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Jaworski v. Ernst & Young U.S. LLP

Superior Court of New Jersey, Appellate Division

July 23, 2015

PAUL JAWORSKI, ALEXANDER HAGGIS and ROBERT HOLEWINSKI, Plaintiffs-Appellants,
v.
ERNST & YOUNG U.S. LLP, TRACEY GUNTER and RICHARD BAKER, Defendants-Respondents

Argued February 23, 2015

Approved for Publication July 23, 2015.

Page 940

On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5223-13.

Christopher P. Lenzo argued the cause for appellants ( Lenzo & Reis, LLC, attorneys; Mr. Lenzo, of counsel and on the briefs).

Robert T. Szyba ( Seyfarth Shaw LLP) argued the cause for respondents ( Mr. Szyba and Loren Gesinsky ( Seyfarth Shaw LLP ), of the New York bar, admitted pro hac vice, attorneys; Mr. Szyba and Mr. Gesinsky, on the brief).

Before Judges LIHOTZ, ESPINOSA and ST. JOHN. The opinion of the court was delivered by ST. JOHN, J.A.D.

OPINION

Page 941

[441 N.J.Super. 467] ST. JOHN, J.A.D.

Plaintiffs Paul Jaworski, Alexander Haggis and Robert Holewinski appeal from the trial court's order compelling arbitration of their age-discrimination suit against defendants Ernst & Young U.S. LLP (EY) and two of its executives, Tracey Gunter and Richard Baker. Plaintiffs challenge the enforceability of EY's mandatory arbitration policy on constitutional, statutory and common law grounds. The employees were provided notice of changes to the arbitration policy by electronic distribution. We must determine whether, if the policy states assent is given by continued employment, remaining employed with the company evinces an unmistakable indication that the employee affirmatively has agreed to arbitrate his claims pursuant to the changed policy. Having reviewed the arguments advanced in light of the record and governing law, we affirm.

[441 N.J.Super. 468] I.

The record discloses the following facts and procedural history. Plaintiffs are former employees of EY's Secaucus office whose employment was terminated in August 2012.

Page 942

Jaworski worked for EY for thirteen years and was a Finance Director in the Global Finance Group before his employment was terminated at the age of sixty-one. Haggis was fifty-seven years old when EY terminated his employment after seventeen years, at which time he was a Manager of Accounting. Holewinski worked at EY for over eleven years before he was fired, at age fifty-five, while working as an Associate Director of Finance in the Global Infrastructure Group.

In August 2002, EY initiated the Common Ground Program (the Program), a set of mandatory alternative dispute resolution (ADR) procedures for its employees. The Program provided in pertinent part:

All claims, controversies, or other disputes between [EY] and an Employee that could otherwise be resolved by a court, [subject to limited exceptions enumerated within] (" Covered Disputes" ), shall be resolved through the Program, and both [EY] and the Employee expressly waive any right to resolve any Covered Dispute through any other means. Neither [EY] nor an Employee will be able to sue in court in connection with a Covered Dispute.
[(Emphasis added).]

As a non-exhaustive list of examples of Covered Disputes within the Program's ambit, EY provided: (1) " [c]laims based on federal statutes" including civil rights and anti-discrimination laws; (2) " [c]laims based on state statutes and local ordinances including state and local anti-discrimination laws" ; (3) " [c]laims based on common law theories such as tort and contract" ; (4) " [c]laims concerning wages, salary and incentive compensation programs" subject to limited exceptions; and (5) " [c]laims concerning application, interpretation and enforcement of the Program." The provision further emphasized that " [a]ll Covered Disputes, whether or not listed here, must be resolved through the Program."

In the event of a Covered Dispute, the Program first required " the parties . . . try to resolve the [dispute] through mediation" [441 N.J.Super. 469] provided by the CPR Institute for Dispute Resolution (CPR). Should a dispute remain unresolved following mediation, either party was then able to proceed with binding arbitration, also through CPR. Any dispute for $250,000 or less was to be decided by one arbitrator, whereas any controversy involving more than $250,000, " or if the party initiating [arbitration] so chooses," went before a three-arbitrator panel. As to discovery, the program limited each party to one deposition pre-hearing, unless the arbitrator(s) found " the party seeking the [additional] discovery ha[d] a substantial need for it and . . . the discovery sought [was] consistent with the expedited nature of arbitration and not unduly burdensome."

In addition to requiring the initiating party to pay any filing fees as well as the party's own attorney's fees, the Program provided:

The parties' intent is for the cost of the arbitration (including administration and arbitrator fees) to be shared equally to the extent permitted by law. However, the portion of the cost to be paid by an Employee shall be adjusted to the extent, if any, necessary for the parties' agreement to arbitrate to be enforced in accordance with applicable law.

Finally, the ADR policy included a provision on Termination or Amendment of the Program:

[EY] may propose termination or amendment of the program at any time by providing notice to Employees through the Daily Connection [daily email bulletin] or other electronic notice. An Employee indicates his or her agreement

Page 943

to the proposed amendment or termination, and such proposed changes become effective as to that Employee, by continuing his or her employment with [EY] for at least three days after the notice is provided. Termination or amendment shall not affect a Covered Dispute as to which [mediation] has already been initiated.

[(Emphasis added).]

On July 29, 2002, EY announced the implementation of the Program to all United States (U.S.) personnel, including plaintiffs, via its Daily Connection email bulletin. The July 29 message provided a brief synopsis of the Program and directed the reader to two links, one leading to the policy's provisions in their entirety in EY's employee manual and the other to an article about the Program.

[441 N.J.Super. 470] On March 23, 2006, EY announced revisions to the Program through a Daily Connection message to all U.S. employees, including plaintiffs. The three main changes, as identified in the email, were: (1) " Employees now have a choice of three ADR providers" -- CPR, the American Arbitration Association (AAA) and JAMS; (2) " [e]xcept for a fee equal to what it would have cost the employee to sue in court, the firm will pay the entire cost of mediation (not including any attorney's fees)" ; and (3) " [d]isputes up to $1 million will be heard by a single arbitrator, rather than by a three-arbitrator panel."

The amendments also clarified certain important provisions through highlighting and italicization, unlike the 2002 version. For instance, under the 2006 Program, " [n]either [EY] nor an employee will be able to sue in court in connection with a Covered Dispute." " All Covered Disputes . . . must be resolved through the Program." Further, " [a]n Employee indicates his or her agreement to the Program and is bound by its terms and conditions by ...


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