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Noren v. Heartland Payment Systems, Inc.

On behalf of Cohn Lifland Pearlman Herrmann & Knopf LLP | Feb 20, 2017 |


Noren v. Heartland Payment Systems, Inc, 2017 WL 476216 (App. Div. Feb. 6, 2017) involved breach of contract and CEPA claims. Plaintiff signed two different employment agreements during the course of his employment with Defendant. The agreements contained a jury-waiver provision, a fee-shifting provision, and specified that he was an at-will employee. The jury provisions purported to “irrevocably wave any right to trial by jury in any suit, action or proceeding under” both agreements. Defendant terminated Plaintiff’s employment in 2005, Plaintiff brought suit, and the trial court denied Plaintiff’s demand for a jury trial. After a bench trial, the trial court dismissed Plaintiff’s complaint, and awarded Defendant just over two million dollars in fees and costs.

The Appellate Division first emphasized the importance of the right to a jury trial, finding that it is both guaranteed in the New Jersey Constitution and explicitly guaranteed in the CEPA statute, NJSA 34:19-5. It found that the Legislature amended the statute in 1990 to specify the right to a jury trial. The panel then held that in order for the provision to be an effective and legally enforceable waiver, the language must clearly explain (1) what right is being surrendered, and (2) the nature of the claims covered by the waiver. The panel thus held that the provisions in the instant case were unenforceable because they did not clearly and unambiguously explain that a jury trial was waived as to a CEPA claim.

The panel then turned to the award of attorney’s fees and costs, and found that the fee-shifting could have been based on either the (1) fee-shifting provision in CEPA, or (2) the fee-shifting provision in the second agreement signed by Plaintiff. The panel found that fee shifting under CEPA is permitted only when the action is brought by plaintiff without any basis in law in fact, and the fact that Plaintiff’s claim survived summary judgment clearly belied this. Turning to the fee-shifting provision in the employment agreement, the panel found that, since fee-shifting is strongly disfavored in New Jersey, this provision should have been strictly construed, the award was in excess of what was permitted under CEPA, and was not authorized under any other statute. Thus, the Appellate Division reversed the judgment on both counts, and remanded for a jury trial and for the trial judge to reasonably apportion the fees and costs.