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LLC, KAREN SCHMITT, Individually,


and TONI RITTER, Individually,



September 18, 2015


Submitted January 28, 2015 Decided

Before Judges Fuentes, Kennedy and O'Connor.

On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-3622-13.

Lueddeke Law Firm, attorneys for appellant (Karri Lueddeke, on the brief).

Littler Mendelson, P.C., attorneys for respondents (Nina K. Markey and Rachel Fendell Satinsky, on the brief).


Plaintiff, C.M., was employed by defendant Maiden Re Insurance Services, L.L.C., (Maiden) as vice president of technical underwriting. Plaintiff filed suit against her employer and defendants Karen Schmitt, president of Maiden Re U.S. operations, Patricia McInerney, vice president of human resources, and Toni Ritter, a human resources representative, as well as other potential defendants identified only as John Doe individuals and corporations, alleging disability discrimination in violation of the New Jersey Law Against Discrimination (LAD) N.J.S.A. 10:5-1 to -49. Plaintiff alleges she was terminated from her employment because of her disability. She also claims defendants violated the anti-discrimination provisions in LAD by denying her request to attend counseling sessions and Alcoholic Anonymous meetings, which she asserts was a reasonable accommodation to maintain her sobriety and avoid a relapse of her alcoholism, a recognized disability under LAD.

Plaintiff appeals from the order of the Law Division dismissing her cause of action and remanding the matter to binding arbitration.1 After reviewing the record developed before the trial court, and mindful of the principles adopted by our Supreme Court in Atalese v. U.S. Legal Services Group, L.P., 219 N.J. 430 (2014), cert. denied sub nom., Legal Servs. Grp., L.P. v. Atalese, 135 S. Ct. 2804 (2015), we reverse. The ostensible arbitration clause in Maiden's employee handbook relied on by defendants is irreconcilable with the expressed language in other sections of the same handbook that prominently and unequivocally disclaim the handbook is intended to create a legally enforceable contract between Maiden and its employees. Leodori v. Cigna Corp., 175 N.J. 293, 304, cert. denied, 540 U.S. 938, 124 S. Ct. 74, 157 L. Ed. 2d 250 (2003).

The Law Division erred in finding plaintiff knowingly and voluntarily agreed to waive her constitutional rights to have her LAD cause of action adjudicated in the Superior Court before a jury, based only on the provisions of the employee handbook drafted by Maiden. Plaintiff's electronic response acknowledging receipt of the handbook is legally insufficient to constitute a knowing waiver of her constitutional rights to have LAD claims decided by a jury. Furthermore, the handbook contains an unambiguous disclaimer in which Maiden expressly disavows that the terms and conditions stated in the handbook are "intended to create contractual obligations." Independent of this lack of contractual relationship between the parties, the arbitration provision in the handbook does not refer to plaintiff's statutory rights; does not explain the nature of an arbitration proceeding; nor plainly states that plaintiff is relinquishing her constitutional right to seek redress in a court of law before a judge and a jury.

We derive the following facts from the record developed before the trial court.


In May 2011, Maiden, a global reinsurance company, hired plaintiff to serve in the position of vice president of technical underwriting. In July 2012, approximately fourteen months after she was first hired, Maiden promoted plaintiff to the position of senior vice president of technical underwriting. Plaintiff claims her superiors at Maiden complimented her professional performance and work ethic.

In support of their motion to remand this matter for arbitration, defendants submitted to the trial court a certification from Patricia McInerney, Maiden's vice president human resources. McInerney attested that in January 2012, Maiden "adopted" an employee handbook. All employees were required to attest they had "received" a copy of this handbook. Donna Scardelletti, Maiden's human resources manager, submitted a certification to the trial court attesting that plaintiff electronically acknowledged receipt of the handbook in response to Scardelletti's email transmitting the handbook as an attachment.

A hardcopy copy of the email provided as part of the appellate record shows plaintiff's name as part of a long list of Maiden employees who, on January 13, 2012 at 7:49 a.m., received the following email message from Scardelletti

The Human Resources Team is . . . pleased to now provide you with the Employee Handbook for Maiden Holdings North America for your reference and review.

This handbook contains information about the employment policies and practices of Maiden Re. All Maiden Holdings North America employees are required to read the handbook. Please take the time to go through the handbook and sign in acknowledgement of your review.

You will find the handbook on the Home/Resources tab in Workforce Now as well as on the Maiden Re intranet under Maiden Global Servicing/Human Resources HR Documents/HR Policies. To acknowledge that you have read the handbook: . . . Go to the Home/Resources tab in Workforce Now. . . Click Read and Acknowledge All Policies. . . Click on Handbook. This will open the handbook document. . . Below this you will see. . . I certify that I have read the policy above. . . Check the box to the left of this statement.

Defendants have also provided a computer print-out indicating that on January 13, 2012 at 12:21 p.m., plaintiff acknowledged she had received and reviewed the employee handbook.

