Grant W. Morgan v. Raymours Furniture Company, Inc.
128 A.3d 1127
N.J. Super. Ct. App. Div.2016Background
- Morgan sued Raymours and two representatives for age discrimination, wrongful termination, and related claims after Raymours terminated him when he refused to sign a standalone arbitration agreement presented after a workplace dispute.
- Defendants moved to compel arbitration based primarily on an arbitration clause and waiver included in the company Associate Handbook and related electronic acknowledgments (August 2011, Feb 2012, Apr 2013); plaintiff disputed reading or assent.
- The Handbook contained a prominent disclaimer stating it did not create contractual rights and that its rules were "not promissory or contractual in nature and are subject to change by the company."
- Plaintiff had signed a 2013 commission document that acknowledged receipt/understanding of the Handbook and stated disputes about commissions would be subject to the EAP; the trial court held this did not clearly waive the right to sue for discrimination/termination claims.
- The trial court denied the motion to compel arbitration; defendants appealed. The Appellate Division affirmed, holding the employer did not obtain a clear and unambiguous waiver of the right to sue given the Handbook disclaimer and surrounding circumstances.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Morgan clearly and unambiguously waived the right to sue via the Handbook/EAP | Morgan did not agree to waive his right to sue; handbook disclaimer precludes finding a clear waiver | Raymours argued Handbook/EAP and multiple acknowledgments manifested mutual assent to arbitrate | Held: No clear and unambiguous waiver — arbitration clause unenforceable given Handbook disclaimers and acknowledgment language |
| Whether an employee signature acknowledging receipt/understanding of the Handbook constitutes assent to arbitration or waiver | Signature acknowledging receipt/understanding is insufficient to show assent to waive the right to sue | Raymours contended the electronic acknowledgments and the 2013 commission agreement manifested acceptance | Held: Acknowledgment that one "received" or "understood" the Handbook does not equate to clear assent to waive the right to sue; the 2013 commission document, at most, covered commission disputes only |
| Whether employer may rely on Handbook as non-contractual in general but invoke it as contractual to compel arbitration | Morgan: Employer cannot take the benefit of the disclaimer in some contexts and disavow it when seeking arbitration — equitable estoppel/consistency principles apply | Raymours: Employer can enforce arbitration provision found in Handbook despite disclaimer | Held: Employer cannot have it both ways; equitable principles and prior NJ decisions require clear, unambiguous waiver, which is lacking here |
| Whether federal law preempts state-law requirements for clear waiver | Morgan: New Jersey precedent controls waiver standard; not preempted | Raymours: FAA/federal law should allow enforcement under ordinary contract principles | Held: State law requirement that waiver be "clear and unambiguous" is compatible with federal law; no preemption found in these circumstances |
Key Cases Cited
- Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430 (N.J. 2014) (requires clear and unambiguous waiver of right to sue in employment documents)
- Woolley v. Hoffman-LaRoche, Inc., 99 N.J. 284 (N.J. 1985) (company manuals may create implied contractual rights unless a prominent disclaimer is present)
- Leodori v. CIGNA Corp., 175 N.J. 293 (N.J. 2003) (receipt/understanding acknowledgments insufficient alone to show contractual assent to waive rights)
- Carlsen v. Masters, Mates & Pilots Pension Plan Tr., 80 N.J. 334 (N.J. 1979) (equitable estoppel principles precluding repudiation of earlier positions)
- Rodriguez v. Raymours Furniture Co., 436 N.J. Super. 305 (App. Div. 2014) (distinguishable decision enforcing a time-limitation clause where different circumstances supported enforceability)