Hampton v. ADT, LLC

• Decision Date: 30 April 2021
• Docket Number: DOCKET NO. A-0172-20
• Parties: ROBERT HAMPTON, Plaintiff-Appellant, v. ADT, LLC, and MARK MILAM, Defendants-Respondents.
• Court: New Jersey Superior Court – Appellate Division

ROBERT HAMPTON, Plaintiff-Appellant, v. ADT, LLC, and MARK MILAM, Defendants-Respondents.

DOCKET NO. A-0172-20

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

Submitted March 17, 2021

April 30, 2021

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

Before Judges Geiger and Mitterhoff.

On appeal from the Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-0435-20.

Castronovo & McKinney, LLC, attorneys for appellant (Paul Castronovo and Edward W. Schroll, of counsel and on the briefs).

Ogletree, Deakins, Nash, PC, attorneys for respondents (Brian D. Lee and Michael Westwood-Booth, on the brief).

PER CURIAM

Plaintiff Robert Hampton appeals from a September 11, 2020 order compelling him to arbitrate his claim that defendants violated the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -14, and dismissing his amended complaint with prejudice. After carefully considering the record and applicable principles of law, we vacate the order and remand for further proceedings to determine whether plaintiff was subject to a binding arbitration agreement, and if so, whether the arbitration agreement was assigned to defendant ADT, LLC (ADT) prior to plaintiff's termination.

I.

Plaintiff was the Vice President of Business Development at MS Electronics/MSE Corporate Security, Inc. (MSE) from February 16, 2016 to August 30, 2019. Prior to commencing his employment with MSE, plaintiff signed an Employment, Confidential Information, Non-Competition and Arbitration Agreement (the Contract) prepared by MSE. The Contract contained the following arbitration clause:

8. Arbitration and Equitable Relief.

(a) Arbitration. Except as provided in section 9(b) below, I agree that any dispute or controversy arising out of, relating to, or concerning any interpretation, construction, performance or breach of this agreement, shall be settled by arbitration with a single arbitrator to be held in Edison, New Jersey, inaccordance with the Employment Dispute Resolution Rules then in effect of the American Arbitration Association. The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator's decision in any court having jurisdiction. The company and I shall each pay one-half of the costs and expenses of such arbitration, and each of us will separately pay our counsel fees and expenses.

This arbitration clause constitutes a waiver of my right to a jury trial and relates to the resolution of all disputes relating to all aspects of the employer/employee relationship . . . including, but not limited to, the following claims:

i. Any and all claims for wrongful discharge of employment; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; and defamation;

ii. Any and all claims for violation of any Federal, State or Municipal Statute, including, but not limited to, Title II of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination Act in Employment Act of 1967, the Americans with Disabilities Act of 1990 and the Fair Labor Standards Act; [and]iii. Any and all claims arising out of any other laws and regulations relating to employment or employment discrimination.

(b) Equitable remedies. The parties may apply to any court of competent jurisdiction for a temporary restraining order, preliminary injunction or other interim or conservatory relief, as necessary, without breach of the arbitration agreement and without abridgement of the powers of the arbitrator.

(c) Consideration. I understand that each party's promise to resolve claims by arbitration in accordance with the provisions of this agreement, rather than through the courts, is consideration for the other party's like promise. I further understand that my employment or continued employment is consideration for my promise to arbitrate claims.

The Contract also included two provisions regarding MSE's successors and assigns. The introductory paragraph stated: "As a condition of my employment with [MSE], their parents, subsidiaries, affiliates, successors or assigns (together the 'Company'), and in consideration of my employment with the Company, I agree to the following . . . ." The Contract also included the following "General Provision[]": "Successors and Assigns. This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns."

