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A federal district court in New Jersey held that an arbitration agreement did not apply to a former employee’s intentional tort claims based on its ruling that the agreement covered only statutory claims and claims arising from termination.
In Steigerwalt v. Terminix Int’l Co., No. 06 CV 1855(JEI), 2006 WL 3000362 (D. N.J., Oct. 19, 2006), Steigerwalt sued Terminix, his former employer, after he suffered severe neurological injuries during a fumigation job involving toxic methyl bromide. Terminix moved to compel arbitration of any claims not covered by New Jersey’s Workers’ Compensation Act (the Act).
The Court dismissed the claims subject to the Act but held that Steigerwalt’s remaining claims (i.e., the intentional wrongs) did not fall within the arbitration clause because it was not an “employment dispute.”
In reaching this holding, the Court reasoned that only a statutory claim or a claim arising from termination constituted an “employment dispute” under the agreement. The Court based this construction on the first paragraph of the agreement, which required arbitration of “any dispute arising out of Employee’s employment with Employer, including termination of employment and all statutory claims.”
Citing the principle that ambiguity should be construed against the drafter, the Court was unable to conclude that “a reasonable employee, after reading the first paragraph of the arbitration agreement would conceive that he was surrendering his right to seek a court remedy for personal injuries occasioned by an employer’s intentional conduct.”
Based on the Court’s interpretation, the arbitration agreement did not apply to Steigerwalt’s remaining claims because they were common law claims and did not arise from termination.
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