August 24, 2020
On August 18, 2020, the New Jersey Supreme Court issued its decision in Skuse v. Pfizer, Inc., concerning employees’ arbitration of claims against their employers. Reversing an intermediate appellate court, the Supreme Court upheld an employer’s arbitration policy that it had disseminated through email and that deemed an employee to have assented to arbitrate any employment claims by continuing to work for the employer for a certain period.
The employer, Pfizer, sent a series of two emails to its employees, including plaintiff Amy Skuse. The first included an arbitration agreement that contained a clause advising employees that if they continued working for sixty days after receipt of the policy, they will have been “deemed to have consented to, ratified and accepted” the agreement, whether or not they affirmatively acknowledged the agreement.
In the second email sent the next day, Pfizer sent its employees a “training” module called “Mutual Arbitration and Class Waiver Agreement and Acknowledgement,” that was an “activity” to be completed within two months. That module consisted of four slides, one of which similarly stated that even if the employee does not acknowledge the arbitration agreement, the employee will be “deemed to have consented to, ratified and accepted” the agreement by continuing to work for sixty (60) days after receipt of the policy. At the end of the slide was button that said: “CLICK HERE to acknowledge,” and the final slide thanked the employee for “reviewing” the agreement and allowed the employee to exit the “course.”
Skuse received both emails and completed the “training” module and was terminated just over sixty days later after refusing to get vaccinated against corporate policy. The foregoing was found sufficient to form an agreement to arbitrate.
First, the Court held that the arbitration agreement itself and attendant communications clearly informed Skuse that she would waive her right to sue in court if she continued her employment for sixty days. It premised its holding on the general rule of contract law that “conduct can constitute contractual assent.” The Court pointed to the language of the agreement advising her that she was deemed to consent by continued employment for sixty days—with no express acknowledgment of the agreement by the employee required.
Second, the Court found that email transmittal of the arbitration agreement was sufficient and appropriate. Nothing in the emails concealed the agreement or understated its importance. Interestingly, the Court did express disapproval of Pfizer’s decision to label the slideshow a “training” module, because “training” was not the most accurate terminology to describe what was occurring. That misnomer was, nevertheless, not grounds to invalidate the arbitration agreement, given the “content and tone” of Pfizer’s communications.
Lastly, the Court rejected the argument that the “CLICK HERE to acknowledge” button—as opposed to “to agree”—was insufficient, because Skuse had assented to the arbitration agreement by way of “Pfizer’s designated method of assent -- her continued employment for an additional sixty days” after receipt of the agreement. In other words, whether she clicked the acknowledgement button was effectively irrelevant. It was just another reminder that regardless, her consent to arbitrate was by her conduct of remaining employed for sixty days.
Justice Albin Lays Groundwork for Future Challenges to Arbitration Agreements
Justice Barry Albin, the author of the Court’s landmark—though oft-debated— 2014 decision in Atalese v. U.S. Legal Services Group, L.P., concurred in the judgment. However, he expressed his view that the Court would soon have to confront the “more profound question” of whether employment arbitration agreements are contracts of adhesion contrary to the fundamental constitutional right of a civil jury trial and, therefore, unconscionable and unenforceable. He observed that Skuse had not raised that issue. In other words, Justice Albin laid the groundwork for future employee-plaintiffs to challenge their arbitration agreements on that more fundamental ground, such that the issue may be brought before the Court in the not-so-distant future.
The Chief Justice’s Dissent
Chief Justice Stuart Rabner dissented. He could not find “clear and unmistakable” proof—the standard used in the Court’s previous arbitration decisions—that Skuse had assented or agreed to the arbitration provision. Neither the clickable “acknowledge” button nor Pfizer’s “one-sided declaration that consent would be deemed by default, met that standard,” according to the Chief Justice. It was his position that an employer cannot unilaterally declare an employee’s agreement to waive rights because, as with any other contract, “one side cannot simply declare that the other agrees.” He believed that Pfizer’s unilateral declaration of an employee’s assent was an attempt to bypass basic contractual principles.
The Chief Justice also pointed out that, while the majority’s decision critiqued Pfizer’s language used in their communications, the fact that the Court nevertheless upheld the agreement would “usher in a new day for arbitration agreements.” More precisely, he posited that, going forward, no employers will ask their employees to expressly agree to arbitration, but instead, will simply ask employees to acknowledge their receipt of arbitration policies and advise that they are deemed to consent by “continuing to show up for work.”
Four Key Takeaways from Skuse
What is the big picture takeaway from the Skuse decision? At least in the employment context:
It isn’t hard to believe that the Chief Justice’s intuition will come to fruition—and quickly. We may soon see the extinction of employers expressly seeking their employees’ agreement to arbitrate claims. To be sure, Justice Albin’s concurrence paves the way for future, more fundamental challenges to industry-wide employment arbitration agreements.
However, it’s hard to envision a majority of this Court essentially reversing course and declaring unconscionable and unenforceable what it just recently found enforceable. The probable confirmation of Fabiana Pierre-Louis as the newest Justice of the Court will likely not be enough to chart a new course. She will take the seat of retiring Justice Walter Timpone, who was not in the four-Justice majority in Skuse.