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Flanzman v. Jenny Craig, Inc.

Supreme Court of New Jersey

November 19, 2019, Argued; September 11, 2020, Decided

A-66 September Term 2018, 082207

Opinion

JUSTICE PATTERSON delivered the opinion of the Court.

In this appeal, we determine whether the Arbitration Agreement (Agreement) signed by plaintiff Marilyn Flanzman and her former employer, defendant JC USA, Inc. (JC USA), compels arbitration of Flanzman's discrimination claims. In the Agreement, Flanzman and JC USA agreed to resolve their disputes by "final and binding arbitration" that would take the place of "a jury or other civil trial." Although the Agreement stated that an arbitrator would resolve [*9]  the parties' disputes, it did not name the arbitrator, designate an arbitration organization to conduct the proceeding, or set forth a process for the parties to choose an arbitrator.

Following a dispute with her employer, Flanzman left her position and filed a complaint against the employer and individual defendants, alleging age discrimination, constructive discharge and other claims pursuant to the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49. The trial court granted defendants' motion to dismiss Flanzman's complaint and compel arbitration of her claims.

The Appellate Division reversed the trial court's judgment. Flanzman v. Jenny Craig, Inc., 456 N.J. Super. 613, 625-30, 196 A.3d 996 (App. Div. 2018). The court held that in order to be valid, an arbitration agreement must designate either an "arbitral institution" or a "process for selecting an arbitration mechanism or setting," and declined to enforce the Agreement on those grounds. Id. at 628-29.

We granted JC USA's petition for certification and reverse the Appellate Division's judgment. As did Congress in the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 to 16, the New Jersey Legislature adopted a policy in favor of arbitration in the New Jersey Arbitration Act (NJAA), N.J.S.A. 2A:23B-1 to -36. ] The NJAA, which provides a default procedure for the selection of an arbitrator [*10]  and generally addresses the conduct of the arbitration, clearly expresses the Legislature's intent that an arbitration agreement may bind the parties without designating a specific arbitrator or arbitration organization or prescribing a process for such a designation. N.J.S.A. 2A:23B-11(a), -15.

Applying principles of New Jersey law that generally govern contracts, we hold that the Agreement at issue is valid and enforceable. We modify the trial court's judgment as to the governing law and forum for the arbitration, and we reinstate that judgment as modified.

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2020 N.J. LEXIS 920 *

Marilyn Flanzman, Plaintiff-Respondent, v. Jenny Craig, Inc., Lillias Piro, individually, and Denise Shelley, individually, Defendants, and JC USA, Inc., Defendant-Appellant.

Prior History: On certification to the Superior Court, Appellate Division, whose opinion is reported at 456 N.J. Super. 613, 196 A.3d 996 (App. Div. 2018) [*1] .

Flanzman v. Jenny Craig, Inc., 456 N.J. Super. 613, 196 A.3d 996, 2018 N.J. Super. LEXIS 156, 2018 WL 5914420 (App.Div., Nov. 13, 2018)

CORE TERMS

arbitration, appointed, default, invalidated, waived, contractual, binding, replace

Business & Corporate Compliance, Alternative Dispute Resolution, Arbitration, Arbitrability, Pretrial Matters, Validity of ADR Methods, Judicial Review, Civil Procedure, Appeals, Standards of Review, De Novo Review, Federal Arbitration Act, Arbitration Agreements, Constitutional Law, Supremacy Clause, Federal Preemption, Contracts Law, Contract Conditions & Provisions, Arbitration Clauses, Labor & Employment Law, Conditions & Terms, Arbitration Provisions, Enforcement, Collective Bargaining & Labor Relations, Labor Arbitration, Contract Formation, Offers, Definite Terms, Waiver