Are CEPA Claims Subject To Contractual Jury Waiver Provisions?

Written by Ravi Sattiraju on February 9, 2017

The Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to -14 (“CEPA”), is New Jersey’s employment whistleblower law. It protects employees from unlawful retaliation by their employers because the employee discloses or objects to unlawful, fraudulent or criminal activities or practices engaged in by the employer. The disclosures can be made directly to supervisors or to outside public bodies to be actionable.

CEPA expressly provides for the right of a jury trial by an aggrieved employee. N.J.S.A. 34:19-5 (“Upon the application of any party, a jury trial shall be directed to try the validity of any claim under” CEPA). However, as has become commonplace, employers are attempting to strip employees of such rights as filing their lawsuits with the courts and waiving the right to a jury trial by requiring their employees to sign mandatory arbitration agreements and other types of agreements that contain jury trial waiver provisions. So is this legal? Can employers strip employees of these rights? The answer, like so many other answers in the law is, “it depends”.

The New Jersey Appellate Division recently addressed this issue in a published case captioned Greg Noren v. Heartland Payment Systems, Inc., Docket No. A-2651-13T3, — N.J. Super. — (Feb. 6, 2016). Mr. Noren, the plaintiff, was an employee of the defendant-employer. In 2002, Mr. Noren signed a “Relationship Manager Agreement” (the RMA”) that contained a jury waiver provision that read:

HPS and RM irrevocably waive any right to trial by jury in any suit, action or proceeding under, in connection with or to enforce this Agreement.
Id., Slip. Op. at 3.

Mr. Noren’s employment was terminated in 2005. He subsequently filed a lawsuit against the defendant-employer alleging, among other claims, a violation of CEPA and a breach of contract cause of action. The trial court enforced the RMA’s jury waiver provision as to all of Mr. Noren’s claims, including the CEPA claim, and held a bench trial in which the trial judge ultimately dismissed Mr. Noren’s claims. Id., Slip. Op. at 3-4.

On appeal, the Appellate Division reversed the trial court’s application of the jury waiver provision to Mr. Noren’s CEPA claim but not to his breach of contract claim. The Appellate Division therefore remanded the CEPA claim to be tried by a jury. Id., Slip. Op. at 15.

In reaching its conclusion, the Appellate Division focused upon the precise wording of the RMA’s jury waiver provision and applied a well-recognized contract law principle: when a contract contains a waiver of rights the waiver must be clearly and unmistakably established. See Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 444 (2014). The Appellate Division in Noren thus reasoned and concluded:

The jury-waiver provision here applied to “any suit, action or proceeding under, in connection with or to enforce this Agreement.” (Emphasis added). It made no reference to statutory claims and did not define the scope of claims as including all claims relating to Noren’s employment … And, by using “this Agreement” as the defining threshold for all suits, actions and proceedings, the provision limits the category of disputes for which a jury trial is waived. We therefore conclude the jury-waiver provision fails to clearly and unambiguously explain that the right to a jury trial is waived as to a CEPA claim and that a remand is necessary for a jury trial on this claim.
Noren, Slip Op. at 9-10.

Thus, the Appellate Division found the RMA’s jury waiver provision unenforceable as to Mr. Noren’s CEPA claim because it did not “clearly and unambiguously” explain that it applied to statutory claims in addition to employment claims arising out of the RMA itself (such as Mr. Noren’s breach of contract claim).

However, if the RMA expressly stated that the jury waiver provision applied to statutory claims or was more broadly written as to state, for example, “all disputes relating to my employment with [defendant-employer] or the termination thereof”, the Appellate Division seems to suggest in its opinion that it would have enforced the jury waiver provision as to Mr. Noren’s CEPA claim.

This case is a great example of how words matter in the law. Before you sign any employment agreement or handbook that contains arbitration and jury waiver provisions, you should consult with an experienced employment attorney so that he or she may explain what rights you are and are not giving up. The answer is not always so clear.

At The Sattiraju Law Firm, P.C., located in Princeton, New Jersey, our attorneys are very experienced at interpreting such provisions and will competently explain to you what it all means and what rights you may be giving up. Give us a call at (609) 722-7039 for a free telephone consultation if you are handed an agreement by your employer containing such provisions. We fight for workers’ justice under a litany of employee-rights statutes.

Posted Under: New Jersey Employment Law
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