A state appeals panel upheld a ruling that a former employee who sued PSE&G in 2015 after being fired, but previously signed an arbitration agreement with the company in 2008, was compelled to move forward with arbitration rather than go to court.

The Appellate Division in Guirguess v. Public Service Electric and Gas cast aside an argument that March 2019 amendments to the Law Against Discrimination by the state Legislature prohibited his discrimination claims from going to arbitration. Those amendments were prospective, or only applicable to future claims, the panel said.

But the panel disagreed with the trial court's dismissal of the employee's complaint with prejudice, and said the Federal Arbitration Act provides that a party may request a stay if a court action has commenced on any issue involving arbitration under the agreement.

"We affirm the portion of the order compelling arbitration, but remand with direction that a new order be entered staying the action pending the arbitration," Appellate Division Judges Clarkson Fisher, Allison Accurso and Robert Gilson said in the opinion Tuesday.

"In summary, the Arbitration Agreement is valid and delegates the threshold question of the scope of the arbitration to the arbitrator," wrote the judges. "Therefore, under the FAA the parties are obligated to proceed to arbitration."

"The arbitrator will then decide if the arbitration agreement governs plaintiff's termination from PSE&G. If so, the arbitrator will then decide the merits of plaintiff's claims," added the judges, who heard the case last Oct. 16.

PSE&G and Richard Blackman, a senior project manager at the company who had sent the plaintiff David Guirguess a termination letter, are named as defendants in the complaint.

The case was on appeal from Middlesex County Superior Court, Law Division, stemming from a Feb. 4, 2019, order granting defendants'  motion to compel arbitration and dismissing Guirguess's complaint with prejudice.

The Appellate Division rejected all three of Guirguess' arguments. He contended that the arbitration agreement he signed in 2008 does not govern the claims in his complaint; that it was unenforceable because it was contrary to a newly enacted provision of LAD; and that it did not govern his claims because the arbitration agreement specifically was with PSEG Power and not applicable to his employment with PSE&G and PSEG Services.

"The arbitration agreement signed by plaintiff is valid," wrote the judges. "It was the product of mutual assent and it clearly stated that the parties were giving up their right to pursue all employment-related claims in court and, instead, agreed to arbitrate those claims before an AAA arbitrator."

"Contrary to plaintiff's argument, the arbitration agreement is neither invalid nor unenforceable under the recent amendments to LAD," they added.

Darren Barreiro of Greenbaum, Rowe, Smith & Davis in Iselin represented Guirguess. Barreiro did not return a call for comment.

Amanda Kirsten Caldwell of Fisher & Phillips in Wayne, Pennsylvania, represented the defendants. Caldwell was also not available to comment.

According to the per curiam decision Tuesday, Guirguess had accepted an offer of employment as a nuclear shift supervisor with PSE&G subsidiary PSEG Nuclear LLC in December 2008. On that day, he signed a mandatory arbitration agreement that provided: "As a condition of my employment, I agree to waive my right to a jury trial in any action or proceeding related to my employment with PSEG. I understand that I am waiving my right to a jury trial voluntarily and knowingly, and free from duress or coercion."

In May 2011, Guirguess switched jobs to become "Project Manager (Remediation)." That offer letter on "PSEG Services Corporation" letterhead did not mention arbitration and it did not enclose an arbitration agreement, according to the decision.

In September 2016, Blackman sent Guirguess a termination letter on PSE&G letterhead, citing as reasons that Guirguess billed inaccurate work hours, falsified expense reports, and removed sign-in sheets at one of his projects.

In May 2017, Guirguess filed a complaint against PSE&G, PSEG Services and Blackman, alleging violation of the state Conscientious Employee Protection Act and the LAD, as well as common-law causes of action.

The defendants filed a motion to compel arbitration, contending that the 2008 arbitration agreement with PSEG Nuclear applied to plaintiff's later employment with PSE&G and PSEG Services. Without hearing oral argument or giving reasons for its decision, the trial court granted the motion, and entered an order compelling arbitration and dismissing Guirguess's complaint with prejudice, according to the decision.

On Guirguess' appeal, the Appellate Division vacated the order and remanded for the trial court to reconsider Guirguess' motion with oral argument and enter a new order.

After hearing oral argument following the remand, the trial court came to the same conclusion and again granted the motion to compel arbitration. In the Feb. 4, 2019, ruling, the trial court held that the 2008 arbitration agreement covered PSEG and its subsidiaries. It also said that when Guirguess changed jobs in May 2011, from PSEG Power to PSE&G, that he essentially transferred from one PSEG subsidiary to another and continued to receive PSEG benefits.

Guirguess appealed again, now arguing that the March 2019 amendments to the LAD prohibited arbitration.

The arbitration agreement was too vague and thus unenforceable, and it violated the LAD amendments, Guirguess said. Among the amendments was a section mandating that a "provision in any employment contract that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment shall be deemed against public policy and unenforceable."

To which the appellate panel on Tuesday responded: "The 2019 amendments to LAD apply only prospectively." The panel noted the effective date of the LAD amendments was March 18, 2019, and that the arbitration agreement signed by Guirguess was entered into on Dec. 20, 2008.

"Accordingly, the new section of LAD does not apply to or govern the Arbitration Agreement at issue here," wrote the judges.