The New Jersey Civil Justice Institute had a busy day in the State House this Thursday. Marcus Rayner, NJCJI’s president, and Alida Kass, NJCJI’s chief counsel, testified against three pieces of legislation, all of which would negatively impact New Jersey’s legal climate and put New Jersey businesses at greater risk of being sued.
Forum Selection Bill
A1515, which is being sponsored by Asm. McKeon (D-Madison), would prohibit businesses from including forum selection clauses in their contracts. The bill would instead mandate that disputes brought by New Jersey consumers be brought in New Jersey.
Courts do not enforce onerous forum selection clauses if they find them unconscionable, so it is not necessary to pass this legislation to protect consumers. What this legislation would do is impose an additional burden on businesses, which use forum selection clauses to control costs by concentrating all the various actions brought against them in a geographic region in a single location. Forcing companies to litigate in multiple locations means they will have to hire additional lawyers and support staff, pay for additional space to work, and increase other related expenses. All these added costs will be passed on to consumers.
Regulation of Arbitration Bill
A2150, which is being sponsored by Committee Chairman Moriarty (D-Turnersville) and Asm. Diegnan (D-South Plainfield), attempts to regulate the arbitration industry as a whole. As the bill’s statement explains, “Under New Jersey’s current law, there are rules governing arbitrators and arbitration generally, but there are no rules pertaining to the regulation of arbitration organizations.” This bill seeks to fill that perceived gap.
As NJCJI has repeatedly noted, New Jersey has no choice but to conform its law to the controlling federal authority favoring arbitration. Beyond the necessity of doing so, it is good public policy because arbitration is speedy, fair, inexpensive, and less adversarial than litigation.
Wage Discrimination Legislation
Over NJCJI’s objections, the Senate Labor Committee voted to advance S992. This bill has been described as a measure that would strengthen protections against employment discrimination and promote equal pay for women. In fact, the bill provides for three distinct policy elements, each of which would significantly increase the risk of unwarranted litigation and introduce considerable uncertainty into the civil justice system.
If you have questions or comments about any of these bills, please contact Alida Kass, NJCJI’s chief counsel.