CHARLES F. WASKEVICH, JR., Plaintiff-Respondent,
HEROLD LAW, P.A., ANTHONY J. REITANO and HOWARD G. KATZ, Defendants-Appellants.
Argued March 13, 2013
On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-5854-11.
Gregory T. Alvarez argued the cause for appellants (Jackson Lewis, L.L.P., attorneys; Mr. Alvarez, James M. McDonnell and Leslie A. Saint, on the briefs).
Charles Z. Schalk argued the cause for respondent (Mauro, Savo, Camerino, Grant & Schalk, P.A., attorneys; Mr. Schalk, of counsel and on the brief).
Before Judges Grall, Simonelli and Koblitz.
In this case involving an employment dispute between attorneys, we enforce federal law requiring bifurcation when some claims between parties must be arbitrated and one statutory claim between the same parties must be tried. Defendants Herold Law, P.A., Anthony J. Reitano and Howard G. Katz, appeal from orders of January 6, 2012 and February 3, 2012, denying their motion to send all of the claims to arbitration pursuant to the arbitration clause in plaintiff Charles F. Waskevich, Jr.'s employment contract. We determine that the court erred only in refusing to bifurcate to compel binding arbitration of the non-Law Against Discrimination (LAD) claims.
Waskevich joined Herold Law at age fifty-three, after spending more than fourteen years at a large New Jersey law firm as a labor and employment attorney. After promotion to shareholder, Waskevich signed an employment agreement on January 14, 2010, effective October 12, 2009, which contained an arbitration clause stating that the parties agree to arbitrate "any controversy, claim, or dispute arising out of or relating to this Agreement, including the construction, interpretation, performance, breach, termination, enforceability, or validity thereof . . . ."
In his complaint, Waskevich asserts LAD violations, breach of contract, breach of implied duty of good faith, tortious interference with contract, and tortious interference with prospective economic advantage. He alleges that defendants breached several aspects of the employment agreement relating to benefits owed and his termination.
Additionally, Waskevich asserts a series of age-based discrimination practices by defendants in violation of the LAD. During the course of his employment at Herold Law, P.A., Waskevich alleges that he was subjected to age discrimination that resulted in his resignation as a shareholder on December 10, 2010, effective December 31, 2010. Thereafter, Waskevich claims that he sought to remain an employee, but the firm terminated him after he did not accept an unfair remuneration proposal.
Defendants responded to the complaint with a pre-answer motion to compel arbitration. The judge denied defendants' motion, holding that under Garfinkel v. Morristown Obstetrics & Gynecology Associates, 168 N.J. 124 (2001), the parties did not contractually agree to arbitrate LAD claims. Additionally, to promote judicial economy and avoid granting a benefit to the party with greater financial resources, the judge denied defendants' application to bifurcate the non-LAD claims and send those to arbitration.
Because "the issues involve contract interpretation and the application of case law to the facts of the case, the appellate court's standard of review is de novo." Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Cantone Research, Inc., 427 N.J.Super. 45, 57 (App. Div.), certif. denied, 212 N.J. 460 (2012). Thus, the "'trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.'" Alfano v. BDO Seidman, LLP, 393 N.J.Super. 560, 573 (App. Div. 2007) (quoting Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).
"The substantive protection of the [Federal Arbitration Act (FAA)] applies irrespective of whether arbitrability is raised in federal or state court." Martindale v. Sandvik, Inc., 173 N.J. 76, 84 (2002). The FAA, 9 U.S.C.A. §§ 1-3, "declare[s] a national policy favoring arbitration[, ]" Southland Corp. v. Keating, 465 U.S. 1, 10, 104 S.Ct. 852, 858 79 L.Ed.2d 1, 12 (1984), and provides that a "written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C.A. § 2. That section "reflects both 'a liberal federal policy favoring arbitration, ' and 'the fundamental principle that arbitration is a matter of contract.'" NAACP of Camden Cnty. E. v. Foulke Mgmt. Corp., 421 N.J.Super. 404, 424 (App. Div. 2011) (citations omitted).
Similarly, New Jersey law favors arbitration agreements. "The 2003 [New Jersey] Arbitration Act, N.J.S.A. 23B-1 to -32, 'continues our State's long-standing policy to favor voluntary arbitration as a means of dispute resolution.'" EPIX Holdings Corp. v. Marsh & McLennan Cos., 410 N.J.Super. 453, 471 n.7 (App. Div. ...