NIKKI CORDERO VS. FITNESS INTERNATIONAL, LLC (L-0641-18, ESSEX COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE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-1662-20
NIKKI CORDERO,
Plaintiff-Appellant,
v.
FITNESS INTERNATIONAL,
LLC, a/k/a LA FITNESS
INTERNATIONAL, LLC,
RYAN FARLEY, LINA
ANDERSON, and GEORGE
WALKER,
Defendants-Respondents.
____________________________
Submitted October 18, 2021 – Decided November 10, 2021
Before Judges Vernoia and Firko.
On appeal from the Superior Court of New Jersey, Law
Division, Essex County, Docket No. L-0641-18.
Smith Eibeler, LLC, attorneys for appellant
(Christopher J. Eibeler, Meghan Chrisner-Keefe, and
Lisa Ackerly Hernandez, on the briefs).
William F. Dahill (Dunnington, Bartholow & Miller,
LLP) of the New York bar, admitted pro hac vice, and
Olivera Medenica (Dunnington, Bartholow & Miller,
LLP) attorneys for respondents Fitness International,
LLC, and Lina Anderson (William F. Dahill and
Olivera Medenica, on the brief).
PER CURIAM
Plaintiff Nikki Cordero appeals from the January 12, 2021 Law Division
order dismissing her complaint asserting claims under the New Jersey Law
Against Discrimination (NJLAD), N.J.S.A. 10:5-1 to -42, quid pro quo sexual
harassment, sexual discrimination, and retaliation against defendants Fitness
International, LLC, also known as LA Fitness International, LLC, and Lina
Anderson (collectively referred to as defendants) 1 and compelling arbitration.
For the reasons that follow, we reverse and remand.
I.
This matter comes before us for a second time. The parties are familiar
with the procedural history and facts of this case and, therefore, they will not be
repeated in detail here.2 We derive the following facts from the motion record
1
Defendants Ryan Farley and George Walker are not participating in this
appeal.
2
The chronology is set forth in this court's unpublished opinion entered on April
10, 2019, in which we reversed the May 25, 2018 Law Division order, denying
defendants' motion to dismiss the complaint and compel arbitration, and the July
20, 2018 order denying their motion for reconsideration. Cordero v. Fitness
Int'l, LLC, No. A-5542-17 (App. Div. Apr. 10, 2019) (slip op. at 2-4). We
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2
on remand. Plaintiff is a former employee of LA Fitness. During her three-
month tenure at the Holmdel LA Fitness gym in 2016, plaintiff claims her
supervisor, defendant George Walker, the trainees' manager, sexually harassed
and assaulted her at work. According to plaintiff, defendants collectively
created a hostile work environment and discriminated against her on the basis
of her sex, resulting in her termination.
On March 3, 2016, plaintiff applied for an open sales counselor position
with LA Fitness's Holmdel gym. She was twenty-two years old at the time and
"had recently moved in with [her] mother." Plaintiff claims she applied for the
position through an app called "Snagajob" and "attached [her] resume to the app
. . . and . . . clicked submit."
Between March 3 and March 9, 2016, plaintiff received an invitation to
interview for an open position from defendant Ryan Farley, the general manager
at the Holmdel gym. Plaintiff interviewed onsite at the Holmdel gym with
Farley and after the interview, she was invited for a second interview that day
reversed and remanded for further proceedings and directed the trial court to
consider the motion anew and enter a new order, together with a written or oral
statement of reasons in conformity with Rule 1:7-4. Id. slip op. at 5. We
incorporate, by reference, the facts stated in our prior opinion to the extent they
are consistent with those developed on remand.
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with Ray Malki. At the conclusion of the second interview, plaintiff was offered
the sales counselor position, which she accepted.
On March 9, 2016, plaintiff began her employment at the Holmdel
location. During her new hire onboarding on her first day of work, plaintiff was
seated across from Farley at his desk. Plaintiff was instructed to "sign a few
things electronically . . . to start." She claimed:
the signature pad was right in front of me to my left.
Like I said, he was sitting across from me looking at the
computer and he was basically clicking away . . . I
signed a few times just so I was able to start . . . my
training for my job . . . .
....
I did not physically see [what I was signing]. He
basically just said, you know, in order for me to start,
you know, I would have to, you know, sign these
employment documents and then we would go on and
start our training. So I signed -- I signed electronically
the things that he told me to sign.
....
After I signed all the stuff that he gave me to sign, he
invited me to sit on his side of the desk where he was
sitting and he pulled up the chair next to me. And at
that point he was basically showing me, you know, all
his clients that he -- potential clients that he had that he
usually makes phone calls to every day to see if they
want a membership. . . .
A-1662-20
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While employed by LA Fitness, plaintiff alleges she repeatedly heard
Walker and Farley make sexual comments regarding the Holmdel gym female
employees and gym members. On March 27, 2016, plaintiff claims Walker
approached her to inquire about her recent manicure while she was working at
her desk. Walker then asked her, "Did you get your toes done too?" After
responding "No," plaintiff avers Walker then stated, "Let me know when you
get your toes done so I can suck them," and she responded, "[N]o thank you."
