DONNA KIRALY VS. FORCEPOINT, INC. (L-2094-17, MORRIS COUNTY AND STATEWIDE) ( 2018 )

NOT FOR PUBLICATION WITHOUT THE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.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2676-17T1
DONNA KIRALY,
Plaintiff-Appellant,
v.
FORCEPOINT, INC.,
DENNIS EVERSEN, and
JULIE MARTINEZ,
Defendants-Respondents,
and
RAYTHEON WEBSENSE, INC.,
KYLE MCGUIRE, and AUTUMN
SANGREY,
Defendants.
Argued September 18, 2018 – Decided October 2, 2018
Before Judges Ostrer and Currier.
On appeal from Superior Court of New Jersey, Law
Division, Morris County, Docket No. L-2094-17.
G. Martin Meyers argued the cause for appellant (Law
Offices of G. Martin Meyers, PC, attorneys; G. Martin
Meyers and Susan S. Singer, on the briefs).
Jessica A. Burt argued the cause for respondents
(Ogletree, Deakins, Nash, Smoak & Stewart, PC,
attorneys; Steven J. Luckner and Jessica A. Burt, on the
brief).
PER CURIAM
Plaintiff Donna Kiraly appeals from the January 19, 2018 order dismissing
her complaint and compelling arbitration. Because we discern the arbitration
agreement did not include a sufficiently clear waiver of plaintiff's right to litigate
her claims in court, we reverse.
In January 2015, plaintiff was hired by defendant Forcepoint, Inc.1 as a
member of its sales force. She was terminated in November 2015. In her
complaint, plaintiff alleged sexual harassment, gender discrimination, and a
hostile work environment during her employment. She alleges that after she
objected to the conduct, she was retaliated against and terminated. Plaintiff
asserts causes of action against defendant under the New Jersey Law Against
Discrimination, N.J.S.A. 10:5-1 to - 49, and a common law claim for malicious
interference with economic relations.
1
Defendants Dennis Eversen and Julie Martinez were employees of Forcepoint.
The remaining defendants were not served with the complaint.
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At the time of plaintiff's hiring, she signed a Confidentiality, Invention
Assignment, Non-Solicit, Non-Compete, and Arbitration Agreement (arbitration
agreement). The agreement incorporated a two-page Dispute Resolution
Addendum detailing the arbitration requirements, processes and procedures.
The addendum and agreement were executed simultaneously.
On pages four and five of the eight-page, single-spaced, small font
agreement, paragraph 10 entitled "Arbitration" states:
In the event of any controversy or dispute between you
and the Company or between you and any affiliate or
an agent of Company, including but not limited to
directors, officers, managers, other employees or
members of the Group, who are being sued in any
capacity, as to all or any part of this Agreement, any
other agreement, or any dispute or controversy
whatsoever pertaining to or arising out of the
relationship between you and the Company, or the
dissolution or termination of same (collectively,
"Arbitrable Disputes") shall, subject to Section 11.1
herein [pertaining to injunctive relief sought by the
Company] be resolved exclusively by binding
arbitration solely between yourself and the Company
conducted in Princeton, New Jersey, which shall be
conducted in accordance with the procedures set forth
in the Dispute Resolution Addendum appended hereto
as Schedule 2 (the "Addendum"), all of which are
incorporated into this Agreement by reference . . . .
The addendum provides that "all [a]rbitrable [d]isputes shall be resolved
only by final and binding arbitration conducted privately and confidentially by
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a single arbitrator selected as specified in this Addendum." The Addendum
provides details on the one-year time limitation to bring a claim, initiating the
arbitration process, selecting an arbitrator, choice of law, discovery process,
hearing and award procedures. Section M provides: "[t]he parties agree that
reliance upon courts of law of equity can add significant costs and delays to the
process of resolving disputes. Accordingly, they recognize that an essence of
this Agreement is to provide for the submission of all Arbitrable Disputes to
binding arbitration."
In lieu of an answer, defendants filed a motion to dismiss the complaint
and to compel arbitration under the agreement. In the January 19, 2018 oral
decision, the motion judge found the language in paragraph 10 of the arbitration
agreement was "unambiguous and clearly encompasse[d] the claims asserted by
plaintiff in this action." In finding the agreement enforceable, the judge granted
defendants' motion.
