On Thursday, May 18, the Assembly Judiciary Committee is holding a hearing on A4173. The bill, which is being sponsored by Asw. Marlene Caride (D-Ridgefield), would prohibit employers and employees from agreeing by contract to arbitrate any employment disputes, all under the guise of codifying a couple of New Jersey Supreme Court rulings.
Although the bill does not mention arbitration by name, it forbids employers from even offering contracts that include many characteristics of arbitration agreements.
While this change may skate by under the dubious arbitration doctrine adopted by the New Jersey Supreme Court, it is in direct conflict with federal law and United States Supreme Court doctrine. It would clearly be barred by yesterday’s Supreme Court decision in Kindred Nursing Centers v. Clark.
Writing for a 7-1 majority, Justice Kagan noted that rules that hinge on a “primary characteristic” of an arbitration agreement, such as a trial by jury, fail to “put arbitration agreements on an equal plane with other contracts,” and therefore violate the Federal Arbitration Act, even if those rules are not limited to arbitration but also apply to “some other contracts implicating ‘fundamental’ constitutional rights.”
We are urging the Assembly Judiciary Committee to hold the bill.
