High Court Weighing State Arbitration Law's Effect on Wage Claims by FAA-Exempt Truckers | New Jersey Law Journal

The workers here are bringing Fair Labor Standards Act wage and hour claims.  The putative classes of truckers is faced with a mandatory arbitration clause - a far less desirable venue generally than a judicial forum.  In a twist on the usual stance - where workers are trying to escape the reach of the Federal Arbitration Act - plaintiffs here argue that it applies - and preempts the New Jersey Arbitration Act.  Because the FAA does not extend to transportation workers (and perhaps more - See New Prime) plaintiffs counsel argues that it exempts such workers from mandatory arbitration, contrary to the Appellate Division in Colon v. Strategic Delivery Solutions.

In the second case Arafa v. Health Express the Appellate Division refused to enforce an arbitration clause which declared it was based on the FAA - which excludes transportation workers whether direct employees or independent contractors (see NJ Law Journal editorial commentary on New Prime).



But as Justice Jaynee LaVecchia suggested during argument the FAA exclusion simply leaves New Jersey free to make its own law.  And the New Jersey Act does - it permits collectively bargained mandatory arbitration.  But it does not bar such provisions for non-union workers.

The plaintiff trial lawyers organization the New Jersey Association for Justice takes a position better grounded in New Jersey law: that their was no meeting of the minds, no informed consent to losing one's right to go to court rather than arbitrate. The Arafa facts seem to be the better fit for that argument.  - GWC

High Court Weighing State Arbitration Law's Effect on Wage Claims by FAA-Exempt Truckers | New Jersey Law Journal

by Suzette Parmley

Does the Federal Arbitration Act, including its exemption of workers in interstate commerce, preempt the New Jersey Arbitration Act?

That question is at the heart of arguments presented before the New Jersey Supreme Court on Monday in a pair of cases that yielded recent conflicting rulings, Colon v. Strategic Delivery Solutions and Arafa v. Health Express Corporation.

Ravi Sattiraju, an employment attorney in Middlesex County who represents the plaintiffs in both Colon and Arafa, presented first in Colon, where truck drivers are asserting wage-and-hour claims.

”This court has held that a fundamental tenet of contract law is that courts will not make a different or better contract than the parties themselves have seen fit to enter into,” Sattiraju said in his opening remarks. “In this case, that is exactly what the Appellate Division did by inserting the FAA into this agreement. They do not like the result of application of the FAA so they are trying to impose a different law that was not agreed upon.”

The Appellate Division, in a published ruling on June 4, 2019, sent the Colon v. Strategic Delivery Solutions case back to a trial court for a determination on whether the plaintiffs were engaged in interstate commerce and therefore exempt from arbitration under §1 of the FAA. The panel in Colon said that though the FAA doesn’t apply, the New Jersey Arbitration Act applies and requires arbitration.

Sattiraju told the justices: “They [the panel] are trying to rewrite the contract because they don’t like the result.

“It’s not that the FAA doesn’t apply. It’s that the FAA does apply and its terms specify that this category of workers cannot arbitrate their claims,” Sattiraju said. “Companies do not like the result so they want to rewrite this contract to invoke the NJAA, which they argue will provide for arbitration as they seek.”

An amicus, the New Jersey Association for Justice, argued in support of the plaintiffs in both cases, represented by William D. Wright of the Wright Law Firm in Stafford Township.

“This court should not find mutual assent where there was none,” Wright said. “To substitute different governing laws and rewrite the parties’ agreement because it is more fundamentally desirable to do so runs afoul of our longstanding general contract jurisprudence,” Wright said.

“Under the limited facts of this case, the FAA conflicts with and therefore preempts the NJAA,” Wright said.