Despite plaintiff's apparent discomfort with Walker's "unwelcomed sexual
advance[s]," he "placed his hands on [plaintiff]'s waist from behind" and
"grabbed and groped [her] breast." Walker then ostensibly stated "words to the
effect of, 'I had a dream last night that I fucked you'" and threatened plaintiff
"with words to the effect of[] 'I'm the boss around here! If I didn't like you, you
would not be working here!'"
In her Law Division complaint, plaintiff also alleged she heard Walker
referring to a female gym member as having a "nice ass and breasts," and stating
to Farley, "[D]amn, I'd hit that." Feeling "intimidated by . . . Walker's behavior
and comments[,]" plaintiff "changed her work wardrobe to long, baggy-fitting
sweaters and other clothes" in order to "draw less attention from . . . Walker."
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After this interaction, plaintiff immediately informed both her direct
supervisor, Farley, via text message, and her mother of the incident. Because
she felt unsafe, plaintiff went outside the Holmdel gym because no management
personnel were inside. Plaintiff's mother then contacted the police, who arrived
at the Holmdel gym shortly thereafter to take plaintiff's statement and speak with
Walker. Plaintiff left work early that day after being interviewed by the police
and felt "tremendous anxiety." Later that day, the police called plaintiff and
advised, "Walker had been arrested for criminal sexual contact and that a 'no
contact' order had been issued." Plaintiff proceeded to advise Farley of the no
contact order.
On March 29, 2016, plaintiff returned to work, where she was informed
by Farley that "Walker would be transferred to . . . [another] LA Fitness' gym
location." After her meeting with Farley, plaintiff attempted to file an incident
report with LA Fitness's human resources manager, defendant Lina Anderson,
who "advised [p]laintiff that the operations manager is responsible for filing an
incident report[,]" and he should be contacted directly. Plaintiff contacted the
operations manager and reported the March 27, 2016 incident to him. An
incident report was filed with human resources. Despite her many attempts "to
learn the status of her complaint and whether there would be an investigation,"
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plaintiff was never informed about whether defendants took any action in
response to her incident report.
On May 10, 2016, plaintiff received a phone call from Anderson and
Malki advising she was terminated. According to plaintiff, Anderson stated,
"that situation shouldn't have affected your work." Walker then returned to work
at the Holmdel gym and allegedly continued his untoward behavior to women.
On July 11, 2017, "Walker was charged with criminal sex charges after he
allegedly groped a female gym member . . . at the Holmdel [g]ym." On January
26, 2018, plaintiff filed her complaint in the Law Division. As stated in our
prior opinion, defendants filed a motion to dismiss the complaint and compel
arbitration. We reversed the May 25, 2018 order denying defendants' motion
and the July 20, 2018 order denying their motion for reconsideration. On
remand, we directed the trial court "to consider the motion anew and enter a new
order, together with a written or oral statement of reasons in conformity with
Rule 1:7-4."
Following remand, a different trial court was assigned this matter.
Consistent with our decision, the trial court permitted "limited discovery" on the
issues regarding arbitration and conducted a plenary hearing in order to assess
credibility issues. The parties exchanged documents and conducted depositions
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prior to the hearing. On July 22 and 31, 2020, the trial court held a plenary
hearing "for the limited purpose of determining whether or not the par ties have
entered into a binding enforceable arbitration agreement in relation to
[plaintiff's] claims."
Plaintiff and two representatives of LA Fitness testified at the hearing.
After the conclusion of the hearing, the trial court allowed post-hearing briefing.
On January 11, 2021, the trial court granted defendants' motion to compel
arbitration and dismissed plaintiff's complaint without prejudice. In its written
eleven-page statement of reasons, the trial court found:
Plaintiff answered [defendant LA Fitness's] job posting
using the website Snagajob. She completed and signed
[the] [a]pplication for [e]mployment remotely.
The [a]pplication for [e]mployment included an
[a]rbitration and [d]ispute [r]esolution [a]greement
. . . . The text instructed her to read and sign the
[a]greement “as a condition of consideration for
employment with Fitness International . . . ."
....
[The arbitration agreement] contained a block for
electronic signature – separate from the signature block
for the application itself. There is no dispute that
[plaintiff] completed the electronic signature for this
[d]ispute [r]esolution [a]greement portion of the
application. An electronic notification – referring to an
IP address – verifies her use of the electronic signature
block from a remote computer.
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....
The [c]ourt finds, on the basis of the evidence
now before it, that . . . [p]laintiff freely assented to the
[d]ispute [r]esolution [a]greement . . . when she was
presented with and signed the same in connection with
the [a]pplication for [e]mployment. The record is
undisputed that a complete form of the [d]ispute
[r]esolution [a]greement was contained within the
[a]pplication for [e]mployment; that [plaintiff]
executed the electronic signature – separately from the
application itself – signifying her assent to its terms;
and the [a]greement itself not only advised her of the
right to seek counsel, but afforded her an opportunity
to reject the [a]greement and withdraw her application.
....
