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Garfinkel v. Morristown Obstetrics & Gynecology Assocs., 168 N.J. 124, 127, (2001)

Garfinkel v. Morristown Obstetrics & Gynecology Assocs., 168 N.J. 124, 127, (2001)(The Supreme Court has invalidated arbitration agreements)

In Garfinkel, the Court REFUSED to enforce an arbitration based on state law contract principles. In Garfinkel, the Court held that basic contract principles warranted the denial of the defendant’s motion to enforce the arbitration clause. The Court specifically held that an employment agreement’s arbitration clause was insufficient to constitute a waiver of the plaintiff’s remedies under the law against discrimination.

The arbitration agreement at issue stated:

Any controversy or claim arising out of, or relating to, this Agreement or the breach thereof, shall be settled by arbitration in Morristown, New Jersey, in accordance with the rules then obtaining of the American Arbitration Association, and judgment [sic] upon any reward [sic] rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof. Id. at 128.

The Supreme Court in Garfinkel specifically held that “as we have stressed in another context, a party’s waiver of statutory rights must be clearly and unmistakably established and contractual language alleged to constitute a waiver will be read expansively. Id. at 132. The Court’s interpretation of the agreement was that since the arbitration was not properly worded so as to apprise the signor of the waiver, the clause was unenforceable.