Notably, MSE did not sign the Contract, leaving its signature line blank. Although plaintiff acknowledges that he signed the Contract, he certified that no one: (a) "told [him he] was signing an arbitration agreement"; (b) "explained the [Contract] to [him]"; (c) "ever advised [him] that [he] could bring the [Contract] home to review it"; (d) "told [him] that [he] could negotiate anything in the [Contract]"; (e) "provided [him] a fully-executed copy of the [Contract] signed by MSE, so it was [his] understanding that it never went into effect"; or (f) told him that "[w]hen ADT, LLC became [his] employer, . . . the [Contract] was in effect or that it was assigned to ADT."

In August 2017, ADT purchased the assets of MSE.¹ As part of asset purchase agreement, MSE employees became ADT employees. Plaintiff's position remained the same, and ADT did not approach plaintiff about signing a new employment contract.

Defendant Mark Milam was Vice President of ADT and plaintiff's direct supervisor. Plaintiff alleges that in mid-August 2019, Milam met with plaintiff to discuss several business accounts. During the meeting, plaintiff voiced his concern that ADT was not submitting the payroll reports required by the New Jersey Prevailing Wage Act, N.J.S.A. 34:11-56.25 to -56.47. Plaintiff also toldMilam that he had previously raised this issue with ADT's Controller, Katie Ortiz.

On August 21, 2019, Milam informed plaintiff that his last day at ADT would be August 23, 2019. During a subsequent phone conversation, Milam extended plaintiff's employment by one week "but refused to give a reason for terminating" him.

On March 30, 2020, plaintiff commenced this action against ADT, Inc. and Milam, alleging they violated CEPA. On June 24, 2020, plaintiff filed an amended complaint, naming ADT, LLC in place of ADT, Inc. as a defendant. Plaintiff alleged he was fired by ADT "in retaliation for blowing the whistle on its legal violations." He claimed that his firing was "causally linked" to his "protected activities of disclosing, refusing to participate in, and/or objecting to [d]efendants' illegal activities on the County of Sussex account." Plaintiff demanded a jury trial and sought compensatory damages, punitive damages, attorney's fees, and costs.

On July 13, 2020, MSE assigned the Contract to ADT. One day later, in lieu of answering the amended complaint, defendants moved to compel arbitration and to dismiss plaintiff's amended complaint pursuant to Rule 4:6-2(e). Defendants argued the Law Division was not the proper forum toadjudicate plaintiff's claims because the arbitration provisions of the Contract were valid and enforceable, and plaintiff's CEPA claim fell within the enumerated causes of action the parties agreed to arbitrate. They further argued that the Contract contained a delegation clause, which required "any dispute or controversy arising out of, relating to, or concerning any interpretation, construction, performance, or breach of [the Contract]" to be "settled by arbitration." They claimed that any issue regarding arbitrability of plaintiff's claims must also be decided by the arbitrator.

Defendants contend that MSE's signature was not necessary to bind the parties to arbitration, citing an unpublished federal district court opinion for the proposition that an employer need not sign an arbitration contract to bind an employee to arbitration even where there is a signature line. In addition, defendants contended that only plaintiff's signature was needed since he was the party to be charged under the contract, citing Leodori v. CIGNA Corp., 175 N.J. 293, 304-05 (2003).

On September 11, 2020, the judge granted defendants' motion in its entirety. The amended complaint was dismissed with prejudice and plaintiff was compelled to arbitrate his "legal claims against defendants in accordance with the terms of [the Contract]."

In his written statement of reasons, the judge first found the Contract enforceable despite MSE's missing signature, citing Byrne and stating, "when both parties have agreed to be bound by arbitration and adequate consideration exists, the arbitration agreement should be enforced." Second, the judge found plaintiff knowingly agreed to arbitrate various claims and that this requirement "does not create obligations that [plaintiff] was not asked to agree to from the beginning of the relationship." Third, the judge found ADT was the assignee of the Contract, which permits non-signatories to enforce arbitration agreement under the contract principles of assumption, assignment, and succession. Fourth, the judge found that although the arbitration clause "does not specifically reference CEPA as an arbitrable claim, our [c]ourts have consistently ruled that despite the omission of a specific statutory claim, the arbitration provision will still be enforceable when" it contains an "any and all claims" catch-all provision. Fifth, the judge found the...