For these reasons, the [c]ourt finds the [d]ispute
[r]esolution [a]greement is an enforceable contract,
binding on [plaintiff] and applicable to the claims
asserted in her action. There has never been an issue
presented in this case concerning whether the terms of
such agreement are sufficiently clear to give rise to an
enforceable waiver of the right to proceed in a court.
A memorializing order was entered. This appeal ensued.
On appeal, plaintiff presents the following arguments for our
consideration:
POINT I: [PLAINTIFF] DID NOT KNOWINGLY
AND VOLUNTARILY AGREE TO WAIVE HER
STATUTORY RIGHT TO A JURY TRIAL.
A. The Employment Application [I]s Not [A]
Contract.
A-1662-20
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B. The Arbitration Agreement [I]s Not [A] Stand-
Alone Contract.
C. Appellant Did Not Knowingly [A]nd Voluntarily
Waive Her Right [T]o Sue.
D. The Court Declined [T]o Analyze Whether [T]he
Documents Signed During [Plaintiff's]
[Onboarding] Were Binding.
POINT II: [PLAINTIFF] DID NOT WAIVE HER
RIGHT TO A JURY TRIAL ON CLAIMS FOR
INJUNCTIVE RELIEF UNDER THE [NJ]LAD.
II.
Orders compelling or denying arbitration are treated as final orders for
purposes of appeal. R. 2:2-3(3); GMAC v. Pittella, 205 N.J. 572, 582 n.6 (2011).
The validity of an arbitration agreement is a question of law. Atalese v. U.S.
Legal Servs. Grp., L.P., 219 N.J. 430, 446 (2014) (citing Hirsch v. Amper Fin.
Servs., LLC, 215 N.J. 174, 186 (2013)). Accordingly, the appellate court applies
a de novo standard of review when determining the enforceability of arbitration
agreements. Goffe v. Foulke Mgmt. Corp., 238 N.J. 191, 207 (2019) (citing
Hirsch, 215 N.J. at 186). As such, we "need not give deference to the analysis
by the trial court." Ibid. However, a trial court's factual findings are reviewed
for an abuse of discretion. See Cumberland Farms, Inc. v. N.J. Dep't of Env't.
Prot., 447 N.J. Super. 423, 437-38 (App. Div. 2016). "The general rule is that
A-1662-20
10
findings by the trial court are binding on appeal when supported by adequate,
substantial, credible evidence." Ibid. (quoting Seidman v. Clifton Sav. Bank,
S.L.A., 205 N.J. 150, 169 (2011)).
Both the Federal and the New Jersey Legislatures have "enunciate[d]
federal and state policies favoring arbitration." Atalese, 219 N.J. at 440
(citations omitted); see also Martindale v. Sandvik, Inc., 173 N.J. 76, 92 (2002)
("[T]he affirmative policy of this State, both legislative and judicial, favors
arbitration as a mechanism of resolving disputes." (citing Barcon Assocs., Inc.
v. Tri-Cnty. Asphalt Corp., 86 N.J. 179, 186 (1981))).
The Federal Arbitration Act (FAA), 9 U.S.C.A. § 1 -307, requires "courts
[to] place arbitration agreements on equal footing with all other contracts. "
Skuse v. Pfizer, Inc., 244 N.J. 30, 47 (2020) (internal quotation marks omitted)
(quoting Kindred Nursing Ctrs. Ltd. P'ship v. Clark, 581 U.S. ___, 137 S. Ct.
1421, 1424 (2017)). Under the FAA, a state "may not 'subject an arbitration
agreement to more burdensome requirements than those governing the formation
of other contracts,'" or invalidate the agreement through "state-law 'defenses that
apply only to arbitration or that derive their meaning from the fact that an
agreement to arbitrate is at issue.'" Ibid. (first quoting Leodori v. CIGNA Corp.,
175 N.J. 293, 302 (2003)); and then quoting Atalese, 219 N.J. at 441). The FAA,
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however, does not bar all state-law defenses and "specifically permits states to
regulate contracts, including contracts containing arbitration agreements under
general contract principles." Ibid. (quoting Martindale, 173 N.J. at 85).
Similarly, the New Jersey Legislature codified its own endorsement of
arbitration agreements in the New Jersey Arbitration Act (NJAA), N.J.S.A.
2A:23B-1 to -36. See Hojnowski v. Vans Skate Park, 187 N.J. 323, 342 (2006).
The statute was enacted to "advance arbitration as a desirable alternative to
litigation and to clarify arbitration procedures in light of the developments of
the law in this area," Assemb. Judiciary Comm. Statement to S. 514 1 (Dec. 9,
2002), and "is nearly identical to the FAA," Arafa v. Health Express Corp., 243
N.J. 147, 167 (2020) (citing Atalese, 219 N.J. at 440). The NJAA provides that
"[a]n agreement contained in a record to submit to arbitration any existing or
subsequent controversy arising between the parties to the agreement is valid,
enforceable, and irrevocable except upon a ground that exists at law or in equity
for the revocation of a contract." N.J.S.A. 2A:23B-6(a).
