NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4749-18T3
JANET STAMATO,
Plaintiff-Appellant,
v.
MORGAN STANLEY SMITH
BARNEY, LLC,
Defendant-Respondent,
and
JOHN CAMPBELL, MAURICE
DAVIS, KATHERINE S. FESTA,
and JOSEPH VACCARO,
Defendants.
_____________________________
Argued January 14, 2020 – Decided February 13, 2020
Before Judges Hoffman and Currier.
On appeal from the Superior Court of New Jersey, Law
Division, Essex County, Docket No. L-8890-18.
Laura Marie Lo Giudice argued the cause for appellant
(Green Savits LLC, attorneys; Laura Marie Lo Giudice,
of counsel and on the briefs).
Tracy L. Gerber (Greenberg Traurig LLP) of the
Florida bar, admitted pro hac vice, argued the cause for
respondent (Greenberg Traurig LLP, attorneys;
Kristine J. Feher, on the brief).
PER CURIAM
In this action asserting employment-related claims based on alleged
violations of the New Jersey Law Against Discrimination (LAD), 1 plaintiff
appeals from the Law Division order granting defendants' motion to stay the
action and compel arbitration. We affirm.
I.
We derive the following facts from the record. Plaintiff has worked in the
financial industry for more than thirty years. She began her employment with
Morgan Stanley Smith Barney, LLC (Morgan Stanley) as a senior vice president
and financial advisor in March of 2009.
A. March 2009 Employment Agreement
1
N.J.S.A. 10:5-1 to -49.
A-4749-18T3
2
On March 19, 2009, plaintiff executed a document titled "Financial
Advisor Employment Agreement" (the Employment Agreement), which
contained the following provision relating to arbitration:
7.1 Any controversy or claim arising out of or relating
to (i) your employment by Morgan Stanley
(excluding statutory employment claims and other
claims covered by Paragraph 7.2), or (ii) this
Agreement (or its breach), will be settled by
arbitration before either the National Association
of Securities Dealers, Inc. ("NASD") or the New
York Stock Exchange, Inc. ("NYSE") in
accordance with their respective rules….
Paragraph 7.1 specifically excluded statutory employment claims, which
it stated are covered in paragraph 7.2. That paragraph, set forth below, does not
mention arbitration or a waiver of the right to litigate claims in court with a jury;
instead, it references only Morgan Stanley's internal alternative dispute
program:
7.2 Notwithstanding the arbitration requirement of
paragraph 7.1 above, you agree that certain other
claims (including, but not limited to, statutory
discrimination and other statutory employment
claims) must be submitted to Morgan Stanley's
Alternate Dispute Resolution Program,
"Convenient Access to Resolutions for
Employees" ("CARE"). Claims required to be
submitted to CARE are recited in the CARE
Guidebook maintained by the CARE Program
Administrator's Office and in the CARE Program
explanatory brochure.
A-4749-18T3
3
According to plaintiff, she never received the CARE Guidebook or
explanatory brochure, either before or after she executed the Employment
Agreement. The CARE Guidebook in effect in 2009 did not require plaintiff to
waive her right to litigate her employment claims in court, but merely provided
arbitration as an option, if Morgan Stanley agreed. The CARE Guidebook also
stated,
CARE creates more options for resolving your
employment-related issues, but it does not create a
contract with you or establish any of the terms of your
employment. . . .
Upon notice, the terms of CARE may change or be
discontinued. Any material changes made to CARE
will be announced in advance of their effective dates
and will then become equally binding upon you and the
Firm.
In 2015, Morgan Stanley announced its expansion of the CARE program
to compel mandatory arbitration for all covered claims. Employees received an
email announcing the change – the email included links to the CARE Arbitration
Agreement, an updated CARE guidebook describing the expanded arbitration
program, and a "CARE Arbitration Program Opt-Out Form." The record
indicates plaintiff received the email titled "Expansion of CARE Arbitration
Program," containing the announcement and document links, on September 2,
2015. Plaintiff certified "hav[ing] no recollection of receiving" this email or
A-4749-18T3
4
"follow[ing] any of the links to open either the Arbitration Agreement or [the]
Opt-Out form."
