KUASHEMA RILEY VS. RAYMOUR & FLANIGAN(L-4100-16, HUDSON 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NOT FOR PUBLICATION WITHOUT THE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-2272-16T1
KUASHEMA RILEY,
Plaintiff-Appellant,
v.
RAYMOUR & FLANIGAN and
MOSHIN CHUNAWALA,
Defendants-Respondents.
__________________________________
Argued September 26, 2017 – Decided October 20, 2017
Before Judges Carroll and Mawla.
On appeal from Superior Court of New Jersey,
Law Division, Hudson County, Docket No. L-
4100-16.
Mark Mulick argued the cause for appellant.
Ivan R. Novich and Tyler A. Sims argued the
cause for respondents (Littler Mendelson, PC,
attorneys; Mr. Novich and Mr. Sims, on the
brief).
PER CURIAM
Plaintiff Kuashema Riley appeals from a January 20, 2017
order granting a motion by Raymour & Flanigan (R&F) and Moshin
Chunawala (collectively defendants) compelling arbitration of
plaintiff's employment discrimination claims and dismissing her
Law Division complaint without prejudice. We affirm.
The following facts are taken from the record. Plaintiff was
employed by R&F in December 2012, as a furniture salesperson. She
alleged several incidents of hostile work environment in violation
of the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-
1 to -49. Specifically, she asserted that her store manager
frequently played music that included the words "nigger," "bitch,"
"ho," and "slut." She claimed that Chunawala and other employees
frequently used the word "nigger" and "faggot" in her presence.
Plaintiff alleged Chunawala threatened to bring a firearm into the
workplace after the storeroom windows of the store had been shot
out. She claimed Chunawala emailed a photograph of his penis to
a fellow co-worker, and that the incident became common knowledge
throughout the workplace.
Plaintiff asserts she complained about the hostile work
environment to her supervisors, but the discriminatory conduct
continued, and she was terminated in retaliation. Plaintiff filed
a complaint in the Law Division alleging her termination was in
violation of LAD. She also alleged defendants were responsible
for the hostile work environment and the discrimination plaintiff
experienced while an employee at R&F.
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Defendants filed a motion to compel arbitration and stay the
litigation in the Law Division pursuant to the Federal Arbitration
Act, 9 U.S.C. § 1. Defendants argued plaintiff entered into an
agreement to arbitrate all claims against R&F when she signed a
document known as the "Associate's Agreement & Consent," during
her employment. This form expressly stated employees who signed
it consented to dispute resolution of all claims under the Employee
Arbitration Program (EAP).
Plaintiff opposed defendants' motion and argued the EAP was
unenforceable, unconscionable, and violated public policy.
Specifically, plaintiff claimed she was forced to sign the EAP
under duress and she did not fully understand the EAP.
The trial court enforced the agreement to arbitrate, noting
the strong public policy favoring arbitration, and the fact
plaintiff had thirty days to review the EAP before signing it.
The trial court granted defendants' motion, ordered arbitration,
and dismissed plaintiff's complaint without prejudice.
On appeal, plaintiff claims the EAP violates public policy
because it requires her to pay the filing fees for arbitration,
which she cannot afford. Plaintiff claims the fee provision of
the EAP renders the whole agreement to arbitrate unenforceable.
She asserts the EAP is unenforceable and violates public policy
because she entered into it under duress, and because its terms
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are complex and incomprehensible. Plaintiff also challenges the
trial court's order because it required R&F to pay for the
arbitration fees beyond the initial filing fee, and therefore
would bias the arbitration process in favor of the party funding
it. Plaintiff also urges reversal because the trial court order
was entered without oral argument.
There is a strong preference to enforce arbitration
agreements because "arbitration is [the] favored method of
resolving disputes." See Garfinkel v. Morristown Obstetrics &
Gynecology Assocs., P.A., 168 N.J. 124, 131 (2001); see also
Hojnowski v. Vans Skate Park, 187 N.J. 323, 341-42 (2006). The
standard of review of the validity of an arbitration agreement and
the legal determinations made by the trial court is de novo.
Morgan v. Sanford Brown Inst., 225 N.J. 289, 302-03 (2016); see
also Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J.
366, 378 (1995). Having considered plaintiff's claims and the
record, we find no error in the trial court's decision to compel
arbitration and we affirm.
I.
Plaintiff claims the EAP violates public policy since it
requires her to pay the fees to initiate the arbitration process.
Plaintiff states she has limited resources and cannot finance an
arbitration. She argues the trial court erred in concluding the
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EAP was enforceable without taking these claims into account.
Instead, she asserts the EAP is unconscionable.
Arbitration agreements are afforded the same contract
defenses of fraud, duress and unconscionability. Delta Funding
Corp. v. Harris, 189 N.J. 28, 39 (2006). The Court has held an
arbitration agreement may be unconscionable where it results in a
litigant funding the arbitration costs because it would deter a
litigant from vindicating his or her rights. Id. at 44.
We disagree the EAP is unconscionable because it requires
plaintiff, as the complainant, to pay the initial filing fee. The
EAP states the costs and fees are paid "in accordance with the
rules of the Administrator for resolving disputes under employer-
promulgated programs." The EAP defines "Administrator" as the
American Arbitration Association (AAA) or Judicial Arbitration and
Mediation Services, Inc. (JAMS). Pursuant to AAA's Employment
Arbitration Rules and Mediation Procedures (AAA Rules), plaintiff
would pay a $200 filing fee. Under the JAMS Employment Arbitration
Rules and Procedures (JAMS Rules), plaintiff would be responsible
for a $1,200 filing fee. These fees do not render the EAP
unconscionable as plaintiff would have to bear the filing fees and
other costs of a litigation in the Law Division were there no
arbitration agreement.
