The Risk of Waiting to Enforce Employee Arbitration Agreements

By Eric B. Meyer

It was just last month that I blogged about arbitration agreement tips for Pennsylvania employers from the 3rd U.S. Circuit Court of Appeals. I hate to leave New Jersey employers out of the loop, so today’s post is for you.

Last week, the New Jersey Superior Court, Appellate Division, in Cole v. Jersey City Medical Center denied a company’s attempt to enforce an arbitration provision in its employee contract because it waited too long to do so after being sued:

As a matter of litigation strategy, Liberty opted to participate in the suit brought in the Superior Court for a period of twenty months and did not raise the issue of arbitration until three days before the case was scheduled for trial. During this time, the parties completed their reciprocal discovery obligations and the case was ready for trial. This indicates a knowing and deliberate decision by Liberty to forgo raising arbitration as a forum to adjudicate plaintiff’s claims. Under these circumstances, Liberty is equitably estopped from compelling plaintiff to submit her claims to arbitration.”

New Jersey employers (and others, too) must remember that if they get sued by an employee and they have arbitration agreements, whether in employee handbooks, employment agreements, or otherwise, don’t delay in moving to compel arbitration. Otherwise, your fate may end up in the hands of the jury.

This was originally published on Eric B. Meyer’s blog, The Employer Handbook.