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As part of the price of getting hired, more and more companies in New Jersey are requiring new employees to agree to rely on arbitration rather than the courts to settle workplace disputes. The question argued Dec. 2 at the New Jersey Supreme Court is what steps employers must take to assure that the employee’s waiver of a jury trial is a knowing and voluntary waiver. In Leodori v. Cigna Corp., A-120-01, the employee trying to whittle out of the arbitration clause was a lawyer. Paul Leodori worked in Cigna Corp.’s legal and public affairs division from June 1995 until May 1999. He had complained to his supervisors about allegedly improper activities. Arlin Adams, a former chief judge for the 3rd U.S. Circuit Court of Appeals retained to investigate Leodori’s claims, found them to be without merit. Leodori complained of a whitewash and was fired. Instead of pursuing arbitration — as each Cigna employee agrees to do by signing the company handbook — he sued for wrongful termination. Camden County, N.J., Superior Court Judge M. Allan Vogelson found the suit barred by the arbitration agreement. The Appellate Division reversed, relying in part on Garfinkle v. Morristown Obstetrics and Gynecological Associates, 168 N.J. 129 (2001). There, the court said employees must make a “knowing and voluntary” waiver of their rights to sue in the courts if arbitration clauses in handbooks are to be enforceable. The appeals panel went further, ruling that those knowing and voluntary waivers must be made on a separate document and not merely be made part of an employee handbook. Cigna’s attorney, Edward Ellis, said the Appellate Division went too far. “The ruling runs afoul of the Federal Arbitration Act,” said Ellis, a partner at Montgomery, McCracken, Walker & Rhoads in Cherry Hill, N.J. The statute, which encourages arbitration over suits as a means of reducing litigation costs, says the arbitration requirement can be a part of an employee handbook and requires no separate document for a new employee to sign, said Ellis. The act only requires that the language in the handbook saying that an employee is waiving his right to pursue a claim in court must be clear and unambiguous. “Any time you agree to arbitration, you waive the right to a jury trial,” said Ellis. Another Cigna attorney, Michael Furey, said Leodori twice agreed to arbitration over litigation in employment disputes when he signed his employee handbooks, even though Leodori now claims he did not know he was waiving his right to sue. The employee handbooks “clearly cover Mr. Leodori’s claims,” said Furey, a partner at Morristown, N.J.’s Riker, Danzig, Scherer, Hyland & Perretti. “The handbooks clearly cover employee disagreements. There is no need to have a separate, signed document.” Leodori, now a Medford, N.J., solo practitioner who argued pro se, insisted that he did not know he was waiving his right to sue when he signed his employee handbooks and that Cigna has failed to show he made a knowing and voluntary waiver. “There is a presumption against a waiver of a fundamental constitutional right,” he said. “Who has the burden of proof of showing there was a waiver of a fundamental constitutional right? The party seeking to show there was a waiver.” Just because he signed the voluminous employee handbooks, Leodori said, does not mean that Cigna has met its burden of proof.

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