Ambiguous Jury Waiver in Employment Agreement Unenforceable in Whistleblower Case

In Noren v. Heartland Payment Systems, Inc., Docket No. A-2651-13T3, __N.J. Super. __ (Feb. 6, 2017), the New Jersey Appellate Division held that a provision in an employment agreement which provided that the employee “irrevocably waive[s] any right to trial by jury in any suit, action or proceeding under, in connection with or to enforce this Agreement” was unenforceable as to a former employee’s statutory employment claims.

Following his termination of employment, Noren sued his former employer alleging a violation of the Conscientious Employee Protection Act (“CEPA”), New Jersey’s employment whistleblower law. The lower court denied Noren’s demand for a jury trial based on the jury-waiver provision in his employment agreement and dismissed Plaintiff’s complaint after a lengthy bench trial. Plaintiff appealed, challenging the application of the jury waiver provision to his CEPA claim.

On appeal, the court focused upon the fact that CEPA and the New Jersey Law Against Discrimination (“NJLAD”) expressly guarantee a right to a jury trial. Given the statutorily guaranteed right, the Appellate Court determined that in order for the waiver to be effective it must “clearly explain (1) what right is being surrendered and (2) the nature of the claims covered by the waiver.” The court found that the jury waiver at issue was unenforceable because it did not make any “reference to statutory claims and did not define the scope of the claims as including all claims relating to Noren’s employment.”

The court noted that while it is preferable for a waiver of rights provision to explicitly provide that the employee is waiving his or her statutorily guaranteed rights, it is possible that a waiver provision would be enforceable without such a specific reference so long as the language is clear, unambiguous and sufficiently broad. The court relied upon its earlier decision in Martindale v. Sandvik, Inc., 173 N.J. 76 (2002), which upheld a mandatory arbitration provision which provided for a waiver of any action or proceeding relating to an individual’s employment, or the termination thereof.

In light of the Noren decision, any jury waiver provision should be reviewed by an attorney to determine whether its language is unambiguous and therefore enforceable.