Antonucci v. Curvature Newco, Inc.

• Decision Date: 15 February 2022
• Docket Number: DOCKET NO. A-1983-20
• Citation: 470 N.J.Super. 553,270 A.3d 1088
• Parties: Gilbert ANTONUCCI, Plaintiff-Appellant, v. CURVATURE NEWCO, INC., Todd Gredesky, and Elizabeth Dapolite, Defendants-Respondents.
• Court: New Jersey Superior Court — Appellate Division

470 N.J.Super. 553

270 A.3d 1088

Gilbert ANTONUCCI, Plaintiff-Appellant,

v.CURVATURE NEWCO, INC., Todd Gredesky, and Elizabeth Dapolite, Defendants-Respondents.

DOCKET NO. A-1983-20

Superior Court of New Jersey, Appellate Division.

Submitted December 8, 2021

Decided February 15, 2022

Ionno & Higbee, attorneys for appellant (Sebastian B. Ionno and D. Rebecca Higbee, Watchung, on the briefs).

Gibbons, PC, attorneys for respondents (John C. Romeo, Trenton, and Cassandra J. Neugold, Newark, on the brief).

Before Judges Gilson, Gooden Brown, and Gummer.

The opinion of the court was delivered by

GILSON, J.A.D.

Plaintiff Gilbert Antonucci appeals from an order compelling arbitration and dismissing with prejudice his discrimination complaint against his former employer and two of its employees. This appeal presents two questions: (1) whether the parties entered a binding agreement to arbitrate their employment disputes; and (2) whether the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 - 16, pre-empts a 2019 amendment to New Jersey's Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -50, that prohibits the waiver of procedural and substantive rights under LAD. That second question is an issue of first impression in this court.

We hold that the arbitration agreement is binding and that LAD's procedural prohibition, which would preclude arbitration, is pre-empted when applied to an arbitration agreement governed by the FAA. Nevertheless, we vacate the order entered by the Law Division and remand for the entry of a new order. Contrary to section 3 of the FAA, 9 U.S.C. § 3, the order on appeal dismissed plaintiff's complaint with prejudice rather than stay the litigation. We, therefore, remand for the entry of a new order compelling arbitration and staying the Law Division action until the arbitration is completed.

I.

In December 2010, plaintiff was hired as a field engineer by SMS Systems Maintenance Services, Inc. (SMS). In 2017, SMS merged with Curvature Newco, Inc. (defendant or Curvature) and the combined entity used the Curvature name.

In October 2019, Curvature sent plaintiff an electronic version of the company's Codes of ethics and conduct and Employee Handbook (the Handbook). Plaintiff was directed to read and acknowledge the Codes and Handbook by reviewing them online as part of a training program.

The Codes and Handbook were over 112 pages and included an arbitration agreement (the Arbitration Agreement). The Arbitration Agreement was identified in the Handbook's table of contents and attached as a separate document in Appendix A.

The Arbitration Agreement stated that all disputes between Curvature and an employee would be resolved by binding and final arbitration. Curvature is defined to include the company and any of its directors, officers, or employees. The Agreement expressly stated that it covered all employment-related claims, including claims of wrongful termination and "discrimination, harassment, or retaliation." The Arbitration Agreement also explained that employees were waiving and giving up their right to bring claims in court or to have a jury trial on those claims. The waiver included claims based on federal or state statutes.

Specifically, the Arbitration Agreement stated, in relevant part:

By virtue of this Arbitration Agreement, you agree that any and all disputes, claims, or controversies between Curvature and you arising out of or relating to this Agreement, the employment relationship between the Parties, or the formation or termination of the employment relationship, that are not resolved by mutual agreement shall be resolved by final and binding arbitration as set forth in this Agreement. This Agreement includes claims that Curvature may have against Employee, or that Employee may have against Curvature. The term "Curvature" shall mean Curvature and its parents, subsidiaries, affiliated companies, owners, officers, directors, current and former employees, representatives, agents and assigns.

By entering into this Agreement, Curvature and you are waiving the right to a jury trial for employment related disputes. You further understand that entering into this Arbitration Agreement does not alter your at-will employment with Curvature.

....

... This Arbitration Agreement does apply to all statutory, contractual and/or common law claims arising from employment with Curvature, including ... wrongful termination; ... discrimination, harassment, or retaliation of any kind, ... violations of any federal, state or other governmental constitution, statute, ordinance or regulation ....

The Arbitration Agreement set forth an overview of the arbitration process, including descriptions of the arbitrator, the binding and final nature of the arbitrator's decision, that the arbitration would be conducted under the rules and procedures of the American Arbitration Association (AAA), and how the employee could obtain a copy of those rules and procedures. The Arbitration Agreement also stated that it was "enforceable under and subject to the Federal Arbitration Act, 9 U.S.C. Sec. 1, et seq."

