KEVIN DUGAN VS. BEST BUY CO., INC.(L-1946-16, BURLINGTON COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-1897-16T4
KEVIN DUGAN,
Plaintiff-Appellant,
and
ROMAN ZIELONKA,
Plaintiff,
v.
BEST BUY CO. INC., and
GARRETT HETRICK,
Defendants-Respondents.
____________________________________
Argued May 31, 2017 – Decided August 11, 2017
Before Judges Vernoia and Moynihan (Judge Vernoia
concurring).
On appeal from the Superior Court of New
Jersey, Law Division, Burlington County,
Docket No. L-1946-16.
Patricia A. Barasch argued the cause for
appellant (Schall & Barasch, LLC, attorneys;
Ms. Barasch, on the briefs).
Lynn A. Kapelman argued the cause for respondents
(Seyfarth Shaw LLP, attorneys; Ms. Kapelman,
Howard M. Wexler and Maria Papasevastos, of
counsel and on the brief).
PER CURIAM
Plaintiff, Kevin Dugan, appeals from the December 6, 2016
order granting defendant, Best Buy's motion to compel arbitration
and dismiss plaintiff's suit. He argues the judge improperly
granted the motion because plaintiff did not agree to be bound by
the arbitration policy introduced by defendant; and that claims
relating to the termination of his employment are not arbitrable
under the terms of the policy.
We agree that plaintiff did not assent to the policy and
reverse.
The existence of a valid and enforceable arbitration
agreement poses a question of law; our standard of review of an
order granting a motion to compel arbitration is de novo. Hirsch
v. Amper Fin. Servs., LLC, 215 N.J. 174, 186 (2013). The "trial
court's interpretation of the law and the legal consequences that
flow from established facts are not entitled to any special
deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140
N.J. 366, 378 (1995). We, therefore, construe the arbitration
contract "with fresh eyes." Kieffer v. Best Buy, 205 N.J. 213, 223
(2011).
Defendant hired plaintiff in June 2000 as an assistant
manager. He was promoted to general manager in 2003.
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On February 4, 2016, plaintiff logged on to an eLearning
program utilized by defendant to introduce employees to an
arbitration policy defendant sought to implement on March 15,
2016. The eLearning module consisted of four screens.
The first screen, titled "Employee Solutions Process," read:
Best Buy is committed to a welcoming,
inclusive environment where employees come to
work every day to do what they enjoy doing.
From time to time you may encounter a concern
that, if left unresolved, could negatively
affect your employment experience. It [i]s
Best Buy's goal to resolve all these [i]ssues
and, in fact, has a clear well-established
[i]nternal process to do just that.
The second screen, bearing the same title, outlined a
progressive system for employees to address employment-related
concerns, starting with discussions with the employee's manager,
next to human resources personnel, and then to the Employee
Relations (ER) team. The text continued, "Under the Peer Review
Program, eligible employees may have certain involuntary
terminations reviewed, first by an ER manager and, if still not
satisfied by the outcome, by a panel of managers and peers." If
those steps did not address the concern, employees could "choose
to file a formal legal claim." The screen text concluded,
"Effective March 15, 2016, you will bring that claim in
arbitration, rather than in court."
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A note at the bottom of both the first and second screens
directed the employee to a link to a site at which "[a]dditional
details" could be found.
The heading of the third screen was: "Why is Best Buy
Implementing an Arbitration policy?" The text that followed
suggested that the arbitration process was more favorable than
court proceedings.
The last screen read:
As with any other Best Buy policy, by
remaining employed, you are considered to have
agreed to the policy. The purpose of the
eLearning is to ensure you read and understand
the policy.
Employees who do not take this eLearning are
still subject to the policy.
I have read and understand the Best Buy
Arbitration Policy that takes effect on March
15, 2016.
Just below that paragraph, the words, "I acknowledge," appeared
in a box that was intended to be mouse-clicked by the reader. A
link at the bottom of the page allowed the reader the opportunity
to "read and review" the policy and "FAQs" - frequently asked
questions.