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., 442 N.J. Super. 599, 605
(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
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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 (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 (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,'" and it "preempts state laws that single out and
invalidate arbitration agreements." Roach, 228 N.J. at 173-74 (first quoting
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991); then citing
Doctor's Assocs. v. Casarotto, 517 U.S. 681, 687 (1996)); see also Kindred
Nursing Ctrs. Ltd. P'ship v. Clark, 137 S. Ct. 1421, 1426 (2017). A court
"'cannot subject an arbitration agreement to more burdensome requirements
than' other contractual provisions." Roach, 228 N.J. at 174 (quoting Atalese,
219 N.J. at 441).
We look to Atalese, the controlling law in New Jersey, for guidance in our
review of the agreement and addendum. There, the Supreme Court reaffirmed
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that an arbitration agreement, "like any other contract, 'must be the product of
mutual assent, as determined under customary principles of contract law.'" 219
N.J. at 442 (citation omitted). "Mutual assent requires that the parties have an
understanding of the terms to which they have agreed." Ibid. "This requirement
of a 'consensual understanding' about the rights of access to the courts that are
waived in the agreement has led our courts to hold that clarity is required."
Moore v. Woman to Woman Obstetrics & Gynecology, L.L.C., 416 N.J. Super.
30, 37 (App. Div. 2010) (citation omitted).
Plaintiff argues on appeal, as she did in the trial court, that the arbitration
agreement failed to apprise her she was waiving the right to bring a claim in
court or try her case to a jury. We agree.
In Atalese, the Court held that "the absence of any language in the
arbitration provision that plaintiff was waiving her statutory right to seek relief
in a court of law renders the provision unenforceable." Id. at 436. For guidance,
the Court provided examples of valid arbitration clauses. Id. at 444. The Court
noted our decision in Griffin v. Burlington Volkswagen, Inc., 411 N.J. Super.
515, 518 (App. Div. 2010), where we "upheld an arbitration clause, which
expressed that '[b]y agreeing to arbitration, the parties understand and agree that
they are waiving their rights to maintain other available resolution processes,
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such as a court action or administrative proceeding, to settle their disputes.'"
Atalese, 219 N.J. at 445.
The Court also approved of arbitration clauses stating, "the plaintiff
agreed 'to waive [her] right to a jury trial,'" and "[i]nstead of suing in court, we
each agree to settle disputes . . . only by arbitration," where "[t]here's no judge
or jury." Id. at 444-45 (citations omitted). We have stated, however, that a valid
arbitration agreement does not require advice on all component rights
encompassed in a waiver seeking relief in court. Such a requirement would
render arbitration clauses too complex, hard to understand, and easy to
invalidate, in contravention of the strong public policy favoring arbitration. See
Jaworski v. Ernst & Young U.S. LLP, 441 N.J. Super. 464, 480-81 (App. Div.
2015) (upholding an arbitration clause stating the parties would not "be able to
sue in court," and rejecting plaintiffs' argument that "the arbitration agreement
must inform the parties of (1) the number of jurors, (2) the parties' rights to
choose the jurors, (3) how many jurors would have to agree on a verdict, and (4)
who will decide the dispute instead of the jurors.").
We are mindful of the Court's mandate in Atalese that "[n]o particular
form of words is necessary to accomplish a clear and unambiguous waiver of
rights." 219 N.J. 444. But, an enforceable arbitration agreement, "at least in
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some general and sufficiently broad way, must explain that plaintiff is giving up
her right to bring her claims in court or have a jury resolve the dispute." Id. at
447.
Here, the arbitration clause and addendum are deficient under the Atalese
standards. While the documents refer to binding arbitration and detail the
process, they lack any reference to the waiver of any right, or that plaintiff is
foreclosed from bringing a claim in court. The signor of the agreement is never
advised that arbitration is a waiver of the right to bring suit in a judicial forum.
The agreement lacks the simple language described in Atalese to ensure a
knowledgeable waiver. Without any reference to the waiver of the right to have
his or her claims litigated in court, the "average member of the public" presented
with this agreement and addendum "may not know — without some explanatory
comment — that arbitration is a substitute for the right to have one's claim
adjudicated in a court of law." Id. at 442. The failure to apprise plaintiff of the
surrender of her right to pursue her claims in court renders this arbitration
agreement unenforceable.
Reversed and remanded for further proceedings. We do not retain
jurisdiction.
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