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Forsyth v. First Trenton Indemnity Co.

May 28, 2010

PHYLLIS FORSYTH, PLAINTIFF,
v.
FIRST TRENTON INDEMNITY COMPANY D/B/A TRAVELERS OF NEW JERSEY, THE TRAVELERS COMPANIES, INC. AND JAY S. FISHMAN, INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY, DEFENDANTS.
FIRST TRENTON INDEMNITY COMPANY, THE TRAVELERS COMPANIES, INC., AND JAY FISHMAN, PLAINTIFFS-RESPONDENTS,
v.
PHYLLIS FORSYTH, DEFENDANT-APPELLANT.



On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-9185-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued April 27, 2010

Before Judges Carchman, Parrillo and Ashrafi.

Plaintiff Phyllis Forsyth appeals from an order of the Law Division compelling her to arbitrate her employment discrimination and retaliation claims against her former employer, defendant First Trenton Indemnity Company (First Trenton), its parent, defendant The Travelers Indemnity Companies, Inc. (Travelers), and its chief executive officer (CEO) defendant Jay Fishman,*fn1 under the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49, and the New Jersey Equal Pay Act (NJEPA), N.J.S.A. 34:11-56.1 to -56.11. Plaintiff argues that the court erred in finding that she waived her right to sue in the Law Division. We disagree, and affirm.

The record established the following facts. During her fifteen-year tenure, plaintiff was the general counsel, president, and CEO of First Trenton, a subsidiary of Travelers, a property casualty insurer. She was hired on May 10, 1993, as the company's general counsel, promoted on June 18, 2002, as its president, and in 2004, appointed its CEO. Effective December 31, 2008, following a major corporate restructuring, plaintiff's position was eliminated, and her employment with defendant terminated.

As a condition of employment, Travelers required all employees to agree to submit employment-related disputes to binding arbitration. First Trenton initially adopted Travelers' mandatory Employment Arbitration Policy (EAP) in July 1994. In a July 5, 1994 letter to all employees, First Trenton's vice president announced "enhancements to [its] existing dispute resolution procedures and the adoption of impartial binding arbitration." All disputes were to be first addressed through First Trenton's internal dispute resolution procedure (IDRP), and those disputes that could not be so resolved would be "submitted to binding arbitration in accordance with the Employment Dispute Resolution Procedures of the American Arbitration Association as modified and expanded by [Travelers]." Under the IDRP and EAP, agreement to arbitrate was "an essential element of [the] employment relationship and a condition of employment." Copies of the IDRP and EAP were attached to the July 5 letter.

Plaintiff acknowledged, in writing, receipt of the July 5 letter, and that it was her "responsibility to read and understand these policies and procedures."

First Trenton published the EAP in its 1994 employee handbook, and apparently every annual employee handbook thereafter. For instance, the August 1997 edition of First Trenton's employee handbook contained two provisions regarding the IDRP and EAP. It stated that if the IDRP did not resolve an employee's concern, "the dispute may be submitted to binding arbitration" in accordance with the company's EAP, and "[a]rbitration is an essential element of your employment relationship and is a condition of your employment." Plaintiff acknowledged receipt of the handbook and that she "underst[oo]d these policies and procedures."

In June 2003, approximately one year after plaintiff was promoted to the position of president, First Trenton distributed to its employees an updated employee handbook, which again included the EAP.*fn2 The opening provisions of the 2003 handbook stated:

IMPORTANT. THIS HANDBOOK CONTAINS A PROVISION WHICH REQUIRES YOU TO SUBMIT EMPLOYMENT RELATED DISPUTES TO BINDING ARBITRATION. PLEASE READ IT CAREFULLY. NO OTHER PROVISION IN THIS HANDBOOK IS INTENDED TO CONSTITUTE A WAIVER, NOR SHOULD BE CONSTRUED TO CONSTITUTE A WAIVER, OF THE COMPANY'S RIGHTS TO COMPEL ARBITRATION OF EMPLOYMENT RELATED DISPUTES.

As in prior years, the handbook stated that if the IDRP does not fully resolve an employment related dispute, the dispute will be submitted "to binding arbitration before the arbitration facilities of the American Arbitration Association . . . ." The handbook also reiterated that "[a]rbitration is an essential element of your employment relationship and is a condition of your employment." The EAP was attached to the handbook.

In 2004, Travelers merged with The St. Paul Companies, Inc. to become The St. Paul Travelers Companies, Inc. (St. Paul Travelers). On April 5, 2004, John Clifford, then Senior Vice President of St. Paul Travelers, sent an e-mail to all employees stating that Travelers' IDRP and EAP would remain in effect for all Travelers employees through December 31, 2004, and reminding them that: "It is your responsibility to read and understand all of our company policies. Your agreement to abide by all of these policies is an express condition of your continued employment . . . ." At the bottom of the e-mail, under a bullet-point stating "Arbitration Policy", there was a hyperlink leading the reader to the full text of the arbitration policy. As before, the e-mail stated that "[a]rbitration is an essential element of your employment relationship and a condition of employment." Clifford sent another e-mail on March 31, 2005, to St. Paul Travelers' employees, extending applicability of the Travelers EAP to all St. Paul Travelers' employees. In the same correspondence, Clifford solicited the support of all St. Paul Travelers member managers, including plaintiff, in ensuring compliance with the EAP by their employees:

As a manager at St. Paul Travelers we ask that you give the Internal Dispute Resolution/Arbitration program your full support. If you have any questions about the program please speak with your Human Resources Generalist.

Travelers also adopted a Code of Business Conduct and Ethics (Code), applicable to all employees, officers and directors. The Code referenced and incorporated the IDRP and EAP and mandated "[a]dherence to these policies and procedures . . . ."*fn3 All Travelers' employees were required to annually certify their receipt, review, and agreement with the Code as part of an annual online compliance training program. Following the online training course, employees were directed to a screen where they were requested to certify compliance with the Code.

The Certification screen for the 2008 compliance training course stated, for example:

* I have read and understand the Code of Business Conduct and Ethics and the policies incorporated within and agree that I will comply with them; . . . .

By clicking the "I certify" button below, I certify that I am in compliance ...


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