On January 21, 2021, the Honorable Craig L. Wellerson, Presiding Judge of the New Jersey Superior Court, Law Division, Civil Part (Ocean County), issued a bench opinion holding that N.J.S.A. 10:5-12.7 is pre-empted by the Federal Arbitration Act (“FAA”). That statute, enacted by the New Jersey Legislature in 2019, has the practical effect of barring employers from using arbitration agreements to compel arbitration of certain employment-related claims. The New Jersey Civil Justice Institute (“NJCJI”) has consistently maintained that this constitutes a clear violation of the FAA, and aggressively lobbied against the statute on that basis.
The above-mentioned case, Albino v. Comcast Corp. (Docket No. OCN-L-002125-20), involved claims by an employee against his employer for unlawful discrimination. The plaintiff-employee argued that the arbitration agreement set forth in his offer letter and related documents was unenforceable as written, and also, that it was void by way of N.J.S.A. 10:5-12.7, which covered his claims. After finding that the agreement complied with the general requirements of New Jersey law governing arbitration agreements, the Court found, as a matter of first impression, that “the supremacy of the [FAA] would clearly override [New Jersey] legislation attempting to divest the [FAA] of the . . . force of law.” Notably, during oral argument, the parties considered the import of NJCJI’s on-going lawsuit against the State of New Jersey seeking to bar enforcement of N.J.S.A. 10:5-12.7 by the New Jersey Attorney General’s Office on those same grounds.
Judge Wellerson ultimately issued an Order granting the defendant-employer’s motion to compel arbitration of the plaintiff’s claims, thereby disregarding the mandate of N.J.S.A. 10:5-12.7 on the basis of federal preemption. It is unclear whether the plaintiff will appeal the Court’s decision in this case. However, this ruling provides some insight on how trial court judges may approach this issue in future cases. NJCJI will continue to monitor the docket of this and other matters in which N.J.S.A. 10:5-12.7 is at issue and update its members accordingly.