Roman v. Bergen Logistics, LLC

• Citation: 456 N.J.Super. 157,192 A.3d 1029
• Decision Date: 23 August 2018
• Docket Number: DOCKET NO. A-5388-16T3
• Parties: Milagros ROMAN, Plaintiff-Appellant, v. BERGEN LOGISTICS, LLC and Gregg Oliver, Defendants-Respondents.
• Court: New Jersey Superior Court – Appellate Division

456 N.J.Super. 157

192 A.3d 1029

Milagros ROMAN, Plaintiff-Appellant,

v.BERGEN LOGISTICS, LLC and Gregg Oliver, Defendants-Respondents.

DOCKET NO. A-5388-16T3

Superior Court of New Jersey, Appellate Division.

Argued February 5, 2018

Decided August 23, 2018

Peter D. Valenzano, Morganville, argued the cause for appellant (Mashel Law, LLC, attorneys; Stephan T. Mashel, of counsel and on the briefs; Peter D. Valenzano, on the briefs).

Jessica L. Sussman, Morristown, argued the cause for respondent Bergen Logistics, LLC (Jackson Lewis PC, attorneys; Richard J. Cino, of counsel; Jessica L. Sussman, on the brief).

Kyle L. Wu argued the cause for respondent Gregg Oliver (Margolis Edelstein, attorneys; Michael R. Miller and Kyle L. Wu, of counsel and on the brief).

Thaddeus P. Mikulski, Jr., Pennington, attorney for amicus curiae National Employment Lawyers Association of New Jersey, Inc. (Thaddeus P. Mikulski, Jr. and Richard M. Schall, on the brief).

Before Judges Accurso, O'Connor and Vernoia.

The opinion of the court was delivered by

VERNOIA, J.A.D.

Plaintiff Milagros Roman appeals from an order dismissing her sexual harassment and retaliation complaint against defendants Bergen Logistics, LLC and Gregg Oliver. Because we are convinced the court correctly determined the complaint should be dismissed because plaintiff agreed to arbitrate her claims, we affirm but modify the court's order to permit plaintiff to pursue her punitive damages claims in arbitration.

I.

In September 2015, Bergen Logistics hired plaintiff as a human resources generalist. Oliver was Bergen Logistics's Human Resources Director and plaintiff's immediate supervisor. He terminated plaintiff's employment on December 30, 2015.

In an April 2017 Law Division complaint, plaintiff alleged Oliver sexually harassed her and created a sexually hostile work environment during her employment. She also alleged that after she objected to his conduct and sexual advances, he retaliated against her and terminated her employment. She asserted causes of action against Bergen Logistics and Oliver under the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49, and for intentional infliction of emotional distress.

Defendants moved to dismiss the complaint, asserting plaintiff was obligated to arbitrate her claims pursuant to the arbitration agreement she signed when hired in September 2015. In support of their motion, defendants relied on the agreement, which refers to plaintiff as "you" and Bergen Logistics as the "Company, and provides in pertinent part that "[a]s an express condition of" plaintiff's "hiring" and "continu[ed]" employment by Bergen Logistics she agreed:

(i) all (past, present and future) disputes, controversies and claims of any nature (whether under federal, state or local laws and whether based on contract, tort, common law, statute ...) arising out of, involving, affecting or related in any way to your ... employment ... and/or termination of employment by or from Company, the conditions of your employment, or any act or omission of Company or Company's other employees shall be resolved exclusively by final and binding arbitration before the American Arbitration Association .... This Agreement covers all employment matters, including but not limited to matters directly or indirectly related to wrongful termination, ... discrimination, harassment, retaliation (in the whistle blower or any other context), ... and any other violation of state, federal or common law ....

....

(iii) neither you nor Company shall file or maintain any lawsuit, action or legal proceeding of any nature with respect to any dispute, controversy or claim within the scope of this Agreement, including, but not limited to, any lawsuit, action or legal proceeding challenging the arbitrability of any such dispute .... BY SIGNING THIS AGREEMENT YOU AND COMPANY ARE WAIVING ANY RIGHT,

STATUTORY OR OTHERWISE, TO A TRIAL BY JURY AND TO PUNITIVE AND EXEMPLARY DAMAGES ....

....

YOU ACKNOWLEDGE AND AGREE THAT YOU ... READ THIS AGREEMENT AND ... HAD SUFFICIENT TIME TO STUDY AND CONSIDER IT AND TO CONSULT WITH COUNSEL OF YOUR CHOICE, THAT YOU UNDERSTAND ALL OF ITS TERMS AND ARE SIGNING THIS AGREEMENT KNOWINGLY AND VOLUNTARILY, AND THAT IN DOING SO YOUR ARE NOT RELYING UPON ANY OTHER STATEMENTS OR REPRESENTATIONS BY THE COMPANY, ITS AFFILIATE OR THEIR EMPLOYEES OR AGENTS ....

Plaintiff opposed the motion, arguing the agreement was unenforceable as against public policy because it barred her recovery of punitive damages otherwise available under the LAD. See N.J.S.A. 10:5-3 (providing for the recovery of punitive damages for LAD claims). Plaintiff also asserted the agreement was unenforceable because she was unable to read it when it was presented, it was not written in plain language and she did not read it before signing it.

