Court Opinion

ID: 4195506
Source: CourtListenerOpinion
Date Created: 2017-08-14 13:07:48.96403+00
Date Added: 2024-06-11T09:36:41.568979
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NOT FOR PUBLICATION WITHOUT THE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-1897-16T4

KEVIN DUGAN,

        Plaintiff-Appellant,

and

ROMAN ZIELONKA,

        Plaintiff,

v.

BEST BUY CO. INC., and
GARRETT HETRICK,

        Defendants-Respondents.

____________________________________

              Argued May 31, 2017 – Decided August 11, 2017

              Before Judges Vernoia and Moynihan (Judge Vernoia
              concurring).

              On appeal from the Superior Court of New
              Jersey, Law Division, Burlington County,
              Docket No. L-1946-16.

              Patricia A. Barasch argued the cause for
              appellant (Schall & Barasch, LLC, attorneys;
              Ms. Barasch, on the briefs).

              Lynn A. Kapelman argued the cause for respondents
              (Seyfarth Shaw LLP, attorneys; Ms. Kapelman,
              Howard M. Wexler and Maria Papasevastos, of
           counsel and on the brief).

PER CURIAM

     Plaintiff, Kevin Dugan, appeals from the December 6, 2016

order granting defendant, Best Buy's motion to compel arbitration

and dismiss plaintiff's suit.              He argues the judge improperly

granted the motion because plaintiff did not agree to be bound by

the arbitration policy introduced by defendant; and that claims

relating to the termination of his employment are not arbitrable

under the terms of the policy.

     We agree that plaintiff did not assent to the policy and

reverse.

     The     existence    of   a   valid        and   enforceable    arbitration

agreement poses a question of law; our standard of review of an

order granting a motion to compel arbitration is de novo. Hirsch

v. Amper Fin. Servs., LLC, 215 N.J. 174, 186 (2013).                     The "trial

court's interpretation of the law and the legal consequences that

flow from established facts are not entitled to any special

deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140
N.J. 366, 378 (1995). We, therefore, construe the arbitration

contract "with fresh eyes." Kieffer v. Best Buy, 205 N.J. 213, 223

(2011).

     Defendant    hired    plaintiff       in    June   2000   as   an    assistant

manager.   He was promoted to general manager in 2003.

                                       2                                    A-1897-16T4
      On February 4, 2016, plaintiff logged on to an eLearning

program     utilized       by    defendant       to   introduce       employees     to    an

arbitration policy defendant sought to implement on March 15,

2016.     The eLearning module consisted of four screens.

      The first screen, titled "Employee Solutions Process," read:

             Best Buy is committed to a welcoming,
             inclusive environment where employees come to
             work every day to do what they enjoy doing.

             From time to time you may encounter a concern
             that, if left unresolved, could negatively
             affect your employment experience.    It [i]s
             Best Buy's goal to resolve all these [i]ssues
             and, in fact, has a clear well-established
             [i]nternal process to do just that.

      The   second       screen,     bearing      the       same    title,     outlined    a

progressive system for employees to address employment-related

concerns, starting with discussions with the employee's manager,

next to human resources personnel, and then to the Employee

Relations (ER) team.             The text continued, "Under the Peer Review

Program,        eligible        employees    may       have        certain     involuntary

terminations reviewed, first by an ER manager and, if still not

satisfied by the outcome, by a panel of managers and peers."                              If

those steps did not address the concern, employees could "choose

to   file   a    formal     legal    claim."          The    screen    text    concluded,

"Effective       March     15,     2016,    you       will    bring     that    claim     in

arbitration, rather than in court."

                                             3                                     A-1897-16T4
     A note at the bottom of both the first and second screens

directed the employee to a link to a site at which "[a]dditional

details" could be found.

     The   heading   of   the   third       screen   was:    "Why    is    Best   Buy

Implementing   an    Arbitration   policy?"          The    text    that   followed

suggested that the arbitration process was more favorable than

court proceedings.

     The last screen read:

           As with any other Best Buy policy, by
           remaining employed, you are considered to have
           agreed to the policy.     The purpose of the
           eLearning is to ensure you read and understand
           the policy.
           Employees who do not take this eLearning are
           still subject to the policy.

           I have read and understand the Best Buy
           Arbitration Policy that takes effect on March
           15, 2016.

