Garfinkel v. MORRISTOWN OB. & GYN.

• Citation: 333 N.J. Super. 291,755 A.2d 626
• Parties: David A. GARFINKEL, M.D., Plaintiff-Appellant, v. MORRISTOWN OBSTETRICS & GYNECOLOGY ASSOCIATES, P.A., Lifeline Medical Associates, LLC, ABC Corp., David E. Jacobwitz, M.D. and Joseph Ramieri, M.D., Defendants-Respondents.
• Decision Date: 25 July 2000
• Court: Superior Court of New Jersey

755 A.2d 626

333 N.J. Super. 291

David A. GARFINKEL, M.D., Plaintiff-Appellant, v. MORRISTOWN OBSTETRICS & GYNECOLOGY ASSOCIATES, P.A., Lifeline Medical Associates, LLC, ABC Corp., David E. Jacobwitz, M.D. and Joseph Ramieri, M.D., Defendants-Respondents.

Superior Court of New Jersey, Appellate Division.

Argued February 2, 2000.

Decided July 25, 2000.

Andrew Dwyer argued the cause for appellant (Dwyer & Ellis, attorneys; Mr. Dwyer, of counsel and on the brief).

Glenn A. Montgomery, Bedminster, argued the cause for respondents Morristown Obstetrics & Gynecology Associates and Joseph Ramieri, M.D. (Pollock, Montgomery & Chapin, attorneys; Mr. Montgomery, on the brief).

Brian W. Kincaid, Parsippany, argued the cause for respondent David E. Jacobwitz, M.D. (Fein, Such, Kahn & Shepard, attorneys; James E. Shepard, on the brief).

Purcell, Ries, Shannon, Mulcahy & O'Neill, Parsippany, attorneys for respondent Lifeline Medical Associates, LLC (Thomas M. Mulcahy, on the brief).

Before Judges STERN, WEFING and STEINBERG. The opinion of the court was delivered by STERN, P.J.A.D

Plaintiff David A. Garfinkel, M.D. appeals from an order, entered January 4, 1999, granting defendants' "Motion to Dismiss [the complaint] and Compel Arbitration." While acknowledging that his employment with defendant Morristown Obstetrics and Gynecology Associates ("MOGA") could be terminated with or without cause, plaintiff seeks damages for (1) breach of contract based "on the procedure by which he was terminated" (counts one and two), (2) discrimination in violation of the New Jersey Law Against Discrimination ("L.A.D."), N.J.S.A. 10:5-1 to -42, asserting he was terminated "solely because plaintiff is a man" (count three), and (3) "post-termination tort claims," which include claims of tortious interference with economic advantage (count four) and defamation (count five). On his appeal, plaintiff contends that the arbitration clause in his agreement with MOGA did not and could not waive his right to a jury trial; that the clause does not apply to the post-termination tort claims or to the claims against the individual defendants who were not party to the agreement, and that defendants have "waived any entitlement to arbitration."

The arbitration clause in paragraph 18 of plaintiff's agreement with MOGA provides:

[e]xcept as otherwise expressly set forth in paragraphs 14 and 15 hereof [which no party deems to be relevant], any controversy arising out of, or relating to, this Agreement or the breach thereof, shall be settled by arbitration in Morristown, New Jersey, in accordance with the rules then obtaining of the American Arbitration Association, and judgement upon any award rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof.

[ (emphasis added).]¹

Plaintiff argues both that "because there was no voluntary and knowing agreement to submit future discrimination claims to arbitration" and "because the arbitration provision ... was involuntarily imposed on plaintiff as a condition of his employment," the arbitration clause is neither applicable nor enforceable.

I.

We initially reject the claim that the demand for arbitration was waived. We agree with Judge Catherine Langlois' analysis in this regard:

First, the court holds that the request to dismiss the matter and refer to arbitration has not been waived by the fact that the defendant has answered the complaint and asserted counterclaims. The fact is that an affirmative defense had been asserted that the issues are to be arbitrated; that no discovery has actually commenced; and that this motion is brought within 30 days of the answer itself. See generally, Comments to Rule 4:5-4.

Defendants MOGA and Ramieri asserted as an affirmative defense that "plaintiff's complaint is barred by the Arbitration Clause in the agreement entered into between the plaintiff and the defendants." See R. 4:5-4. While defendant Jacobwitz failed to include this affirmative defense in his answer dated November 5, 1998, it is undisputed that on November 25, 1998, less than ninety days after the complaint was filed, defendants MOGA and Ramieri moved to compel arbitration in accordance with the parties' agreement, and Jacobwitz joined the motion. See R. 4:6-2, -3. In any event, "[t]he mere filing of a complaint or an answer to the complaint is not a waiver of arbitration.... The court has the power, anytime before judgment, to refer the dispute to arbitration." Wasserstein v. Kovatch, 261 N.J.Super. 277, 290, 618 A.2d 886 (App. Div.) (citations omitted), certif. denied, 133 N.J. 440, 627 A.2d 1145 (1993).

II.

