Settle v. Securitas Sec. Servs. U.S.

Decision Date12 April 2023
Docket NumberA-0723-22
PartiesCRYSTAL SETTLE, Plaintiff-Appellant, v. SECURITAS SECURITY SERVICES USA, INC., and STEVEN MEDINA, both individually and in his managerial and/or supervisory capacity, Defendants-Respondents
CourtNew Jersey Superior Court – Appellate Division

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted March 22, 2023

O'Connor, Parsons, Lane &Noble, LLC, attorneys for appellant (Gregory B. Noble and R. Daniel Bause, of counsel and on the briefs).

Kluger Healey, LLC, attorneys for respondents (Lance N. Olitt, on the brief).

Before Judges Firko and Natali.

PER CURIAM

Plaintiff Crystal Settle appeals from an October 7, 2022 order granting defendants Securitas Security Services USA, Inc.'s and Steven Medina's application to compel arbitration and dismiss her complaint. We affirm.

I.

Plaintiff was employed by Securitas as a security officer for approximately one month, from mid-March 2021 until April 2021. She was assigned to a Securitas client site in Weehawken, and reported to Steven Medina, the Securitas Account Manager. Prior to commencing her employment plaintiff signed a written Dispute Resolution Agreement Acknowledgment, dated February 25, 2021 (DRA Acknowledgment). The DRA Acknowledgment provided:

I have received a copy of the Securitas Security Services USA, Inc. (the "Company") Dispute Resolution Agreement (the "Agreement") and I have read and I understand all of the terms contained in the Agreement. I understand that employment at the Company constitutes acceptance of this Agreement and its terms. I further acknowledge that the Company and I are mutually bound by this Agreement and its terms, and that all covered employment-related disputes between me and the Company must be resolved on an individual basis in arbitration rather than in court.

The referenced Agreement provided it was governed by the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-402,[1] and specifically stated:

This [Agreement] . . . is an arbitration agreement governed by the [FAA]. Under the terms set forth below, both you (sometimes referred to as "Employee") and the Company mutually agree and thus are required to resolve covered claims either may have against the other by Arbitration instead of in a court of law. Acceptance of this Agreement is a condition of employment with Securitas Security Services USA, Inc. ....
This Agreement is governed by the [FAA] and evidences a transaction involving commerce.... [T]his Agreement applies to any dispute arising out of or related to your employment with Securitas Security Services USA, Inc. or one of its affiliates, subsidiaries or parent companies ("Company") or termination of employment and survives after the employment relationship terminates. ....
[T]his Agreement is intended to apply to the resolution of disputes that otherwise would be resolved in a court of law or before a forum other than arbitration. It requires all such disputes to be resolved only by an Arbitrator through final and binding arbitration and not by way of court or jury trial. Except as this Agreement otherwise provides, such disputes include, without limitation, disputes arising out of or relating to the interpretation or application of this Agreement, including disputes over the scope, enforceability, revocability, or validity of the Agreement, or any portion of the Agreement.
[T]his Agreement applies, without limitation, to disputes with any entity or individual arising out of or related to the . . . employment relationship or the termination of that relationship . . . discrimination, or harassment and claims arising under . . . state statutes or regulations addressing the same or similar subject matters (except to the extent a valid and enforceable state law precludes certain claims from being subject to a pre-dispute arbitration agreement), and, to the full extent permitted by law, all other federal or state legal claims . . . arising out of or relating to Employee's employment or the termination of employment.

On June 14, 2022, plaintiff filed a five-count complaint against defendants asserting numerous violations of the New Jersey Law Against Discrimination (NJLAD), N.J.S.A. 10:5-1 to -50. She specifically claimed defendants created a hostile work environment and Medina sexually assaulted her. She also alleged quid pro quo sexual harassment by Medina, gender discrimination, and constructive discharge. She further maintained defendants aided and abetted harassment and discrimination in the workplace.