Just below that paragraph, the words, "I acknowledge," appeared

in a box that was intended to be mouse-clicked by the reader.                       A

link at the bottom of the page allowed the reader the opportunity

to "read and review" the policy and "FAQs" - frequently asked

questions.

     Plaintiff clicked on the "I acknowledge" box without reading

the policy. He was also responsible, as general manager, to ensure

his staff completed the eLearning module.

                                        4                                   A-1897-16T4
     The policy went into effect on March 15.             Plaintiff was

terminated on April 5.1       On September 16, plaintiff filed an age

discrimination action against defendant under the New Jersey Law

Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49. Those claims

are, according to the terms of the motion judge's order, subject

to arbitration.

     The Federal Arbitration Act (FAA), 9 U.S.C.A. §§ 1-16, and

the New Jersey Arbitration Act, N.J.S.A. 2A:23B-1 to -32, are

premised on policies favoring arbitration as a means of resolving

disputes.     Atalese v. U.S. Legal Servs, Grp., 219 N.J. 430, 440

(2014), cert. denied, 135 S. Ct. 2804, 192 L. Ed. 2d 847 (2015).

"Arbitration's favored status does not mean that every arbitration

clause, however phrased, will be enforceable."              Id. at 441.

"Although it is firmly established that the FAA preempts state

laws that invalidate arbitration agreements, the FAA specifically

permits     states   to   regulate   contracts,     including   contracts

containing     arbitration    agreements    under     general   contract

principles; therefore, an arbitration clause may be invalidated

1
  The reason for the termination is in dispute. Plaintiff alleges
he was fired because of his age, and complaints he lodged about
discriminatory comments made by his supervisor regarding
plaintiff's age.    Defendant avers plaintiff was fired for an
inappropriate comment plaintiff made to an employee (according to
plaintiff's complaint, it was to an employee; the motion judge
found the comment was made to a customer). We do not address the
merits of those claims.

                                     5                            A-1897-16T4
'upon such grounds as exist at law or in equity for the revocation

of any contract.'" Martindale v. Sandvik, Inc., 173 N.J. 76, 85

(2002) (quoting 9 U.S.C.A. § 2).

     "An agreement to arbitrate, like any other contract, 'must

be the product of mutual assent, as determined under customary

principles of contract law.'"        Atalese, supra, 219 N.J. at 442

(citation omitted).      An employee's waiver of the right to sue in

court "must reflect that an employee has agreed clearly and

unambiguously to arbitrate the disputed claim."         Leodori v. CIGNA

Corp., 175 N.J. 293, 302, cert. denied, 540 U.S. 938, 124 S. Ct.
74, 157 L. Ed. 2d 250 (2003).        Such a waiver, the Court found,

"results   only   from   an   explicit,   affirmative   agreement    that

unmistakably reflects the employee's assent."           Id. at 303; see

also Atalese, supra, 219 N.J. at 442-43.

     Since assent requires a full understanding of the terms of

the agreement and the rights being waived, id. at 442, we must

first   determine   if   defendant   provided   sufficient   notice     to

plaintiff.   "The point is to assure that the parties know that in

electing arbitration as the exclusive remedy, they are waiving

their time-honored right to sue."         Marchak v. Claridge Commons,

Inc., 134 N.J. 275, 282 (1993).

     The terms of defendant's arbitration policy satisfactorily

alert employees they are waiving their right to sue in court.         The

                                     6                           A-1897-16T4
policy, on page one, plainly warns that any disputes governed by

the policy terms "will be decided by an arbitrator in arbitration

and not by way of a court or jury trial."2 That warning is repeated

four pages later, and the policy spells out the arbitration

process.

      The policy does not express that employees are "waiving"

their right to sue.3      The policy, presented as a fait accompli,

requires employees to arbitrate as a "mandatory" condition of

employment; "by becoming or remaining employed after the effective

date of this Policy, employees agree[d] to th[e] Policy's terms."

The policy makes no mention of any "right" of an individual to sue

in   court.    Although   "[t]he   absence     of   any   language   in    the

arbitration provision that plaintiff was waiving [his] statutory

right to seek relief in a court of law renders the provision

unenforceable," Atalese, supra, 219 N.J. at 436 (emphasis in

original),    "[n]o   particular   form   of    words     is   necessary    to

accomplish a clear and unambiguous waiver of rights." Id. at 444.

