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arbitration - Credit: Brasil Creativo/ Credit: Brasil Creativo/

To no one’s surprise, in late March, a New Jersey federal district judge held that New Jersey’s 2019 amendment to the Law Against Discrimination, in N.J.S.A. 10-5:12.7, conflicted with and thus was preempted by the pro-arbitration policy of the Federal Arbitration Act to the extent the amendment [to the LAD] purported to prohibit enforcement of pre-dispute agreements in employment contracts as “against public policy.” The attorney general was, therefore, enjoined from attempting to enforce that part of the LAD. N.J. Civil Justice Institute v. Grewal, No. 19-17518, 2021 U.S. Dist. LEXIS 57437 (D.N.J. Mar. 25, 2021). We suggest that this is not the end of the battle against pre-dispute agreements for arbitration in the employment context, though the opponents of such agreements do have an uphill battle.

Once the United States Supreme Court held that the pro-arbitration mandate of the FAA was not limited to the context of B2B commercial relationships, employers and consumer-products/services companies gradually, then with exponential speed, included such clauses in their standard form employment, sales, service, and similar contracts with individuals. The companies were used to arbitration in their B2B disputes, and they often favored the greater speed, lower costs, and privacy/confidentiality offered by private dispute resolution. Companies also often saw private arbitration as a more favorable—or at least a less unfavorable—forum than a jury trial in a dispute with an individual.

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