Consequently, New Jersey courts "may 'regulate [arbitration] agreements,
including those that relate to arbitration, by applying its contract-law principles
that are relevant in a given case.'" Skuse, 244 N.J. at 47 (quoting Leodori, 175
N.J. at 302). When reviewing a motion to compel arbitration, courts apply a
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two-pronged inquiry: (A) whether there is a valid and enforceable agreement to
arbitrate disputes; and (B) whether the dispute falls within the scope of the
agreement. Martindale, 173 N.J. at 83, 92.
Plaintiff here contends the arbitration agreement is not a valid and
enforceable contract because the agreement: (1) was not "in writing"; (2) was
not divisible from the employment application, which is not a contract per the
application's disclaimer; and (3) was executed without her knowing and
voluntary consent. First, plaintiff argues that defendants conditioned the
agreement to "require such a document to be executed[] 'in writing.'"
"I understand that . . . this document . . . [does not] constitute[] an
employment contract unless a specific document to that effect is executed by
both the employer and myself, in writing." (emphasis added). Plaintiff
specifically notes that the employment application was "online only, . . . not in
a document[,] . . . [defendant Bryant's] electronic signature . . . was inserted[,]
[and] . . . [plaintiff] never signed the employment application in writing."
We analyze the term "in writing" in the context of the agreement under
review. A "writing" is "[a]ny intentional recording of words in a visual form,
whether in handwriting, printing, typewriting, or any other tangible form . . .
includ[ing] hard-copy documents, electronic documents on computer media,
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audio and videotapes, e-mails, and any other media on which words can be
recorded." Writing, Black's Law Dictionary (11th ed. 2019).
Our Supreme Court has routinely upheld the use of electronic documents
and signatures to uphold a contract. See Skuse, 244 N.J. at 55 n.2 ("[E]lectronic
. . . agreements are considered to be writings because they are printable and
storable." (quoting Feldman v. Google, Inc., 513 F. Supp. 2d 229, 236 (E.D. Pa.
2007))); Shelton v. Restaurant.com, Inc., 214 N.J. 419, 439 (2013) (rejecting the
argument that an electronic, consumer contract between parties cannot be
considered a contract because it was not "in writing," pursuant to the Plain
Language Act, N.J.S.A. 56:12-1 to -13); Caspi v. Microsoft Network, L.L.C.,
323 N.J. Super. 118, 125 (App. Div. 1999) ("[E]lectronic versus printed[,] . . .
in any sense that matters, there is no significant distinction."); see also N.J.S.A.
12A:12-7(a) (stating an electronic consumer contract or signature may not "be
denied legal effect or enforceability solely because it is in electronic form") . 15
U.S.C.A. § 7001(a) ("[A] signature, contract, or other record relating to [a]
transaction may not be denied legal effect, validity, or enforceability solely
because it is in electronic form[] [or] . . . because an electronic signature or
electronic record was used in its formation.").
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Here, the fact the application was available online, included an electronic
signature, and was never physically signed by plaintiff, permits only a
conclusion that the arbitration agreement constituted an "intentional recording
of words in a visual form," i.e., "in writing." Writing, Black's Law Dictionary
(11th ed. 2019).
Second, plaintiff argues the trial court erred in its "factual finding that the
[a]rbitration [a]greement was 'contained within the [a]pplication for
[e]mployment'" but was divisible from the application for purposes of enforcing
the agreement's arbitration provisions. An employer may not assert "its written
rules and regulations were not contractual and then argue, through reference to
the same materials, that the employee contracted away a particular right."
Morgan v. Raymours Furniture Co., 443 N.J. Super. 338, 342-43 (App. Div.
2016).
In Woolley v. Hoffman-La Roche, Inc., our Supreme Court held that a
company manual "impos[es] an obligation on the employer to abide by the terms
of [its] [employee] manual." Wade v. Kessler Inst., 172 N.J. 327, 340 (2002)
(citing Woolley, 99 N.J. 284, 292 (1995)). Employers, however, may avoid such
obligations by including in its manuals "a prominent disclaimer of the
contractual nature of a handbook." Morgan, 443 N.J. Super. at 342.
A-1662-20
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But an employer may not "seek both the benefit of its disclaimer . . . while
insisting that [its materials were] contractual when it suits its purposes." Ibid.
(citation omitted). In Morgan, where the plaintiff was terminated after refusing
to sign a stand-alone arbitration agreement, we determined the prominent
disclaimer included in the employee handbook precluded enforcement of the
arbitration agreement contained in the same handbook. 433 N.J. Super. at 343.
"By inserting such a waiver provision in a company handbook, which, at the
time, the employer insisted was not 'promissory or contractual,' an employer
cannot expect—and a court, in good conscience, will not conclude—that the
employee clearly and unambiguously agreed to waive the valued right to sue."
Ibid. However, a stand-alone arbitration agreement will be enforced by the
court. Id. at 344.
Plaintiff, relying on our decision in Morgan, where the disclaimer
included in the employee handbook precluded enforcement of the unsigned
arbitration agreement included in same, asserts the disclaimer within defendants'
employment application disclaimed the application's arbitration agreement.