The five-paragraph email explained that, effective October 2, 2015,
arbitration under the new "CARE Arbitration Program" would be "mandatory
for all employees" unless an employee individually chose to opt out:
Morgan Stanley is announcing the expansion of
CARE . . . to extend arbitration obligation for all US
employees-registered and non-registered. Effective
October 2, 2015, arbitration under the CARE
Arbitration Program will be mandatory for all
employees . . . and all covered claims between the firm
and employees will be resolved through final and
binding arbitration on a non-class, non-collective and
nonrepresentative action basis as more fully described
in the Arbitration Agreement and CARE Guidebook.
The email advised employees to review the CARE Arbitration Agreement and
the CARE guidebook.
Under the heading "Next Steps," the email stated,
By continuing your employment with Morgan Stanley,
you accept and agree to, and will be covered and bound
by the terms of the Arbitration Agreement and the
Arbitration Provisions in the CARE Guidebook, unless
you opt out of the Care Arbitration Program by
completing, signing and returning an effective CARE
Arbitration Opt-Out Form by October 2, 2015. . . . If
you remain employed and do not timely complete, sign
and submit an effective CARE Arbitration Program
Opt-Out Form, . . . you have consented and agreed to
A-4749-18T3
5
the terms of the Arbitration Agreement and the
arbitration provisions of the CARE Guidebook.
Plaintiff did not opt-out of the CARE Arbitration Agreement during the
opt-out window. Regarding her lack of recollection of receiving the September
2, 2015 email, plaintiff explained she received "multiple emails every day from
different departments providing information concerning different programs or
opportunities," and that she paid little attention to them "because they simply
did not impact [her] job responsibilities."
B. March 2015 Growth Bonus Award
Throughout the course of her employment at Morgan Stanley, plaintiff
was eligible for various bonuses and awards based on her performance. To
receive these bonuses and awards, Morgan Stanley required plaintiff to execute
agreements setting forth the terms for her receipt of the bonuses and the terms
that would apply to her upon acceptance. The Bonus Agreement obligated
Morgan Stanley to make the bonus payment to plaintiff "within fifteen business
days following March 15, 2016" (with subsequent bonuses to be paid annually
until 2020), provided that plaintiff remained an employee in good standing at
Morgan Stanley on the payment dates, and subject to the terms of the Bonus
Agreement. Pursuant to the Bonus Agreement, plaintiff received bonus
A-4749-18T3
6
payments of nearly $32,000: $10,786.97 in March 2016; $10,639.26 in March
2017; and $10,491.54 in March 2018.
The Bonus Agreement included a detailed arbitration provision setting
forth the terms of mandatory arbitration, and the venue and the types of claims
subject to arbitration, expressly including statutory discrimination claims. The
arbitration provision stood out because it had its own heading: "Arbitration
Agreement," at the top of page four of the Bonus Agreement; significantly, no
other paragraphs contained headings. The arbitration provision stated, in
relevant part,
Any controversy or claim . . . based on, arising out of,
or which arose out of or in any way relate to
[e]mployee's employment, compensation, and terms
and conditions of employment with Morgan Stanley…
including, but not limited to . . . statutory
discrimination, harassment and retaliation claims, and
claims under, based on, or relating to any federal, state
or local . . . statute . . . and any other . . . discrimination
or employment law . . . will be resolved by final and
binding arbitration . . . .
Plaintiff executed the Bonus Agreement on March 31, 2015. Plaintiff implied
she signed the agreement without reading it, as she "assumed . . . the document
related only to the bonus [she] was receiving, [as she] had no reason to even
suspect [it] contained agreements related to [her] entire employment relationship
with Morgan Stanley."
A-4749-18T3
7
In 2018, plaintiff voluntarily resigned from Morgan Stanley. On
December 17, 2018, plaintiff filed a four-count complaint against defendants,
Morgan Stanley and four of its executives, asserting LAD claims of age and
gender discrimination, hostile work environment based on age and gender
discrimination, aiding and abetting discrimination, and constructive discharge.
On March 18, 2019, defendants filed a motion "to stay the action . . . and to
compel arbitration of [p]laintiff's claims."
Following oral argument, the court granted defendants' motion,
concluding that plaintiff entered into a binding agreement which required her to
arbitrate her claims against Morgan Stanley. The court considered plaintiff a
"sophisticated party" who "is in [the] financial transactions business that deals
with due diligence involving different types of commercial agreements . . . ."
