After Pfizer Ruling, Here Are Keys to Using Electronic Media to Present Binding Arbitration Policies

The “Skuse” appeals court said the manner of presenting the arbitration clause was too “oblique” and failed to provide the requisite assent of employees.

In the wake of an Appellate Division ruling invalidating Pfizer Inc.’s electronic distribution of a mandatory arbitration agreement to its workers, companies using computers and email to obtain employees’ approval of such policies should be candid about the arbitration agreement and its potential waiver of the employee’s statutory rights.

In Skuse v. Pfizer, the appeals court refused to enforce a mandatory arbitration agreement that the drugmaker emailed to employees for viewing during online training. In a Jan. 16 ruling, the appeals court said the manner of presenting the arbitration clause was too “oblique” and failed to provide the requisite assent of employees.

By asking them to “acknowledge” the mandatory arbitration policy by clicking on a box, rather than signing their names, the company failed to obtain “the valid personal agreement of an employee to give up his or her statutorily protected rights to litigate claims against an employer in a public forum and seek a trial by jury,” the appeals court said.

The appeals court in Skuse overturned a ruling that said the arbitration agreement was enforceable. The suit was brought by Amy Skuse, a former flight attendant on Pfizer’s corporate aircraft who said she refused to comply with the company’s vaccination policy for religious reasons.
Pfizer has asked the state Supreme Court to hear the case.

But even after the Skuse decision, employers needn’t rule out using computers and email to communicate with employees about an arbitration clause and to obtain their agreement to the policy, said Bruce Greenberg, a commercial litigator at Lite DePalma Greenberg in Newark.

“My impression is, employers who present candidly and directly what it is they’re looking for employees to agree to, won’t necessarily be precluded from doing what they want to do,” Greenberg said.
Greenberg noted that Judge Jack Sabatino, who wrote the Skuse decision, “said there was nothing necessarily wrong with using an email to do what Pfizer was looking to do. He emphasized that it was important to do it in a direct and straightforward fashion.”

Pfizer’s manner of presenting the arbitration agreement failed to recognize the serious nature of the issue, according to the panel of judges. The court said that “obtaining an employee’s binding waiver of his or her legal rights is not a training exercise. It is not on a par with routine or mundane training subjects, such as how to obtain an assigned space in an employee parking lot or process a travel voucher.”

A critical flaw in Skuse was Pfizer’s use of a click box on its computer screen asking employees to “acknowledge” the policy. While such click boxes are an acceptable means of obtaining mutual assent, Pfizer should have done more, like including a conspicuous disclosure about the employee’s waiver of rights, and a place for employees to initial key provisions of the agreement, said Benjamin Widener, chairman of the employment law group at Stark & Stark in Lawrenceville.

Another key flaw in Pfizer’s approach was the way the arbitration agreement was presented to employees as a “training policy,” Widener said. In so doing, the court noted that Pfizer diluted the legal significance of the situation.

When implemented and communicated appropriately, arbitration agreements are perfectly enforceable, according to Widener. He cited Singh v. Uber, a 2017 case from the District of New Jersey that found a valid arbitration agreement existed between parties in an employment dispute.

The Singh case “presents a road map, so to speak, of rules and guidelines employers should follow if they intend to seek an employee’s agreement to arbitration by way of a web-based platform or electronic application,” Widener said. “When read along with Skuse, Singh provides that an arbitration agreement and waiver of rights is clear on its face, and not called something else.”

In addition, if there is a hyperlink to a complete written agreement, then the material terms of the agreement should be conspicuously displayed immediately above the electronic signature or box to click manifesting acceptance, Widener said.

“The employee should know this is an arbitration agreement, a very serious document,” Widener said. “The employee should understand that they are being requested to give up these rights and agree to this arbitration agreement.”

But Mitchell Schley, a plaintiff-side employment lawyer in East Brunswick, takes a more cautious approach. He says the message lawyers should take from Skuse is that email is not a valid means to transmit an arbitration clause to employees.

New Brunswick sports bar to pay $57K to former employees, following wage theft suit

NEW BRUNSWICK, NJ – A New Brunswick sports bar has agreed to pay $57,500 to six former employees, following a wage theft lawsuit that went on several years, according to a release from New Labor, a local worker’s rights group.

The lawsuit, filed by former employee James Gerard, accused World of Beer of violating state and federal minimum wage laws, according to a federal lawsuit against the establishment in the summer 2015.

World of Beer has roughly 70 locations around the country in college towns such as New Brunswick, catering mainly to sports crowds.

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The New Brunswick business served and employed many Rutgers students, including several of the six former employees.

Although the New Brunswick establishment later changed its name to Hub City Brewhouse, it retained the same owners for a certain period. The lawsuit demanded any unpaid wages and overtime denied to the employees.

