A Capehart Scatchard Blog

Is Your Employee’s Waiver of a Statutory or Constitutional Right Enforceable?

By on March 23, 2017 in Employee Rights with 0 Comments

In the Winter of 2016, the New Jersey Appellate Division made a significant change to employment law in New Jersey when the Court held that without a clear and unambiguous waiver of the right to sue, an employee cannot be forced to arbitrate employment claims (meaning that generally, arbitration agreements found in employee handbooks cannot be enforced).  On February 6, 2017, the Appellate Division once again made a significant ruling regarding employment law and an employee’s waiver of a right to a jury trial.  Specifically, the Appellate Division held that a waiver of a right, in this case a waiver of a right to a jury trial, must be clearly and unambiguously established and there must be a mutual understanding of the terms of the waiver.  Although no specific language is required to accomplish the waiver of the jury trial, the employee must have full knowledge of his or her legal rights and an intent to surrender those rights.

The case, Noren v. Heartland Payment Systems, Inc., Docket No. A-2651-13T3 (App. Div. Feb. 6, 2017), involves Greg Noren, an employee with Heartland Payment Systems employed as a Relationship Manager from April 1998 through June 2005.  In July 2002, Noren signed an employment agreement which contained a provision waiving a right to a jury trial.  Specifically, the provision stated:

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.

In January 2003, Noren signed another agreement, superseding all prior agreements.  However, this agreement contained an identical jury waiver provision and indicated that his employment was at-will.  In June 2006, Noren’s employment was terminated.  Although Noren demanded a jury trial, the demand was denied by the trial court as a result of the jury waiver provision.

In evaluating the jury waiver provision of the agreement, the Appellate Division noted that a person’s right to a trial by jury is guaranteed by the New Jersey Constitution and in the case of a CEPA claim (as well as other statutory claims such as claims under the New Jersey Law Against Discrimination), explicitly established by statute.  Therefore, the Appellate Division was required to determine whether the jury waiver provision was a “legally enforceable waiver of this constitutionally and statutorily guaranteed right. . . .”

The Court explained that when a contract contains a provision waiving a right, the waiver must be “clearly and unmistakably established.”  The Court went on to explain that a waiver “must reflect that [the party] has agreed clearly and unambiguously to its terms,” and that there cannot be a clear and unambiguous waiver “without a ‘mutual understanding’ of the terms of the waiver.”  A person waiving his or her rights must clearly understand his or her legal rights and must have a clear and unambiguous intent to give up those rights.

As was noted above, the Court indicated that there is no specific or required language for a waiver of rights provision.  However, the Court did explain that even though a specific statutory or constitutional right does not need to be identified in the waiver, the provision must still contain clear and plain language that is understandable to the average person that a statutory and/or constitutional right is being waived.  The Court stated:

In short, to effect a waiver, the language must clearly explain (1) what right is being surrendered and (2) the nature of the claims covered by the waiver.

The Court held that in the Noren case, the jury waiver provision did not identify or reference a waiver of a right to a jury trial in regard to statutory claims and did not extend the scope of claims as including all claims relating to the employee’s employment.  As a result, the jury waiver provision contained in Noren’s agreement failed to “clearly and unambiguously explain that the right to a jury trial” included a waiver of a jury trial as to a CEPA claim.  The Appellate Division remanded the case back to the trial court for a jury trial.

What does this case mean for you as an employer?  This means that any employee waiver (not just a waiver of a jury trial) of a constitutional or statutory right must be clear and unambiguous and must reflect that the employee has agreed clearly and unambiguously agreed to the terms of the waiver.  The waiver must be written in plain language that an average person can understand.  If you have employee contracts or employee manuals that contain waivers of constitutional and/or statutory rights, now is an appropriate time to undergo a review of those provisions to bring them into compliance with New Jersey law.

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