A former J.C. Penney employee has to submit her employment dispute to binding arbitration even though the form she signed to give assent did not recite the entire policy, a New Jersey appeals court has ruled.

The Appellate Division reversed the dismissal of a motion by J.C. Penney to dismiss the complaint and compel arbitration of an employment dispute with Alexis Russo. She claimed she was fired from the company's East Brunswick branch for having young children, and she brought claims against the retailer under the Law Against Discrimination and the Conscientious Employee Protection Act.

The Law Division denied J.C. Penney's motion to compel arbitration because the page on the retailer's intranet that was signed by Russo did not list the claims that are subject to arbitration. J.C. Penney moved for reconsideration, and Superior Court Judge Francis Schultz of Hudson County conceded that the format of the J.C. Penney form passed legal muster but found the rules governing arbitration disputes “misleading” and therefore invalid.

J.C. Penney's new-employee orientation included a series of steps on the company's intranet, such as confirmation of the employment offer, completion of forms, review of the company dress code and execution of a binding arbitration agreement. The full text of the arbitration agreement was incorporated through a hyperlink on the agreement's main page, which also included a description of the rules governing employment disputes and an electronic signature box. The rules identified types of claims subject to binding arbitration, including discrimination, retaliation, wrongful termination and breach of common-law obligations or duties.

Russo claimed that she was rushed through the orientation process and that she did not realize she was signing a mandatory agreement. She also suggested someone else clicked the “agree” button for her while she was out of the room. However, Schultz concluded that Russo signed the agreement knowingly and voluntarily.

On appeal, J.C. Penney argued that its agreement constitutes a valid contract to arbitrate, and that Schultz held the company to a more stringent requirement for enforceability than has been established by case law.

Appellate Division judges Richard Hoffman and Jessica Mayer, citing case law, said a page where an employee acknowledges and agrees to an arbitration clause need not recite the full policy, as long the policy is explained more fully in an accompanying handbook or other document available to the employee. They said an arbitration agreement is enforceable even if the specific rules are only referenced in the agreement.

“In this case, the agreement plainly stated that plaintiff was agreeing 'to resolve disputes arising from, related to, or asserted after the termination of [her] employment through mandatory binding arbitration under the J.C. Penney Rules of Employment Arbitration' and 'waiv[ing] the right to resolve these disputes in courts.' Because the rules were provided to plaintiff, the agreement is valid and enforceable,” Hoffman and Mayer said in an unsigned ruling.

“We disagree with the motion judge's legal conclusion that the agreement was invalid because the list of claims subject to binding arbitration was not included on the face of the one-page agreement. We find that the claims subject to binding arbitration were described fully in the hyperlink to the agreement and that plaintiff expressly acknowledged she had an opportunity to review the entire agreement, including the rules,” they said.

Elizabeth Foster, the Dumont solo practitioner who represented Russo, said her client was contemplating an appeal to the Supreme Court.

“We're obviously disappointed. Arbitration does not give employment plaintiffs the same opportunity for justice that the jury system does,” said Foster.

“I think it's becoming more common for employers to trick employees into signing an arbitration agreement. My client quit her [previous] job [to work at J.C. Penney] and didn't know anything about an arbitration agreement. Not until she got fired and we sent a demand letter, not until we sued, did we know there was an arbitration agreement.

J.C. Penney was represented by Carmon Popler of LeClairRyan in Philadelphia, who did not return a call about the case.