ROBERT HAMPTON v. ADT, LLC
Annotate this CaseNOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0172-20
ROBERT HAMPTON,
Plaintiff-Appellant,
v.
ADT, LLC, and MARK MILAM,
Defendants-Respondents.
___________________________
Submitted March 17, 2021 – Decided April 30, 2021
Before Judges Geiger and Mitterhoff.
On appeal from the Superior Court of New Jersey, Law
Division, Somerset County, Docket No. L-0435-20.
Castronovo & McKinney, LLC, attorneys for appellant
(Paul Castronovo and Edward W. Schroll, of counsel
and on the briefs).
Ogletree, Deakins, Nash, PC, attorneys for respondents
(Brian D. Lee and Michael Westwood-Booth, on the
brief).
PER CURIAM
Plaintiff Robert Hampton appeals from a September 11, 2020 order
compelling him to arbitrate his claim that defendants violated the Conscientious
Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -14, and dismissing his
amended complaint with prejudice. After carefully considering the record and
applicable principles of law, we vacate the order and remand for further
proceedings to determine whether plaintiff was subject to a binding arbitration
agreement, and if so, whether the arbitration agreement was assigned to
defendant ADT, LLC (ADT) prior to plaintiff's termination.
I.
Plaintiff was the Vice President of Business Development at MS
Electronics/MSE Corporate Security, Inc. (MSE) from February 16, 2016 to
August 30, 2019. Prior to commencing his employment with MSE, plaintiff
signed an Employment, Confidential Information, Non-Competition and
Arbitration Agreement (the Contract) prepared by MSE. The Contract contained
the following arbitration clause:
8. Arbitration and Equitable Relief.
(a) Arbitration. Except as provided in section
9(b) below, I agree that any dispute or controversy
arising out of, relating to, or concerning any
interpretation, construction, performance or breach of
this agreement, shall be settled by arbitration with a
single arbitrator to be held in Edison, New Jersey, in
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accordance with the Employment Dispute Resolution
Rules then in effect of the American Arbitration
Association. The arbitrator may grant injunctions or
other relief in such dispute or controversy. The
decision of the arbitrator shall be final, conclusive and
binding on the parties to the arbitration. Judgment may
be entered on the arbitrator's decision in any court
having jurisdiction. The company and I shall each pay
one-half of the costs and expenses of such arbitration,
and each of us will separately pay our counsel fees and
expenses.
This arbitration clause constitutes a waiver of my
right to a jury trial and relates to the resolution of all
disputes relating to all aspects of the
employer/employee relationship . . . including, but not
limited to, the following claims:
i. Any and all claims for wrongful discharge of
employment; breach of contract, both express
and implied; breach of covenant of good faith and
fair dealing, both express and implied; negligent
or intentional infliction of emotional distress;
negligent or intentional misrepresentation;
negligent or intentional interference with
contract or prospective economic advantage; and
defamation;
ii. Any and all claims for violation of any
Federal, State or Municipal Statute, including,
but not limited to, Title II of the Civil Rights Act
of 1964, the Civil Rights Act of 1991, the Age
Discrimination Act in Employment Act of 1967,
the Americans with Disabilities Act of 1990 and
the Fair Labor Standards Act; [and]
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iii. Any and all claims arising out of any other
laws and regulations relating to employment or
employment discrimination.
(b) Equitable remedies. The parties may apply
to any court of competent jurisdiction for a temporary
restraining order, preliminary injunction or other
interim or conservatory relief, as necessary, without
breach of the arbitration agreement and without
abridgement of the powers of the arbitrator.
(c) Consideration. I understand that each
party's promise to resolve claims by arbitration in
accordance with the provisions of this agreement,
rather than through the courts, is consideration for the
other party's like promise. I further understand that my
employment or continued employment is consideration
for my promise to arbitrate claims.
The Contract also included two provisions regarding MSE's successors
and assigns. The introductory paragraph stated: "As a condition of my
employment with [MSE], their parents, subsidiaries, affiliates, successors or
assigns (together the 'Company'), and in consideration of my employment with
the Company, I agree to the following . . . ." The Contract also included the
following "General Provision[]": "Successors and Assigns. This Agreement
will be binding upon my heirs, executors, administrators and other legal
representatives and will be for the benefit of the Company, its successors, and
its assigns."
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Notably, MSE did not sign the Contract, leaving its signature line blank.
