Court Opinion

ID: 4430398
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:40:49.794724+00
Date Added: 2024-06-11T14:50:57.385074
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-2676-17T1

DONNA KIRALY,

          Plaintiff-Appellant,

v.

FORCEPOINT, INC.,
DENNIS EVERSEN, and
JULIE MARTINEZ,

          Defendants-Respondents,

and

RAYTHEON WEBSENSE, INC.,
KYLE MCGUIRE, and AUTUMN
SANGREY,

          Defendants.

                    Argued September 18, 2018 – Decided October 2, 2018

                    Before Judges Ostrer and Currier.

                    On appeal from Superior Court of New Jersey, Law
                    Division, Morris County, Docket No. L-2094-17.
             G. Martin Meyers argued the cause for appellant (Law
             Offices of G. Martin Meyers, PC, attorneys; G. Martin
             Meyers and Susan S. Singer, on the briefs).

             Jessica A. Burt argued the cause for respondents
             (Ogletree, Deakins, Nash, Smoak & Stewart, PC,
             attorneys; Steven J. Luckner and Jessica A. Burt, on the
             brief).

PER CURIAM

      Plaintiff Donna Kiraly appeals from the January 19, 2018 order dismissing

her complaint and compelling arbitration. Because we discern the arbitration

agreement did not include a sufficiently clear waiver of plaintiff's right to litigate

her claims in court, we reverse.

      In January 2015, plaintiff was hired by defendant Forcepoint, Inc.1 as a

member of its sales force. She was terminated in November 2015. In her

complaint, plaintiff alleged sexual harassment, gender discrimination, and a

hostile work environment during her employment. She alleges that after she

objected to the conduct, she was retaliated against and terminated. Plaintiff

asserts causes of action against defendant under the New Jersey Law Against

Discrimination, N.J.S.A. 10:5-1 to - 49, and a common law claim for malicious

interference with economic relations.

1
 Defendants Dennis Eversen and Julie Martinez were employees of Forcepoint.
The remaining defendants were not served with the complaint.
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      At the time of plaintiff's hiring, she signed a Confidentiality, Invention

Assignment, Non-Solicit, Non-Compete, and Arbitration Agreement (arbitration

agreement).     The agreement incorporated a two-page Dispute Resolution

Addendum detailing the arbitration requirements, processes and procedures.

The addendum and agreement were executed simultaneously.

      On pages four and five of the eight-page, single-spaced, small font

agreement, paragraph 10 entitled "Arbitration" states:

              In the event of any controversy or dispute between you
              and the Company or between you and any affiliate or
              an agent of Company, including but not limited to
              directors, officers, managers, other employees or
              members of the Group, who are being sued in any
              capacity, as to all or any part of this Agreement, any
              other agreement, or any dispute or controversy
              whatsoever pertaining to or arising out of the
              relationship between you and the Company, or the
              dissolution or termination of same (collectively,
              "Arbitrable Disputes") shall, subject to Section 11.1
              herein [pertaining to injunctive relief sought by the
              Company] be resolved exclusively by binding
              arbitration solely between yourself and the Company
              conducted in Princeton, New Jersey, which shall be
              conducted in accordance with the procedures set forth
              in the Dispute Resolution Addendum appended hereto
              as Schedule 2 (the "Addendum"), all of which are
              incorporated into this Agreement by reference . . . .

      The addendum provides that "all [a]rbitrable [d]isputes shall be resolved

only by final and binding arbitration conducted privately and confidentially by

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a single arbitrator selected as specified in this Addendum." The Addendum

provides details on the one-year time limitation to bring a claim, initiating the

arbitration process, selecting an arbitrator, choice of law, discovery process,

hearing and award procedures. Section M provides: "[t]he parties agree that

reliance upon courts of law of equity can add significant costs and delays to the

process of resolving disputes. Accordingly, they recognize that an essence of

this Agreement is to provide for the submission of all Arbitrable Disputes to

binding arbitration."

      In lieu of an answer, defendants filed a motion to dismiss the complaint

and to compel arbitration under the agreement. In the January 19, 2018 oral

decision, the motion judge found the language in paragraph 10 of the arbitration

agreement was "unambiguous and clearly encompasse[d] the claims asserted by

plaintiff in this action." In finding the agreement enforceable, the judge granted

defendants' motion.

      We review the court's order dismissing the complaint de novo because it

is founded on a determination of a question of law — the validity of the

arbitration agreement. Barr v. Bishop Rosen & Co., 442 N.J. Super. 599, 605

(App. Div. 2015). "Our review of a contract, generally, is de novo, and therefore

we owe no special deference to the trial court's . . . interpretation. Our approach

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in construing an arbitration provision of a contract is governed by the same de

novo standard of review." Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430,

445-46 (2014) (citations omitted).

