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Eileen S. Helfand v. Cdi Corporation and Barry O'donnell

January 13, 2012

EILEEN S. HELFAND, PLAINTIFF-RESPONDENT,
v.
CDI CORPORATION AND BARRY O'DONNELL, DEFENDANTS-APPELLANTS.



On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-4363-10.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued November 16, 2011

Before Judges Fuentes, Harris and Koblitz.

Plaintiff, Eileen S. Helfand, an employee of defendant CDI Corporation (CDI), brought suit in the trial court alleging violations of the New Jersey Law Against Discrimination (NJLAD), N.J.S.A. 10:5-1 to -42. Approximately eight months after plaintiff filed her complaint, defendants filed a motion to compel arbitration pursuant to an arbitration clause in plaintiff's employment contract. The trial court denied defendants' motion, finding they waived their right to arbitration by participating in litigation. Defendants appeal this decision.

Plaintiff, on appeal, maintains that the trial court was correct in its waiver analysis. In addition, plaintiff asserts that the arbitration clause is unenforceable and, in any event, does not waive NJLAD claims. After reviewing the record in light of the contentions advanced on appeal, we hold that the arbitration clause is enforceable and was not waived. We therefore reverse.

On January 30, 1998, plaintiff was hired by CDI as a salesperson. She signed an employment agreement, which contained the terms and conditions of her employment. The employment agreement contained a section entitled "Arbitration," which stated,

You and we agree that it would be mutually beneficial to obtain prompt and cost effective resolutions of any controversies, claims or disputes which may arise out of, or relate to, your employment with us or the termination of such employment, or this Employment Agreement or an alleged breach thereof, or the relations between you and us, arising either during or after the employment relationship. Accordingly, you and we agree that, to the extent permitted by law, all such controversies, claims and disputes will be decided by arbitration in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association, and not by a court of law, and you and we specifically waive all rights to a jury trial of such issues . . . . Claims covered by this agreement to arbitrate include . . . claims for discrimination . . . and claims for violation of any federal, state or other governmental law, statue, regulation or ordinance.

The agreement also contained a choice-of-law provision stating that the agreement "will be construed and interpreted in accordance with the laws of the Commonwealth of Pennsylvania (without regard to the principles of conflicts of law therein)." The agreement stated the arbitration provision (section 11) "will survive, and be enforceable following, termination of [the] Agreement or [plaintiff's] employment [there]under." Finally, the agreement explained that if plaintiff's compensation is changed during the terms of the agreement, "the compensation provision in the Information Section will be deemed to have been amended to reflect the different compensation." Plaintiff and defendants initialed each page of the agreement.

During her time with CDI, plaintiff changed positions several times. Each time, plaintiff signed a new "compensation" or "commission" plan. These documents pertain only to compensation of employees.

On May 28, 2010, plaintiff filed a complaint alleging discriminatory practices in violation of NJLAD against defendants CDI and Barry O'Donnell. Defendants' answer did not raise arbitration as a defense. The answer included a "reservation of rights" section where "[d]efendants reserve[d] the right to plead any additional separate defenses, the availability of which may come to light as the action progresses."

Neither defendants nor plaintiff took any depositions during the litigation, although they did exchange written discovery. On December 21, 2010, defendants notified plaintiff in an e-mail of their intention to enforce the arbitration clause in the employment agreement. Shortly after this e-mail was received, the parties engaged in mediation, which unfortunately was not successful.

On January 19, 2011, defendants filed a motion to compel arbitration pursuant to plaintiff's employment agreement. The motion judge found that under "the totality of the circumstances the [d]efendants have waived their right to [] arbitration." He determined the delay in invoking the arbitration provision prejudiced plaintiff by causing her to spend six months pursuing the case in the court system, including court-ordered mediation, settlement discussions and interrogatories, while incurring significant legal fees.

On appeal, defendants argue that the motion judge erred in finding that their delay in seeking arbitration constituted a waiver of the ...


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