After hearing argument, the court issued a written opinion finding plaintiff knowingly signed the agreement, and that it contained an unambiguous waiver of claims for "punitive and exemplary damages."¹ The court found plaintiff's hiring and continued employment provided consideration for the agreement, which covered the claims asserted in the complaint, was binding and required submission of her claims to arbitration. The court entered an order dismissing the complaint. This appeal followed.

II.

Plaintiff first contends the court erred by dismissing the complaint because the arbitration agreement's punitive damages waiver violates the public policy underlying the LAD, thereby rendering the agreement unenforceable.² Bergen Logistics and Oliver contend punitive damages waivers do not violate public policy and therefore there is no basis to void plaintiff's obligation to arbitrate her claims under the agreement's plain language.

We review the court's order dismissing the complaint de novo because it is founded on a determination of a question of law – the validity of the arbitration agreement. Barr v. Bishop Rosen & Co., Inc., 442 N.J. Super. 599, 605, 126 A.3d 328 (App. Div. 2015). "Our review of a contract, generally, is de novo, and therefore we owe no special deference to the trial court's ... interpretation. Our approach in construing an arbitration provision of a contract is governed by the same de novo standard of review." Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 445-46, 99 A.3d 306 (2014) (citations omitted).

The Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 to 16, and the New Jersey Arbitration Act (NJAA), N.J.S.A. 2A:23B-1 to -32, reflect federal and state policies favoring arbitration of disputes. Roach v. BM Motoring, LLC, 228 N.J. 163, 173-74, 155 A.3d 985 (2017) ; Hojnowski v. Vans Skate Park, 187 N.J. 323, 342 (2006). The FAA was enacted "to ‘reverse the longstanding judicial hostility’ towards arbitration agreements and to ‘place arbitration agreements upon the same footing as other contracts,’ " Roach, 228 N.J. at 173, 155 A.3d 985 (quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991) ), and "preempts state laws that single out and invalidate arbitration agreements," id. at 174, 155 A.3d 985 (citing Doctor's Assocs. v. Casarotto, 517 U.S. 681, 687, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996) ). A court " ‘cannot subject an arbitration agreement to more burdensome requirements than’ other contractual provisions." Ibid. (quoting Atalese, 219 N.J. at 441, 99 A.3d 306 ).

"The preference for arbitration ‘is not without limits,’ " Hirsch v. Amper Fin. Servs., LLC, 215 N.J. 174, 187, 71 A.3d 849 (2013) (quoting Garfinkel v. Morristown Obstetrics & Gynecology Assocs., 168 N.J. 124, 132, 773 A.2d 665 (2001) ), and "[t]he right of freedom to contract ‘is not such an immutable doctrine as to admit of no qualification,’ " Rodriguez v. Raymours Furniture Co., Inc., 225 N.J. 343, 361, 138 A.3d 528 (2016) (quoting Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 388, 161 A.2d 69 (1960) ). "[S]tate contract-law principles generally govern a determination whether a valid agreement to arbitrate exists." Hojnowski, 187 N.J. at 342. Thus, "[a]n arbitration clause may be invalidated ‘upon such grounds as exist at law or in equity for the revocation of any contract.’ " Martindale v. Sandvick, Inc., 173 N.J. 76, 85, 800 A.2d 872 (2002) ; see also Morgan v. Sanford Brown Inst., 225 N.J. 289, 303-04, 137 A.3d 1168 (2016) ("Under the FAA, an arbitration agreement, like any contract, may be held invalid ‘upon such grounds as exist at law or in equity for the revocation of any contract.’ "); Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 68, 130 S.Ct. 2772, 177 L.Ed.2d 403 (2010) (quoting Casarotto, 517 U.S. at 687, 116 S.Ct. 1652 ) (finding arbitration agreements "may be invalidated by ‘generally applicable contract defenses, such as fraud, duress, or unconscionability’ ").

Our courts have "recognize[d] that an individual may agree by contract to submit his or her statutory LAD claim to alternative dispute resolution and therefore different processes," Rodriquez, 225 N.J. at 364, 138 A.3d 528, and applied state contract law principles in enforcing agreements requiring arbitration of employment-related claims, see, e.g., Martindale, 173 N.J. at 91-92, 800 A.2d 872 (finding an arbitration agreement in an employment application constitutes a binding contractual obligation); Young v. Prudential Ins. Co. of Am., Inc., 297 N.J. Super. 605, 618, 688 A.2d 1069 (App. Div. 1997) (enforcing an agreement to arbitrate LAD claims and claims arising under the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to -14).

Applying contract principles, our courts have also determined agreements otherwise requiring arbitration of employment-related claims are unenforceable. See, e.g., Leodori v. CIGNA Corp., 175 N.J. 293, 302-07, 814 A.2d 1098 (2003) (finding an arbitration requirement in an employee handbook was not binding because there was no evidence the plaintiff consented to it); Garfinkel, 168 N.J. at 132-36, 773 A.2d 665 (finding an...