Employer’s Arbitration Provision Enforceable Even Though Employer Labeled it a “Training Module,” Since Employee Understood She Was Agreeing to Arbitration

Skuse v. Pfizer, Inc., 244 N.J. 30 (2020). As discussed here, the Appellate Division in this case reversed a trial level ruling that compelled the plaintiff employee to arbitrate a dispute that she had with her employer, Pfizer. Pfizer had e-mailed employees what it called a “training module” that contained slides regarding Pfizer’s mandatory arbitration policy. That material stated, among other things, that employees who continued their employment at Pfizer for 60 days would be “deemed” to have agreed to the arbitration provision. Employees were asked to “acknowledge [their] receipt” of the arbitration “Agreement,” which plaintiff did, but not to “accept” it. The Appellate Division held that the employee had not assented to arbitration, and since mutual assent is required for an arbitration provision to be effective, it was error to have dismissed plaintiff’s lawsuit in favor of arbitration.

Pfizer obtained Supreme Court review, and that Court reversed by a 5-1 vote (Justice Timpone did not participate). Justice Patterson wrote the majority opinion. Justice Albin filed a concurrence. Chief Justice Rabner was the lone dissenter.

The majority held that Pfizer’s “Agreement and its related communications clearly informed Skuse that by continuing to be employed for sixty days, she would waive her right to pursue employment discrimination claims against Pfizer in court.” Pfizer “unambiguously explained” that in its communications, thus complying with the Court’s caselaw regarding waiver of the right to sue in favor of arbitration.

The fact that Pfizer communicated the arbitration agreement by e-mail did not make it invalid. “[N]o principle of New Jersey contract law bars enforcement of a contract because that contract is communicated by e-mail rather than by the transfer of a hard-copy document.” Justice Patterson cited precedent that allowed electronic communication of contract terms.

Pfizer’s “training module” label, the Court said, was a “misnomer.” But that did not invalidate the agreement. “By virtue of their content and tone, Pfizer’s communications could not be misconstrued as a routine component of a training program.” Instead, those communications “plainly informed employees that they needed to understand and act on the new policy, and that they should seek the advice of counsel if they had legal questions about it.”

Finally, Pfizer’s direction that employees “acknowledge,” rather than “agree” to, the arbitration policy did not mean, as the Appellate Division ruled, that Skuse had not assented to the policy. “[T]he prescribed form of assent here was the employee’s decision to remain employed after the effective date of the arbitration policy.” Plaintiff had relied on Leodori v. CIGNA Corp., 175 N.J. 293 (2003), in this regard, but the majority found that case distinguishable.

Justice Albin concurred in the majority’s result, stating that “the totality of the evidence persuades me that plaintiff clearly and unmistakably understood that she was agreeing to submit any disputed employment issue to an arbitrator rather than a court.” But he expressed concern about what would happen if, in the future, “an entire profession or industry” adopted “the perfect, unassailable arbitration clause.” He “set the stage” for the question of whether that circumstance would violate the constitutional right to a civil jury trial. Recognizing, however, that “this is not the time or the case” to rule on that issue, he did not do so. But he put that marker down for the time to come.

Chief Justice Rabner’s dissent agreed with the reasoning of the Appellate Division. On the facts here, he found no “explicit, affirmative agreement that unmistakably reflects the employee’s assent,” quoting Leodori (emphases by the Chief Justice). “[N]either the ‘acknowledgment’ of company policy that Pfizer elicited from its employees, nor a one-sided declaration that consent would be deemed by default, met that standard.”

This was one of the biggest employment cases on the Court’s docket for the current Term. Now it is “in the books.”