Plaintiff clicked on the "I acknowledge" box without reading
the policy. He was also responsible, as general manager, to ensure
his staff completed the eLearning module.
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The policy went into effect on March 15. Plaintiff was
terminated on April 5.1 On September 16, plaintiff filed an age
discrimination action against defendant under the New Jersey Law
Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49. Those claims
are, according to the terms of the motion judge's order, subject
to arbitration.
The Federal Arbitration Act (FAA), 9 U.S.C.A. §§ 1-16, and
the New Jersey Arbitration Act, N.J.S.A. 2A:23B-1 to -32, are
premised on policies favoring arbitration as a means of resolving
disputes. Atalese v. U.S. Legal Servs, Grp., 219 N.J. 430, 440
(2014), cert. denied, 135 S. Ct. 2804, 192 L. Ed. 2d 847 (2015).
"Arbitration's favored status does not mean that every arbitration
clause, however phrased, will be enforceable." Id. at 441.
"Although it is firmly established that the FAA preempts state
laws that invalidate arbitration agreements, the FAA specifically
permits states to regulate contracts, including contracts
containing arbitration agreements under general contract
principles; therefore, an arbitration clause may be invalidated
1
The reason for the termination is in dispute. Plaintiff alleges
he was fired because of his age, and complaints he lodged about
discriminatory comments made by his supervisor regarding
plaintiff's age. Defendant avers plaintiff was fired for an
inappropriate comment plaintiff made to an employee (according to
plaintiff's complaint, it was to an employee; the motion judge
found the comment was made to a customer). We do not address the
merits of those claims.
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'upon such grounds as exist at law or in equity for the revocation
of any contract.'" Martindale v. Sandvik, Inc., 173 N.J. 76, 85
(2002) (quoting 9 U.S.C.A. § 2).
"An agreement to arbitrate, like any other contract, 'must
be the product of mutual assent, as determined under customary
principles of contract law.'" Atalese, supra, 219 N.J. at 442
(citation omitted). An employee's waiver of the right to sue in
court "must reflect that an employee has agreed clearly and
unambiguously to arbitrate the disputed claim." Leodori v. CIGNA
Corp., 175 N.J. 293, 302, cert. denied, 540 U.S. 938, 124 S. Ct.
74, 157 L. Ed. 2d 250 (2003). Such a waiver, the Court found,
"results only from an explicit, affirmative agreement that
unmistakably reflects the employee's assent." Id. at 303; see
also Atalese, supra, 219 N.J. at 442-43.
Since assent requires a full understanding of the terms of
the agreement and the rights being waived, id. at 442, we must
first determine if defendant provided sufficient notice to
plaintiff. "The point is to assure that the parties know that in
electing arbitration as the exclusive remedy, they are waiving
their time-honored right to sue." Marchak v. Claridge Commons,
Inc., 134 N.J. 275, 282 (1993).
The terms of defendant's arbitration policy satisfactorily
alert employees they are waiving their right to sue in court. The
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policy, on page one, plainly warns that any disputes governed by
the policy terms "will be decided by an arbitrator in arbitration
and not by way of a court or jury trial."2 That warning is repeated
four pages later, and the policy spells out the arbitration
process.
The policy does not express that employees are "waiving"
their right to sue.3 The policy, presented as a fait accompli,
requires employees to arbitrate as a "mandatory" condition of
employment; "by becoming or remaining employed after the effective
date of this Policy, employees agree[d] to th[e] Policy's terms."
The policy makes no mention of any "right" of an individual to sue
in court. Although "[t]he absence of any language in the
arbitration provision that plaintiff was waiving [his] statutory
right to seek relief in a court of law renders the provision
unenforceable," Atalese, supra, 219 N.J. at 436 (emphasis in
original), "[n]o particular form of words is necessary to
accomplish a clear and unambiguous waiver of rights." Id. at 444.
