On February 6, 2017, the Appellate Division of the New Jersey Superior Court reached a key decision in determining the specificity required in waiver provisions in employment contracts. The New Jersey appeals court reversed and remanded a $2 million attorneys’ fee award awarded to the employer, Heartland Payment Systems, Inc.

In the matter, Noren v. Heartland Payment Systems, Inc., an employee brought a suit against his former employer for a number of claims that at the time of trial were limited to breach of contract and violation of the Conscientious Employee Protection Act (CEPA). After determining that Mr. Noren had waived his right to a trial by jury, the trial court found in favor of the employer on both claims and dismissed Mr. Noren’s action.

Mr. Noren appealed the trial court’s decision on the basis that the court incorrectly denied him a trial by jury.

Within Mr. Noren’s employment contract was a jury-waiver provision, which stated that it applied to: “any suit, action or proceeding under, in connection with or to enforce this Agreement.” The Appellate Division ultimately determined that the language of the jury-waiver provision did not clearly and unambiguously waive Mr. Noren’s right to a trial by jury as it relates to statutory claims such as CEPA.

The right to a trial by jury is a right for all New Jersey litigants and is specifically guaranteed under CEPA. The Appellate Division determined that in order for the jury-waiver provision to be effective regarding the CEPA claim, the provision would have to specify that statutory claims are waived. Because the jury-waiver provision had limiting language, which only applied to claims, actions, and suits from “this agreement” it could not be broadly defined to include claims outside of the agreement such as CEPA claims.

What Does this Mean?

The immediate aftermath is that employee contracts, at the very least jury-waiver provisions, will not be interpreted to the broadest extent possible. Whether this ruling will be applied to all employee contract provisions remains to be seen. Nevertheless, this is a victory for employees. Employment contracts will require more specificity, especially with respect to waiver provisions. This is important not only when interpreting existing employment contracts, but also when negotiating new contracts.

Matthew R. Tavares focuses his practice in Litigation, Employment Law, and School Law matters. He is a trained mediator and has successfully mediated small claims and special civil part matters.

You may contact Matt at (908) 751-1551, or matthew@legalcounselnj.com.