The Court cited a few examples of policy language that adequately

2
  Although plaintiff claims he did not read the policy, he
acknowledged that he did when he clicked the box on the last page
of the eLearning module.
3
 The policy mentions waivers only in provisions related to claims
against the defendant "on a class or collective basis" or in
California Private Attorney General Act representative actions.

                                    7                                A-1897-16T4
advised a party that the longstanding right to sue was being

relinquished, one of which provided:

           Instead of suing in court, we each agree to
           settle disputes (except certain small claims)
           only by arbitration. The rules in arbitration
           are different. There's no judge or jury, and
           review is limited, but an arbitrator can award
           the same damages and relief, and must honor
           the same limitations stated in the agreement
           as a court would.

           [Id. at 445 (quoting the arbitration clause
           in Curtis v. Cellco Partnership, 413 N.J.
           Super. 26, 31 (App. Div.), certif. denied, 203
N.J. 94 (2010)].

     The   language    in   defendant's    policy    similarly      notified

employees of the distinction between resolution of a conflict in

arbitration and in a court.      Although the policy does not include

an explicit "waiver," it does advise that a dispute will not be

handled in a court, and explains the arbitration process.                 The

terms   adequately    inform   employees   that,    by   agreeing    to   the

arbitration policy, they are waiving their right to access the

court to resolve disputes.

     The terms of the agreement, however, are unenforceable unless

plaintiff's assent to its terms is established by either his

signature on the agreement or "some other explicit indication that

[he] intended to abide by that provision."           Leodori, supra, 175

N.J. at 305.   It is undisputed that plaintiff did not mechanically

sign any document.     That is a "significant factor in determining

                                    8                                A-1897-16T4
whether" an agreement was reached.    Ibid.   A handwritten signature

"is the customary and perhaps surest indication of assent."        Id.

at 306-07.

       Plaintiff did click on the box acknowledging that he read and

understood the policy.   We have recognized that a party can assent

to the terms of a contract by electronically clicking on a website

box.    See Caspi v. Microsoft Network, LLC, 323 N.J. Super. 118,

122 (App. Div.)(recognizing assent to a forum selection clause can

be established by a party clicking on a block labeled, "I Agree"),

certif. denied, 162 N.J. 199 (1999).   Merely acknowledging receipt

of a policy, however, does not indicate assent to the policy.

Leodori, supra, 175 N.J. at 307.        We have also held that by

"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 or regulations, the employer cannot

fairly contend the employee 'agreed' to a waiver of the right to

sue that might be found within those materials."           Morgan v.

Raymours Furniture Co., 443 N.J. Super. 338, 343 (App. Div.)

(alteration in original)(citations omitted), certif. denied, 225
N.J. 220, cert. denied, 137 S. Ct. 204, 196 L. Ed. 2d 132 (2016).

Plaintiff's mouse-click on the acknowledgment box did not manifest

his assent to the policy, only that he read and understood the

policy.

                                  9                           A-1897-16T4
     It has been over thirteen years since our Supreme Court

advised employers of an easy method to avoid the problem defendant

now faces:

          [W]ith minimal effort, employers can revise
          the language to include an indication that the
          recipient has received and agreed to an
          arbitration policy. The acknowledgment form
          need not recite that policy verbatim so long
          as the form refers specifically to arbitration
          in a manner indicating an employee's assent,
          and the policy is described more fully in an
          accompanying handbook or in another document
          known to the employee.

          [Leodori, supra, 175 N.J. at 307.]

Defendant could have firmly established plaintiff's assent by

simply adding the words "and agree to the terms of the policy" to

the acknowledgment box.   Ibid.

     The fact that plaintiff knew of the policy, and his status

as a general manager who was tasked with having other employees

complete the eLearning module, does not establish his assent to

the policy.   Id. at 306; Garfinkel v. MOGA, 168 N.J. 124, 136

(2001). His knowledge of the policy and employment status may be

factors related to his understanding of the policy, but do not

indicate his agreement to same.

     The terms of the policy provided employees agreed to be bound

"[b]y remaining employed" after its effective date of March 15,

                                  10                       A-1897-16T4
2016.     The   only   possible   indication      of    plaintiff's   assent,

therefore, was his continued employment.

