NJ appeals court compels arbitration of sex harassment claims

On October 26, 2022, the New Jersey Appellate Division once again confirmed that the Federal Arbitration Act (FAA) preempts the 2019 amendment to the New Jersey Law Against Discrimination (NJLAD) invalidating employment agreements that require employees to waive rights pertaining to claims of harassment, discrimination, and retaliation. So, the employee in this case was required to proceed to arbitration on his sexual harassment, sexual assault, and retaliation claims.

Facts

In January 2020, Patrick Rourke entered into an employment agreement with Herr Foods. His employment agreement contained a mutual arbitration agreement. Specifically, the company and Rourke agreed that all disputes related to his employment were subject to arbitration and not by a court or jury.

The arbitration agreement unequivocally stated that “the parties hereby forever waive and give up the right to have a judge or a jury decide the Covered Claims” and that the agreement was “governed by the Federal Arbitration Act (FAA) and, to the extent not inconsistent with or preempted by the FAA.”

In January 2021, Rourke and Herr Foods signed a new employment agreement that contained the same provision governing the arbitration of claims. Five months later, the company fired him.

After his termination, Rourke filed a suit alleging sexual harassment, sexual assault, and retaliation in violation of the NJLAD. Herr Foods asked the court to dismiss the case, arguing the FAA preempted his NJLAD claims, so he was required to arbitrate.

Trial court decision