"[A]n arbitration agreement is unenforceable when it is contained in a document
that disclaims [it] is a contract." Plaintiff relies on the fact that the trial court
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itself recognized that the arbitration agreement was in fact included in the
employment application. 3
However, our Supreme Court has previously held an arbitration agreement
contained within an employment application is a stand-alone contract. In
Martindale, where the plaintiff argued an arbitration agreement contained within
an employment application to be unenforceable because the agreement was not
an employment contract, the Supreme Court held an arbitration "agreement is
complete in and of itself and need not be part of a larger employment contract."
173 N.J. at 86. "[T]he question of enforceability is determined not on the basis
of whether the arbitration agreement is contained in an application for
employment or in an employment contract, but rather whether the arbitration
provision qualifies as a valid and enforceable contract." Id. at 87.
Here, the trial court found the agreement, standing on its own, to be a valid
and enforceable contract and noted the agreement had its own separate and
distinct block for electronic signatures. Importantly, unlike in Morgan, where
3
Although the trial court did in fact recognize the agreement was contained
within in the application for employment, it distinguished the application's
disclaimer from that in Morgan, determining the disclaimer in Morgan to have
been broader than defendant's arbitration agreement, "contain[ing] language to
the effect that the entire contents of the document did not give rise to an
enforceable employment contract."
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the employee's signature "only established that the employee had received a
copy of the same and did not evidence agreement to any of its terms," plaintiff's
signature here ostensibly established both receipt of the agreement as well as
her agreement with its terms. Thus, plaintiff's consent to the agreement is
distinct and separate from that of the disclaimer. Because the trial court found
the agreement was a stand-alone arbitration agreement, and thus not limited by
the application's disclaimer, the sole "question of [its] enforceability is
determined . . . [by] whether the arbitration provision qualifies [on its own] as a
valid and enforceable contract." Martindale, 173 N.J. at 87.
Third, plaintiff argues the arbitration agreement itself is not a valid
contract because it was executed without her knowledge or consent. Only the
trial court, and not the arbitrator, may determine whether a valid arbitration
agreement in fact exists. See Martindale, 173 N.J. at 83. An arbitrator is not
empowered to decide disputes related to the parties' agreement "unless and until
the trial court initially resolves the issues of fact pertaining to the formation of
the arbitration provision, and determines the parties agreed to arbitrate their
claims." Knight v. Vivint Solar Dev., LLC, 465 N.J. Super. 416, 428 (App. Div.
2020), cert. denied, 246 N.J. 222 (2021), and cert. denied, 246 N.J. 223 (2021).
Under our State's defined contract-law principles, a valid and enforceable
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agreement requires: (1) consideration; 4 (2) a meeting of the minds; and (3)
unambiguous consent. See Atalese, 219 N.J. at 442-45. Additionally, if the
arbitration agreement is a contract of adhesion, the court will not enforce the
agreement if the agreement is unconscionable. 5 Vitale v. Schering-Plough
Corp., 447 N.J. Super. 98, 111 (App. Div. 2016).
An arbitration agreement, like any other contract, requires a meeting of
the minds. A meeting of the minds, i.e., mutual assent, requires the parties to
have both: (1) reasonable notice of the agreement, See Hoffman v. Supplements
Togo Mgmt., LLC, 419 N.J. Super. 596, 607 (App. Div. 2011); and (2) "an
understanding of the terms to which they have agreed," Atalese, 219 N.J. at 442.
4
Our Supreme Court has held "that the creation of an employment relationship,
which is achieved when the employer agrees to consider and/or agrees to hire
the applicant for employment, is sufficient consideration to uphold an arbitration
agreement contained in an employment application." Martindale, 173 N.J. at 88(citations omitted) (finding defendants' consideration of plaintiff's application
to be adequate consideration).
5
"Whether an employment provision is enforceable depends on an analysis of
the subject of the provision, the sophistication of the employee, and whether the
employee has some bargaining power." Vitale, 447 N.J. Super. at 111 (citing
Martindale, 173 N.J. at 90). Generally, an arbitration agreement for employment
is enforceable because "[a]lthough the parties were in an unequal bargaining
position, [applicants] [are] entitled to reject the disclaimer and seek employment
elsewhere." Ibid. As such, courts will generally only find an arbitration
agreement unenforceable if the agreement violates public policy. Ibid.A-1662-20
19
An arbitration agreement "is not enforceable unless the [parties] ha[ve]
reasonable notice of its existence." Wollen v. Gulf Stream Restoration &
Cleaning, LLC, __ N.J. Super. ___, ___ (App. Div. July 9, 2021) (slip op. at 19)
(citing Hoffman, 419 N.J. Super. at 609). A party does not have a reasonable
notice of an arbitration agreement where the agreement is "proffered unfairly[]
or . . . design[ed] to conceal or de-emphasize its provisions" through the
application's "style[,] . . . mode of presentation, or the placement of the
[agreement]." Skuse, 244 N.J. at 55 (citing Caspi, 323 N.J. Super. at 125).
If a party has reasonable notice of an arbitration agreement, the party may
not claim a lack of notice for failure to read it. "[A]s a general rule, 'one who
does not choose to read a contract before signing it cannot later relieve himself
of its burdens.'" Skuse, 244 N.J. at 54 (quoting Riverside Chiropractic Grp. v.
