In Dugan v. Best Buy Co., Inc. (decided on August 11, 2017), the Appellate Division held that an employee’s continued employment may not be sufficient to establish the employee’s assent to an employer’s arbitration policy.  As set forth below, this decision has important ramifications for both employers and employees in the State of New Jersey.

Kevin Dugan served as Best Buy’s General Manager.  Approximately six years after Mr. Dugan commenced employment, Best Buy introduced its employees to an arbitration policy via an eLearning program.  Mr. Dugan clicked “I acknowledge” on the last screen of the program, but did not read the policy.   Approximately three weeks later, Best Buy terminated Mr. Dugan’s employment.  He then filed a lawsuit against Best Buy alleging age discrimination in violation of the New Jersey Law Against Discrimination.   In response, Best Buy filed a motion to compel arbitration and dismiss Mr. Dugan’s lawsuit, which was granted by the trial court.  Mr. Dugan then appealed to the Appellate Division, which reversed the trial court’s ruling and remanded the action back to the trial court.

The Appellate Division reversed the trial court’s decision for a variety of reasons.  First and foremost, the Appellate Division found that the policy did not express that employees were “waiving” their right to sue.  In addition, the Appellate Division found that there was no evidence that the employee assented or agreed to the terms of the policy.  Specifically, the Appellate Division determined that “the fact that plaintiff knew of the policy, and his status as a general manager who was tasked with having other employees complete the eLearning module, does not establish his assent to the policy.”  Furthermore, the Appellate Division found that Mr. Dugan’s brief period of employment with Best Buy following the effective date of the policy (three weeks) “did not meet the high standard required to establish an unambiguous waiver of plaintiff’s right to sue.”  Accordingly, the Appellate Division held that “no agreement to arbitrate was reached.”

From an employee’s perspective, this is a positive opinion because it gives employees further ammunition to argue arbitration policies unfairly erode and waive their right to a jury trial in employment law disputes.  From an employer’s perspective, the opinion provides guidance and demonstrates the perils of rolling out unclear electronic arbitration policies to their employees.

If you have any questions about arbitration policies and/or the rights of employees under the New Jersey Law Against Discrimination, please contact the Law Office of Frank A. Custode, LLC.