Court Opinion

ID: 3167866
Source: CourtListenerOpinion
Date Created: 2016-01-07 17:05:42.448974+00
Date Added: 2024-06-11T12:01:25.904530
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
               APPROVAL OF THE APPELLATE DIVISION

                                    SUPERIOR COURT OF NEW JERSEY
                                    APPELLATE DIVISION
                                    DOCKET NO. A-2830-14T2

GRANT W. MORGAN,
                                       APPROVED FOR PUBLICATION
         Plaintiff-Respondent,
                                           January 7, 2016
    v.
                                         APPELLATE DIVISION
RAYMOURS FURNITURE COMPANY, INC.,
PATRICK HYNES, and WENDY
GREENWALD,

          Defendants-Appellants.
________________________________________________

         Argued November 17, 2015 – Decided January 7, 2016

         Before    Judges    Fisher,      Espinosa      and
         Rothstadt.

         On appeal from the Superior Court of New
         Jersey, Law Division, Burlington County,
         Docket No. L-2257-14.

         James G. Fannon argued the cause for
         appellants (Law Office of James G. Fannon,
         and Edward T. Groh, attorneys; Mr. Fannon
         and Mr. Groh, on the brief).

         Alan   H.  Schorr   argued   the  cause   for
         respondent (Alan H. Schorr & Associates,
         P.C., attorneys; Mr. Schorr, on the brief).

         Andrew Dwyer argued the cause for amicus
         curiae     National    Employment Lawyers
         Association of New Jersey (The Dwyer Law
         Firm, L.L.C., attorneys; Mr. Dwyer, of
         counsel and on the brief).
            William D. Wright argued the cause for
            amicus curiae New Jersey Association for
            Justice (The Law Office of William Wright
            LLC, attorneys; Mr. Wright, on the brief).

       The opinion of the court was delivered by

FISHER, P.J.A.D.

       In this appeal, we consider whether plaintiff is bound to

arbitrate his claims against his former employer.                         Because the

employee handbook, which contains an arbitration clause and a

purported waiver of plaintiff's right to sue, clearly conveyed

that its "rules, regulations, procedures and benefits . . . are

not    promissory   or   contractual       in    nature     and    are    subject       to

change by the company," we agree with the motion judge that

plaintiff did not clearly and unambiguously waive his right to

sue defendants in court.

       On September 19, 2014, plaintiff Grant W. Morgan commenced

this    action   against   his   former         employer,    defendant       Raymours

Furniture Company, and two Raymours representatives, alleging a

violation of the Law Against Discrimination, N.J.S.A. 10:5-1 to

-49, wrongful termination, and other similar causes of action.

After    unsuccessfully     moving     for       a   change       of     venue      —    an

application that might fairly suggest a waiver of the right to

                                       2                                         A-2830-14T2
arbitrate1 — defendants moved to compel arbitration.      That motion

was denied as well, and defendants appeal, as is their right

despite the interlocutory nature of the order in question. See

R. 2:2-3(a).

       In appealing, defendants present the following arguments:

            I. THE TRIAL COURT ERRED BY FAILING TO
            ENFORCE THE PARTIES' AGREEMENT TO ARBITRATE,
            WHICH   SATISFIES   ALL  OF   THE  CUSTOMARY
            CONTRACT FORMATION ELEMENTS.

                 A. The FAA[2] Requires Application
                 of Ordinary State-Law Principles
                 Governing The Formation Of Con-
                 tracts in Determining Whether Par-
                 ties Have Agreed to Arbitrate.

                 B. Raymour & Flanigan Made A
                 Clear, Unmistakable And Unambig-
                 uous   Offer   of   [Its   Employee
                 Arbitration Program (EAP)].

                 C. Plaintiff Accepted The EAP on
                 Multiple  Occasions  in  Multiple
                 Ways.

                 D. Sufficient Consideration       Sup-
                 ported The EAP.

                 E. Plaintiff's Claims   Are   Within
                 The Scope Of The EAP.

            II. THE TRIAL COURT ERRED BY FOCUSING
            EXCLUSIVELY ON PLAINTIFF'S SIGNATURE ON THE
            2013 COMMISSION AGREEMENT AND BY HOLDING

1
  Such an argument was not raised on appeal and we, therefore,
offer no further view on the impact of that circumstance on the
arbitration issue presented.
2
    Federal Arbitration Act, 9 U.S.C.A. §§ 1-16.

                                  3                          A-2830-14T2
             THAT IT WAS INSUFFICIENT              TO    MANIFEST   HIS
             ASSENT TO THE EAP.

