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Arbitration agreements must be specific and conspicuous

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in Discrimination and Harassment,Human Resources,Leaders & Managers,Performance Reviews

If, like many employers, you want to avoid the risk of a jury trial or a judge’s unpredictable decision, you may have considered requiring employees to agree to use arbitration to settle workplace disputes. But if the agreement doesn’t conform to New Jersey’s contract laws, you may end up spending time and money defending the agreement instead of arbitrating disputes.

That’s why it’s vital to make any arbitration agreement as specific and conspicuous as possible—two factors considered crucial under New Jersey contract law. The following case shows that arbitration agreements can work, if they’re done right.

Recent case: Glen Hemberger accepted an employment offer from E-Trade to work in its Jersey City office. The offer letter included language above the signature line stating that the parties agreed to arbitrate any employment disputes, including any type of discrimination claims. It concluded with the statement, “You and the Company hereby waive your respective rights to have any disputes tried to a judge or jury.”

Hemberger signed and started work. He then began having panic attacks and claimed his supervisors and others harassed him about his disability. After he was fired for alleged performance problems, he sued E-Trade, claiming it had violated the New Jersey Law Against Discrimination (NJLAD).

But the court said the case should go to arbitration, since the agreement had been clear, upfront and had bound both parties. Hemberger will have to persuade an arbitrator—not a judge or jury—that E-Trade violated the NJLAD disability discrimination provision. (Hemberger v. E-Trade Financial, No. 07-1621, DC NJ, 2007)

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