At the end of the Arbitration Agreement, it stated that an employee may indicate his or her acceptance "by signing in the space below." The Agreement also explained:

However, if you voluntarily continue employment after the effective date of the Employee Handbook to which this Agreement is attached, you will also be deemed to have knowingly and voluntarily consented to, and accepted all the terms set forth in, this Agreement notwithstanding the lack of [the employee's] signature below.

Curvature's records establish that on October 22, 2019, plaintiff spent one hour and thirty-three minutes reviewing the company's Codes and 2019 Handbook, to which the Arbitration Agreement was attached. Plaintiff did not sign the Arbitration Agreement in the space provided. He electronically clicked on an "I Accept" check box acknowledging that he had "received and reviewed the policies and procedures" outlined in the Codes and Handbook.

On May 31, 2020, plaintiff was fired from his employment with Curvature. Several months later, in September 2020, he filed a complaint against Curvature and two of its employees in the Law Division. In the complaint, which he amended, he asserted claims of discrimination and wrongful termination under LAD. He also asserted that defendants "caused post-employment harm to [p]laintiff by contesting his claim for unemployment benefits."

In lieu of an answer, defendants moved to dismiss the complaint and compel arbitration. On February 19, 2021, the trial court heard oral argument, and that same day it issued a written opinion and order dismissing plaintiff's complaint with prejudice and compelling arbitration.

The trial court found that plaintiff had agreed to the Arbitration Agreement. In making that finding, the trial court found that Curvature had sent plaintiff the Handbook and Arbitration Agreement, he had acknowledged reviewing the documents, and that the Arbitration Agreement was clear in explaining that his continued employment constituted acceptance of the Arbitration Agreement. The trial court also found that the Agreement was valid and enforceable and that it covered the discrimination claims asserted by plaintiff. The trial court did not address the issue of whether the 2019 amendment to LAD was pre-empted by the FAA. Plaintiff now appeals from the order dismissing his complaint and compelling arbitration.

II.

On appeal, plaintiff makes two arguments, contending that the trial court erred in (1) finding that he had agreed to the Arbitration Agreement; and (2) implicitly ruling that LAD's prohibition on arbitration of discrimination claims was pre-empted by the FAA.

1. The Enforceability of the Arbitration Agreement.

The interpretation of an arbitration agreement and its enforceability are questions of law that we review de novo. Goffe v. Foulke Mgmt. Corp., 238 N.J. 191, 207, 208 A.3d 859 (2019) ; Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 445-46, 99 A.3d 306 (2014). It is undisputed that plaintiff was given a copy of the Arbitration Agreement and had an opportunity to review it.

Consequently, we also review on a de novo basis the question whether plaintiff agreed to arbitrate because that issue involves the application of established facts to the legal question of what constitutes assent to a contract. Skuse v. Pfizer, Inc., 244 N.J. 30, 50, 236 A.3d 939 (2020).

Under both the FAA and New Jersey law, arbitration is fundamentally a matter of contract. Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 67, 130 S.Ct. 2772, 177 L.Ed.2d 403 (2010) ; 9 U.S.C. § 2 ; NAACP of Camden Cnty. E. v. Foulke Mgmt. Corp., 421 N.J. Super. 404, 424, 24 A.3d 777 (App. Div. 2011). The FAA "places arbitration agreements on an equal footing with other contracts." Rent-A-Center, 561 U.S. at 67, 130 S.Ct. 2772. Accordingly, "the FAA ‘permits states to regulate ... arbitration agreements under general contract principles,’ and a court may invalidate an arbitration clause ‘upon such grounds as exist at law or in equity for the revocation of any contract.’ " Atalese, 219 N.J. at 441, 99 A.3d 306 (quoting Martindale v. Sandvik, Inc., 173 N.J. 76, 85, 800 A.2d 872 (2002) ).

"An agreement to arbitrate, like any other contract, ‘must be the product of mutual assent, as determined under customary principles of contract law.’ " Id. at 442, 99 A.3d 306 (quoting NAACP, 421 N.J. Super. at 424, 24 A.3d 777 ). "A legally enforceable agreement requires ‘a meeting of the minds.’ " Ibid. (quoting Morton v. 4 Orchard Land Tr., 180 N.J. 118, 120, 849 A.2d 164 (2004) ). Consequently, to be enforceable, the terms of an arbitration agreement must be clear, and any legal rights being waived must be identified. Id. at 442-43, 99 A.3d 306 ; see also Kernahan v. Home Warranty Adm'r of Fla., Inc., 236 N.J. 301, 319-20, 199 A.3d 766 (2019).

To accomplish a waiver of rights, "[n]o magical language is required." Morgan v. Sanford Brown Inst., 225 N.J. 289,...