The handbook's table of contents lists twenty-seven separate topics or policy statements. For example, under the heading "Compliance" (on page six of the handbook), there were categories listing "Equal Employment Opportunity, Harassment and Discrimination, Reporting Procedures, Retaliation is prohibited, Code of Conduct, Maiden Ethics Hotline," and other similar areas regulated by law. Under the heading "Time Off" (on page twelve of the handbook), there were categories listing "Holidays, Paid Time Off, Family and Medical Leave . . . Jury Duty/Witness, Time Off for Voting" and similar areas concerning absence from the workplace.

On the first page of the handbook, before the "Table of Contents," and before the "Welcome Message," is the following statement


This handbook contain information about the employment policies and practices of Maiden Holdings North America, Ltd. and its direct and indirect subsidiaries (collectively "Maiden Re" or "the Company"). Each employee is expected to read this handbook carefully as it is a valuable reference for understanding his or her job and Maiden Re. The policies outlined in this handbook should be regarded as management guidelines only which in a developing business will require changes from time to time. Maiden Re retains the right to make decisions involving employment as needed in order to conduct its work in a manner that is beneficial to the employees and Maiden Re. This handbook supersedes and replaces any and all prior handbooks and inconsistent verbal or written policy statements. Except for the policy of at-will employment, which can only be changed by the CEO of Maiden Re in writing, Maiden Re reserves the right to revise, delete, or add to the provisions of this handbook. All such revisions, deletions or additions will be in writing and communicated to all employees. No oral statements or representations can change the provisions of the handbook.

The provisions of the handbook are not intended to create contractual obligations with respect to any matters it covers. Nor is this handbook intended to create a contract guaranteeing that employees will be employed for any specific time period.

Maiden Re is an at-will employer. this means that regardless of any provision in this handbook, either the employee or Maiden re may terminate the employment relationship at any time, for any reason, with or without cause or notice, unless prohibited by law. nothing in this handbook or in any document or statement, written or oral, shall limit the right to terminate employment at will. no officer, employee or reprehensive of maiden re is authorized to enter into an agreement express or implied with any employee for employment other than at-will.

[(Underline added for emphasis) (The statement written in bold capital letters is reproduced here as it appears in the handbook).]

The last page of the handbook contains an "Acknowledgement form," which includes the following additional disclaimer

By signing below, you acknowledge that you have read and understand the policies outlined in this Employee Handbook. You agree to comply with the policies contained in this Handbook and to read and understand any revisions to it and be bound by them. You understand this Handbook is intended only as a general reference and is not intended to cover every situation that may arise during your employment. This handbook is not a full statement of company policy. Any questions regarding this Handbook can be discussed with Human Resources.

You acknowledge that this Handbook is not intended to create, nor shall be construed as creating, any express or implied contract of employment for a definite or specific period of time between you and Maiden Re or to otherwise create express or implied legally enforceable contractual obligations on the part of Maiden Re concerning any terms, conditions, or privileges of employment.

[(Emphasis added).]

The arbitration clause at issue does not appear until page twenty-seven of this twenty-nine-page handbook. It is contained under the section entitled "Company Guidelines," and it reads as follows

Arbitration; Choice of Law

Any controversy or claim arising out of or relating to the employment relationship created between the employer (Maiden Re) and employee (you), including all topics covered in this Employee Handbook, and interpretation of this Handbook, or any alleged breach of it, shall be settled by arbitration in accordance with the Arbitration Rules of the American Arbitration Association, with such arbitration to take place in the County of Burlington, State of New Jersey with an agreed upon arbitrator. If the parties cannot agree on an arbitrator, a court of competent jurisdiction shall appoint an arbitrator at the request of either party. Although the parties shall initially bear the cost of arbitration equally, the prevailing party, if any as determined by the arbitrator at the request of the parties which is hereby deemed made, shall be entitled to reimbursement for its share of costs and reasonable attorney's fees, as well as interest at the statutory rate. For individuals that do not live in the vicinity of the County of Burlington in the State of New Jersey, the arbitrator may determine whether the cost of attending the arbitration is overly burdensome on the individual due to necessity of travel and may order that Maiden Re reimburse the individual for necessary and reasonable travel related expenses. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The determination of the arbitrator in such proceeding shall be final, binding, and non-appealable.

On August 1, 2013, plaintiff and defendant, Karen Schmitt, the president of Maiden's operations in the United States, had a conversation in which they discussed plaintiff's alcoholism. In her pleading, plaintiff characterized this encounter as a particularly vulnerable experience. Plaintiff claims she revealed to Schmitt that she had "completed a detox program and was seeing a counselor the following Monday, August 5, 2013, to form a long term plan for [her] treatment and recovery for her disability." Plaintiff emphatically states that she "made it very clear to defendant Schmitt that she needed an accommodation for her disability as she needed to get into a residential rehabilitation setting for her treatment and recovery as soon as possible."

In defendants' responsive pleading, Schmitt characterized this encounter with plaintiff as a discussion about plaintiff's problem with alcohol. Defendants denied the rest of plaintiff's claims. On August 6, 2013, Patricia McInerney, Maiden's vice president of human resources, and Toni Ritter, a human resources representative, informed plaintiff that her employment at Maiden had been terminated. Neither McInerney nor Ritter provided plaintiff with an explanation or justification for her termination. On September 16, 2013, plaintiff filed this complaint alleging unlawful discrimination under LAD. Defendants filed their responsive pleading on November 26, 2013, together with a motion seeking to dismiss the action and remand the matter to arbitration. The Law Division Judge granted defendants' motion on January 30, 2014, almost eight months before the Supreme Court decided Atalese.


