More Fun for Judge Fisher as He Affirms a Denial of Arbitration

Morgan v. Raymours Furniture Co., 443 N.J. Super. 338 (App. Div. 2016).  Today, Judge Fisher issued the first published Appellate Division decision of 2016.  Recently, Judge Fisher wrote an opinion that cited Humpty Dumpty and Joyce Kilmer’s poem “Trees.”  His opinion today incorporates Aesop, a 1546 form of a familiar proverb about having one’s cake and eating it too, and the ancient legal doctrine that “if my grandmother had wheels, she’d be a bicycle.”  For entertainment value alone, Judge Fisher has set a high bar for 2016 judicial opinions.

This was an employment discrimination and wrongful termination case.  Defendants moved to compel arbitration (but only after having moved unsuccessfully for a change of venue, a motion that Judge Fisher observed “might fairly suggest a waiver of the right to arbitrate,” though because waiver was not raised by plaintiff, the panel did not rule on that).  The Law Division denied the motion, and the Appellate Division affirmed.

Defendants’ basis for arbitration was a provision in its employee handbook that contained an arbitration clause.  But the handbook also stated that the handbook did not create an employment contract, and that the handbook’s “rules, regulations, procedures and benefits … are not promissory or contractual in nature and are subject to change by the company.”

Noting that these disclaimers were likely included so that the company was not contractually bound to any of the benefits that employee handbooks often contain, Judge Fisher did not permit the employer to “seek both the benefit of its disclaimer in most instances, while insisting that the handbook was contractual when it suits its purposes.”  Defendants’ position “runs counter to ancient English proverb: ‘wolde ye both eate your cake, and haue your cake?’John Heywood, Dialogue of Proverbs (1546), as well as its corollary, which may have originated with Aesop, ‘sauce for the goose is sauce for the gander.'”  Though the courts’ “decisions are not governed by cliches, these in particular can be found at the root of the court’s equity jurisdiction,” a jurisdiction that was triggered by defendants’ request for a stay of the lawsuit and an order compelling arbitration.

Under prior decisions such as Atalese v. U.S. Legal Servs. Group, L.P., 219 N.J. 430 (2014), cert. denied, ___ U.S. ___, 135 S.Ct. 2804 (2015), discussed here, and Barr v. Bishop Rosen & Co., ___ N.J. Super. ___ (App. Div. 2015), discussed here, an employee must “clearly and unambiguously” waive the right to sue in favor of arbitration.  A waiver in a handbook that the company “insisted was not ‘promissory or contractual'” would not lead a court to find, “in good conscience,” a waiver.  Nor would the fact that plaintiff signed a document stating that he had “received” and “underst[ood]” the handbook and its contents.

Judge Fisher also rejected defendants’ argument that federal law required enforcement of the arbitration clause.  The Supreme Court’s rulings, such as that in Atalese, and a decision of the Fourth Circuit in “nearly identical circumstances” one week after today’s case was argued, formed the basis for the panel’s disagreement with defendants’ position about the effect of federal law.

Finally, Judge Fisher noted that the situation “would likely” have been different if plaintiff had signed a stand-alone arbitration agreement that defendants presented to him “when a rift formed in the parties’ relationship.”  But he did not sign it, and Judge Fisher concluded his opinion by stating “To that [defendants’ argument] we only need say, ‘if my grandmother had wheels, she’d be a bicycle.'”