             III. THE TRIAL COURT ERRED BY DISREGARDING
             THE U.S. SUPREME COURT'S SEVERABILITY DOC-
             TRINE AND DENYING ENFORCEMENT OF THE EAP
             BASED UPON ITS ASSESSMENT OF THE SURROUNDING
             HANDBOOK.

             IV. THE TRIAL COURT ERRED BECAUSE IT APPLIED
             HEIGHTENED, ARBITRATION SPECIFIC STANDARDS
             TO THE EAP.

             V. IN THE EVENT THE COURT FINDS GENUINE
             DISPUTES OF MATERIAL FACT REMAIN, DEFENDANTS
             REQUEST THAT THE ACTION BE REMANDED WITH
             INSTRUCTIONS   TO  CONDUCT  AN   EVIDENTIARY
             HEARING (Not Raised Below).

In   light   of     well-established      legal     principles      governing     the

availability        of    arbitration    in    this      and   similar    settings,

reiterated in a number of recent cases, see, e.g., Atalese v.

U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 444-45 (2014), cert.

denied, __ U.S. __, 135 S. Ct. 2804, 192 L. Ed. 2d 847 (2015);

Barr v. Bishop Rosen & Co., __ N.J. Super. __, __ (App. Div.

2015)   (slip       op.    at   6-9),3   we    find      insufficient     merit   in

defendants' arguments to warrant further discussion in a written

opinion.     R. 2:11-3(e)(1)(E).          We add only the following brief

comments.

      The circumstances at hand are relatively simple.                    Plaintiff

contends     that    upon   complaining       of   age   discrimination     in    the

3
  These are but a few and only two of the most recent; our
jurisprudence suffers no shortage of case law on this subject.

                                         4                                 A-2830-14T2
workplace, defendants confronted him with an ultimatum — that he

either sign a stand-alone arbitration agreement or defendants

would terminate his employment.            Plaintiff refused to sign the

agreement and defendants carried out their threat. Plaintiff was

terminated and this suit followed.

    Despite       plaintiff's   refusal        to    sign     an    arbitration

agreement, defendants moved to compel arbitration on the basis

of the company handbook.        Although plaintiff disputes that he

actually   read    or   acknowledged       receipt   of     the    handbook,   he

consented to the trial court's consideration of these issues on

the assumption that he acknowledged receipt of the handbook and

EAP in August 2011, February 2012, and April 20134; like the

trial judge, we find these circumstances unavailing.

    For example, the handbook is prefaced with the employer's

disclaimer as to the nature of the parties' undertaking:

           Nothing in this Handbook or any other
           Company    practice  or   communication   or
           document, including benefit plan descript-
           tions,   creates   a promise   of  continued
           employment, [an] employment contract, term

4
  Plaintiff allegedly signed in December 2013 another document
relating to the commission rate by which he would be
compensated; in signing, plaintiff expressed that he "agree[d]"
disputes would be subject to the EAP.   We agree with the trial
judge that this document, if actually signed, would only give
rise to the possibility that a dispute about commissions — not
discrimination or wrongful termination claims — would be
arbitrable.

                                       5                                A-2830-14T2
            or obligation of any kind on the part of the
            Company.

            [Emphasis added.]

In addition, when electronically acknowledging receipt of this

documentation,      an    employee    signifies        only    that   he    or    she

"received a copy of the Associate Handbook" (emphasis added),

and, further, that he or she

            understand[s] that the rules, regulations,
            procedures and benefits contained therein
            are not promissory or contractual in nature
            and are subject to change by the company.

            [Emphasis added.]

These disclaimers were likely included because of Woolley v.

Hoffman-LaRoche, Inc., 99 N.J. 284, 309, modified, 101 N.J. 10

(1985),    where    the   Court   determined         that   company   manuals     may

create implied contractual rights and duties, but that employers

—   to    avoid    this   possibility         —   could     include   a    prominent

disclaimer of the contractual nature of a handbook.

     Here,    the    employer     would       seek   both   the   benefit    of   its

disclaimer in most instances, while insisting that the handbook

was contractual when it suits its purposes — a proposition to be

rejected if for no other reason than it runs counter to the

ancient English proverb: "wolde ye bothe eate your cake, and

haue your cake?" John Heywood, Dialogue of Proverbs (1546), as

well as its corollary, which may have originated with Aesop,

                                          6                                 A-2830-14T2
"sauce for the goose is sauce for the gander." Of course, our

decisions are not governed by clichés, but these in particular

can be found at the root of the court's equity jurisdiction.

