Quigley v. KPMG PEAT MARWICK, LIP
749 A.2d 405, 330 N.J. Super. 252 (2000)
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Rule of Law:
An agreement to arbitrate will not be enforced as a waiver of an employee's statutory rights under the New Jersey Law Against Discrimination (LAD) if the right did not exist when the agreement was signed, or if the contractual language is too ambiguous to constitute a clear and unmistakable waiver of such rights.
Facts:
- In 1978, Joseph A. Quigley began his employment with KPMG Peat Marwick, LLP.
- In July 1981, upon his promotion to Manager, Quigley was required to sign a Manager's Agreement as a condition of the promotion.
- In July 1984, upon his promotion to Senior Manager, Quigley was again required to sign a Senior Manager's Agreement as a condition of continued employment.
- Both agreements contained an identical arbitration clause stating: 'Any claim or controversy between the parties arising out of or relating to this Agreement or the breach thereof, or in any way related to the terms and conditions of the employment... shall be settled by arbitration.'
- Quigley alleged that his supervisor told him he had to sign the agreements or he would no longer work there.
- To signify his objection, Quigley secretly inserted the initials 'U.D.' for 'under duress' into his signature on both agreements.
- In July 1996, after approximately eighteen years of employment, KPMG Peat Marwick, LLP terminated Quigley's employment.
- Following his termination, KPMG offered Quigley's position to a younger person.
Procedural Posture:
- Joseph A. Quigley filed a complaint against KPMG Peat Marwick, LLP in the Superior Court of New Jersey, Law Division, alleging age discrimination under the New Jersey Law Against Discrimination (LAD).
- KPMG filed a motion to compel arbitration and dismiss the complaint, citing the arbitration clauses in Quigley's employment agreements.
- The trial court granted KPMG's motion, dismissing the complaint and ordering the parties to arbitration.
- Quigley, as appellant, appealed the trial court's order to the Superior Court of New Jersey, Appellate Division, with KPMG as the respondent.
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Issue:
Does an arbitration agreement, signed before the statutory right to a jury trial for a New Jersey Law Against Discrimination (LAD) claim existed, constitute a knowing and voluntary waiver of that right where the agreement's language does not explicitly mention statutory claims, discrimination, or termination?
Opinions:
Majority - Havey, P.J.A.D.
No. The arbitration agreement does not constitute a knowing and voluntary waiver of the employee's right to a jury trial for his statutory discrimination claim. A valid waiver requires the voluntary and intentional relinquishment of a known and existing right. The statutory right to a jury trial for LAD claims was not established in New Jersey until a 1990 statutory amendment, years after Quigley signed the agreements in 1981 and 1984. Therefore, Quigley could not have knowingly waived a right that did not yet exist. Furthermore, the language of the arbitration clause is ambiguous and too narrow to encompass a statutory discrimination claim. The clause does not mention statutory claims, discrimination, or termination, and a clause depriving a citizen of access to the courts must clearly and unmistakably state its purpose. Because the agreement fails to clearly state that it covers statutory LAD claims, it cannot be read expansively to force arbitration of this dispute.
Analysis:
This decision reinforces the principle that a waiver of statutory rights in favor of arbitration must be clear, unmistakable, and knowing. It establishes that an employee cannot be deemed to have waived a right, such as the right to a jury trial, that did not legally exist at the time the arbitration agreement was executed. The case sets a high standard for the drafting of arbitration clauses intended to cover statutory employment claims, suggesting that broad, generic language referring to 'terms and conditions of employment' is insufficient. For such clauses to be enforceable against statutory claims, they must explicitly reference those claims or be drafted broadly enough to leave no doubt as to their inclusion.
