On behalf of a client, Mashel Law recently filed a multicount complaint in the New Jersey Superior Court alleging, inter. alia., that she as the Plaintiff/Employee, was the victim of a hostile work environment and disparate treatment because of her female gender which ultimately resulted in her retaliatory wrongful discharge for complaining about the alleged unlawful treatment she endured. In lieu of filing an Answer, the Defendant/Employer filed a motion to dismiss claiming that New Jersey courts did not possess subject matter jurisdiction over Plaintiff’s employment law claims based on the language of a choice of law/forum selection clause found in an employment agreement Plaintiff signed at the inception of her employment. The forum selection clause at issue stated that in the event of “any litigation arising from, to enforce, to interpret or otherer related in any way to this Agreement” such a lawsuit would have to be filed in the state courts of Tennessee where the Defendant/Employer was headquartered, and Tennessee law would need to be applied to any such claims brought.
In its opposition to the motion to dismiss, Mashel Law argued that the forum selection clause was effectively a waiver of rights clause because if enforced it resulted in the Plaintiff losing the benefit of many statutory rights and remedies which are afforded to victims of discrimination under New Jersey’s Law Against Discrimination (“LAD”) which are not available under the Tennessee Human Rights Act (“THRA”). Specifically, it was argued that this would result in the loss to Plaintiff of the following rights and remedies provided under the LAD which are not available under the THRA:
- The right to sue in the New Jersey Superior Court.
- The right to have a “reasonable woman standard” apply to her sex/gender discrimination claims.
- The right not to have to prove the Defendants’ intentionality.
- The right to be able to purse aiding and abetting liability against individual named party defendants.
- The right to seek uncapped compensatory damages.
- The right to seek punitive damages.
Mashel Law further argued in opposition that since the forum selection clause was a waiver of rights clause and therefore under well-settled decisional law, it was not enforceable because it was too ambiguous due to its failure to expressly place the Plaintiff/Employee on notice that the Defendant/Employer intended it to act as a waiver of statutory claims other than those provided under Tennessee law. In Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430 (2014), the New Jersey Supreme Court held that “[A]ny contractual ‘waiver-of-rights provision must reflect that [the party] has agreed clearly and unambiguously’ to its terms.” Id. (emphasis added) The waiver of rights “must be clearly and unmistakably established.” Id. at 14 (emphasis added). See also Garfinkel v. Morristown Obstetrics & Gynecology, 168 N.J. 124 (2001) (“To pass muster, a waiver-of-rights provision should at least provide that the employee agrees to arbitrate all statutory claims out of the employment relationship or its termination.” Id. at 135.)
Lastly, Mashel Law argued the forum selection clause must further be deemed invalid because its enforcement would violate N.J.S.A. 10:5-12.7 which forbids any employment contract to waive statutory rights provided by the LAD as would be the case if Tennessee law would be applied to Plaintiff’s claims instead of New Jersey’s LAD. N.J.S.A. 10:5-12.7, which became effective on March 18, 2024, states that “[a] provision in any employment contract that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment shall be deemed against public policy and unenforceable.” N.J.S.A. 10:5-12.7(a) (emphasis added). Moreover, “[n]o right or remedy under the [NJLAD] or any other statute or case law shall be prospectively waived.” N.J.S.A. 10:5-12.7(b).
In its oral decision from the bench, the Trial Court accepted the opposition arguments made by Mashel Law and denied the Defendant’s Motion to Dismiss. In doing so, the Trial Court found the forum selection clause neither valid nor enforceable because its language was “unclear” as to its scope. This lack of clarity was caused by the absence of express language placing Plaintiff/Employee on notice that the clause included within its meaning potential statutory claims like the sexual harassment claim she filed under New Jersey’s LAD. Due to the absence of such express and required language, the Trial Court was correct in concluding the Plaintiff did not knowingly and voluntarily waive procedural and substantive rights afforded her by the LAD.
The Trial Court also agreed with Mashel Law when it concluded that even if the forum selection was clear, unambiguous, and therefore valid, it could not be enforced because to do so would result in the Plaintiff being deprived of statutory procedural and substantive rights under the LAD which were not available under the THRA. For example, the Court agreed that the LAD provides that victims of discrimination have the right to file their claims in the New Jersey Superior Court. N.J.S.A. 10:5-3(a)(2). Finally, in denying the Motion to Dismiss, the Trial Court suggested in dicta that the forum selection clause contravened N.J.S.A. 10:5-12.7 because if applied, it would deny Plaintiff certain procedural and substantive rights afforded to her and other victims of discrimination under the LAD.
The Defendant/Employer’s subsequent Motion for Leave to Appeal the Trial Court’s decision denying their Motion to Dismiss was denied by the New Jersey Superior Court, Appellate Division.
If you believe you are or have been a victim of unlawful workplace discrimination you are urged to call the attorneys at Mashel Law (732) 536-6161 or fill out the contact form on this page for immediate help. Mashel Law, located in Marlboro, New Jersey, is dedicated to protecting the rights of its employees.