Sign on dotted line: arbitration agreement enforceability against predecessor company

The New Jersey Appellate Division recently vacated a September 2020 trial court order dismissing a former employee’s lawsuit and compelling him to arbitrate his Conscientious Employee Protection Act (CEPA) claims against his former employer’s predecessor. In so doing, the appellate court found the trial court must first determine whether the arbitration agreement was binding on the former vice president and, if so, whether his former employer was in fact the agreement’s assignee.

Facts

Robert Hampton began serving as the vice president of business development at MS Electronics/MSE Corporate Security, Inc. (MSE) on February 16, 2016. Before beginning his employment, he signed various agreements, including an arbitration agreement prepared by the employer. The agreement’s arbitration and equitable relief clause provided:

Except as provided in Section 9(b), I agree that any dispute or controversy arising out of, relating to, or concerning any interpretation, construction, performance, or breach of this agreement, shall be settled by arbitration with a single arbitrator to be held in Edison, New Jersey, in accordance with the Employment Dispute Resolution Rules in effect of the American Arbitration Association (AAA). The company and I shall each pay one-half of the costs and expenses of such arbitration, and each of us will separately pay for our counsel fees and expenses.