The Court cited a few examples of policy language that adequately
2
Although plaintiff claims he did not read the policy, he
acknowledged that he did when he clicked the box on the last page
of the eLearning module.
3
The policy mentions waivers only in provisions related to claims
against the defendant "on a class or collective basis" or in
California Private Attorney General Act representative actions.
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advised a party that the longstanding right to sue was being
relinquished, one of which provided:
Instead of suing in court, we each agree to
settle disputes (except certain small claims)
only by arbitration. The rules in arbitration
are different. There's no judge or jury, and
review is limited, but an arbitrator can award
the same damages and relief, and must honor
the same limitations stated in the agreement
as a court would.
[Id. at 445 (quoting the arbitration clause
in Curtis v. Cellco Partnership, 413 N.J.
Super. 26, 31 (App. Div.), certif. denied, 203
N.J. 94 (2010)].
The language in defendant's policy similarly notified
employees of the distinction between resolution of a conflict in
arbitration and in a court. Although the policy does not include
an explicit "waiver," it does advise that a dispute will not be
handled in a court, and explains the arbitration process. The
terms adequately inform employees that, by agreeing to the
arbitration policy, they are waiving their right to access the
court to resolve disputes.
The terms of the agreement, however, are unenforceable unless
plaintiff's assent to its terms is established by either his
signature on the agreement or "some other explicit indication that
[he] intended to abide by that provision." Leodori, supra, 175
N.J. at 305. It is undisputed that plaintiff did not mechanically
sign any document. That is a "significant factor in determining
8 A-1897-16T4
whether" an agreement was reached. Ibid. A handwritten signature
"is the customary and perhaps surest indication of assent." Id.
at 306-07.
Plaintiff did click on the box acknowledging that he read and
understood the policy. We have recognized that a party can assent
to the terms of a contract by electronically clicking on a website
box. See Caspi v. Microsoft Network, LLC, 323 N.J. Super. 118,
122 (App. Div.)(recognizing assent to a forum selection clause can
be established by a party clicking on a block labeled, "I Agree"),
certif. denied, 162 N.J. 199 (1999). Merely acknowledging receipt
of a policy, however, does not indicate assent to the policy.
Leodori, supra, 175 N.J. at 307. We have also held that by
"obtaining the employee's signature on a rider, which stated only
that the employee 'received' and 'underst[ood]' the contents of
the company handbook or rules or regulations, the employer cannot
fairly contend the employee 'agreed' to a waiver of the right to
sue that might be found within those materials." Morgan v.
Raymours Furniture Co., 443 N.J. Super. 338, 343 (App. Div.)
(alteration in original)(citations omitted), certif. denied, 225
N.J. 220, cert. denied, 137 S. Ct. 204, 196 L. Ed. 2d 132 (2016).
Plaintiff's mouse-click on the acknowledgment box did not manifest
his assent to the policy, only that he read and understood the
policy.
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It has been over thirteen years since our Supreme Court
advised employers of an easy method to avoid the problem defendant
now faces:
[W]ith minimal effort, employers can revise
the language to include an indication that the
recipient has received and agreed to an
arbitration policy. The acknowledgment form
need not recite that policy verbatim so long
as the form refers specifically to arbitration
in a manner indicating an employee's assent,
and the policy is described more fully in an
accompanying handbook or in another document
known to the employee.
[Leodori, supra, 175 N.J. at 307.]
Defendant could have firmly established plaintiff's assent by
simply adding the words "and agree to the terms of the policy" to
the acknowledgment box. Ibid.
The fact that plaintiff knew of the policy, and his status
as a general manager who was tasked with having other employees
complete the eLearning module, does not establish his assent to
the policy. Id. at 306; Garfinkel v. MOGA, 168 N.J. 124, 136
(2001). His knowledge of the policy and employment status may be
factors related to his understanding of the policy, but do not
indicate his agreement to same.
The terms of the policy provided employees agreed to be bound
"[b]y remaining employed" after its effective date of March 15,
10 A-1897-16T4
2016. The only possible indication of plaintiff's assent,
therefore, was his continued employment.