For     example,        estoppel    principles           preclude        a     party     from

disavowing        a   previous     position       if    repudiation           violates     the

demands      of   justice    and   good     conscience.          Carlsen       v.    Masters,

Mates    &   Pilots      Pension    Plan    Tr.,       80     N.J.     334,    339   (1979);

Connell v. Am. Funding, Ltd., 231 N.J. Super. 409, 416 (Ch. Div.

1987), aff’d o.b., 231 N.J. Super. 202 (App. Div. 1989).                                     In

this setting, it is simply inequitable for an employer to assert

that, during its dealings with its employee, its written rules

and regulations were not contractual and then argue, through

reference to the same materials, that the employee contracted

away     a    particular      right.        See        also     2      Pomeroy's       Equity

Jurisprudence § 385, at 52 (5th ed. 1941) (recognizing "that

whatever be the nature of the controversy between two definite

parties, and whatever be the nature of the remedy demanded, the

court    will     not    confer    its     equitable          relief    upon     the    party

seeking its interposition and aid, unless he had acknowledged

and conceded, or will admit and provide for, all the equitable

rights, claims and demands justly belonging to the adversary

                                            7                                        A-2830-14T2
party, and growing out of or necessarily involved in the subject

matter of the controversy").5

       In any event, our Supreme Court has made clear that an

employee in this circumstance must "clearly and unambiguously"

agree to a waiver of the right to sue. Atalese, supra, 219 N.J.

at 443.      By inserting such a waiver provision in a company

handbook, which, at the time, the employer insisted was not

"promissory or contractual," an employer cannot expect — and a

court, in good conscience, will not conclude — that the employee

clearly and unambiguously agreed to waive the valued right to

sue.     And,     by   the   same   token,    in   obtaining    the   employee's

signature    on    a   rider,   which   stated      only   that     the   employee

"received"      and    "underst[ood]"       the    contents    of   the   company

handbook or rules and regulations, the employer cannot fairly

contend the employee "agreed" to a waiver of the right to sue

that might be found within those materials.                   Leodori v. CIGNA

Corp., 175 N.J. 293, 307, cert. denied, 540 U.S. 938, 124 S. Ct.

74, 157 L. Ed. 2d 250 (2003); Barr, supra, __ N.J. Super. at __

n.5 (slip op. at 13 n.5).           These principles preclude enforcement

of the arbitration provision and waiver of the right to sue

5
  Make no mistake, although the dispute about the parties'
transactions evoke questions of law, defendants seek a mandatory
injunction — a stay of this lawsuit and an order compelling of
arbitration — that triggers the court's equity jurisdiction.

                                        8                                 A-2830-14T2
contained       within   Raymours'     company   handbook    and     related

documents.6

       We also reject defendants' forceful argument that such a

determination conflicts with federal law. We disagree on the

strength of our Supreme Court's own prior rulings, cited above,

regarding the relationship between federal and state law in such

matters.    We also note that one week after we heard argument in

this    case,    a   federal   court   of   appeals   came   to    the   same

conclusion that we now reach in nearly identical circumstances.

Lorenzo v. Prime Commc'ns, L.P., __ F.3d __ (4th Cir. 2015).

       We lastly recognize that had plaintiff executed the stand-

alone arbitration agreement presented to him when a rift formed

in the parties' relationship, a different outcome would likely

6
  In Rodriguez v. Raymours Furniture Co., 436 N.J. Super. 305
(App. Div. 2014), the plaintiff's execution of a job application
— and its incorporated "agreement" to limit to six months the
applicant's time for filing any future lawsuit against Raymours
—   was   found   enforceable.   The    Supreme  Court   granted
certification, 220 N.J. 100 (2014), heard oral argument on
December 1, 2015, and has yet to file an opinion. Although our
colleagues' published opinion in Rodriguez was filed eight
months before this appeal was filed, neither plaintiff nor
defendants — nor able amici — referred to Rodriguez in any of
their written or oral submissions. Consequently, we invited and
have received the parties' letters explaining their thoughts on
Rodriguez. We agree with plaintiff that the many distinguishing
features between this case and Rodriguez demonstrate its
inapplicability here.   We also take — with more than a modicum
of salt — defendants' sudden contention that Rodriguez is
supportive of the arguments they pose here.

                                       9                            A-2830-14T2
have followed.   To that we only need say, "if my grandmother had

wheels, she'd be a bicycle."

    Affirmed.

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