New Jersey’s Appellate Court Denies Employer’s Attempt to Dismiss Claims on Eve of Trial Based on Employee Agreement to Arbitrate

By: Lynne Anne Anderson and Jerrold Wohlgemuth

Can an employer litigate employment claims in court and then enforce an arbitration agreement against the plaintiff-employee on the eve of trial to avoid presenting the case to a jury?  The New Jersey Appellate Division just said, “No.”

Plaintiff Karen Cole was a nurse anesthetist employed by Liberty Anesthesia Associates, LLC to work at Jersey City Medical Center.  When her privileges were revoked by the Hospital, Liberty terminated her employment and she filed suit against both Liberty and the Hospital for retaliatory discharge under the New Jersey Conscientious Employee Protection Act (“CEPA”), and for discriminatory discharge based on her disability under the New Jersey Law Against Discrimination (“LAD”).

Cole settled her claims against the Hospital at the hearing on the Hospital’s motion for summary judgment.  Liberty did not settle with plaintiff at that time.  Instead, after defending the action for almost two years in litigation, Liberty moved to dismiss the claims against it one month later in a motion in limine filed three days before trial based on the arbitration agreement Cole had entered into in her employment agreement with Liberty.  The trial court enforced the arbitration agreement and dismissed the case on the eve of trial, and Cole appealed.

In a March 29, 2012 opinion, the New Jersey Appellate Division reversed and remanded the action for trial.  The court found that Liberty’s counsel had pursued the litigation – instead of seeking to enforce the arbitration agreement – as a deliberate trial strategy, and determined that Liberty was equitably estopped from enforcing the arbitration provision at the last minute before trial where it had failed to mention arbitration among the thirty-five affirmative defenses asserted in its Answer; failed to identify the arbitration agreement in discovery; and failed to raise the agreement in its motion for summary judgment on the merits.  The court observed that Liberty’s deliberate course of conduct was prejudicial to Cole where it had caused her not only to participate in extensive discovery, but also to prepare to try her case before a jury, which the court noted required a great deal more preparation than presenting a case in arbitration.

To read the published opinion in Cole click hereCole is reported at 425 N.J. Super 48 (App. Div. 2012).

New Jersey Appellate Division Re-affirms Employers Are Not Required To Provide Indefinite Leaves Of Absence Under the New Jersey Law Against Discrimination

By: Jerrold Wohlgemuth

The New Jersey Appellate Division recently re-affirmed that an employer is not required to provide an indefinite leave of absence in order to meet its obligation under the New Jersey Law Against Discrimination (“LAD”) to reasonably accommodate the disabilities of its employees.  In Lozo-Weber v. New Jersey Department of Human Services, Plaintiff, who suffered from lupus, requested a medical leave of absence and submitted a doctor’s note indicating that she would be unable to work for at least one year.  The employer placed Plaintiff on leave pursuant to the Family and Medical Leave Act (“FMLA”).  Once she exhausted her FMLA time, the employer agreed to an accommodation of an additional six months of unpaid leave, advising her in writing that it could not continue the leave longer than that due to operational needs.  When the extended leave was about to expire, Plaintiff requested additional leave as an accommodation, but did not provide a date certain by which she would be able to return to work.  Instead, the doctor’s note stated only that she would need to be out of work for “approximately” six more weeks.  At the expiration of the approved six months leave, the employer terminated Plaintiff’s employment.

In affirming summary judgment for the employer on the claim of failure to accommodate under the LAD, the Appellate Division observed that the employer had provided Plaintiff with a reasonable accommodation by extending the FMLA leave by an additional six months.  The court further held that an indefinite leave of absence was not a reasonable accommodation where the Plaintiff admittedly could not say when she would be able to return to work.  While courts recognize that “reasonable accommodation” includes medical leaves of absence for reasonable periods of time, employers in New Jersey should look carefully at the notes submitted by doctors in support of requests for continued medical leaves, as there is no requirement to provide indefinite leave to employees who are physically unable to work and who cannot specify how long they will need to be out of work.