     "[C]ontinued      employment    has   been        found   to   constitute

sufficient      consideration       for    certain        employment-related

agreements."     Martindale v. Sandvik, 173 N.J. 76, 88 (2002);

Quigley v. KPMG Peat Marwick, LLP, 330 N.J. Super. 252, 265-66

(App. Div.), certif. denied, 165 N.J. 527 (2000).              Under the facts

of this case, plaintiff's continued employment did not amount to

an "explicit, affirmative agreement that unmistakably" reflected

his assent to the arbitration policy.          Leodori, supra, 175 N.J.

at 303.

     Our holding in Jaworski v. Ernst & Young U.S., 441 N.J. Super.
464 (App. Div.), certif. denied, 223 N.J. 406 (2015), upon which

defendant relies in arguing that continued employment reflected

plaintiff's consent, is distinguishable.          The policy in this case

contained language similar to that in Jaworski, providing that the

employee's continued employment after the effective date of the

policy signified the employee's agreement to the terms requiring

arbitration.     In Jaworski, however, the employee continued his

employment for five years after the effective date of the policy

                                     11                                A-1897-16T4
until his termination.4 Plaintiff, by remaining employed for three

weeks after its effective date, did not indicate his assent to the

policy; employment for that brief period does not meet the high

standard   required   to    establish   an   unambiguous   waiver    of

plaintiff's right to sue.    Plaintiff did no more than he did every

other day during his tenure with Best Buy - he showed up for work.

While remaining employed for five years may reflect an employee's

acquiescence to employment terms, plaintiff's continuation of

employment for three weeks was not an explicit, unmistakable

acceptance of the policy.5

     The policy was offered on a take-it-or-leave it basis.6        The

policy provides that it "is a mandatory condition of initial and

continuing employment."     Employees who did not take the eLearning

module were, according to the fourth screen of the training course,

still subject to the terms of the policy.      Defendant's position,

4
  The policy was actually a revision to one that was initiated in
2002, id. at 468, before the employee signed his original
employment agreement in 2004, id. at 473, and revised several
times in 2006 and 2007, id. at 470-71.
5
  We are careful not to conflate the concept of continued
employment as sufficient consideration for an agreement with
continued employment as an indication of explicit assent to an
agreement.
6
  It is clear defendant did not intend to negotiate the terms of
the policy; although we recognize negotiation of an arbitration
clause is not required. Leodori, supra, 175 N.J. at 307.

                                 12                           A-1897-16T4
if adopted, does not reasonably allow enough time for an objecting

employee to find another situation, especially in circumstances

such as these.         This is not the case where an applicant for

employment could simply walk away upon disagreeing with a proposed

policy.       See    Martindale,      supra,      173   N.J.     at    91    (holding      a

prospective     employee        was   not    forced     to     sign     an    employment

application containing an arbitration clause; also indicating the

prospective employee had an opportunity to ask the employer for

changes). Plaintiff had worked for defendant for almost sixteen

years.    He was forty-six years old.             The choice given by defendant

to   "leave    it"    if   an    employee       did   not     agree    to    the    policy

"amount[ed]     to    no   choice     at    all."       Id.    at     103    (Stein,    J.,

dissenting)7 (quoting Cooper v. MRM Investment Co., 199 F. Supp.
771, 778 (M.D. Tenn. 2002)).                 It is unreasonable to expect an

established employee to walk away from a career, without any

prospects, when an employer unilaterally presents a new agreement.

Plaintiff's choice to stay at his job for the short period did not

indicate his agreement to the policy.

7
  The Court was considering whether an agreement was a contract of
adhesion. We do not undertake such an analysis here. Nor do we
consider whether an agreement was the result of coercion or duress.
We consider only whether plaintiff assented to the policy, and
whether there was an agreement.

                                           13                                      A-1897-16T4
     Plaintiff's conduct was insufficient to establish his assent

to the defendant's arbitration policy.   In light of our decision

that no agreement to arbitrate was reached, we need not address

the scope of the arbitration agreement. Because of our disposition,

we need not address appellants' remaining arguments. To the extent

we have not explicitly addressed any other argument a party has

advanced, it is because the argument is without sufficient merit

to require discussion in a written opinion. See R. 2:11-3(e)(1)(E).