Because the decision of the trial court was based exclusively on the legal interpretation of defendants' employment manual, our review is de novo. Town of Kearny v. Brandt, 214 N.J. 76, 92 (2013). We do not owe any deference to the trial court's interpretation of law or legal conclusions that flow from established facts. State v. Perini, 221 N.J. 412, 425 (2014). As a matter of public policy, our Supreme Court strongly favors the enforcement of arbitration agreements. Hirsch v. Amper Fin. Servs., 215 N.J. 174, 186 (2013).

Congress has also endorsed this form of alternative dispute resolution as a matter of national public policy. When Congress adopted the Federal Arbitration Act, it declared that "[a] written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C.A. 2. Our State's Legislature has endorsed a similar sentiment when it adopted New Jersey's Arbitration Act.

An agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract.

[N.J.S.A. 2A:23B-6(a).]

However, the preference for arbitration "is not without limits." Hirsch, supra, 215 N.J. at 187 (quoting Garfinkel v. Morristown Obstetrics & Gynecology Assocs., 168 N.J. 124, 131 (2001)). The first step in assessing an arbitration clause is determining whether a valid agreement to arbitrate exists at all. Ibid. In going about this task, a court must apply settled contract law principles without imposing a stricter standard of review, merely because the contract at issue is an arbitration agreement. Id. at 187-88. Accordingly, "an agreement to arbitrate must be the product of mutual assent" and "requires a meeting of the minds." Atalese, supra, 219 N.J. at 442. The parties must understand "the terms to which they have agreed," and "[a]n effective waiver requires a party to have full knowledge of his legal rights and intent to surrender those rights." Ibid. (quoting Knorr v. Smeal, 178 N.J. 169, 177 (2003)).

Here, plaintiff argues that no enforceable arbitration agreement exists between her and Maiden because she did not agree to be bound by the terms of the handbook. She emphasizes that the electronic acknowledgement she submitted in response to the email from the human resources department did not include specific language mentioning the arbitration provision. Defendant argues plaintiff took deliberate steps indicating she received, reviewed, and understood the handbook and the arbitration provision contained therein.

Both parties cite Leodori, in support of their irreconcilable positions. In Leodori, our Supreme Court identified the two questions that must be answered to determine the enforceability of an arbitration provision: "[d]oes the relevant waiver-of-rights provision reflect an unambiguous intention to arbitrate a [statutory] claim? If yes, does the record . . . indicate that [the] plaintiff clearly had agreed to that provision?" 175 N.J. at 302. With respect to the second question, the Court emphasized that an employee's acceptance of an arbitration provision must be clear and unambiguous. Id. at 303.

In determining whether a plaintiff has agreed to an arbitration provision, the omission of one party's signature is significant in assessing mutual assent. Id. at 305. In Leodori, the plaintiff employee had not signed an agreement accompanying the employee handbook, which contained an arbitration provision. Ibid. Given the absence of "some other explicit indication that the employee intended to abide by that provision" or otherwise affirmatively agree to it, the Leodori Court held the arbitration provision was invalid. Id. at 305-07.

Here, we do not need to reach this question because the plain language in the handbook defendants drafted shows, with unmistakable clarity, that Maiden did not intend the handbook to create a binding agreement. The following passages from the Disclaimer section of the handbook makes this point directly and unequivocally

The policies outlined in this handbook should be regarded as management guidelines only. . . .

The provisions of the handbook are not intended to create contractual obligations with respect to any matters it covers. Nor is this handbook intended to create a contract guaranteeing that employees will be employed for any specific time period.

This language is unambiguous and its intent cannot be seriously disputed. This type of language reflects that defendants heeded the Court's admonition in Woolley v. Hoffman-La Roche, 99 N.J. 284, 306 (1985), and drafted an employee handbook that made clear that the employees were at-will, and subject to termination without cause. Defendants cannot selectively disavow the anti-Woolley language in the handbook to insulate the "arbitration" provision from the legal consequences of the disclaimer provision. The employee handbook cannot be a binding agreement with respect to the arbitration provision, and an unenforceable document merely containing "management guidelines" for the rest of its provisions.

We hold plaintiff did not waive her rights to seek redress for her LAD claims in the Superior Court by virtue of having acknowledged receipt of the employee handbook drafted by defendants. The employee handbook did not create a binding enforceable agreement between Maiden and plaintiff. The order of the Law Division is reversed and the matter is remanded for trial in the Law Division or for such further proceedings as may be warranted.

Reversed and remanded. We do not retain jurisdiction.

1 Pursuant to Rule 2:2-3(a)(3) "any order either compelling arbitration, whether the action is dismissed or stayed, or denying arbitration shall also be deemed a final judgment of the court for appeal purposes."