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Posts Tagged ‘appellate’

Arbitration Agreements in New Jersey Need More Details

Posted on: November 16th, 2018

By: Chris Curci

On November 13, 2018, the Superior Court of New Jersey, Appellate Division, issued an important decision holding that an arbitration agreement between the employer and employee was not enforceable. Flanzman v. Jenny Craig, Inc., Docket No. L-6238-17.  The arbitration agreement read:

Any and all claims or controversies arising out of or relating to [plaintiff’s] employment, the termination thereof, or otherwise arising between [plaintiff] and [defendant] shall, in lieu of a jury or other civil trial, be settled by final and binding arbitration. This agreement to arbitrate includes all claims whether arising in tort or contract and whether arising under statute or common law including, but not limited to, any claim of breach of contract, discrimination or harassment of any kind.

According to the Appellate Division, this agreement was unenforceable because it “failed to identify the general process for selecting an arbitration mechanism.” What exactly does that mean?

In its effort to clarify this standard, the Appellate Division stated that an employer is not required to “detail in the arbitration agreement the exact manner in which the arbitration” will proceed. However, an employer must identify the “forum” for the arbitration and clearly explain how the employee’s judicial rights to a jury trial are being replaced by the arbitration rights.

For example, the Court noted that it would be sufficient for an employer to (1) identify a forum such as the American Arbitration Association (“AAA”) or the Judicial Arbitration and Mediation Services (“JAMS”), and (2) adopt that forum’s rules and procedures. The Court opined that this would be sufficient because AAA and JAMS’s rules and procedures address numerous procedural issues, such as: (1) notification requirements, (2) how to initiate proceedings, (3) management conferences, (4) discovery, (5) the location of the hearings, (6) the number of arbitrators, (7) how to communicate with the arbitrator, (8) attendance requirements, (9) dispositive motions, (10) evidence, (11) modification of awards, (12) and applications for fees, expenses and costs.

In other words, while the arbitration agreement is not required to “detail the exact manner in which the arbitration will proceed,” an employer must specifically identify a forum such as AAA or JAMS and incorporate that forum’s rules and procedures. This allows the employee to fully understand how his or her judicial rights to a jury trial are being replaced by arbitration.

Employers should review their employee arbitration agreements to ensure their enforceability. If you need help with this or any other employment related question, Chris Curci practices Labor & Employment law in Pennsylvania and New Jersey and is a member of Freeman Mathis & Gary’s Labor and Employment Law National Practice Section. He represents employers in litigation and advises clients on all aspects of employment law. He can be reached at [email protected].

New Jersey Appellate Court Affirms Association’s Right to Enforce Code of Conduct

Posted on: October 1st, 2018

By: Mark Stephenson

The close-set nature of condominium association communities lends to the adoption of codes of conduct as an effective way to promote efficient dispute resolution and unit owner civility. Such disputes are a too-fruitful source of litigation. Recently, in Chassman v. Longview at Montville Condominium Association, the Superior Court of New Jersey, Appellate Division affirmed the right of a community association to enforce its code of conduct and approved the way in which the association did so. Docket No. A-1660-16Te, 2018 N.J. Super. Unpub. LEXIS 1325 (June 7, 2018)

Plaintiff Jacqueline Chassman lived with her son as a unit owner at the Longview condominium. On February 3, 2014, Chassman and her son were involved in an altercation with an employee of the snow removal company hired by the Association. During the altercation, the son allegedly threw a punch at the snow removal employee. Learning of the incident, the Association sent a “Cease and Desist Order, Notice of Fine” letter to Chassman, advising her that her son’s conduct was a violation of the Association’s code of conduct, resulting in a $100.00 fine.

The Association’s by-laws afforded unit owners with a dispute resolution procedure, which Chassman used to request a hearing to dispute the allegations regarding the incident. The Association’s judicial committee held a hearing and Chassman was afforded the opportunity to testify, call and cross-examine witnesses and present evidence. Based on the record evidence before it, the committee concluded that the evidence showing Chassman’s son had punched the snowplow operator was credible, the conduct violated the code of conduct and increased the fine to $150.00. The committee issued a written decision that Chassman appealed to the Association’s board, which affirmed the original decision. Chassman refused to pay the fine, causing her membership privileges to be suspended. As a result, she was unable to use the condominium’s common facilities, including its clubhouse and swimming pool.

In May 2015, Chassman filed suit against the Association, alleging, among other things, that the code of conduct was invalid, the Association’s dispute resolution procedure was unlawful, and the Board had breached its fiduciary duties owed to her as well seeking $8,500.00 in damages plus interest and costs. The trial court granted summary judgment in the Associations’ favor, holding that its actions, and those of the Board and the Committee in resolving the dispute were authorized by the by-laws. Chassman appealed. In affirming summary judgment and dismissal, the Appellate Division made clear the Association’s broad right to determine and enforce appropriate rules of conduct and impose penalties for violations, a holding helpful to Associations coping daily with vexing and often highly-personalized disputes.