Mercury Ins. Co., 404 N.J. Super. 228, 238 (App. Div. 2008); see also Goffe,
238 N.J. at 212 ("[T]he argument that [a] plaintiff did not understand the import
of the arbitration agreement and did not have it explained to her by the
[employer] is simply inadequate to avoid enforcement of [the] clear and
conspicuous arbitration agreement[ ] that [she] signed." (citing Borough of E.
Caldwell v. Borough of Caldwell, 26 N.J. 9, 24-25 (1958))).
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We have recognized that electronic or online "contracts are no longer a
novel concept." Wollen, __ N.J. Super. at __ (slip op. at 14). The enforceability
of an electronic contract "often turns on whether the agreement is characterized
as a 'scrollwrap,' 'sign-in wrap,' 'clickwrap,' or 'browsewrap' – or a hybrid
version of these electronic contract types." Id. at __ (slip op. at 15) (citing
Berkson v. Gogo LLC, 97 F. Supp. 3d 359, 394-401 (E.D.N.Y. 2015)); see also
ibid. (defining the online contract characterizations). But regardless of the
contract's characterization, "the pertinent inquiry is whether the user was
provided with reasonable notice of the applicable terms, based on the design and
layout of the [application]." Id. at ___ (slip op. at 17). "In that regard,
[electronic] contracts are not all that different from traditional, written contracts
containing arbitration provisions." Ibid.A "scrollwrap" agreement is generally sufficient to show reasonable
notice. A "scrollwrap" agreement requires "users to physically scroll through
an [electronic] agreement and click on a sperate 'I agree' button in order to assent
to the terms and conditions of the [application]." Id. at ___ (slip op. at 15)
(quoting Berkson, 97 F. Supp. 3d at 394-401). In Caspi, where prospective
subscribers had to view multiple computer screens of information, including a
membership agreement with a forum selection clause, and registration could
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only proceed after the prospective subscriber clicked "I Agree" after having the
opportunity to scroll through view the full membership agreement, the appellate
court held the plaintiffs had reasonable notice. 323 N.J. Super. at 122, 125.
Here, defendants' application and arbitration agreement consisted of a
"scrollwrap" agreement. As such, plaintiff should have had reasonable
knowledge of the agreement as required to constitute a meeting of the minds.
An arbitration agreement, like any other contract, requires a meeting of the
minds. A meeting of the minds, i.e., “[m]utual assent[,] requires that the parties
have an understanding of the terms to which they have agreed.” Atalese, 219
N.J. at 442.
Because an arbitration agreement waives a constitutional right, "the right
to pursue a case in a judicial forum, 'courts take particular care in assuring the
knowing assent of both parties to arbitrate, and a clear mutual understanding of
the ramifications of that assent.'" Atalese, 219 N.J. at 442-43 (quoting NAACP
of Camden Cnty. E. v. Foulke Mgmt. Corp., 421 N.J. Super. 404, 425 (App. Div.
2011)). "The point is to assure that the parties know that in electing arbitration
as the exclusive remedy, they are waiving their time-honored right to sue."
Marchak v. Claridge Commons, Inc., 134 N.J. 275, 282 (1993). As such, to
show mutual assent to arbitrate, the terms must "be sufficiently clear to place
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[an individual] on notice that he or she is waiving a constitutional or statutory
right." Atalese, 219 N.J. at 443.
When analyzing the validity of an arbitration agreement, there are "no
prescribed set of words [that] must be included . . . to accomplish a waiver of
rights." Atalese, 219 N.J. at 447. "No particular form of words is necessary to
accomplish a clear and unambiguous waiver of rights." Id. at 444. If "at least
in some general and sufficiently broad way" the language of the clause conveys
that arbitration is a waiver of the right to bring suit in a judicial forum, the clause
will be enforced. Id. at 447; see Arafa, 243 N.J. at 172 (finding waiver "was
knowing and voluntary in light of the . . . broad agreement to resolve 'all
disputes' between the parties through binding arbitration"). In the employment
setting in particular, an arbitration "provision must reflect that an employee has
agreed clearly and unambiguously to arbitrate the disputed claim." Leodori, 175
N.J. at 302.
Here, the terms of the agreement appear to be clear and unambiguous:
This [d]ispute [r]esolution [a]greement and the
[d]ispute [r]esolution [r]ules and [p]rocedures affect
your legal rights. You may wish to seek legal advice
before signing this . . . [a]greement.
....
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I AGREE AND ACKNOWLEDGE RECEIPT OF THE
DISPUTE RESOLUTION RULES AND
PROCEDURES.
I AGREE THAT I WILL RESOLVE ANY AND ALL
CLAIMS OR CONTROVERSIES BETWEEN ME
AND [DEFENDANTS] EXCLUSIVELY BY FINAL
AND BINDING ARBITRATION IN MY
INDIVIDUAL CAPACITY BEFORE A NEUTRAL
ARBITRATOR INSTEAD OF ANY COURT ACTION
OR JURY TRIAL WHICH I HEREBY EXPRESSLY
FOREVER GIVE UP.
