NJ Appellate Division Holds that Continued Employment Demonstrates Consent to an Employer’s Mandatory Arbitration Policy

On July 23, 2015, in Jaworski v. Ernst & Young, a three-judge Appellate Division panels upheld language in Ernst & Young’s employment policy that states that employees were deemed to have accepted a mandatory arbitration policy by remaining company employees. As a result, three former employees of the accounting giant who allege to have been wrongfully terminated on the basis of age discrimination had their claims sent to arbitration.

In 2002, Ernst & Young adopted what it referred to as the “Common Ground Program” as a formal employment policy (the “ADR” policy). The ADR policy requires all employment disputes to be first submitted to non-binding mediation, and thereafter arbitrated in the event an amicable resolution was not possible. The ADR policy specifically prohibited employees from filing lawsuits.

Moreover, Ernst & Young retained the right to unilaterally alter or revise the ADR policy, and did so several times following its adoption in 2002. When initially adopting and also when revising unilaterally, Ernst & Young expressly advised its employees that they will be deemed to have consented to the policy and/or revisions thereto by voluntarily continuing their employment for a certain period of time post-adoption.

In concluding that the ADR policy was “valid and enforceable,” Judge Jerome St. John noted that the employees were provided notice of changes to the ADR policy by electronic distribution and the ADR policy stated that consent was given by continued employment; thus, remaining employed with the company “evinced an unmistakable indication” that the employee affirmatively has agreed to arbitrate their claims pursuant to the ADR policy.

As costs and risks of employment-related claims continue to grow, adopting a mandatory arbitration policy is a risk management tool that employers—including health care providers and health care related businesses—should carefully analyze. And health care employers considering adopting or revising a mandatory arbitration policy should consult with the health care transactional lawyers at Buttaci Leardi & Werner, LLC, who are well-versed in both drafting and enforcing these policies.

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Posted in: Alternative Dispute Resolution, Compliance, Healthcare Contracts, Healthcare Transactions, Risk Management