TRENTON, N.J. (Legal Newsline) – The Appellate Division of the Superior Court of New Jersey has reversed and remanded the case of a former Jenny Craig employee who alleged that she was fired because of age discrimination.
According to the Superior Court’s ruling on Nov. 13 written by Judge Douglas Fasciale, plaintiff Marilyn Flanzman and Jenny Craig Inc., JC USA Inc., et al. were unable to settle the dispute through arbitration.
“This appeal requires us to decide whether to invalidate an arbitration agreement because the parties failed to identify any arbitration forum and any process for conducting the arbitration,” the opinion stated.
According to the Superior Court, the mechanism or setting for the proceeding is important because the rights associated with arbitration forums may differ depending on which forum the parties choose, or on how they define the arbitral process.
In this case, the Superior Court said the agreement ignored the subject altogether.
“We hold that the parties lacked a ‘meeting of the minds’ because they did not understand the rights under the arbitration agreement that ostensibly foreclosed plaintiff's right to a jury trial,” the opinion stated. “We therefore reverse the order compelling arbitration for lack of mutual assent.”
The Superior Court said Flanzman was 82 years old when she was fired from Jenny Craig, where she worked for 26 years providing weight loss counseling.
“Defendant gradually reduced plaintiff's full-time hours to only 3 hours per week,” the opinion stated. “The substantial reduction in hours led to her termination.”
Flanzman alleged age discrimination and harassment in violation of the New Jersey Law Against Discrimination, the court said.
The defendant then filed its motion to compel arbitration relying on the parties' arbitration agreement, the court added.
The Superior Court said Flanzman "has no recollection of signing the document that contained the arbitration agreement, which the parties did not execute when defendant hired her."
“Rather, in 2011, 20 years after she was hired, defendant presented plaintiff with the document, which she signed to maintain her employment,” the opinion stated.
According to the agreement, cited by the court, all claims or controversies arising out of employment are to 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,” the agreement states.
The Superior Court said the plaintiff primarily argues that the arbitration agreement lacked mutual assent and is therefore invalid as a matter of contract law.
“She asserts that without that information communicated somehow in the agreement – whether it be by designating AAA, JAMS, or some other mechanism intended to replace her right to a jury trial – there exists no mutual assent,” the opinion stated.
The Superior Court said there was no designated arbitral forum or general process selected by the parties in the first place, so the parties did not reach any agreement at all.
That became evident when the defendant continued to improvise negotiations during oral argument before the motion judge, the court said.
“The parties here failed to appreciate fully the ramifications of the supposed arbitration agreement,” the opinion stated.
The court added that the agreement must first reflect a meeting of the minds about what rights replaced plaintiff's right to a jury trial.
“If the parties had done that, but remained unable to choose a particular arbitrator, then they could have arguably petitioned the court to make such a selection,” the opinion stated.