A Major Appellate Victory for NJ Workers
On February 26, 2024, a New Jersey Appeals Court affirmed a lower court ruling that an arbitration clause which would have prevented our clients from pursuing their class action wage claims in Court is unenforceable and contrary to New Jersey public policy. The employers in this case used a New York choice of law clause—which would have likely rendered the arbitration clause enforceable—to circumvent New Jersey’s more stringent requirement that a waiver of rights provision between parties with asymmetric bargaining power must explicitly state the rights that are being waived. The Court wrote: “[W]e conclude the arbitration agreements here are unenforceable because they fail to adequately ‘explain that the plaintiff[s] [are] giving up [their] right to bring [their] claims in court or have a jury resolve the dispute,’ as required by Atalese v. U.S. Legal Services Group, L.P., 219 N.J. 430, 447 (2014),” later adding, “Protecting individuals' rights to sue and to a jury trial, and ensuring any waiver of those rights is knowing, intelligent, and voluntary are unquestionably fundamental policies of New Jersey. Contrary to New Jersey law in this respect, New York law does not specifically require an arbitration clause explain that agreement thereto involves waiving the right to a jury trial, and defendants have cited no precedent to the contrary. Therefore, we are satisfied application of New York law in this circumstance would be contrary to a fundamental policy of New Jersey and accordingly apply New Jersey law.”
The Court further found the class-action waivers in plaintiffs’ contracts to be in applicable.
The case is a proposed class action on behalf of “last-mile” delivery drivers in New Jersey who we allege have been misclassified by Defendants CDL Last Mile Solutions and Subcontracting Concepts, LLC (“SCI”) as “independent contractors” when they are in fact employees. As a result of the misclassification, hundreds of delivery drivers—many of whom work long hours and have to pay for their own equipment—were deprived of overtime and subjected to other forms of wage theft. Read our complaint here.
The case is being litigated by Menken Simpson and Rozger LLP Partner Scott Simpson and Associate Raya F. Saksouk (both practicing in New Jersey pro hac vice). MSR is litigating the case with Partner Daniel J. Cohen and Associate Daniel C. Stark of the Bergen County, NJ law firm of Newman, Simpson & Cohen LLP.