The court concluded the CARE Arbitration Agreement clearly expressed the
rights of the parties.
Regarding plaintiff's contention that the 2015 opt-out agreement failed to
provide adequate consideration and that it lacked her affirmative assent, the
motion court concluded that Jaworski v. Ernst and Young U.S. LLP, 441 N.J.
Super. 446 (App. Div. 2015) was dispositive of the arguments presented, finding
the facts and issues analogous. The court found plaintiff, like the employees in
A-4749-18T3
8
Jaworski, manifested her assent to be bound to the arbitration agreement by
continuing her employment upon receipt of the revised agreement and failing to
opt-out.
The motion court also found that the Bonus Agreement was "clear and
explicit as to the arbitration" provision and "it's clear that they entered into an
agreement by acceptance of that bonus award that they also accept to be bound
by the terms and agreement of that award contract. . . . "The court therefore
concluded that both the revised CARE Arbitration Agreement and Bonus Award
Agreement required the arbitration of plaintiff's claims against defendants.
On June 17, 2019, the motion court issued an order compelling arbitration
and staying the action pending resolution of any subsequent arbitration. Plaintiff
now appeals, arguing the motion court erroneously concluded the mandatory
arbitration provisions of the CARE Arbitration Agreement and the Bonus Award
Agreement are enforceable against her.
II.
We apply a de novo standard of review when reviewing a motion judge's
determination of the enforceability of a contract. Goffe v. Foulke Mgmt. Corp.,
238 N.J. 191, 207, 208 (2019). When reviewing arbitration clauses within
contracts, "the enforceability of arbitration provisions is a question of law;
A-4749-18T3
9
therefore, it is one to which we need not give deference to the analysis by the
trial court." Ibid.
We begin by recognizing the Federal and New Jersey Arbitration Acts
express a general policy favoring arbitration. Atalese v. U.S. Legal Services
Group, L.P., 219 N.J. 430, 440 (2014); see also 9 U.S.C. §§ 1 to 16; N.J.S.A.
2A:23B-1 to -32. "The public policy of this State favors arbitration as a means
of settling disputes that otherwise would be litigated in a court." Badiali v. N.J.
Mfrs. Ins. Grp., 220 N.J. 544, 556 (2015). Although enforcement is generally
favored, it "does not mean that every arbitration clause, however phrased, will
be enforceable." Atalese, 219 N.J. at 441.
A valid arbitration clause "must state its purpose clearly and
unambiguously." Id. at 435. Further, an arbitration agreement "must be the
product of mutual assent," which "requires that the parties have an
understanding of the terms to which they have agreed." Id. at 442 (quoting
NAACP of Camden Cty. E. v. Foulke Mgmt., 421 N.J. Super. 404, 424 (App.
Div. 2011)). Our Supreme Court clearly set forth that a party "cannot be
required to arbitrate when it cannot fairly be ascertained from the contract 's
language that [he or] she knowingly assented to the provision's terms or knew
that arbitration was the exclusive forum for dispute resolution." Kernahan v.
A-4749-18T3
10
Home Warranty Adm'r of Fla., Inc., 236 N.J. 301, 322 (2019). The "critical
inquiry" is whether an employee "surrendered [his or her] statutory rights
knowingly and voluntarily." Leodori v. Cigna Corp., 175 N.J. 293, 305 (2003).
In her brief, plaintiff's primary contention is that the motion court
mistakenly relied on Jaworski in reaching its conclusion to compel arbitration.
Instead, plaintiff urges us to follow Skuse v. Pfizer, Inc., 457 N.J. Super. 539,
550 (App. Div.) cert. granted 238 N.J. 374 (2019), which recognized, in the
"important context of an employer soliciting a waiver of an employee's statutory
rights," the critical importance that such communications substantiate "an
employee's 'explicit, affirmative agreement that unmistakably reflects the
employee's assent' to a binding arbitration policy." (emphasis in original)
(quoting Leodori, 175 N.J. 293, 303 (2003)).