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We also note nothing bars the arbitrator from re-allocating
fees to the prevailing party, especially considering plaintiff's
claims are grounded in the LAD, which is a fee shifting statute.
N.J.S.A. 10:5-27.1; see also Rendine v. Pantzer, 141 N.J. 292,
332-33 (1995). Therefore, the EAP is not unconscionable because
of its fee provisions. Also, because we conclude the fee
provisions of the EAP are valid, we reject plaintiff's claim the
EAP as a whole should be deemed unenforceable.
II.
Plaintiff also challenges the validity of the EAP claiming
she signed it under duress and without a proper understanding of
its terms. We find no support in the record for these claims.
Economic duress occurs when the party alleging
it is "the victim of a wrongful or unlawful
act or threat," which "deprives the victim of
his unfettered will." "[T]he 'decisive
factor' is the wrongfulness of the pressure
exerted. The term 'wrongful' in this context
encompasses more than criminal or tortious
acts, for conduct may be legal but still
oppressive." The acts or threats constituting
the duress "'are wrongful, not necessarily in
a legal, but in a moral or equitable sense.'"
In addition, duress entails inadequate
consideration.
[Quigley v. KPMG Peat Marwick, LLP, 330 N.J.
Super. 252, 263 (App. Div. 2000) (citations
omitted).]
R&F provided the EAP to all employees in February 2014.
Plaintiff refused to immediately sign the document, and claims she
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was pressured to do so. Notwithstanding, she certified that she
took the EAP home, "read it carefully," and signed it "about one
month later." Plaintiff alleges if she did not sign the EAP she
feared she would lose her job, which constitutes evidence of
duress.
The Supreme Court has held that employment is sufficient
consideration for an employer to require employees to execute
employment related contracts such as arbitration agreements. See
Martindale v. Sandvik, Inc., 173 N.J. 76, 90 (2002) (holding "the
[United States] Supreme Court obviously contemplated avoidance of
the arbitration clause only upon circumstances more egregious than
the ordinary economic pressure faced by every employee who needs
the job" (quoting Young v. Prudential Ins. Co. of Am., Inc., 297
N.J. Super. 605, 688 (App. Div. 1997))). "[C]ourts that have
considered this issue [of whether the threat of termination of
employment for refusing to agree to arbitration is oppressive]
have consistently determined that the economic coercion of
obtaining or keeping a job, without more, is insufficient to
overcome an agreement to arbitrate statutory claims." Muhammad
v. Cty. Bank of Rehoboth Beach, 379 N.J. Super. 222, 240 (App.
Div. 2005) (quoting Quigley v. KPMG Peat Marwick, LLP, 330 N.J.
Super. 252, 263 (App. Div. 2000)).
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The record lacks objective evidence of duress exerted by R&F.
Furthermore, R&F requiring plaintiff to execute the EAP as a
condition of ongoing employment is not duress. For these reasons,
we reject plaintiff's claim of duress.
III.
Plaintiff asserts the EAP is unenforceable and violates
public policy because it is written in an incomprehensible manner.
The record does not support such a claim.
In Garfinkel, supra, 168 N.J. at 131-32, the Supreme Court
stated:
Because of the favored status afforded to
arbitration, "[a]n agreement to arbitrate
should be read liberally in favor of
arbitration." That favored status, however,
is not without limits. The Court has stressed
that "[i]n the absence of a consensual
understanding, neither party is entitled to
force the other to arbitrate their dispute.
Subsumed in this principle is the proposition
that only those issues may be arbitrated which
the parties have agreed shall be." In respect
of specific contractual language, "[a] clause
depriving a citizen of access to the courts
should clearly state its purpose. 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." As we have stressed in other contexts,
a party's waiver of statutory rights "must be
clearly and unmistakably established, and
contractual language alleged to constitute a
waiver will not be read expansively." In the
same vein, a "court may not rewrite a contract
to broaden the scope of arbitration[.]"
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[citations omitted.]
"A party who enters into a contract in writing, without any
fraud or imposition being practiced upon him, is conclusively
presumed to understand and assent to its terms and legal effect."
Rudbart v. N. Jersey Dist. Water Supply Comm'n, 127 N.J. 344, 353
(1992) (quoting Fivey v. Pennsylvania R.R. Co., 67 N.J.L. 627, 632
(E. & A. 1902)). An employee who signs but claims to not understand
an arbitration agreement will not be relieved from an arbitration
agreement on those grounds alone. See Booker v. Robert Half Int'l,
Inc., 315 F. Supp. 2d 94, 101 (D.D.C. 2004); see also Friedman v.
Tappan Dev. Corp., 22 N.J. 523, 531 (1956).
Plaintiff's assertion the EAP was difficult to understand,
rendering it unenforceable, lacks merit. The EAP states, in
pertinent part, "[u]nder this Program, you and we waive all rights
to have a Claim decided by a court, judge, jury and, where
permitted by law, an administrative agency." The EAP then explains
what arbitration is and how it is different from a court
proceeding. The document sets forth detailed instructions
regarding the arbitration process. Therefore, plaintiff's
argument the EAP is ambiguous, confusing, and drafted
incomprehensibly is not supported by the record.
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IV.
Finally, plaintiff's claims that the arbitrator will be
biased because defendant was ordered to fund the arbitration
proceeding, and her claim the trial court order should be reversed
because there was no oral argument, lack sufficient merit to
warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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