The appellate court observed that a condominium association’s authority is found in the New Jersey Condominium Act and its by-laws. Such by-laws allow an association to establish a method to adopt, amend and enforce reasonable administrative rules and regulations that the association and its board are responsible to enforce, including reasonable fines, assessments and late fees on unit owners as the by-laws may authorize. In this matter, the Association’s by-laws empowered the Board to adopt rules and regulations necessary for operation and use of the property, including rules and regulations regarding the conduct of unit owners and persons residing in their units. The Association’s by-laws expressly authorized the Board to impose a penalty for violations of the code of conduct and suspend unit owners from membership privileges when they fail to pay a duly-imposed penalty. Finally, the appeals court found that the Association’s dispute resolution process fairly addressed Chassman’s claims. Eventually, Chassman paid the fine and her privileges were restored.

Disputes involving condominium associations, their board and committee members, unit owners and residents are often time-consuming, burdensome and costly. Effective dispute resolution procedures and well thought-out codes of conduct can help resolve matters more efficiently and quickly.

If you have any questions or would like more information, please contact Mark Stephenson at [email protected].

$10M Wrongful Death Verdict Against City of Albany Reversed on Sovereign Immunity Grounds

Posted on: June 26th, 2018

By: Wes Jackson

In a much-anticipated opinion, the Georgia Court of Appeals reversed a $10,640,000 trial verdict against the City of Albany on sovereign immunity grounds. Freeman Mathis & Gary attorneys Sun Choy, Jake Daly, and Wes Jackson represented the City as appellate counsel.

At trial, Sheryl Stanford and Wilfred Foster, as co-administrators of their son’s estate, argued that the City was partially responsible for the murder of their son at Brick City, a night club in Albany, after a fight that started in the club.  It was undisputed that, while Brick City was only licensed as a recording studio, the City allowed it to operate as an illegal nightclub even though it knew that the establishment was rife with drug use, illegal alcohol sales, and violence.  In an effort to overcome sovereign immunity, plaintiffs asserted the City maintained a “nuisance” by failing to shutter the illegal club.

After trial, a jury awarded the plaintiffs $15,200,000 in damages, apportioning 70% of the liability to the City. The jury only apportioned 10% of the liability to the owners and operators of Brick City, 13% to the actual murderer, and 1% each to seven participants in the brawl.

In reversing, the Court of Appeals concluded that plaintiffs cannot circumvent sovereign immunity by simply alleging that the City’s discretionary conduct amounted to the maintenance of a “nuisance.” While the plaintiffs may appeal to the Georgia Supreme Court, the case marks an important victory for the City of Albany and strengthens sovereign immunity protections for local governments in Georgia.

For additional questions about this matter or sovereign immunity under Georgia law, please contact Sun Choy ([email protected]), Jake Daly ([email protected]), or Wes Jackson ([email protected]).

Supreme Court Declines to Hear Data Breach Standing Case

Posted on: February 23rd, 2018

By: Amy C. Bender

The ongoing issue of when a plaintiff has grounds (“standing”) in data breach cases saw another development this week when the U.S. Supreme Court declined to weigh in on the debate.

CareFirst, a BlueCross BlueShield health insurer, suffered a cyberattack in 2014 that was estimated to have exposed data of 1.1 million customers. Affected customers filed a federal class action lawsuit in the District of Columbia claiming CareFirst failed to adequately safeguard their personal information. CareFirst asked the court to dismiss the case, arguing that, since the customers had not alleged their stolen personal data had actually been misused or explained how it could be used to commit identity theft, the customers had not suffered an injury sufficient to give them standing to sue and the court therefore lacked jurisdiction to hear the case. The court agreed with CareFirst and dismissed the case. Notably, in this particular breach, CareFirst maintained the hackers had not accessed more sensitive information such as the customers’ Social Security or credit card numbers, and the court found the customers had not alleged or shown how the hackers could steal the customers’ identities without that information. In other words, the mere risk to the customers of future harm in the form of increased risk of identity theft was too speculative.

The customers appealed this decision, and the appellate court reversed, finding the district court had read the customers’ complaint too narrowly. The appellate court reasoned that the customers actually had asserted their Social Security and credit card numbers were included in the compromised data and that they had sufficiently alleged a substantial risk of future injury.

In response, CareFirst filed a petition with the Supreme Court asking it to review the appellate decision. This would have been the first pronouncement on this issue from the high court in a data breach class action lawsuit, a move long-awaited by lower courts, lawyers, and their clients in order to gain more clarity on the application of prior decisions like Spokeo in the specific context of data breach litigation. However, the Supreme Court denied the request (without explanation, as is typical).

As we have reported here and here, courts continue to grapple with the contours of standing in data breach cases. We will continue to monitor and report on developments in this still-evolving area of the law.

If you have any questions or would like more information, please contact Amy Bender at [email protected].