Leodori v. Cigna Corp.

• Decision Date: 13 February 2003
• Citation: 175 N.J. 293,814 A.2d 1098
• Court: New Jersey Supreme Court
• Parties: Paul LEODORI, Plaintiff-Respondent, v. CIGNA CORPORATION, CIGNA Insurance Company, Insurance Company of North America, Wilson Taylor, Thomas Wagner, Gerald Isom, James Engel, John Murphy, David Gold, Beverly Sherbondy, Stephanie Middleton, Anthony Smith, Alfred Decrane, James J. Ritchie and Robert Campbell, Defendants-Appellants, and John Does 1-5, and ABC Corporations 1-5, said individuals and corporations being fictitious, Defendants. Paul Leodori, Plaintiff-Respondent, v. CIGNA Corporation, CIGNA Insurance Company and Insurance Company of North America, Defendants-Appellants, and Schnader Harrison Segal & Lewis, LLP, Arlin Adams, Lisa Detweiler, Wilson Taylor, Thomas Wagner, Gerald Isom, James Engel, John Murphy, David Gold, Beverly Sherbondy, Stephanie Middleton, Anthony Smith, James J. Ritchie, Robert Campbell, Dennis Kane, Alfred Decrane, Peter Larson, Joseph Neubauer, Harold Wagner, Carol Cox Wait, John Does 1-10 and ABC Corporations 1-10, said individuals and corporations being fictitious, Defendants.

814 A.2d 1098

175 N.J. 293

Paul LEODORI, Plaintiff-Respondent, v. CIGNA CORPORATION, CIGNA Insurance Company, Insurance Company of North America, Wilson Taylor, Thomas Wagner, Gerald Isom, James Engel, John Murphy, David Gold, Beverly Sherbondy, Stephanie Middleton, Anthony Smith, Alfred Decrane, James J. Ritchie and Robert Campbell, Defendants-Appellants, and John Does 1-5, and ABC Corporations 1-5, said individuals and corporations being fictitious, Defendants.

Paul Leodori, Plaintiff-Respondent, v. CIGNA Corporation, CIGNA Insurance Company and Insurance Company of North America, Defendants-Appellants, and Schnader Harrison Segal & Lewis, LLP, Arlin Adams, Lisa Detweiler, Wilson Taylor, Thomas Wagner, Gerald Isom, James Engel, John Murphy, David Gold, Beverly Sherbondy, Stephanie Middleton, Anthony Smith, James J.

Ritchie, Robert Campbell, Dennis Kane, Alfred Decrane, Peter Larson, Joseph Neubauer, Harold Wagner, Carol Cox Wait, John Does 1--10, said individuals and corporations being fictitious, Defendants.

Supreme Court of New Jersey.

Argued December 2, 2002.

Decided February 13, 2003.

Edward T. Ellis, Philadelphia, PA and Michael K. Furey, argued the cause for appellants (Riker, Danzig, Scherer, Hyland & Perretti, Morristown, for CIGNA Corporation, Wilson Taylor, Thomas Wagner, Gerald Isom, John Murphy, Beverly Sherbondy, Stephanie Middleton, Anthony Smith, Alfred Decrane, James J. Ritchie and Robert Campbell and Montgomery, McCracken, Walker & Rhoads, Philadelphia, PA, for CIGNA Insurance Company, Insurance Company of North America, James Engel and David Gold, attorneys; Mr. Ellis, Mr. Furey, Janice Greenberg Dubler and Michael H. Wilck, Morristown, on the briefs).

Paul Leodori, argued the cause pro se.

The opinion of the Court was delivered by VERNIERO, J.

This is an employment action. Plaintiff alleges that his employer fired him in violation of the New Jersey Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to -8 (CEPA). The merit of that allegation is not before us. We are called on solely to evaluate the enforceability of a waiver-of-rights provision contained in an employee handbook distributed by defendant. That provision requires employees to resolve employment-related claims by submitting them to an arbitrator rather than to a jury, which is otherwise their right. Although the provision is unambiguous, we are unable to conclude that plaintiff clearly had agreed to it. We thus hold that the waiver is invalid as applied to this plaintiff.

I.

Plaintiff Paul Leodori began working for Insurance Company of North America (INA) in June 1995. INA's sister company is CIGNA Insurance Company (CIGNA). (Unless otherwise indicated, we shall refer to INA and CIGNA collectively as defendant or the company.) During the course of his employment, plaintiff served as an in-house attorney at INA's Division of Legal & Public Affairs (L & PA). In August 1994, nearly a year before plaintiff had begun his employment, L & PA adopted an arbitration policy that required arbitration as a final means for resolving employment-related disputes between defendant and its employees. In August 1996, INA sent a revised policy via inter-office mail and U.S. mail to all L & PA employees, including plaintiff. The revised policy also embraced arbitration as the final method by which defendant and its employees would resolve their disagreements.

