A New Jersey appeals court has voided Best Buy’s mandatory arbitration policy for workplace disputes, holding that the employee did not agree to the terms, though the panel members were split on the reasoning.
The Appellate Division reinstated an age discrimination suit by a former store manager after ruling that he did not agree to be bound to the company’s policy mandating arbitration of employee disputes.
After the policy was presented to him in electronic form—via an “eLearning module”—plaintiff Kevin Dugan did click on a box on the screen to acknowledge reading and understanding the policy. But an arbitration policy is only valid if the employee agrees to be bound by its terms, and reading and understanding a mandatory arbitration policy is not the same as agreeing to waive the right to take an employment dispute to court, the appeals court said Friday in Dugan v. Best Buy Co.
Best Buy’s arbitration policy went into effect on March 15, 2016. Three weeks later, Dugan was terminated from his job as manager of the Best Buy store in Woodbridge, in April 2016, according to the decision.
Best Buy’s arbitration policy terms provided that employees agreed to be bound by it “by remaining employed” after its effective date.
The appeals court said continued employment has been held to constitute assent to certain employment-related agreements. Citing the short period between the policy’s effective date and Dugan’s termination, however, the court said, “under the facts of the case, plaintiff’s continued employment did not amount to an explicit, affirmative agreement that unmistakably reflected his assent to the arbitration policy.”
Dugan’s suit claimed violations of the Law Against Discrimination, but Burlington County Superior Court Judge Susan Claypoole dismissed his complaint, deeming his claims subject to arbitration. Dugan, 46 at the time of his firing, filed his age discrimination suit along with a former Best Buy colleague, Roman Zielonka, who was fired before the company’s arbitration policy went into effect. Zielonka’s case is proceeding in the Law Division.
Dugan appealed his dismissal. The lawyer for Best Buy, Lynn Kappelman of Seyfarth Shaw in Boston, cited Jaworski v. Ernst & Young U.S., a 2015 Appellate Division ruling, in arguing that continued employment indicated agreement with the policy.
But the unsigned Appellate Division ruling, from Judges Francis Vernoia and Scott Moynihan, said the Jaworski case is distinguishable because the plaintiff there worked for five years after enactment of an arbitration policy, compared to three weeks in Dugan’s case.
“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,” the court said.
Vernoia, in a concurring opinion, disagreed with his colleague’s opinion holding that the plaintiff could not assent to the arbitration policy because he was only on the job for three weeks after it went into effect. While joining in the reversal of the order dismissing the case, Vernoia disagreed with the notion that Jaworski requires a long period of continuing employment to establish assent to an arbitration agreement.
Such a holding “contravenes a basic principle guiding our interpretation of contracts: we will not rewrite a contract for the parties better or different than the one they wrote for themselves,” he said.
Richard Schall of Schall & Barasch in Moorestown, who represents Dugan, said the court’s main opinion is clear that continued employment, by itself, does not constitute assent to an arbitration policy.
“I think the case stands for the proposition that continued employment, by itself, is not going to constitute assent and certainly does not constitute assent under the facts of this case,” Schall said.