Although plaintiff acknowledges that he signed the Contract, he certified that no
one: (a) "told [him he] was signing an arbitration agreement"; (b) "explained
the [Contract] to [him]"; (c) "ever advised [him] that [he] could bring the
[Contract] home to review it"; (d) "told [him] that [he] could negotiate anything
in the [Contract]"; (e) "provided [him] a fully-executed copy of the [Contract]
signed by MSE, so it was [his] understanding that it never went into effect"; or
(f) told him that "[w]hen ADT, LLC became [his] employer, . . . the [Contract]
was in effect or that it was assigned to ADT."
In August 2017, ADT purchased the assets of MSE. 1 As part of asset
purchase agreement, MSE employees became ADT employees. Plaintiff's
position remained the same, and ADT did not approach plaintiff about signing
a new employment contract.
Defendant Mark Milam was Vice President of ADT and plaintiff's direct
supervisor. Plaintiff alleges that in mid-August 2019, Milam met with plaintiff
to discuss several business accounts. During the meeting, plaintiff voiced his
concern that ADT was not submitting the payroll reports required by the New
Jersey Prevailing Wage Act, N.J.S.A. 34:11-56.25 to -56.47. Plaintiff also told
1
The asset purchase agreement is not part of the record.
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Milam that he had previously raised this issue with ADT's Controller, Katie
Ortiz.
On August 21, 2019, Milam informed plaintiff that his last day at ADT
would be August 23, 2019. During a subsequent phone conversation, Milam
extended plaintiff's employment by one week "but refused to give a reason for
terminating" him.
On March 30, 2020, plaintiff commenced this action against ADT, Inc.
and Milam, alleging they violated CEPA. On June 24, 2020, plaintiff filed an
amended complaint, naming ADT, LLC in place of ADT, Inc. as a defendant.
Plaintiff alleged he was fired by ADT "in retaliation for blowing the whistle on
its legal violations." He claimed that his firing was "causally linked" to his
"protected activities of disclosing, refusing to participate in, and/or objectin g to
[d]efendants' illegal activities on the County of Sussex account." Plaintiff
demanded a jury trial and sought compensatory damages, punitive damages,
attorney's fees, and costs.
On July 13, 2020, MSE assigned the Contract to ADT. One day later, in
lieu of answering the amended complaint, defendants moved to compel
arbitration and to dismiss plaintiff's amended complaint pursuant to Rule 4:6-
2(e). Defendants argued the Law Division was not the proper forum to
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adjudicate plaintiff's claims because the arbitration provisions of the Contract
were valid and enforceable, and plaintiff's CEPA claim fell within the
enumerated causes of action the parties agreed to arbitrate. They further argued
that the Contract contained a delegation clause, which required "any dispute or
controversy arising out of, relating to, or concerning any interpretation,
construction, performance, or breach of [the Contract]" to be "settled by
arbitration." They claimed that any issue regarding arbitrability of plaintiff's
claims must also be decided by the arbitrator.
Defendants contend that MSE's signature was not necessary to bind the
parties to arbitration, citing an unpublished federal district court opinion for the
proposition that an employer need not sign an arbitration contract to bind an
employee to arbitration even where there is a signature line. In addition,
defendants contended that only plaintiff's signature was needed since he was the
party to be charged under the contract, citing Leodori v. CIGNA Corp., 175 N.J.
293, 304-05 (2003).
On September 11, 2020, the judge granted defendants' motion in its
entirety. The amended complaint was dismissed with prejudice and plaintiff
was compelled to arbitrate his "legal claims against defendants in accordance
with the terms of [the Contract]."
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In his written statement of reasons, the judge first found the Contract
enforceable despite MSE's missing signature, citing Byrne and stating, "when
both parties have agreed to be bound by arbitration and adequate consideration
exists, the arbitration agreement should be enforced." Second, the judge found
plaintiff knowingly agreed to arbitrate various claims and that this requirement
"does not create obligations that [plaintiff] was not asked to agree to from the
beginning of the relationship." Third, the judge found ADT was the assignee of
the Contract, which permits non-signatories to enforce arbitration agreement
under the contract principles of assumption, assignment, and succession.
Fourth, the judge found that although the arbitration clause "does not
specifically reference CEPA as an arbitrable claim, our [c]ourts have
consistently ruled that despite the omission of a specific statutory claim, the
arbitration provision will still be enforceable when" it contains an "any and all
claims" catch-all provision. Fifth, the judge found the cost-sharing provision,
which required plaintiff to pay one-half of the costs of arbitration, was moot
because the American Arbitration Association (AAA) limits a plaintiff's
financial burden to paying the initial filing fee. It also found this provision was
severable. This appeal followed.