"[C]ontinued employment has been found to constitute
sufficient consideration for certain employment-related
agreements." Martindale v. Sandvik, 173 N.J. 76, 88 (2002);
Quigley v. KPMG Peat Marwick, LLP, 330 N.J. Super. 252, 265-66
(App. Div.), certif. denied, 165 N.J. 527 (2000). Under the facts
of this case, plaintiff's continued employment did not amount to
an "explicit, affirmative agreement that unmistakably" reflected
his assent to the arbitration policy. Leodori, supra, 175 N.J.
at 303.
Our holding in Jaworski v. Ernst & Young U.S., 441 N.J. Super.
464 (App. Div.), certif. denied, 223 N.J. 406 (2015), upon which
defendant relies in arguing that continued employment reflected
plaintiff's consent, is distinguishable. The policy in this case
contained language similar to that in Jaworski, providing that the
employee's continued employment after the effective date of the
policy signified the employee's agreement to the terms requiring
arbitration. In Jaworski, however, the employee continued his
employment for five years after the effective date of the policy
11 A-1897-16T4
until his termination.4 Plaintiff, by remaining employed for three
weeks after its effective date, did not indicate his assent to the
policy; employment for that brief period does not meet the high
standard required to establish an unambiguous waiver of
plaintiff's right to sue. Plaintiff did no more than he did every
other day during his tenure with Best Buy - he showed up for work.
While remaining employed for five years may reflect an employee's
acquiescence to employment terms, plaintiff's continuation of
employment for three weeks was not an explicit, unmistakable
acceptance of the policy.5
The policy was offered on a take-it-or-leave it basis.6 The
policy provides that it "is a mandatory condition of initial and
continuing employment." Employees who did not take the eLearning
module were, according to the fourth screen of the training course,
still subject to the terms of the policy. Defendant's position,
4
The policy was actually a revision to one that was initiated in
2002, id. at 468, before the employee signed his original
employment agreement in 2004, id. at 473, and revised several
times in 2006 and 2007, id. at 470-71.
5
We are careful not to conflate the concept of continued
employment as sufficient consideration for an agreement with
continued employment as an indication of explicit assent to an
agreement.
6
It is clear defendant did not intend to negotiate the terms of
the policy; although we recognize negotiation of an arbitration
clause is not required. Leodori, supra, 175 N.J. at 307.
12 A-1897-16T4
if adopted, does not reasonably allow enough time for an objecting
employee to find another situation, especially in circumstances
such as these. This is not the case where an applicant for
employment could simply walk away upon disagreeing with a proposed
policy. See Martindale, supra, 173 N.J. at 91 (holding a
prospective employee was not forced to sign an employment
application containing an arbitration clause; also indicating the
prospective employee had an opportunity to ask the employer for
changes). Plaintiff had worked for defendant for almost sixteen
years. He was forty-six years old. The choice given by defendant
to "leave it" if an employee did not agree to the policy
"amount[ed] to no choice at all." Id. at 103 (Stein, J.,
dissenting)7 (quoting Cooper v. MRM Investment Co., 199 F. Supp.
771, 778 (M.D. Tenn. 2002)). It is unreasonable to expect an
established employee to walk away from a career, without any
prospects, when an employer unilaterally presents a new agreement.
Plaintiff's choice to stay at his job for the short period did not
indicate his agreement to the policy.
7
The Court was considering whether an agreement was a contract of
adhesion. We do not undertake such an analysis here. Nor do we
consider whether an agreement was the result of coercion or duress.
We consider only whether plaintiff assented to the policy, and
whether there was an agreement.
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Plaintiff's conduct was insufficient to establish his assent
to the defendant's arbitration policy. In light of our decision
that no agreement to arbitrate was reached, we need not address
the scope of the arbitration agreement. Because of our disposition,
we need not address appellants' remaining arguments. To the extent
we have not explicitly addressed any other argument a party has
advanced, it is because the argument is without sufficient merit
to require discussion in a written opinion. See R. 2:11-3(e)(1)(E).
