In Skuse v. Pfizer, Inc., __ N.J. __, 2020 N.J. LEXIS 904 (Aug.18, 2020), the New Jersey Supreme Court resolved the tension with earlier case law created by the appellate division’s holding that “acknowledging” receipt of a company-wide email announcing a new policy requiring arbitration was not sufficient for the formation of an arbitration contract.
Pfizer had circulated two emails to all employees announcing its new arbitration policy and stating that employees would be deemed to have accepted that policy if they remained in the company’s employ more than 60 days later. In the first email, the final page of the “Agreement” stated:
You understand that your acknowledgement of this Agreement is not required for the Agreement to be enforced. If you begin or continue working for the Company sixty (60) days after receipt of this Agreement, even without acknowledging this Agreement, this Agreement will be effective, and you will be deemed to have consented to, ratified and accepted this Agreement through your acceptance of and/or continued employment with the Company.
The email also included a link to frequently asked questions, with answers such as, “The Arbitration Agreement is a condition of continued employment with the Company. If you begin or continue working for the Company sixty (60) days after receipt of this Agreement, it will be a contractual agreement that binds both you and the Company.” This warning was repeated at other locations, including a second email with four “slides.” The third slide stated, in part:
I understand that I must agree to the Mutual Arbitration and Class Waiver Agreement as a condition of my employment. Even if I do not click here, if I begin or continue working for the Company sixty (60) days after receipt of this Agreement, even without acknowledging this Agreement, this Agreement will be effective, and I will be deemed to have consented to, ratified and accepted this Agreement through my acceptance of and/or continued employment with the Company. After that paragraph, the slide contained a button instructing the employee to “CLICK HERE to acknowledge” the new policy, as indicated earlier in the slides.
A dispute arose when Skuse, a corporate flight attendant, declined to be vaccinated for yellow fever on religious grounds. (The vaccine contained animal products, the ingestion of which was contrary to her Buddhist faith.) The company allegedly refused an accommodation, and she was terminated. When she sued for violation of New Jersey’s Law Against Discrimination, the company successfully moved to compel arbitration. The trial court relied on Jaworski v. Ernst & Young U.S. LLP, 441 N.J. Super. 464 (App. Div. 2015), which had held that continuing employment could constitute assent to an announced arbitration policy. Skuse said the trial court should assume she had received the emails.
On appeal, the appellate division reversed, 457 N.J. Super. 539 (App. Div. 2019), holding that there must be an affirmative acceptance of the arbitration requirement by use of the word “agree” or a similar term. Implied agreement, or agreement by performance, was held “inadequate,” 457 N.J. Super. at 542, despite Jaworski and other cases holding that agreement could be indicated by accepting employment or continuing to work with knowledge of the arbitration policy.
The Supreme Court reversed, noting that courts may not subject arbitration agreements to “more burdensome requirements than those governing the formation of other contracts.” Slip Op. at 19, quoting Leodori v. CIGNA Corp., 175 N.J. 293, 302 (2003). It then reaffirmed Martindale v. Sandvik, Inc., 173 N.J. 76, 88-89 (2002), for the proposition that continued employment can “constitute sufficient consideration to support certain employment-related agreements,” and Weichert Co. Realtors v. Ryan, 128 N.J. 427, 436 (1992), that “assent” to an offer can be by words or “by conduct, creating a contract implied-in-fact.”
Given the prior case law, the question became whether it was appropriate to notify employees by emails sending attachments and slides termed “training,” and whether the employee need only “acknowledge” receipt of the email notice (by clicking a button in the electronic message) rather than “agree” to be bound by the terms set out in the communications. Leodori had held that where the company says that assent is to be indicated by signing the handbook at issue, acknowledging receipt or other methods of purported “assent” are not sufficient for contract formation. In Skuse, the Supreme Court held that the concerns evident in Leodori were not present, since Pfizer had informed the employees that assent would be communicated by continued employment, rather than by a signature or clicking “agree.” While characterizing the communication as a “training” module was a misnomer, it was held not “misleading” in this context. The court held that emails were a regular means of corporate communication, and employees who do not read their emails do so at their own risk. Consistent with standard contract principles, not reading a contract or clause does not negate contract formation where assent is otherwise present.
By amplifying the differences between Martindale and Leodori, in the context of mass email communications and click-wrap solicitations, Skuse gives employers clearer guidance regarding distributing an arbitration program and the means of obtaining employees’ assent, all marked as consistent with standard contract formation principles.