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Applying New Jersey law rather than the Federal Arbitration Act (FAA) and its policy favoring arbitration, a federal court in New Jersey held that a vaguely worded arbitration agreement did not require arbitration of an employee's statutory discrimination claims.
In Samukai v. Emily Fisher Charter School of Advanced Studies, Civil Action No. 06-1370, 2007 WL 316449 (D.N. J. Jan. 30, 2007), Samukai, a native of Liberia, alleged that he was demoted and terminated on the basis of his race and national origin in violation of 42 U.S.C. §1981 and 42 U.S.C. §1983. The employer argued that Samukai's claims were subject to an arbitration clause in his employment contract.
The Court held that the arbitration clause did not waive Samukai's right to have his discrimination and retaliatory discharge claims heard in a judicial forum. As a general rule, arbitration clauses that do no specifically mention statutory claims are still sufficient to waive a jury trial on statutory claims. See Martindale v. Sandvik, 800 A.2d 872 (N.J. 2002). However, Samukai's arbitration clause was even more ambiguous than the clause in Martindale because it failed to address both the plaintiff's statutory remedies and the plaintiff's waiver of the right to a jury trial. These facts brought the case more closely in line with Gilbert v. Fox & Roach, LP, 2005 WL 2347121 (D.N.J. 2005), where the court found the arbitration clause too ambiguous.
By ruling in favor of Samukai, the Court disregarded the FAA's strong federal policy favoring arbitration. See Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983). Normally, ambiguities are resolved in favor of arbitration, but the Court in this case felt compelled to apply New Jersey contract law in determining that the dispute was not subject to arbitration.
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