New Jersey Appellate Division Crafts Additional Hurdle To The Enforceability Of Employee Arbitration Agreements

On September 1, 2015, in Milloul v. Knight Capital Group, Inc., the New Jersey Appellate Division held that an arbitration agreement between an employer and its employee was not enforceable because it failed to expressly indicate that the employee was waiving his right to a trial in court. In so doing, the court adopted the holding from a 2014 New Jersey Supreme Court decision, Atalese v. U.S. Legal Services Group, L.P., 219 N.J. 430 (2014), a Consumer Fraud Act case, finding no distinction between the right-to-sue waiver language required in consumer arbitration agreements versus employee arbitration agreements.

In Milloul, a New Jersey Law Against Discrimination (LAD) religious discrimination case, Knight Capital Group (KCG), upon acquiring the plaintiff's prior employer (Edgetrade), required its employees to sign a Dispute Resolution Agreement (DRA). The DRA, one paragraph in length, read:

I agree that I will settle any and all previously unasserted claims, disputes or controversies arising out of or relating to my application for employment, my employment or the cessation of my employment with Knight Capital Group, Inc. or any of its affiliates exclusively by final and binding arbitration pursuant to the rules of the American Arbitration Association. Such claims include but are not limited to claims under federal, state and local statutory law or common law, such as the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, including the amendments of the Civil Rights Act of 1991, the Americans with Disabilities Act, the law of contract and the law of tort.

Citing Atalese, the court found the KCG DRA was unenforceable because it did not make clear that Milloul was "waiving [his] time-honored right to sue." The court explained that "an average member of the public may not know - without some explanatory comment - that arbitration is a substitute for the right to have one's claim adjudicated in a court of law." In that regard, the court specified that "[a]n...