In Skuse, Pfizer, the employer, disseminated a mandatory arbitration
policy and class waiver agreement to its employees through an email, as a
training module presenting the company's policy. Id. at 545. The email linked
the employees to the company's computer-based training portal, the same portal
employees used for all their assigned trainings. Id. at 546. The training module
consisted of four slides that presented an overview of the company's new
arbitration policy; however, the arbitration agreement was included in a separate
A-4749-18T3
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link and not displayed in the module. Id. at 546-47. One of the slides informed
employees the agreement was a mandatory condition of their employment and
that they would be deemed to have assented to the policy by continuing to work
for sixty days after being presented the agreement, despite failing to click
"acknowledge." Ibid. Employees agreed to the arbitration agreement by
checking a box which read "CLICK HERE to acknowledge." Id. at 548.
The trial court in Skuse relied on Jaworski and concluded the employee's
claims were subject to arbitration because the sixty-day waiver was legally
sufficient to manifest the employee's assent. Id. at 561-62. However, a different
panel of this court decided Skuse and declined to follow Jaworski; instead the
court reversed, holding that Pfizer's unilateral action of binding its employees
to arbitrate all claims, by acknowledging or ignoring a brief presentation
summarizing the agreement, did not constitute the "explicit, affirmative
agreement that unmistakably reflects [an] employee's assent" to arbitration. Id.
at 563 (quoting Leodori, 175 N.J. at 303).
In ruling that Morgan Stanley's revised Care Arbitration Agreement and
accompanying emails became enforceable against plaintiff based upon her
continued employment with Morgan Stanley and her failure to opt-out, the
motion court
A-4749-18T3
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focused only on Jaworski, without consideration of Skuse. In addition, the court
did not address the paragraph of the Employment Agreement that stated, "This
Agreement may be amended only by a writing signed by both [plaintiff] and
Morgan Stanley." While the motion court's analysis did not convince us that the
facts and circumstances warranted the application of Jaworski to impose the
terms of the revised CARE Arbitration Agreement upon plaintiff, we conclude
the motion court correctly ruled that plaintiff is subject to the terms of the Bonus
Award Agreement she signed.
We reject plaintiff's argument that the motion court should have allowed
her to avoid the clearly worded mandatory arbitration provision contained in the
Bonus Award Agreement based upon her incorrect assumption that "the
document related only to the bonus [she] was receiving." The Bonus Award
Agreement consisted of eleven pages containing sixteen numbered paragraphs,
with only numbered paragraph 7 set apart with a separate heading, as follows:
7. Arbitration Agreement
That same paragraph included eight sub-paragraphs and was the only paragraph
that contained sub-paragraphs. Most significantly, the Bonus Award Agreement
required a signature from plaintiff.
A-4749-18T3
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We conclude this signature requirement – at the end of an agreement
containing a clearly worded mandatory arbitration provision – satisfies the
mandate "for an 'explicit, affirmative agreement that unmistakably reflects [an]
employee's assent' to arbitration, and 'concrete proof' of a waiver of an
employee's rights to a jury trial and to litigate discrimination claims in court."
Skuse, 457 N.J. Super. at 563 (quoting Leodori, 175 N.J. at 303 and 307).
We therefore affirm the Law Division order under review based upon the
Bonus Award Agreement signed by plaintiff. Because plaintiff's agreement to
the terms of the Bonus Award Agreement provides adequate support for the
entry of the order granting a stay and compelling arbitration, we decline to
address the alternative basis reached by the motion court, based on the
September 2, 2015 email and Morgan Stanley's amended CARE Guidebook. 2
Any arguments asserted by plaintiff that we have not expressly addressed
lack sufficient merit to warrant discussion in a written opinion. R. 2:11-
3(e)(1)(E).
Affirmed.
2
Because our analysis diverges, in part, from the motion court, we note that
"we review orders and not, strictly speaking, reasons that support them. . . . [A]
correct result, even if predicated on an erroneous basis in fact or in law, will not
be overturned on appeal." El-Sioufi v. St. Peter's Univ. Hosp., 382 N.J. Super.
145, 169 (App. Div. 2005).
A-4749-18T3
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JANET STAMATO VS. MORGAN STANLEY SMITH BARNEY, LLC (L-8890-18, ESSEX COUNTY AND STATEWIDE)
Combined Opinion