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Many private-sector employers in New Jersey have for years required their employees to arbitrate claims of workplace discrimination, harassment, and the like. While employers have taken varied approaches to this practice—whether by including compulsory arbitration clauses in applications and handbooks, for example, or requiring employees to sign stand-alone arbitration program documents—among the most common approaches is to include a compulsory arbitration agreement in the employee’s offer letter or employment contract. Whether such arbitration agreements may be enforced in the future, however, is the issue currently pending before U.S. District Judge Anne Thompson in New Jersey Civil Institute et al. v. Grewal, No. 3:19-cv-17518 (“Grewal”).

The factual background in Grewal is straightforward. On March 18, 2019, Governor Phil Murphy signed into law a series of amendments to the New Jersey Law Against Discrimination (LAD). Among these were two provisions, codified at N.J.S.A. 10:5-12.7, that impact mandatory arbitration agreements between employers and their (non-unionized) workforce:

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