Ding Dong Forced Arbitration and Confidentiality are Dead (In Employment Cases)

On March 18, 2019, Governor Murphy signed a game-changing law that will benefit all New Jersey workers. That law, S121, makes two important changes to what rights employees can be forced to give up just to be able to work.

The first change is that, as of March 18, employers can no longer force employees to arbitrate their discrimination, harassment, and/or retaliation claims or give up any other rights related to those claims. The second significant change is that employers can no longer demand silence in exchange for the settlement of discrimination, harassment and/or retaliation claims.

In recent years, more and more employers have forced their workers to give up their right to jury trials. Instead, many employers demanded that employees bring any claims they may have in arbitration – a secret process where one person (instead a jury of the employees’ peers) decides the outcome.

Critics of arbitration have argued, with support from studies, that arbitration favors repeat customers (such as employers) by both handing wins to employers far more often than juries do and by awarding far less money to successful employees than juries do, even in those limited circumstances where employees win in arbitration.

On a more basic level, discovery (the process by which the parties to a lawsuit exchange information) is often significantly limited in arbitration. That is particularly harmful to plaintiffs in employment cases and makes it difficult for them to prove their cases because almost all of the evidence is in the possession of employers in those cases. It is easy to understand why employers favor arbitration over jury trials.

But S121 changes all that. It specifically prohibits employers from requiring employees to give up any substantive or procedural rights or remedies relating to claims of discrimination, retaliation or harassment. That means that employees cannot be forced to arbitrate claims of discrimination, retaliation or harassment. It also means that employees cannot be required to give up their right to a jury trial and be, instead, forced to have judges decide their claims. It also means that employees cannot be forced to agree to shortened statutes of limitations, which some employers have done in recent years, or to agree to limit the money that they can be awarded if successful.

In an apparent nod to the “Me Too” movement, the law also puts an end to the muzzling of workers, which silence permits workplace discrimination, harassment, and retaliation to fester and continue. It does that by making clear that employees cannot be forced to agree to confidentiality in exchange for settling their claims of discrimination, harassment, and/or retaliation.

The law goes a long way to ending unlawful workplace conduct by stopping employers’ ability to require silence in exchange for the settlement of discrimination, harassment, and/or retaliation claims and shining a light on the existence those claims, as well as the workplaces where such unlawful behavior is allowed to grow and continue like toxic mold.