In granting defendants' motion to dismiss the complaint, Judge Langlois wrote:

[t]here is specific precedent, under the cases cited, that an employee may knowingly and voluntarily waive statutory remedies under LAD in favor of arbitration and be bound by that agreement. These decisions look to basic contract principles and to the Supreme Court decision in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 11 [111] S.Ct. 1647, 114 L.Ed.2d 26 (1991), that even claims based upon discrimination may be arbitrated. See also, Seus v. John Nuveen & Co., Inc., 146 F.3d 175 (3d Cir. 1998)

(Title VII claims are subject to compulsory arbitration); Bleumer v. Parkway Insurance Co., 277 N.J.Super. 378, 401, 649 A.2d 913 (Law Div.1994).

The focus of the courts, therefore, is not on the right to provide for arbitration, but rather on whether there is an agreement to arbitrate. As Young, Singer, and Galarza instruct, if both parties knowing[ly] agree to arbitrate a particular dispute, and there are circumstances that assure mutual agreement—in contrast to a take-it-or-leave-it, unequal bargaining situation—the court ought to compel arbitration and carry out their wishes. Caldwell v. KFC Corp., 958 F.Supp. 962, 975 (D.N.J.1997)[.]

In that regard, the employment agreement here was negotiated, with counsel for plaintiff, between highly educated, medical professionals of equal bargaining position. Plaintiff acknowledges that he was able to negotiate with regard to the other provisions of the agreement but that defendant took the position that the arbitration clause was standard and mandatory. So, he agreed to it. That fact is not sufficient to bring into question the validity of the provision or agreement as a whole.

We agree, and affirm the judgment.

A.

On August 9, 1996, plaintiff and MOGA entered into an employment contract for his services as a physician. Defendants Jacobwitz and Ramieri are shareholders of MOGA. Jacobwitz is its president and Ramieri is the secretary. Defendant Lifeline Medical Associates is identified as "a successor in interest" to MOGA.

Plaintiff began employment as a physician with MOGA on August 12, 1996. On January 20, 1998, defendants told plaintiff that he would not be made a partner in the practice, because, as plaintiff alleges, defendant Ramieri stated plaintiff was "born the wrong sex." Shortly thereafter, on March 6, 1998, defendant was terminated by defendants. Plaintiff alleges that "[o]n March 9, 1998, Dr. Ramieri told plaintiff that plaintiff did not attract patients well because he was male, and this was the reason he was being terminated." Plaintiff alleges that defendants lied to plaintiff's patients about his whereabouts after he was terminated.

Plaintiff contends that the trial judge erred in determining that "the arbitration provision is in broad language and covers any controversy or claim arising out of and relating to this employment agreement." He asserts both that his LAD claims must be tried before a jury as a matter of State public policy, and that his post-termination claims are not subject to the arbitration provision of the agreement.

Our courts have consistently enforced arbitration provisions in employment contracts despite discrimination claims. "The fact that what is at issue is a statutory remedy does not, in itself, affect the favored status accorded to arbitration." Alamo Rent A Car, Inc. v. Galarza, 306 N.J.Super. 384, 389, 703 A.2d 961 (App.Div.1997); see also Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 23, 111 S.Ct. 1647, 1650, 114 L.Ed.2d 26, 35 (1991)

(holding that the plaintiff's claim under the Age Discrimination in Employment Act (ADEA), 29 U.S.C.A. §§ 621 to -634, may be subjected to mandatory arbitration); Great Western Mortgage Corp. v. Peacock, 110 F.3d 222, 230-31 (3d Cir.) (rejecting the argument, advanced by the plaintiff, that an agreement to arbitrate a discrimination claim is "void as a matter of public policy" pursuant to the LAD, and stating that "[a]ny argument that the provision of the Arbitration Agreement involving a waiver of substantive rights afforded by the state statute may be presented in the arbitral forum"), cert. denied, 522 U.S. 915, 118 S.Ct. 299, 139 L.Ed.2d 230 (1997); Quigley v. KPMG Peat Marwick LLP, 330 N.J.Super. 252, 264, 749 A.2d 405 (App. Div.2000). In fact, the Third Circuit has determined that there is no "New Jersey policy against arbitration of claims such as [the plaintiff's]." Peacock, supra, 110 F.3d at 231.

"New Jersey courts have also enforced employees' agreements to arbitrate statutory employment claims." Quigley, supra, 330 N.J.Super. at 260, 749 A.2d 405. The plaintiff in Quigley filed a complaint alleging age discrimination under LAD after he was terminated from his position as a senior manager with the defendant for eighteen years. Id. at 256, 749 A.2d 405. The defendant argued that under the employment agreement, which was signed by the plaintiff on two separate occasions, all claims brought against the defendant must be resolved through arbitration. Id. at 257, 749 A.2d 405. Although we ultimately determined that the plaintiff "did not knowingly and voluntarily waive his right to a trial by jury on his LAD claim, since no such statutory right existed at the time," id. at 256, 749 A.2d 405, and given the specific language of the...