The U.S. Chamber of Commerce and the New Jersey Civil Justice Institute (NJCJI) prevailed on their challenge to New Jersey’s effective prohibition against the inclusion of mandatory arbitration agreements in employment contracts. 

The federal court for the District of New Jersey held that the state’s attempt to invalidate employment arbitration agreements violates the Federal Arbitration Act favoring the use of arbitration to resolve workplace disputes. The court’s thoughtful and well-reasoned opinion permanently enjoined the New Jersey attorney general from enforcing the statute.

John Wood, the Chamber’s General Counsel and Chief Legal Officer, said:  “We are very pleased with the court’s decision.  Employees tend to get more money, more often, and more quickly when they utilize arbitration rather than litigation.  Both employers and employees benefit from the fact that arbitration is faster and less expensive than court proceedings.”  

Anthony Anastasio, President of the New Jersey Civil Justice Institute, said: “The court’s ruling confirms what NJCJI has always maintained in advocating against this statute: A categorical rule banning employment arbitration agreements is invalid under federal law.” 

As studies have shown, arbitration is better for employees and employers.  Employees are more likely to prevail and recover higher damages in arbitration than in court. 

The Court’s ruling follows Supreme Court precedent that courts must enforce arbitration agreements that comply with the Federal Arbitration Act, which ensures a neutral and fair process for dispute resolution.

The Chamber previously prevailed in a similar lawsuit challenging a similar statute in California.

Below, please find links to the Court’s Opinion and Order in the matter.