On January 2, 2014, the U.S. District Court for the District of New Jersey denied a motion made by Raymour & Flanigan to compel arbitration and stay proceedings despite the fact that an arbitration clause existed in its employment manual. Raymour & Flanigan is owned by Raymour Furniture Company, Inc. (“Raymour”) and is considered one of the largest furniture retailers in the United States.
This decision stems from a complaint brought by a Raymour Sales Associate who alleges she was discriminated and retaliated against on the basis of her disability. After a demand to settle the Sales Associates’ claims out of court, Raymour filed a demand for arbitration alleging that her underlying claims were subject to an enforceable arbitration agreement located in its Employee Handbook (“Handbook”). Raymour claimed this arbitration agreement was enforceable because the Sales Associate signed a Receipt and Acknowledgement (“Acknowledgment”) of this Handbook in October, 2009 that stated she would become familiar with and be bound by all future revisions. Although there was no arbitration agreement added until January 2012, Raymour claimed that the Sales Associate was notified and acknowledged receipt and review of the updated handbook through Raymour’s online HR website on February 8, 2012. The specific terms of the arbitration agreement require Raymour employees to submit to final and binding arbitration for any and all employment-related claims (specifically including claims under the Americans with Disabilities Act and Title VII).
The Sales Associate opposed Raymour’s motion to compel arbitration by arguing that the Arbitration Agreement was unenforceable. Raymour denied this claim by arguing the Sales Associate agreed to arbitrate her claims through her Acknowledgement of the Arbitration Program and through her conduct.
After reviewing both arguments, the Court ruled in the favor of the Sales Associate given that the first page of the Handbook provided an expansive Woolley disclaimer (a standard “at-will” condition of employment stating the manual was not a contract) that did not include an exception for the Arbitration Program. As Chief Judge Simandle stated in his order:
[The Sales Associate] could not have agreed ‘clearly and unambiguously to arbitrate.’ [Raymour] may not in a single, voluminous document, which bears disclaimer that nothing therein creates a contract of employment, seek to enforce certain provisions while regarding others as unenforceable without clear notice to that effect and unambiguous agreement by Defendant… Further, none of the communications from [Raymour] to [Sales Associate] ensured she understood that the Arbitration Program was distinct from the non-binding provision of the Handbook. The February 1, 2012 email regarding updates to the Handbook does not identify the Arbitration Program as exempt from the general disclaimer on the first page of the Handbook.
The Employment Lawyer of Fitapelli & Schaffer, LLP frequently represent employees who have faced discrimination in the workplace. If you feel you are being discriminated against due to disability, age, sex or race, then please call the Employment Lawyers of Fitapelli & Schaffer, LLP, (212) 300-0375, to schedule a free consultation.