Client Advisory

The New Jersey Appellate Division reversed a trial court’s ruling that granted plaintiff’s motion for reconsideration and denied defendant employer’s motion to compel arbitration in Milagros Cintron v. Brink’s Inc., et al.. There, plaintiff filed a two-count complaint alleging that Brink’s (“defendant”), her employer, subjected her to a hostile work environment based on race and gender in violation of N.J.S.A. 10:5-1 to -50. Plaintiff became aware of a group chat where her coworkers and supervisors used derogatory epithets about her race and gender. A member of the group chat reported the comments, and plaintiff alleged that defendant’s HR Director and Manager failed to address the report or discipline the employees involved.

Plaintiff began working for Brink’s in 1997, twenty-two (22) years later in 2022 she relocated to a new location for a new role. Upon her relocation and employment in a new role, she was presented with and electronically signed a Mutual Arbitration Agreement (“agreement”), which provided that defendant and plaintiff agreed to submit all legally cognizable employment related claims between defendant and plaintiff to binding arbitration and waive all rights to a trial by jury or a judge. Claims excepted from the agreement were claims for state insurance benefits, actions to enforce the agreement, actions to compel arbitration, and actions to enforce or vacate an arbitrator’s award.

The agreement also contained opt-out instructions that were in bold typeface, which required plaintiff to request an opt-out form within 30 days of the execution of the agreement, and to mail back the opt-out form to a specified address. If an employee did not complete the opt-out instructions, they were deemed to be bound under the terms of the arbitration agreement.

Since Plaintiff had not completed the opt-out process, when she filed her complaint defendant filed a motion to dismiss and to compel arbitration. Plaintiff did not respond and the trial court granted defendant’s motion to dismiss the complaint without prejudice and compelled plaintiff to arbitrate her claim. Plaintiff moved for reconsideration arguing that she inadvertently failed to oppose the motion. The trial court reconsidered its decision dismissing the complaint and denied plaintiff’s motion to compel arbitration, holding that the agreement was unenforceable under contract law principles because it lacked consideration. The trial court also reasoned that plaintiff was unaware she was signing an arbitration agreement and unaware of the opt-out provision.

Defendant appealed contending that the trial court’s decision violated established precedent, which favors the enforcement of arbitration agreements and that the agreement was valid and enforceable. Plaintiff argued that the trial court properly reconsidered the motion to dismiss the complaint and properly denied defendant’s motion to compel arbitration as the trial court held the agreement contained no mutual assent. Plaintiff additionally argued for the first time that even if the agreement was valid, plaintiff’s claims are required to be resolved in court rather than arbitration under the Ending Forced Arbitration of Sexual Assault and Harassment Act of 2021, 9 U.S.C. §§ 401-02 (“EFAA”).

The Appellate Division ruled that the trial court improperly held the agreement to be void, as the agreement was clear and unambiguous with its terms, the agreement was supported by adequate consideration by way of plaintiff’s continued employment, plaintiff’s signature on the agreement constituted a meeting of the minds, and though plaintiff argued that she did not recall signing the agreement or the agreement being explained to her, plaintiff cannot be relieved from signing a contract she did not read or claim to understand.

As to plaintiff’s EFAA argument, defendants argued that because plaintiff first brought her EFAA assertion in response to defendant’s appeal and not before the trial court, the Appellate Division was precluded from considering said argument. The Appellate Division held that generally, an argument brought forth for the first time on appeal is typically precluded from being considered, however, there are exceptions for matters of great public concern. Therefore, because the claims brought forward by plaintiff were of great public concern, and because the EFAA was created due to Congress’s concerns with the FAA’s compelled sexual harassment arbitration to divert matters of public concern to private settings, especially after the #MeToo movement, the Appellate Division remanded plaintiff’s EFAA claims to the trial court to determine the application of EFAA to plaintiff’s complaint.

Key Takeaways: This case reaffirms the general contract principles that failure to read or understand will not relieve a party’s apparent assent via signature. However, in relying on arbitration agreements employers should consider state and federal laws concerning arbitrations arising from matters of public concern.