      The Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 to 16, and the New

Jersey Arbitration Act (NJAA), N.J.S.A. 2A:23B-1 to -32, reflect federal and

state policies favoring arbitration of disputes. Roach v. BM Motoring, LLC,

228 N.J. 163, 173-74 (2017); Hojnowski v. Vans Skate Park, 187 N.J. 323, 342

(2006). The FAA was enacted "to 'reverse the longstanding judicial hostility'

towards arbitration agreements and to 'place arbitration agreements upon the

same footing as other contracts,'" and it "preempts state laws that single out and

invalidate arbitration agreements." Roach, 228 N.J. at 173-74 (first quoting

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991); then citing

Doctor's Assocs. v. Casarotto, 517 U.S. 681, 687 (1996)); see also Kindred

Nursing Ctrs. Ltd. P'ship v. Clark, 137 S. Ct. 1421, 1426 (2017). A court

"'cannot subject an arbitration agreement to more burdensome requirements

than' other contractual provisions." Roach, 228 N.J. at 174 (quoting Atalese,

219 N.J. at 441).

      We look to Atalese, the controlling law in New Jersey, for guidance in our

review of the agreement and addendum. There, the Supreme Court reaffirmed

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that an arbitration agreement, "like any other contract, 'must be the product of

mutual assent, as determined under customary principles of contract law.'" 219

N.J. at 442 (citation omitted). "Mutual assent requires that the parties have an

understanding of the terms to which they have agreed." Ibid. "This requirement

of a 'consensual understanding' about the rights of access to the courts that are

waived in the agreement has led our courts to hold that clarity is required."

Moore v. Woman to Woman Obstetrics & Gynecology, L.L.C., 416 N.J. Super.

30, 37 (App. Div. 2010) (citation omitted).

      Plaintiff argues on appeal, as she did in the trial court, that the arbitration

agreement failed to apprise her she was waiving the right to bring a claim in

court or try her case to a jury. We agree.

      In Atalese, the Court held that "the absence of any language in the

arbitration provision that plaintiff was waiving her statutory right to seek relief

in a court of law renders the provision unenforceable." Id. at 436. For guidance,

the Court provided examples of valid arbitration clauses. Id. at 444. The Court

noted our decision in Griffin v. Burlington Volkswagen, Inc., 411 N.J. Super.

515, 518 (App. Div. 2010), where we "upheld an arbitration clause, which

expressed that '[b]y agreeing to arbitration, the parties understand and agree that

they are waiving their rights to maintain other available resolution processes,

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such as a court action or administrative proceeding, to settle their disputes.'"

Atalese, 219 N.J. at 445.

      The Court also approved of arbitration clauses stating, "the plaintiff

agreed 'to waive [her] right to a jury trial,'" and "[i]nstead of suing in court, we

each agree to settle disputes . . . only by arbitration," where "[t]here's no judge

or jury." Id. at 444-45 (citations omitted). We have stated, however, that a valid

arbitration agreement does not require advice on all component rights

encompassed in a waiver seeking relief in court. Such a requirement would

render arbitration clauses too complex, hard to understand, and easy to

invalidate, in contravention of the strong public policy favoring arbitration. See

Jaworski v. Ernst & Young U.S. LLP, 441 N.J. Super. 464, 480-81 (App. Div.

2015) (upholding an arbitration clause stating the parties would not "be able to

sue in court," and rejecting plaintiffs' argument that "the arbitration agreement

must inform the parties of (1) the number of jurors, (2) the parties' rights to

choose the jurors, (3) how many jurors would have to agree on a verdict, and (4)

who will decide the dispute instead of the jurors.").

      We are mindful of the Court's mandate in Atalese that "[n]o particular

form of words is necessary to accomplish a clear and unambiguous waiver of

rights." 219 N.J. 444.      But, an enforceable arbitration agreement, "at least in

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some general and sufficiently broad way, must explain that plaintiff is giving up

her right to bring her claims in court or have a jury resolve the dispute." Id. at

447.

       Here, the arbitration clause and addendum are deficient under the Atalese

standards. While the documents refer to binding arbitration and detail the

process, they lack any reference to the waiver of any right, or that plaintiff is

foreclosed from bringing a claim in court. The signor of the agreement is never

advised that arbitration is a waiver of the right to bring suit in a judicial forum.

The agreement lacks the simple language described in Atalese to ensure a

knowledgeable waiver. Without any reference to the waiver of the right to have

his or her claims litigated in court, the "average member of the public" presented

with this agreement and addendum "may not know — without some explanatory

comment — that arbitration is a substitute for the right to have one's claim

adjudicated in a court of law." Id. at 442. The failure to apprise plaintiff of the

surrender of her right to pursue her claims in court renders this arbitration

agreement unenforceable.

       Reversed and remanded for further proceedings.           We do not retain

jurisdiction.

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