Plaintiff raises the following points for our consideration:
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I. THERE IS NO MUTUAL ASSENT BECAUSE
PLAINTIFF'S PRIOR EMPLOYER NEVER SIGNED
OR ASSIGNED THE ARBITRATION AGREEMENT
BEFORE THIS ACTION.
A. The Agreement Fails Because it is Not
Mutually Executed.
B. The Post-Litigation Assignment Proves Lack
of Mutual Assent.
II. PLAINTIFF DID NOT KNOWINGLY AND
VOLUNTARILY AGREE TO WAIVE HIS CEPA
RIGHT TO A JURY TRIAL.
III. THE ARBITRATION AGREEMENT IS
UNCONSCIONABLE.
II.
Rule 4:6-2(e) permits dismissal of a complaint that fails to state a claim
upon which relief can be granted. When deciding a Rule 4:6-2(e) motion, "all
facts alleged in the complaint and legitimate inferences drawn therefrom are
deemed admitted." Rieder v. State Dept. of Transp., 221 N.J. Super. 547, 552
(App. Div. 1987) (quoting Smith v. City of Newark, 136 N.J. Super. 107, 112
(App. Div. 1975)). "On appeal, we apply a plenary standard of review from a
trial court's decision to grant a motion to dismiss pursuant to Rule 4:6-2(e)."
Rezem Fam. Assocs., LP v. Borough of Millstone, 423 N.J. Super. 103, 114
A-0172-20
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(App. Div. 2011) (citing Sickles v. Cabot Corp., 379 N.J. Super. 100, 106 (App.
Div. 2005)). "We owe no deference to the trial court's conclusions." Ibid.
"Our standard of review of the validity of an arbitration agreement, like
any contract, is de novo." Morgan v. Sandford Brown Inst., 225 N.J. 289, 302
(2016) (citing Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 446 (2014)).
We likewise "apply a de novo standard of review when determining the
enforceability of . . . arbitration agreements." Goffe v. Foulke Mgmt. Corp.,
238 N.J. 191, 207 (2019) (citing Hirsch v. Amper Fin. Servs., LLC, 215 N.J.
174, 186 (2013)). Reviewing courts "owe no deference" to a trial court's
"interpretative analysis." Morgan, 225 N.J. 303 (citing Atalese, 219 N.J. at 445-
46). "We therefore construe the arbitration provision with fresh eyes." Ibid.
(citing Kieffer v. Best Buy, 205 N.J. 213, 223 (2011)).
The "interpretation of an arbitration clause is a matter of contractual
construction . . . ." NAACP of Camden Cnty. E. v. Foulke Mgmt. Corp., 421 N.J. Super. 404, 430 (App. Div. 2011) (quoting Coast Auto. Grp., Ltd. v.
Withum Smith & Brown, 413 N.J. Super. 363, 369 (App. Div. 2010)). "State
law governs not only whether the parties formed a contract to arbitrate their
disputes, but also whether the parties entered an agreement to delegate the issue
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of arbitrability to an arbitrator." Morgan, 225 N.J. at 303 (citing First Options
of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995)).
To be enforceable, an agreement requires mutual assent. Id. at 308 (citing
Atalese, 219 N.J. at 442); accord Barr v. Bishop Rosen & Co., Inc., 442 N.J.
Super. 599, 605-06 (App. Div. 2015) ("An agreement to arbitrate 'must be the
product of mutual assent, as determined under customary principles of contract
law.'" (quoting Atalese, 219 N.J. at 442)). "Mutual assent requires that the
parties have an understanding of the terms to which they have agreed" or, in
other words, a "meeting of the minds." Atalese, 219 N.J. at 442 (quoting Morton
v. 4 Orchard Land Tr., 180 N.J. 118, 120 (2004)).