We reverse the entry of the order compelling arbitration and

dismissing plaintiff's complaint.     The matter is remanded for

further proceedings consistent with this opinion. We do not retain

jurisdiction.

     Reversed.

                               14                           A-1897-16T4
___________________________

VERNOIA, J.A.D., concurring.

      I join in the reversal of the order dismissing the complaint

and directing that plaintiff's claims be resolved in arbitration,

but write separately because I respectfully disagree with the

portion    of   my    colleague's   thoughtful    opinion     suggesting     that

plaintiff could not have assented to the arbitration policy because

he continued his employment with defendant for only three weeks

following the policy's promulgation.

      An   arbitration      agreement   that    includes    a   waiver   of   an

employee's right to assert causes against an employer in court

requires "an explicit, affirmative agreement that unmistakenly

reflects the employee's assent." Leodori v. Cigna Corp., 175 N.J.
293, 303 (2001), cert. denied, 540 U.S. 938, 124 S. Ct. 74, 157
L. Ed. 2d 250 (2003).         An employee's "signature to an agreement

is the customary and perhaps surest indication of assent," but

where an employee has not signed an arbitration agreement, assent

may be inferred based on "some other unmistakable indication that

the   employee       affirmatively .    .   .   agreed   to     arbitrate"    the

employee's claims. Id. at 306-07.

      In Jaworski v. Ernst & Young US LLP, 441 N.J. Super. 464

(App. Div.), certif. denied, 223 N.J. 406 (2015), we recognized

that under certain circumstances an employee may manifest binding
assent to an arbitration agreement by continuing employment with

the employer. In Jaworski, the employer promulgated an arbitration

program    stating        that    "[a]n    [e]mployee       indicates      his    or   her

agreement to the [p]rogram and is bound by its terms and conditions

by beginning or continuing employment with [the employer] after"

a designated effective date. Id. at 474. We found the plaintiff

was bound by the arbitration program because he continued to work

for the defendant following the effective date, "thus manifesting

his     intent    to   be        bound    pursuant     to    the   unambiguous         and

specifically-emphasized            terms    of   the   [arbitration]           [p]rogam."

Ibid.     Our finding was supported by the clear language of the

arbitration program - that the plaintiff assented to agreement by

continuing employment beyond the designated effective date.

       To be sure, we also noted that the plaintiff continued to

work for the defendant for five years after the effective date.

Ibid. However, I disagree with my colleague that Jaworski requires

a lengthy period of continuing employment, or anything beyond the

mere    commencement        of     continued     employment,       to    establish       an

employee's       assent    to     an   arbitration     agreement        that   otherwise

clearly and expressly provides that an employee manifests assent

by continuing employment. Such a holding is not supported by our

decision in Jaworski, and contravenes a basic principle guiding

our interpretation of contracts: we will not "rewrite a contract

                                            2                                     A-1897-16T4
for the parties better than or different from the one they wrote

for themselves." Kieffer v. Best Buy, 205 N.J. 213, 223 (2011).

       My reading of Jaworski does not require an affirmance of the

court's   order.         As   noted,    in       Jaworski    the    policy     at     issue

unambiguously advised the plaintiff that his continuing employment

constituted assent to the arbitration program and an agreement to

be bound by its terms. Jaworski, supra, 441 N.J. Super. at 474.

In    contrast,    the    language       used      by   defendant      here     did      not

unambiguously advise plaintiff that he assented to the arbitration

policy by continuing his employment. The fourth screen of the

eLearning    program      vaguely       stated      only    that    defendant         would

"consider" an employee's continued employment as the employee's

consent to be bound by the policy.

       Unlike the policy language in Jaworski, defendant's eLearning

screen described only how defendant would perceive an employees'

continued employment, and did not clearly inform plaintiff that

his   continuing    employment          constituted         his    agreement    to       the

arbitration   policy.         It   is   for      that   reason,     and   not   because

plaintiff's continuing employment lasted for only three weeks

beyond the policy's putative effective date, that I concur in the

conclusion that plaintiff's continued employment did not establish

the explicit and unmistakable assent required to support the motion

court's decision. See Leodori, supra, 175 N.J. at 303.

                                             3                                      A-1897-16T4