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Tuesday, January 7, 2014

Raymour & Flanigan's Arbitration Clause Unenforceable

By: Peter J. Lamont, Esq.
New Jersey Business and Personal Law Attorney
Law Offices of Peter J. Lamont

A New Jersey judge has held that the arbitration requirement of the Raymour & Flanigan employee handbook is not enforceable due to conflicting working in the clause.  The handbook contains a clause that requires all workplace disputes to be arbitrated.  If worded properly, NJ courts will enforce such provision.  However, in this case the clause was so amigos that it could not be enforced. 
The facts of this case involve a former employee who was fired allegedly due to a disability.  When the former employee filed a lawsuit Raymour demanded, under a program added to the employee handbook in January 2012, that she  arbitrate her claims with the American Arbitration Association.
The subject arbitration arbitration program specifically covered claims under the Americans With Disabilities Act and Title VII, and provided, "This Program is an essential element of your continued employment relationship with Raymour & Flanigan and is a condition of your employment."
The handbook also stated,  "THIS HANDBOOK IS NOT A CONTRACT OF EMPLOYMENT,"  in boldface type that employment was at-will and said, "Nothing in this Handbook, or any other Company practice or communication or document, including benefit plan descriptions, creates a promise of continued employment, employment contract, term or obligation of any kind on the part of the Company."
The Judge ruled that he provision was unenforceable and allowed the litigation to move forward. 

Part of the problem with Raymour's handbook is that it was distributed by the home office to all stores in the country.  They did not create state specific handbooks as they should have.  If you are an employer or company and have locations outside of your home state, you need to have a lawyer draft state specific documents and agreements. Each state has their own licensing, registration, contract and compliance laws. 

If you would like more information about this topic or have general legal questions, please feel free to contact me at (973)949-3770 or via email at plamont@peterlamontesq.com We answer legal questions on a daily basis and would be happy to discuss any issues or questions that you have with you.  Offices in: New Jersey New York, Colorado & Puerto Rico.  Affiliated throughout the country.

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