"The Federal Arbitration Act (FAA), 9 [U.S.C.] §§ 1-16, and the nearly
identical New Jersey Arbitration Act, N.J.S.A. 2A:23B-1 to -32, enunciate
federal and state policies favoring arbitration." Atalese, 219 N.J. at 440 (citing
AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011)). "[O]ur
jurisprudence has recognized arbitration as a favored method for resolving
disputes." Garfinkel v. Morristown Obstetrics & Gynecology Assocs., P.A., 168 N.J. 124, 131 (2001). We therefore review orders compelling or denying
arbitration "mindful of the strong preference to enforce arbitration agreements,
both at the state and federal level." Hirsch, 215 N.J. at 186. "However, the
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preference for arbitration 'is not without limits.'" Id. at 187 (quoting Garfinkel,
168 N.J. at 132).
"In accordance with the FAA '[judges] must place arbitration agreements
on an equal footing with other contracts . . . and enforce them according to their
terms.'" Flanzman v. Jenny Craig, Inc., 244 N.J. 119, 132 (2020) (second
alteration in original) (quoting Concepcion, 563 U.S. at 339). A written
agreement to submit to arbitration "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. § 2; see Martindale v. Sandvik, 173 N.J. 76, 84 (2002).
Despite the national policy favoring arbitration, "the law presumes that a
court, not an arbitrator, decides any issue concerning arbitrability." Morgan,
225 N.J. at 304 (citing First Options, 514 U.S. at 944). "[T]o overcome the
judicial-resolution presumption, there must be 'clea[r] and unmistakabl[e]'
evidence 'that the parties agreed to arbitrate arbitrability.'" Ibid. (alterations in
original) (quoting First Options, 514 U.S. at 944). "Silence or ambiguity in an
agreement does not overcome the presumption that a court decides arbitrability."
Ibid. (citing First Options, 514 U.S. at 944).
The agreement to arbitrate may include a waiver of statutory remedies in
favor of arbitration. Garfinkel, 168 N.J. at 131. An otherwise valid agreement
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to arbitrate claims arising under CEPA is enforceable. Young v. Prudential Ins.
Co. of Am., 297 N.J. Super. 605, 619 (App. Div. 1997). There is "no prescribed
set of words [that] must be included . . . to accomplish a waiver of rights."
Atalese, 219 N.J. at 447. The Atalese Court emphasized that
when a contract contains a waiver of rights—whether
in an arbitration or other clause—the waiver "must be
clearly and unmistakably established." Thus, a "clause
depriving a citizen of access to the courts should clearly
state its purpose." We have repeatedly stated that "[t]he
point is to assure that the parties know that in electing
arbitration as the exclusive remedy, they are waiving
their time-honored right to sue."
[Id. at 444 (alterations in original) (citations omitted)
(quoting Garfinkel, 168 N.J. at 132).]
"In evaluating the existence of an agreement to arbitrate, a court
'consider[s] the contractual terms, the surrounding circumstances, and the
purpose of the contract.'" Hirsch, 215 N.J. at 188 (alteration in original)
(quoting Marchak v. Claridge Commons, Inc., 134 N.J. 275, 282 (1993)).
However, "[a] party who enters into a contract in writing, without any fraud or
imposition being practiced upon him, is conclusively presumed to understand
and assent to its terms and legal effect." Roman v. Bergen Logistics, LLC, 456 N.J. Super. 157, 174 (App. Div. 2018) (alteration in original) (quoting Rudbart
v. N. Jersey Dist. Water Supply Comm'n, 127 N.J. 344, 353 (1992)).
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Accordingly, "[a]n employee who signs but claims to not understand an
arbitration agreement will not be relieved from an arbitration agreement on those
grounds alone." Ibid.
Plaintiff does not contend he did not sign or assent to the arbitration
agreement. See Leodori, 175 N.J. at 303 (finding an "explicit, affirmative
agreement that unmistakably reflects the employee's assent" is sufficient to bind
an employee to arbitration). Instead, he contends on appeal that MSE's failure
to sign the arbitration agreement makes it unenforceable because there was no
meeting of the minds between the parties. In response, defendants rely upon
unpublished cases2 for the proposition that an employer's signature on an
arbitration agreement is not necessary.
Contract formation issues relating to an arbitration agreement containing
a delegation clause are properly resolved by the trial court, not an arbitrator.
See Sandvik AB v. Advent Int'l Corp., 220 F.3d 99, 107 (3d Cir. 2000) (holding
a court must examine a person's signatory authority because agreement to a
contract "is a necessary prerequisite to the court's fulfilling its role of
determining whether the dispute is one for an arbitrator to decide under the terms
of the arbitration agreement"); see also Spahr v. Secco, 330 F.3d 1266, 1272
2 See R. 1:36-3 (stating that unpublished opinions are not binding on this court).
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(10th Cir. 2003) (holding a court must decide whether a party had sufficient
mental capacity to enter into a contract containing an arbitration provision);
Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 297 (2010) ("To
satisfy itself that [an arbitration] agreement exists, the court must resolve any
issue that calls into question the formation or applicability of the specific
arbitration clause that a party seeks to have the court enforce."). Consistent with
these principles, a trial court should decide a dispute as to whether a party
assented to the terms of an arbitration contract, including a provision delegating
disputes over arbitrability to the arbitrator.
