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Arbitration Agreements and the Employment Relationship.

Wagner v. Open Road Auto Group, No.: A-5312-10T3, (N.J. Super. App. Div. Jan. 10, 2012) is an employment discrimination case which analyzes the impact of arbitration agreements on discrimination claims. Many times, when employment is offered to a person, the employment may be conditioned upon acceptance of an arbitration agreement. In this case, the Plaintiff reported a supervisor's sexual harassment of other employees to a supervisor. After reporting said conduct, he was fired, for what he alleged was complaining to authorities. The arbitration agreement signed during employment stated:

any claim, dispute, difference, or controversy, whether or not related to or arising ou[t] of the employment relationship, and including any claim, dispute, difference, or controversy (i) arising under federal, state or local statu[t]e or ordinance (including claims of discrimination and harassment); (ii) based on any common-law rule of practice, including breach of contract or fraud; (iii) involving the validity or interpretation of this [a]greement; or (iv) any other claim, dispute, difference, or controversy whatsoever.

When the suit made its way to court, the defendants argued that all claims were barred, and that instead the case was required to go through binding arbitration. This decision discussed why the court agreed with the defendants' interpretation, instead of with the lower court which felt the clause was too broad and could not encompass this claim.

According to the court,New Jerseyhas a strong public policy favoring arbitration. Agreements to arbitrate should be read liberally to allow parties to waive statutory remedies. The court's feelings on arbitration should be limited by certain principles. An arbitration agreement should clearly state its purpose. A waiver of statutory rights must be unambiguously stated such that contractual language alleged to be a waiver should not be read expansively.

The court needed to decide only what is necessary then to waive access toNew Jersey's anti-discrimination statutes. To be a valid waiver, the clause alleged to waive access to the courts should provide that the agreement to arbitrate waives rights related to the employment relationship or its termination. Similarly, when doubtful, the arbitration agreement should be read against the employer.

In this case, the Court decided that the claim needed to be submitted to arbitration. The clause shows what sorts of claims are contemplated by the clause, as well as the fact that it says whether or not related...to the employment relationship. The court held this employee was subject to the arbitration agreement.

The reason this case is important is because it represents a way in which an employer can be ahead of the game prior to employment discrimination suits. By waiving access to courts, and instead utilizing an arbitrator, employers can avoid jury trials. They instead go before a neutral decision maker who may be an expert in the area, and thus lose the courtroom of their choice. It is an interesting litigation strategy that is commonly used, and in this case was valid.

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