A subsequent L & PA handbook contained a similar clause. Defendant distributed that handbook in June 1998 to all employees, including plaintiff. (We recite at length certain excerpts from the L & PA handbook and from other documents because they are critical to the parties' arguments.) The handbook bears this disclaimer:

This handbook does not alter the "at will" status of your employment. Just as you may terminate your employment at any time for any reason, your employment may be terminated at any time for any reason. Except for the arbitration policy mentioned in this handbook, which is a term and condition of your continued employment, the policies and practices set forth herein are for your information and guidance. Things change and there is no guarantee that the policies and practices contained herein will not change in the future. The company reserves the right to alter, amend, and make exceptions to this handbook at any time in its sole discretion, with or without prior notice.

The L & PA handbook also contains the following arbitration provision:

In the interest of fairly and quickly resolving employment-related disagreements and problems, CIGNA's policy is that arbitration by a neutral third-party is the required and final means for the resolution of any serious disagreements and problems not resolved by the company's internal dispute resolution process. Both CIGNA and the employee will be bound by any decision made by a neutral arbitrator. If the employee or CIGNA do not abide by the arbitrator's decision, either party may go to court to enforce the arbitrator's decision, but arbitration must be used before going to court. This policy is intended to prevent an employee from going to court over employment-related disputes; it is not intended to take away any other rights.

Along with the L & PA handbook, the company distributed an acknowledgment form that states:

I hereby acknowledge that I have received a copy of the 1998/99 Legal & Public Affairs employee handbook.

I understand this handbook includes information on division policies and programs and that I am responsible for knowing the policies and information. I further understand any of the policies and programs are subject to change at the discretion of senior management and that the handbook and its contents are not a contract of employment.

As is evident, that language does not refer specifically to arbitration. Plaintiff signed the acknowledgment form in June 1998.

In July 1998 defendant distributed to plaintiff and other employees another handbook. That handbook, entitled "You and CIGNA," also contains a purported agreement to arbitrate all employment disputes. It provides, in part:

The agreement to arbitrate applies to serious employment-related disagreements and problems, which are those that concern a right, privilege, or interest recognized by applicable law. Such serious disputes include claims, demands, or actions under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Civil Rights Act of 1991, the Equal Pay Act, the Age Discrimination in Employment Act, the Employee Retirement Security Act of 1974, the Fair Labor Standards Act, the Rehabilitation Act of 1973, the Americans with Disabilities Act, the Family and Medical Leave Act, and any other federal, state, or local statute, regulation, or common law doctrine, regarding employment discrimination, conditions of employment, or termination of employment.

An acknowledgment form accompanied the "You and CIGNA" handbook, similar to the one that had accompanied the L & PA handbook. It provides: "This is to acknowledge that I have received my copy of the July 1998 employee handbook, You and CIGNA. I have reviewed the material which includes information on policies, programs and services for employees of the CIGNA companies." Plaintiff signed that form in September 1998.

A separate form, entitled "Employee Handbook Receipt and Agreement" (Agreement), also contains a place for an employee to sign. (We cannot discern from the record whether that form is contained on an actual page of the "You and CIGNA" handbook or whether it was distributed or made available to plaintiff separately. Our analysis would be the same under any of those circumstances.) The Agreement states:

This is to acknowledge that I have received my copy of the July 1998 employee handbook, You and CIGNA. I understand that by accepting employment and being eligible to receive increases in compensation and benefits, I am agreeing to the following two important terms of my employment described in You and CIGNA: (1) my employment can be terminated by me or my employer at any time for any reason—therefore, my employment is at the will of either party, and (2) I will use the Company's internal and external employment dispute resolution processes to resolve legal claims against the Company— therefore rather than go to court or to a government agency for a hearing to decide my legal claim, I will submit my employment related legal claims except workers' compensation and unemployment compensation to final and binding neutral third party arbitration. I understand further that these two terms of my employment replace and supersede any prior agreement concerning these terms and cannot be changed except in writing signed by me and the president of the Company.

[(Emphasis added).]

Significantly, plaintiff did not sign the Agreement. The signature line in plaintiff's copy was left blank.

Echoing the importance of the Agreement, the opening page of the "You and CIGNA" handbook states, in part:

This handbook contains only two terms of your employment. They are very important. The first is that your employment is not for any fixed period of time. Just as you can terminate your employment, at any time for any reason, the Company can terminate your employment at any time for any reason. The second is that by accepting employment and being eligible to receive increases in compensation and benefits, you agree that you will not go to court or a government agency for a hearing to decide an employment-related claim. Instead, you will resolve all employment related legal disputes (except workers' compensation and unemployment compensation) by going to a neutral third party arbitrator. Regardless of what anyone may have told you or you may have read before you were hired or after, these two terms of your employment are the full and complete agreement between you and the Company concerning these terms and cannot be changed except by a written agreement between you and your

...