The suit alleged that the employees, all servers, were made to perform tasks for which they weren’t paid and hadn’t even signed up for, such as taking out trash, washing windows, mopping floors and cleaning bathrooms.

It was alleged the owners also applied a “tip credit” to the employees, paycheck without their prior knowledge or consent. Employees weren’t paid for the hours they spent in mandatory training, the suit said.

Gerard worked at World of Beer from August 2012 to May 2015, according to the suit. During the year he spent as a server, he earned $2.13 an hour for the first 40 hours, and wasn’t paid overtime, the lawsuit reads.

Then, after taking the job as a product manager in 2014 for the business, Geard earned a $400 weekly salary despite working upwards of 60 hours, the lawsuit said.

Gerard’s suit was filed against defendants Willie Mingo, Nirav Patel and Desiree Mingo, as well as TapMasters, LLC and Tapmasters II, LLC, according to the suit.

In June 2016, the owners of the sports bar agreed to pay the unpaid wages, according to New Labor. Yet that amount hadn’t been paid a year later. It was during this time that the business became Hub City Brewhouse.

The owners against whom the suit was filed were no longer with the bar and left in the summer 2017, according to a current owner, who declined to further comment.

The former owners could not be reached for comment, while their legal counsel declined to comment. A lawyer for Patel could not be immediately reached for comment.

Around June 2017, a federal judge entered a judgment enforcing the settlement, according to New Labor.

Soon after, Gerard’s counsel, East Brunswick attorney Mitchell Schley, petitioned the city to deny the Hub City Brewhouse the renewal of its food-service license if the payments weren’t made before November 30, prompting the payments to be made.

New Brunswick’s wage theft ordinance, enacted in December 2013 and considered the first of its kind in the state, prevents establishments from having their business licenses renewed if theyhave outstanding wage claims at the time of the application.

“We are pleased that we were finally able to obtain the money due the employees, who were mainly Rutgers students,” said Schley. “College students often fall victim to improper employment practices by unscrupulous employers.”

Reporter Daniel J. Munoz,;

Merrill Employees Seek Overtime Pay for Vetting Brokers’ E-Mails

Merrill Lynch is violating federal and state labor laws by failing to pay overtime to over 50 compliance employees who review emails for the firm’s retail brokers, according to a class-action claim filed Tuesday in the U.S. District Court of New Jersey.

Jennifer Porter, an e-mail reviewer for 17 years at Merrill’s Central Business Review Unit in Pennington, NJ, said the firm has knowingly classified her and colleagues as exempt from receiving overtime pay since Bank of America bought the broker-dealer in 2009.

E-mail reviewers are entitled to 1.5 times their hourly pay rate because they do not manage other employees or direct any business divisions, and do not qualify for “administrative” or “supervisory” exemptions, according to Mitchell Schley, a lawyer in East Brunswick, New Jersey, representing the plaintiffs.

“It’s a grueling job, and they work a lot of hours because they’re expected to have all e-mails checked by the end of the day,” Schley said.

The action is the latest in a long history of cases in which securities industry employees have battled firms’ arguments that they do not have to pay overtime to “exempt” executive, administrative or so-called professional workers who hit minimum pay levels.

Smith Barney reached a $98 million settlement with brokers in 2006 after arguing that salespeople are exempt from the Fair Labor Standards Act, and current and former Merrill client associates collected $89,000 from Merrill and Bank of America in a May settlement after suing them in August 2016 for more than $5 million.

The latest suit alleges that Merrill had classified e-mail reviewers as non-exempt employees entitled to overtime pay until its acquisition by Bank of America. The change was unlawful and made “pursuant to a policy, plan, or practice of minimizing labor costs and denying employees compensation,” the complaint said.

Porter was the second most tenured e-mail reviewer at Merrill when she left the firm in April, it said. She is seeking an unspecified amount of wages for the hours she and her colleagues worked beyond the 40-hour workweek, in addition to interest, injunctive relief and attorney’s’ fees and costs, according to the complaint.

A spokesman for Merrill Lynch declined to comment.

E-mail reviewers’ standard work day ran from 8:30 am to 5:30 pm, but they routinely work later into the day or remotely from home to meet the requirements of their jobs, the lawsuit alleges.

“Mondays were particularly demanding because FAs routinely sent emails to customers on Friday and over the weekend,” it said. “Management expected all of those emails to be reviewed by the end of Monday.”

The lawsuit gives some insight into the nature of reviewers’ jobs.

In addition to reviewing brokers’ electronic messages to customers and prospects that have been flagged by Merrill’s automated Autonomy review system and weeding out false positives, e-mail reviewers parse unflagged communications at random for potential violations, according to the lawsuit.

They are trained to give attention to any e-mail containing customer account information such as social security numbers, personal data such as birth dates, customer complaints, “guarantees” by brokers of investment returns, vulgar language, ethnic slurs and pornographic material and material marked as “For Internal Use Only,” the lawsuit said.