However, the party seeking to enforce an arbitration agreement must
prove the nonmoving party knowingly and voluntarily assented to it. See
Atalese, 219 N.J. at 447 (quoting Garfinkel v. Morristown Obstetrics &
Gynecology Assocs., 168 N.J. 124, 135 (2001)); Midland Funding LLC v.
Bordeaux, 447 N.J. Super. 330, 336 (App. Div. 2016). Assent requires "some
concrete manifestation of the [party's] intent as reflected in the text of the
agreement itself." Leodori, 175 N.J. at 300 (quoting Garfinkel, 168 N.J. at 135).
"[A] valid waiver results only from an explicit, affirmative agreement that
unmistakably reflects the employee's assent." Id. at 303 (citing Garfinkel, 168
N.J. at 135 (instructing when asked to enforce an arbitration agreement, "[t]he
[c]ourt [may] not assume that employees intend to waive [their] rights")).
Although a party's signature is "not strictly required, a party's signature to
an agreement is the customary and perhaps surest indication of assent." Id. at
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306-07; see id. at 305 ("When one party . . . presents a contract for signature to
another party, the omission of that other party's signature is a significant factor
in determining whether the two parties mutually have reached an agreement.").
Absent a signature, the party seeking to enforce an arbitration agreement must
provide some other explicit or unmistakable "indication that the employee
affirmatively had agreed to" and "intended to abide by th[e] [arbitration]
provision." Id. at 305, 307. "Finding no such proof, [the court] must hold for
plaintiff." Id. at 307.
A virtual signature is not an unmistakable indication of consent where the
employee denies having signed the agreement. In Knight, the plaintiff asserted
defendant had "neither displayed the [arbitration] provision nor explained its
legal ramifications to her at any time." 465 N.J. Super. at 427. More
importantly, she denied "checking any boxes on [defendant's] [application],
including the box, which would otherwise indicate her assent to be bound by the
terms of an arbitration provision." Ibid. We noted the importance of plaintiff's
assertion, "from the outset of the litigation . . . that she never checked any boxes
on the [application], including the arbitration provision" and defendant's failure
to have "provided plaintiff with an electronic or hard copy of the [agreement] at
any time." Id. at 427-28. Because "the trial court specifically noted there existed
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'a factual issue' as to whether plaintiff checked the arbitration box," we
concluded the plaintiff had "not 'sign[ed]' the arbitration agreement." Id. at 427.
Here, the trial court held "[t]he record is undisputed that . . . [plaintiff]
executed the electronic signature . . . signifying her assent to its terms." In
finding the record uncontroverted, the trial court relied primarily on the IP
address6 attached to the agreement's electronic signature, which "verifie[d]
[plaintiff's] use of the electronic signature block from a remote computer." The
court also gave considerable weight to the testimony of Mimi Stokesberry, the
Vice President of Human Resources for LA Fitness, who developed the
application and onboarding process.
At the hearing, Stokesberry testified that in order to apply for a position
at LA Fitness, "[t]he applicant would go to our public website," could apply
"[f]rom any computer . . . [and] [or] even do it from their phone." After the
applicant submits the application, "the[] [application] fills in the date and . . .
shows [defendants'] the IP address from which [the application] was executed."
When asked how she knew the IP address listed on plaintiff's application was
6
An IP address "acts like a literal address." Digital 101: What is an IP address
and what does it mean?, L EADFORENSICS, https://www.leadforensics.com/
digital-101-what-is-an-ip-address-and-what-does-it-mean/ (last reviewed Oct.
26, 2021). "Every online action involves an exchange of IP addresses." Ibid.
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not one of defendants' addresses, Stokesberry responded, "Because ours all start
with [ten]."
Based on the proofs, there is no dispute that defendants' application
contains plaintiff's name, personal information, and typed signature, i.e., her
name typed "exactly the way it was typed in at the beginning of the application."
"Stokesb[erry] testified this is the only application and it was the one used to
hire [plaintiff], and there's no dispute that [the application] was filled out outside
of LA Fitness." Saliently, defendants did not suggest that there was no dispute
"[plaintiff] executed the electronic signature . . . signifying her assent to its
terms."
Notwithstanding the documentary evidence, throughout her testimony at
the hearing, plaintiff consistently disputed the fact that she completed
defendants' application:
Yes, it's my information, but I didn't put it there.
....
I submitted [my] resume through Snagajob.
....
I don't know [who put down, "Radius will travel to
work [ten] miles"].
....
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I don't know [if somebody made it up].
....
It's not accurate [that I have a high school diploma or
GED].
....
I didn't [supply that information].
....
[The information under "Reasons for leaving" was] on
my resume.
....
I do not know [how information about an interest in
club staff got into the application].
....
I do not know [how that information could have been
inputted in here].
When asked whether she was aware if someone else filled out the defendants'
application on her behalf, plaintiff responded she was unaware. Rather, plaintiff
consistently asserted she had not applied for the position through defendants'
website, but rather applied on a separate app. And, plaintiff claimed she applied
for the position "on [her] telephone . . . [on] an app that [she] downloaded,"
"called Snagajob." According to plaintiff:
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Snagajob . . . is basically an app that you download and
it has many different employment opportunities and
many different jobs, whatever category you want. You
just put what you're looking for and a whole bunch of
jobs come up and you're able to click on it and you're
able to apply for it.