We reverse the entry of the order compelling arbitration and
dismissing plaintiff's complaint. The matter is remanded for
further proceedings consistent with this opinion. We do not retain
jurisdiction.
Reversed.
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___________________________
VERNOIA, J.A.D., concurring.
I join in the reversal of the order dismissing the complaint
and directing that plaintiff's claims be resolved in arbitration,
but write separately because I respectfully disagree with the
portion of my colleague's thoughtful opinion suggesting that
plaintiff could not have assented to the arbitration policy because
he continued his employment with defendant for only three weeks
following the policy's promulgation.
An arbitration agreement that includes a waiver of an
employee's right to assert causes against an employer in court
requires "an explicit, affirmative agreement that unmistakenly
reflects the employee's assent." Leodori v. Cigna Corp., 175 N.J.
293, 303 (2001), cert. denied, 540 U.S. 938, 124 S. Ct. 74, 157
L. Ed. 2d 250 (2003). An employee's "signature to an agreement
is the customary and perhaps surest indication of assent," but
where an employee has not signed an arbitration agreement, assent
may be inferred based on "some other unmistakable indication that
the employee affirmatively . . . agreed to arbitrate" the
employee's claims. Id. at 306-07.
In Jaworski v. Ernst & Young US LLP, 441 N.J. Super. 464
(App. Div.), certif. denied, 223 N.J. 406 (2015), we recognized
that under certain circumstances an employee may manifest binding
assent to an arbitration agreement by continuing employment with
the employer. In Jaworski, the employer promulgated an arbitration
program stating that "[a]n [e]mployee indicates his or her
agreement to the [p]rogram and is bound by its terms and conditions
by beginning or continuing employment with [the employer] after"
a designated effective date. Id. at 474. We found the plaintiff
was bound by the arbitration program because he continued to work
for the defendant following the effective date, "thus manifesting
his intent to be bound pursuant to the unambiguous and
specifically-emphasized terms of the [arbitration] [p]rogam."
Ibid. Our finding was supported by the clear language of the
arbitration program - that the plaintiff assented to agreement by
continuing employment beyond the designated effective date.
To be sure, we also noted that the plaintiff continued to
work for the defendant for five years after the effective date.
Ibid. However, I disagree with my colleague that Jaworski requires
a lengthy period of continuing employment, or anything beyond the
mere commencement of continued employment, to establish an
employee's assent to an arbitration agreement that otherwise
clearly and expressly provides that an employee manifests assent
by continuing employment. Such a holding is not supported by our
decision in Jaworski, and contravenes a basic principle guiding
our interpretation of contracts: we will not "rewrite a contract
2 A-1897-16T4
for the parties better than or different from the one they wrote
for themselves." Kieffer v. Best Buy, 205 N.J. 213, 223 (2011).
My reading of Jaworski does not require an affirmance of the
court's order. As noted, in Jaworski the policy at issue
unambiguously advised the plaintiff that his continuing employment
constituted assent to the arbitration program and an agreement to
be bound by its terms. Jaworski, supra, 441 N.J. Super. at 474.
In contrast, the language used by defendant here did not
unambiguously advise plaintiff that he assented to the arbitration
policy by continuing his employment. The fourth screen of the
eLearning program vaguely stated only that defendant would
"consider" an employee's continued employment as the employee's
consent to be bound by the policy.
Unlike the policy language in Jaworski, defendant's eLearning
screen described only how defendant would perceive an employees'
continued employment, and did not clearly inform plaintiff that
his continuing employment constituted his agreement to the
arbitration policy. It is for that reason, and not because
plaintiff's continuing employment lasted for only three weeks
beyond the policy's putative effective date, that I concur in the
conclusion that plaintiff's continued employment did not establish
the explicit and unmistakable assent required to support the motion
court's decision. See Leodori, supra, 175 N.J. at 303.
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