III.
Guided by these legal principles, we conclude that unresolved controlling
facts precluded the dismissal of plaintiff's complaint under Rule 4:6-2(e).
Accordingly, we vacate the order dismissing plaintiff's amended complaint and
compelling arbitration.
Notably, the Contract does not expressly state that plaintiff waived his
right to sue in court. Rather, it states that the "arbitration clause constitutes a
waiver of [his] right to a jury trial" and that he "expressly consent[s] to the
personal jurisdiction of the state and federal courts located in New Jersey for
any lawsuit arising from or related to [the Contract]. . . ."
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Defendants argue that the first sentence and paragraph 9(d) of the Contract
is controlling. The first sentence states: "As a condition of my employment
with [MSE], their . . . successors or assigns (together the 'Company'), and in
consideration of my employment with the Company and my receipt of
compensation now and hereafter paid to me by [the] Company, I agree to the
following" terms of the Contract. In turn, paragraph 9(d) states: "Successors
and Assigns. This [Contract] will be binding upon my heirs, executors,
administrators and other legal representatives and will be for the benefit of the
Company, its successors, and its assigns." We are unpersuaded given the limited
record presented to the trial court and this court.
Viewing the facts in a light most favorable to the non-moving plaintiff,
the motion record demonstrates that: (a) MSE did not sign the Contract; (b)
MSE did not provide plaintiff with an executed copy of the Contract; and (c)
when ADT became plaintiff's employer, neither MSE nor ADT advised plaintiff
that the Contract had been assigned to ADT.
Defendants rely on unpublished and out-of-state opinions in support of
the proposition that an arbitration agreement does not necessarily have to be
signed by the employer. However, we are bound by Rule 1:36-3, which states:
"No unpublished opinion shall constitute precedent or be binding upon any
A-0172-20
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court." Unreported decisions "serve no precedential value, and cannot reliably
be considered part of our common law." Trinity Cemetery v. Wall Twp., 170 N.J. 39, 48 (2001) (Verniero, J., concurring) (citing R. 1:36-3). Likewise,
published opinions from other jurisdictions are not binding on the courts of this
state. Lewis v. Harris, 188 N.J. 415, 436 (2006); In re Adoption of N.J.A.C.
13:38-1.3(f), 341 N.J. Super. 536, 546 (App. Div. 2001).
The trial court found both parties agreed to be bound by the Contract,
plaintiff accepted the employment offer, and worked as Vice President of
Business Development for approximately three years, thereby providing
adequate consideration for the Contract. Relying on unpublished and other non-
binding opinions, the trial court found the Contract was mutually agreed upon
and enforceable against both parties. Whether MSE intended to waive its right
to a jury trial or to contest plaintiff's claims in court is a fact-sensitive analysis.
Those facts are not part of the record. 3 As such, vacating the order and
remanding is required to better understand whether MSE intended to be bound
by the Contract as reflected by discovery.
3
We also note that by not signing the Contract, MSE ostensibly created a win-
win situation depending on the adventitiousness of arbitration—MSE or its
assignee could either disavow the arbitration clause if it preferred a jury trial or
non-jury court proceedings, claiming it's not bound because of its omitted
signature, or, as here, compel arbitration because arbitration suited it.
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MSE subsequently entered into an asset purchase agreement with ADT,
which is also not part of the record. Consequently, the terms of the asset
purchase agreement are unknown. This missing information is vital to deciding
the issues in this appeal. Without knowing the terms of the asset purchase
agreement, we are unable to determine if MSE assigned its rights under the
Contract to ADT or whether ADT assumed MSE's obligations under the
Contract. As a result, defendants did not establish that ADT had the right,
through assignment by MSE, to enforce the arbitration clause against plaintiff.
Defendants' reliance on unpublished case law discussing concepts of the
assignment of rights and the assumption of obligations through merger is also
misplaced. Unlike mergers, an asset purchase agreement does not necessarily
involve the assumption of obligations or the assignment of contractual rights.
