Schall and Barasch LLC

A VICTORY AGAINST FORCED ARBITRATION, a/k/a Another Kind of “Black Friday” for Best Buy

A VICTORY AGAINST FORCED ARBITRATION, a/k/a Another Kind of “Black Friday” for Best Buy
Richard Schall
December 5, 2017

Sexually harassed at work? Sorry, you can’t take your case to court and have it heard by a jury. Terminated from your job because the Company thought you “too old” to adapt to new technology? Again, too bad. You can’t take your discrimination case to court and present it to a jury for their decision.

Unfortunately, as a result of large corporations forcing “agreements” on their employees requiring their cases to be heard only in arbitration – a secret, private proceeding, heard by a single arbitrator, not a jury of peers – this is becoming the reality for more and more employees here in New Jersey and around the country.

A recent study conducted on behalf of the Employee Rights Advocacy Institute for Law and Policy, found the following:

The ability to access courts is disappearing for workers in America because arbitration clauses have permeated the majority of the leading companies in America. Personal injury claims, wage claims, civil rights claims, sexual assault claims, and other claims involving the workplace and vulnerable workers may never be heard in a public court, with broad procedural protections for employees, because of the use of arbitration clauses. Further, through the use of class waivers, it is impossible for employees to join together in a class or collective action against their more powerful and far better-resourced employers. Access to courts has become increasingly more difficult for workers, and the vast majority of America’s top companies have tried to block workers from entering the courthouse door.

The key findings of this study are as follows:

• 80% of the companies in the Fortune 100, including subsidiaries or related affiliates, have used arbitration agreements in connection with workplace-related disputes since 2010.

• Of the 80 companies with arbitration agreements in the workplace, 39 have used arbitration clauses containing class waivers.

Here at Schall & Barasch, we are happy to report our recent victory upending Best Buy’s attempt to force arbitration down the throats of its employees. In late February, 2016, Best Buy informed all of its employees that as of March 15, 2016, they would be bound to arbitrate all disputes with the Company, including claims of employment discrimination. As many companies do, Best Buy tried to sell the arbitration policy to their employees as a better way to resolve claims than by going to court as part of the Company’s commitment to creating a “welcome, inclusive environment where employees come to work every day to do what they enjoy doing.”

But the Company’s sales pitch came with a “kicker.” As an employee, you had no choice: the Company was considering you bound by the arbitration policy whether you agreed to it or not.

Three weeks after implementing its forced arbitration policy, Best Buy fired our client, Kevin Dugan, one of its store managers, after 16 years of employment. As soon as we filed suit in state court in New Jersey, the Company attempted to get the court to dismiss the case and order Mr. Dugan to arbitration. We argued that, under New Jersey law, an employer cannnot bind its employees to an arbitration policy without getting some indication from them of their agreement to be bound –a choice that Best Buy did not give its employees.

After the trial court agreed with Best Buy and ordered the case to arbitration, we appealed that decision to the Appellate Division of the New Jersey Superior Court, where a two-judge panel found Best Buy’s arbitration policy unenforceable on the ground that the Company had never obtained any agreement from its employees to be covered by the policy.

In rejecting Best Buy’s argument that by “continuing their employment” its employees had indicated their agreement to be bound by the policy, one of the Appellate Division judge’s wrote as follows:

Plaintiff, by remaining employed for three weeks after [the policy’s] effective date did not indicate his assent to the policy; employment for that brief period does not establish an unambiguous waiver of plaintiff’s right to sue. . . . The policy was offered on a take-it-or-leave-it basis. . . . Plaintiff had worked for defendant for almost sixteen years. The choice given by defendant to ‘leave it’ if an employee did not agree with the policy amounted to no choice at all. It is unreasonable to expect an established employee to walk away from a career, without any prospects, when an employer unilaterally presents a new agreement.”
The second judge on the Appellate Division panel likewise found grounds to strike down Best Buy’s arbitration policy, finding that the Company had failed to ever make clear to its employees that by continuing their employment they had “agreed” to be bound by the arbitration policy, and that the Company had instead stated only that it was “considering” their employees to be bound, whether they agreed with the policy or not.

Best Buy, unwilling to live with the decision of the Appellate Division, sought to review of the decision with the New Jersey Supreme Court. On Friday, November 17, 2016 – one week before the actual “Black Friday,” the Supreme Court turned down Best Buy’s request for review. So, Best Buy’s arbitration policy has been found void and unenforceable by the New Jersey courts, and Mr. Dugan, along with all Best Buy employees in the State, is now free to pursue his case in court and have it decided by a jury of his peers.

The full study can be downloaded at http://employeerightsadvocacy.org/publications/widespread-use-of-workplace-arbitration/.


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* In every year since 2014, the law firm of Schall & Barasch has been included in the Tier 1 list of best law firms in New Jersey practicing in the field of employment law on behalf of individuals. This list is compiled by U.S. News & World Report. A description of the selection methodology can be found at www.bestlawfirms.usnews.com/methodology.aspx.

** The methodology for the Avvo ratings of Richard Schall and Patricia Barasch can be found at www.avvo.com/support/avvo_rating.

*** In every year since 2009, Richard Schall has been chosen to be included on the list of Best Lawyers in New Jersey practicing in the field of labor and employment law. The Best Lawyers list is issued by Best Lawyers International. A description of the selection methodology can be found at www.bestlawyers.com/about/MethodologyBasic.aspx.

**** In every year since 2005, both Patricia Barasch and Richard Schall have been chosen to be included on the list of Super Lawyers in New Jersey practicing in the field of employment law on behalf of plaintiffs. The Super Lawyers list is issued by Thomson Reuters. A description of the selection methodology can be found at www.superlawyers.com/about/selection_process.html.

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