After downloading Snagajob, plaintiff claims she "started submitting
applications to many different jobs and . . . places[,] [and] came across LA
Fitness. So [she] attached [her] resume to the app . . . and . . . clicked submit
and . . . submitted [her] resume to whoever posted the job." After considering
plaintiff's testimony, the trial court found she had "answered [defendants'] job
posting using . . . Snagajob," even though this fact was not included in plaintiff's
certification in opposition to defendant's motion.
Stokesberry admitted she was unaware of Snagajob. Although
Stokesberry denied an applicant could use any other "website" to apply for a LA
Fitness position, she acknowledged it was possible that the Holmdel gym could
have advertised on Snagajob. She stated, "I don't know if managers out there
are doing their own thing." Stokesberry claimed to "know that . . . VP's
advertise, indeed we've given them the verbiage to use." Moreover, Stokesberry
testified that the LA Fitness contract does not create a binding contract between
the applicant and LA Fitness, and Stokesberry had even seen ads on Craigslist,
which, when brought to her attention, were requested to be taken down.
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At the hearing, Farley testified that during the onboarding process,
plaintiff sat across from his desk, the computer screen was facing him, and out
of her sight. Farley also stated that plaintiff signed her name on an electronic
signature pad, but he also admitted he had no independent recollection of
plaintiff or her onboarding process—he simply testified as to his "general
practices."
Based on our review of the record developed during the plenary hearing,
we are constrained to reverse and remand this matter because we conclude there
is a factual issue as to whether plaintiff typed the electronic signature. Knight,
465 N.J. Super. at 427. The circumstances surrounding plaintiff's execution of
the agreement is subject to conflicting interpretations based upon the record
before us and does not present a clear expression of an explicit and voluntary
agreement to forego the court system and be bound by arbitration and requi res
further factual findings by the trial court.
Moreover, the disclaimer states that "neither this document," which
includes the putative arbitration agreement, "nor any offer of employment from
the employer constitutes an employment contract unless a specific document to
that effect is executed by both the employer and myself." (Emphasis added).
Thus, the application itself suggests that binding contractual obligations would
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be set forth in a separate "specific document" setting forth its terms, and, a lso
declares that the application is not a binding contract. The Woolley disclaimer
is unclear; it does not carve out the arbitration agreement from its disavowal of
the application as a contract. For that reason, the disclaimer could be construed
as ambiguous and misleading and, as a result, it could not be reasonably
concluded plaintiff knowingly consented to a binding contractual obligation to
arbitrate her claims.
On remand, because the trial court did not address whether the onboarding
arbitration agreement allegedly signed without plaintiff's opportunity for review
was a valid and binding contract, the trial court must make findings of fact and
conclusions of law on the issues pertaining to the formation of the second
arbitration provision before an arbitrator may be empowered to decide disputes
related to the parties' agreement.
III.
Finally, plaintiff contends she did not waive her right to a jury trial on
claims for injunctive relief under the NJLAD. Here, defendant's agreement
includes "claims under federal, state and local statutory or common law, such as
. . . the law of contract and law of tort." Plaintiff claims the arbitration
agreement's language "provide[s] an express exception for 'claims by either
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party for injunctive relief pending arbitration as provided by applicable state
law.'" (emphasis added). No specific, applicable State law has been advanced
by plaintiff—rather, her claim for injunctive relief appears to stem from the
NJLAD's "overarching goal" to "eradicate[e] . . . the cancer of discrimination."
(citing Fuchilla v. Layman, 109 NJ. 319, 334-35 (1988)). And, plaintiff argues
under a plain reading, the arbitration agreement functionally requires that
"claims by either party for injunctive relief" carve the entire claim from
arbitration as it relates to liability and injunctive relief pending arbitration of the
monetary damages.
In contrast, defendants contend that the applicable state law is N.J.S.A.
2A:23B-8(b)(2), which states "[a]fter an arbitrator is appointed and is authorized
and able to act . . . a party to an arbitration proceeding may move the court for
a provisional remedy only if the matter is urgent and the arbitrator is not able to
act timely or the arbitrator cannot provide an adequate remedy." Here, because
defendants allowed Walker to return to the Holmdel location after her
employment ended, plaintiff seeks "injunctive relief to protect the rights of other
victims of harassment." We note that plaintiff asserts this claim without having
established defendants' liability under the NJLAD or other statutory or common
law or identifying the individuals she deems need protection from harassment.
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The trial court determined the provision on which plaintiff "relies does
not exempt from the [d]ispute [r]esolution [a]greement all claims for injunctive
relief that may be afforded a litigant under applicable law" and "is simply not
the injunctive relief [plaintiff] seeks in her lawsuit." On remand, the trial court
may reconsider its decision after considering any additional evidence.
Reversed and remanded for further proceedings consistent with this
opinion. We do not retain jurisdiction.
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