In lieu of an answer, defendants filed a motion to dismiss plaintiff's complaint under Rule 4:6-2(e) and compel arbitration, in part arguing the FAA preempted N.J.S.A. 10:5-12.7 of the NJLAD (Section 12.7). Section 12.7 states in pertinent part that "[a] provision in any employment contract that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment shall be deemed against public policy and unenforceable," and also states "[n]o right or remedy under [N]LAD] . . . shall be prospectively waived." N.J.S.A. 10:5-12.7(a) to (b). Section 12.7, therefore, makes unenforceable agreements which require the relinquishment of the right to resolve disputes in court and receive a jury trial for claims regarding discrimination and harassment, which is one of the "defining features" of an arbitration agreement. See Antonucci v. Curvature Newco, Inc., 470 N.J.Super. 553, 566 (App. Div. 2022) (internal citations omitted).

In opposition to defendants' motion, plaintiff argued Section 12.7 was not preempted by the FAA based on a recent amendment, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFA), Pub. L. No. 117-90, § 2(a), 136 Stat. 26, 26-27 (2022) (codified at 9 U.S.C. §§ 401402). Under the EFA "no pre[-]dispute arbitration agreement . . . shall be valid or enforceable with respect to a case which is filed under Federal, Tribal or State law and relates to the . . . sexual assault dispute or the sexual harassment dispute." 9 U.S.C. § 402(a). The EFA applies expressly "to any dispute or claim that arises or accrues on or after the date of enactment," which was March 3, 2022, EFA § 3, 136 Stat. at 28.

Further, Section 2 of the FAA was amended in accordance with the EFA and provides that contracts containing agreements to arbitrate are "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract or as otherwise provided in [9 U.S.C. §§ 401-402]." 9 U.S.C. § 2. Plaintiff claimed notwithstanding the EFA's effective date, by precluding arbitration in sexual harassment and sexual assault claims, the EFA was actually consistent with Section 12.7, thus permitting her claims to be brought in court, as her arbitration agreement was unenforceable under the NJLAD.

In response, defendants relied on our decision in Antonucci, 470 N.J.Super. at 558. In that case, plaintiff sought to assert claims of wrongful termination and discrimination under Section 12.7 against his employer in court, despite having previously agreed to arbitrate those claims. We held that Section 12.7 is preempted "when applied to prevent arbitration called for in an agreement governed by the FAA." Id. at 566. Defendants argued our decision in Antonucci, as well as the "clear language of the . . . [EFA] statute" compelled enforcement of plaintiff's arbitration agreement for her claims of sexual assault and sexual harassment, as they occurred or accrued prior to the passage of the EFA.

After considering the parties' submissions and oral arguments, the court granted defendants' motion, dismissed plaintiff's complaint and directed plaintiff to submit her claims to arbitration and detailed its reasoning in an oral opinion. The court concluded under the United States Constitution's Supremacy Clause, U.S. Const. art. VI, cl. 2, the FAA preempted Section 12.7 with respect to sexual harassment or sexual assault claims as we decided in Antonucci, 470 N.J.Super. at 566. The court explained the EFA applied only "to claims that arose or accrue[d] on or after" the date of its enactment, March 3, 2022, relying both on the express language of the statute as well as Congress' intent as support. It determined it would be "unreasonable" to deduce a congressional intention that the EFA would exempt from arbitration "any and all claims whenever they arose or accrue[d] relating to sexual harassment." This appeal followed.

II.

Against this factual background, plaintiff reprises the arguments she made before the trial court and contends Congress's enactment of the EFA resulted in a lack of conflict between Section 12.7 and the FAA, as both federal law and New Jersey law evinced a desire to prevent "victims of sexual assault or sexual harassment to be forced into arbitration." She further maintains she is not seeking a retroactive application of the EFA, nor is she "attempting to enforce the EFA." Rather, plaintiff argues she is "seeking to enforce a State law that enforces the exact same interests" as the EFA.

Defendants argue the plain language of the EFA requires plaintiff to arbitrate her claims, as the EFA applies only to claims that accrued after its effective date of March 3, 2022. Defendants further argue when Section 2 of the FAA was amended in accordance with the EFA to include the phrase "or as otherwise provided in [9 U.S.C. §§ 401-402]," Congress specifically maintained the applicability of pre-enactment arbitration agreements such as plaintiff's. Defendants therefore argue Section 12.7 "still directly conflicts with and frustrates the purpose of the FAA," for such...

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