See 106 W. Broadway Assocs., LP v. 1 Mem. Drive, LLC, ___ N.J. Super. ___,
___ (App. Div. 2021) (slip op. at 14-16) (recognizing the general principle that
"a corporation purchasing only the assets of another corporation [is] not liable
for the debts and liabilities of the selling corporation" and discussing the four
fact-sensitive exceptions to this principle (quoting Stuart L. Pachman, Title 14A
Corporations, cmt. 5(b)(1) on N.J.S.A. 14A:10- (2021))). More particularly, a
successor employer does not automatically assume its predecessor's
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employment contracts in an asset purchase. See In re Allegheny Health, Educ.
& Rsch. Found., 383 F.3d 169, 179 (3d Cir. 2004) (stating that "a successor
employer is not automatically bound by its predecessor's collective bargaining
agreements").
Further, the subsequent July 13, 2020 assignment of the Contract to ADT
does not militate in defendants' favor. The assignment agreement came long
after ADT purchased the assets of MSE in August 2017. It also came more than
ten months after plaintiff's whistle blowing and alleged retaliatory termination.
Most notably, it came more than three months after plaintiff filed this action and
just one day before defendants filed their motion to dismiss. While defendants
attempt to marginalize the import of the assignment agreement, referring to it as
a mere "belt and suspenders" approach, we view the decision to enter into the
assignment agreement as at least circumstantial evidence that MSE and ADT
did not believe the Contract had been assigned to ADT.
The trial court's finding that ADT is the assignee of the Contract is not
supported by the limited record. Analysis of the terms of the asset purchase
agreement and the reason MSE subsequently assigned the Contact is required.
To that end, related discovery is also required.
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Because these threshold issues are presumably decided by the court, rather
than an arbitrator, and that presumption has not been overcome by clear and
unmistakable evidence, we are constrained to vacate the order dismissing
plaintiff's amended complaint and compelling him to arbitrate and remand for
further proceedings. See Morgan, 225 N.J. at 305 (discussing the need for "clear
and unmistakable language evidencing an agreement to delegate arbitrability ").
Plaintiff also argues that the Contract is unconscionable because it
requires plaintiff to pay one-half of the costs of arbitration. The judge found
that argument moot because AAA rules limit plaintiff's financial burden to
paying the initial filing fee. The judge also found the clause unconscionable but
severable. The Contract contains a severability clause, which states: "If one or
more of the provisions in this [Contract] are deemed void by law, then the
remaining provisions will continue in full force and effect." "[I]f a contract
contains an illegal provision, if such provision is severable [we] will enforce the
remainder of the contract after excising the illegal position." Roman, 456 N.J.
Super. at 170 (alterations in original) (quoting Naseef v. Cord, Inc., 90 N.J.
Super. 135, 143 (App. Div.), aff'd, 48 N.J. 317 (1966)). We are satisfied that
the unenforceable cost-sharing provision is severable and must be severed from
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the Contract. See id. at 171 (severing an unenforceable prohibition against the
recovery of punitive damages).
Finally, we note that the Contract also provides that each party "will
separately pay [their] counsel fees and expenses." Measured against the
standard employed by the Court in Rodriguez v. Raymours Furniture Co., 225 N.J. 343, 363-66 (2016),4 we are persuaded that the Contract's attempted waiver
of the right to seek an award of reasonable counsel fees and costs under N.J.S.A.
34:19-13(d) is unenforceable because it violates the public policy embodied in
CEPA. See Roman, 456 N.J. Super. at 167 (deeming an arbitration agreement's
bar of punitive damages under the New Jersey Law against Discrimination,
N.J.S.A. 10:5-1 to -50, unenforceable). We are satisfied that the unenforceable
waiver of the statutory right of a prevailing plaintiff to recover reasonable
counsel fees and costs under CEPA is severable and must be severed from the
Contract.
IV.
In summary, material facts on the threshold issues of contract formation,
assignment, assumption, and resulting enforceability are disputed and cannot be
4
Rodriguez involved a claim under the New Jersey Law Against
Discrimination, N.J.S.A. 10:5-1 to -42. Its reasoning applies with equal force
to recovery of reasonable counsel fees and costs under CEPA.
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resolved on this limited record. We therefore vacate the September 11, 2020
order and remand for further proceedings. The remand court shall conduct a
management conference within thirty days. We leave it to the sound discretion
of the trial court to determine the scope and timing of discovery to be afforded
to the parties related to the threshold issues.
Vacated and remanded for further proceedings consistent with this
opinion. We do not retain jurisdiction.
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