieved employee may file suit in the Law Division or may pursue an administrative remedy by filing a complaint with the DCR. (pp. 7-8) 2. Arbitration has long been a favored method of dispute resolution in New Jersey and because of its favored status, agreements to arbitrate are to be read liberally in favor of arbitration. The agreement to arbitrate must be clear and consensual, however, for parties must know that by electing arbitration, they are giving up the right to sue in court. Therefore, a party's waiver of statutory rights must be unmistakable and courts will not read such a waiver broadly. (pp. 9-10) 3. The language used in the arbitration clause of the parties' employment agreement does not mention, either expressly or by general reference, statutory claims asserted under the LAD; the language suggests that the parties intended to arbitrate only disputes involving a contract term, a condition of employment, or some other element of the agreement itself. The clause is insufficient to constitute a waiver of remedies under the LAD. (pp. 10-14) 4. The policies that support the LAD and the rights it confers on employees are essential to eradicating discrimination in the workplace and the Court will not assume that an employee intends to waive those rights unless the terms of an agreement that so provides are unambiguous. To be enforceable, a waiver-of-rights provision should provide at least that the employee agrees to arbitrate all statutory claims arising out of the employment relationship or its termination. (pp. 14-15) 5. The Court assumes, without deciding, that Garfinkel's common-law claims are subject to arbitration, but for reasons of judicial economy, the common-law claims should be joined with the LAD claim for trial in the Law Division. (pp. 17-18) Judgment of the Appellate Division is REVERSED and the matter is REMANDED to the Law Division for resolution of all issues, including the common-law claims. CHIEF JUSTICE PORITZ and ASSOCIATES JUSTICES STEIN, COLEMAN, LONG, LaVECCHIA, and ZAZZALI join in JUSTICE VERNIERO'S opinion. DAVID A. GARFINKEL, M.D., Plaintiff-Appellant, v. MORRISTOWN OBSTETRICS & GYNECOLOGY ASSOCIATES, P.A., DAVID E. JACOBWITZ, M.D., and JOSEPH RAMIERI, M.D., Defendants-Respondents, and LIFELINE MEDICAL ASSOCIATES, Defendant. Argued March 26, 2001 -- Decided June 13, 2001 On certification to the Superior Court, Appellate Division, whose opinion is reported at 333 N.J. Super. 291 (2000). Andrew Dwyer argued the cause for appellant (The Dwyer Law Firm, attorneys). Glenn A. Montgomery argued the cause for respondents Morristown Obstetrics & Gynecology Associates, P.A. and Joseph Ramieri, M.D. (Pollock, Montgomery & Chapin, attorneys). James E. Shepard argued the cause for respondent David E. Jacobwitz, M.D. (Fein, Such, Kahn & Shepard, attorneys; Brian W. Kincaid, of counsel and on the brief). Jeffrey C. Burstein, Senior Deputy Attorney General, argued the cause for amicus curiae, New Jersey Division on Civil Rights (John J. Farmer, Jr., Attorney General of New Jersey, attorney; James R. Michael, Deputy Attorney General, on the brief). The opinion of the Court was delivered by VERNIERO, J. The principal issue in this appeal is whether plaintiff waived his right to sue his former employer in the Law Division for alleged violations of the Law Against Discrimination, N.J.S.A. 10:5-1 to -42 (LAD). Plaintiff is a physician formerly associated with an obstetrics and gynecology practice in Morris County. He claims that he was unlawfully discharged from that practice on account of his gender. He also asserts under the common law that his employer's conduct constituted defamation and tortious interference with his economic advantage. The trial court determined that plaintiff's claims, including those asserted under the LAD, were subject to arbitration pursuant to the parties' written employment agreement. That agreement, which plaintiff signed prior to joining the practice, provides that any controversy arising out of, or relating to, this Agreement or the breach thereof, shall be settled by arbitration[.] The Appellate Division affirmed the trial court's determination. We now reverse. We hold that because of its ambiguity the language contained in the arbitration clause does not constitute an enforceable waiver of plaintiff's statutory rights under the LAD. Therefore, plaintiff may proceed with his discrimination action in the Law Division. Consistent with principles of judicial economy, plaintiff's common-law claims should be tried in the same action as the LAD claim. NO. A-52 DAVID A. GARFINKEL, M.D., Plaintiff-Appellant, v. MORRISTOWN OBSTETRICS & GYNECOLOGY ASSOCIATES, P.A., DAVID E. JACOBWITZ, M.D., and JOSEPH RAMIERI, M.D., Defendants-Respondents, and LIFELINE MEDICAL ASSOCIATES, Defendant. DECIDED June 13, 2001 Chief Justice Poritz