Collazo v. Prime Flight of DE, Inc.: The DNJ Rules That Explicit Jury Waivers Are Not Needed To Enforce Arbitration Agreements in the Employment Context

Collazo v. Prime Flight of DE, Inc.: The DNJ Rules That Explicit Jury Waivers Are Not Needed To Enforce Arbitration Agreements in the Employment Context

By Punam Alam, Esq., on August 19, 2020

Continuing its pro-arbitration trend, the United States District Court for the District of New Jersey recently enforced an arbitration clause which did not contain language expressly indicating that the employee was waiving her right to a jury trial.  See Collazo v. Prime Flight of DE, Inc., 19-cv-21314(KM) (D.N.J. July 13, 2020) (Judge McNulty).  In so doing, the Court relied on Atalese v. U.S. Legal Services, a New Jersey Supreme Court decision many have interpreted as requiring the inclusion of the aforementioned language to render an arbitration clause enforceable. 219 N.J. 430, 447 (2014)(stating that the arbitration clause “at least in some general and sufficiently broad way, must explain that the plaintiff is giving up her right to bring her claims in court or have a jury resolve the dispute.”).  Specifically, the District Court of New Jersey granted the employer’s motion to compel arbitration of claims brought by a former employee under the New Jersey Law Against Discrimination, N.J.S.A. § 10:5-1 et seq., and the Family Medical Leave Act, 29 U.S.C. § 2601.

The arbitration clause at issue in Collazo stated that the employee was waiving the right to bring a lawsuit in court, but omitted language stating she was waiving the right to a jury trial. The former employee argued that the ruling in Atalese rendered the arbitration clause invalid because of the omission.  In rejecting this argument, the Court distinguished the arbitration agreement at issue in Atalese involving a commercial contract from the employment context in this case finding that a contract in the employment context “pertains to a major life decision; a person would naturally give it more attention than, say, the fine print in a car rental contract.”  While holding that the arbitration clause was enforceable despite the lack of explicit language that the employee was waiving the right to a jury trial, the Court, relying on Atalese, noted that there are no particular words that are required in an arbitration clause, instead, the arbitration clause “must clearly convey the concept that the plaintiff ‘is choosing to arbitrate disputes rather than have them resolved in a court of law.’” In this case, the Court found that the arbitration clause made clear that the employee was giving up her right to sue in court and that she was required to pursue employment-related claims through arbitration.

Notwithstanding the Court’s decision in Collazo, employers should continue to include a clear jury waiver in arbitration agreements and scrutinize the language used therein given the evolving case law surrounding the enforceability of arbitration clauses.

The case is Collazo v. Prime Flight of DE, Inc., 19-cv-21314(KM) (D.N.J. July 13, 2020).

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