New Jersey Appellate Division Agrees With Mashel Law That a Victim of Workplace Discrimination Cannot be Forced to Waive Their Right to Pursue Punitive Damages

In a written decision issued on August 23, 2018 in the case of Roman v. Bergen Logistics, LLC., et. al, Docket No. A-5388-16T3, the New Jersey Superior Court, Appellate Division agreed with Mashel Law’s argument that the motion court below erred as a matter of law when it enforced an arbitration agreement barring Mashel Law’s client, a victim of alleged workplace sexual harassment, from pursuing punitive damages in arbitration for the harms caused to her by her former employer and supervisor. Punitive damages are designed to require the wrongdoer to pay an amount of money that is of an amount ample enough to punish a party for especially egregious conduct and to deter that party from committing discriminatory or harassing conduct in the future. In so ruling, the appellate court opined:

“An agreement barring the recovery of punitive damages to victims of employment discrimination under the LAD (New Jersey’s Law Against Discrimination) allows an employer's upper management to be willfully indifferent to the most egregious forms of discriminatory conduct without fear of punishment and without the incentive to stop or prevent the discriminatory conduct that the availability of punitive [damages] is intended to provide. We find such a result is contrary to the public policy underlying the LAD – the eradication of discrimination – and therefore the arbitration agreement's bar to the recovery of punitive damages is unenforceable as against public policy.”

The Roman case will now proceed with the issue of punitive damages intact, and to be decided by an arbitrator pursuant to the terms of an employment arbitration agreement the client entered when she was hired by the defendant-employer.

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