ESSAM ARAFA VS. HEALTH EXPRESS CORPORATION (L-4792-17, MIDDLESEX COUNTY AND STATEWIDE) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1862-17T3
ESSAM ARAFA, on behalf
of himself and others
similarly situated,
Plaintiff-Appellant,
v.
HEALTH EXPRESS
CORPORATION,
Defendant- Respondent.
_______________________________
Argued May 13, 2019 – Decided June 5, 2019
Before Judges Messano, Fasciale and Rose.
On appeal from Superior Court of New Jersey, Law
Division, Middlesex County, Docket No. L-4792-17.
Anthony S. Almeida argued the cause for appellant
(The Sattiraju Law Firm, PC, attorneys; Ravi Sattiraju,
of counsel and on the brief; Anthony S. Almeida, on the
brief).
Michael T. Grosso argued the cause for respondent
(Littler Mendelson, PC, attorneys; Michael T. Grosso
and Dylan C. Dindial, on the brief).
PER CURIAM
We granted permission to reinstate this appeal, which is from a December
6, 2017 order granting defendant's motion to dismiss and compel arbitration, in
the aftermath of the Supreme Court's decision in New Prime Inc. v. Oliveira,
586 U.S. ___, 139 S. Ct. 532 (2019). 1 Relying on New Prime, we now reverse
and remand.
Pursuant to a "contract of employment" entered into between plaintiff and
defendant, plaintiff drove a truck and delivered defendant's pharmaceutical
products in and around New Jersey. Defendant classified plaintiff as an
independent contractor instead of an employee. That classification led to this
lawsuit, in which plaintiff alleged that defendant violated two statutes: the New
Jersey Wage and Hour Law, N.J.S.A. 34:11-56a to -56a38; and the New Jersey
Wage Payment Law, N.J.S.A. 34:11-4.1 to -4.14. Plaintiff alleged that
defendant violated these statutes by failing to pay plaintiff for all of the hours
that he worked and by withholding money from him.
1
We originally listed argument for May 21, 2018, but granted an adjournment
because on that day, the Court issued its opinion in Epic Systems Corp. v. Lewis,
584 U.S. ___, 138 S. Ct. 1612 (2018). Counsel returned for oral argument in
October 2018, but voluntarily dismissed the appeal since the Supreme Court
granted certiorari in Oliveira v. New Prime, Inc., 857 F.3d 7 (1st Cir. 2017),
cert. granted, 586 U.S. ___, 138 S. Ct. 1164 (2019). We allowed the parties to
reinstate the appeal after the Court decided New Prime.
A-1862-17T3
2
In support of its motion to dismiss and compel arbitration, defendant
relied on the parties' arbitration agreement. The agreement specifically states:
"This Agreement is governed by the Federal Arbitration Act [(FAA)], 9
[U.S.C.A. §§ 1 to 16]." Notwithstanding his status as an employee or an
independent contractor, plaintiff opposed the motion relying on 9 U.S.C. § 1,
which states in pertinent part "nothing herein contained shall apply to contracts
of employment . . . of workers engaged in foreign or interstate commerce." He
contended that his employment agreement qualified under Section 1. Plaintiff
argued that because the FAA itself exempted employment contracts like his, it
could not govern the parties' arbitration proceeding. In other words, the parties
lacked a meeting of the minds. The judge granted defendant's motion without
addressing the FAA argument and without conducting oral argument, although
plaintiff had requested it.
On appeal, plaintiff maintains (like Oliveira in New Prime) that even as
an independent contractor – as opposed to an employee – his contract with
defendant qualifies as a "contract of employment" under Section 1. In New
Prime, the Court resolved this question. Applying the meaning of the FAA as
enacted in 1925, the Court concluded that a "contract of employment" meant
"nothing more than an agreement to perform work." New Prime, 139 S. Ct. at
A-1862-17T3
3
539. "As a result, most people then would have understood § 1 to exclude not
only agreements between employers and employees but also agreements that
require independent contractors to perform work." Ibid. Therefore, the Court
upheld the First Circuit's determination that it "lacked authority under the [FAA]
to order arbitration." Id. at 544.
Relying on New Prime, we conclude that plaintiff's employment contract
qualifies under Section 1 under the FAA. Consequently, the FAA cannot govern
the arbitration agreement, as contemplated by the parties. The inapplicability of
the FAA to the parties' arbitration agreement undermines the entire premise of
their contract. Because the FAA cannot apply to the arbitration, as required by
the parties, their arbitration agreement is unenforceable for lack of mutual
assent. And because the arbitration agreement is invalid, all other arbitration
issues are moot.
Reversed and remanded. We do not retain jurisdiction.
A-1862-17T3
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