The Appellate Division of New Jersey Superior Court has ruled that firefighters who claim that the city’s method of calculating overtime violates state wage and hour laws, are entitled to have their case heard in court, despite the fact that the city uses a method prescribed by the collective bargaining agreement, and despite the CBA’s arbitration provision. The suit was brought by two Paterson firefighters who claimed the CBA permitted overtime to be paid in violation of the New Jersey Wage and Hour Law.
Adrian Evans and Kenneth Hicks filed their lawsuit in 2023. The trial court granted the city’s motion to dismiss concluding that the matter was subject to mandatory arbitration pursuant to the CBA, and that the firefighters’ failed to exhaust their administrative remedies.
The Appellate Division disagreed, reversing the trial court, and ruling as follows (with citations and internal quotations removed):
- In reviewing orders compelling arbitration, we are mindful of the strong preference to enforce arbitration agreements, both at the state and federal level.
- Arbitration, as a favored means for dispute resolution, is not, however without limits.
- The Supreme Court’s decision in Wright v. Universal Maritime Service Corp., 525 U.S. 70 (1998), … held a union-negotiated waiver of employees’ statutory right to a judicial forum for claims of employment discrimination must be clear and unmistakable.
- We are satisfied beyond any doubt … the arbitration clause in the CBA is unenforceable because it fails to include a clear and unambiguous explanation of rights waived.
- The arbitration provision before us fails to contain the language necessary to constitute an effective waiver of a party’s rights to judicial relief.
- First and foremost, the CBA expressly reserves plaintiffs’ rights in this regard by stating this contract is not intended and shall not be construed as a waiver of any right or benefit to which employees are entitled by law.
- The right to trial by jury in civil cases is deeply rooted in New Jersey’s history and predates the founding of our Republic.
- Further, the CBA does not disclose that arbitration would replace litigation or a jury trial and appears to limit the right to an arbitral forum to the Association, excluding the individual firefighters from that remedy.
- That result is contrary to the CBA’s express recognition that it will not impact an individual firefighter’s access to any right or benefit to which they are entitled by law.
- The issue before us requires a determination of whether the CBA’s arbitration provision contains a clear and unambiguous waiver of plaintiffs’ rights to bring statutory claims in a judicial forum.
- As contract interpretation is a question for judicial resolution, plaintiffs properly brought the matter in court.
- Finally, plaintiffs contend they were not required to first exhaust the grievance procedures under the CBA before filing a lawsuit seeking to enforce their NJWHL claims.
- Exhaustion of administrative remedies before resort to the courts is a firmly embedded judicial principle.
- We recognize, however, the exhaustion doctrine is not an absolute.
- Exceptions exist when only a question of law need be resolved; when the administrative remedies would be futile; when irreparable harm would result; when jurisdiction of the agency is doubtful; or when an overriding public interest calls for a prompt judicial decision.
- Furthermore, courts need to evaluate whether a grievance procedure and arbitration provision are mandatory or permissive.
- Applying these principles, we are persuaded plaintiffs were not required to exhaust the administrative remedies available to them prior to filing their complaint.
- First, the grievance procedure within the CBA does not mandate the aggrieved party follow the grievance process.
- Indeed, the CBA states employees and the Association are expected to present their grievances through regular supervisory channels.
- The use of the term expected clearly gives plaintiffs the option of following the grievance procedure but does not mandate they do so.
- Second, plaintiffs need not exhaust the administrative remedies available to them because only a question of law need be resolved.
- Under these circumstances, we are satisfied the exhaustion of administrative remedies doctrine is inapplicable, and the matter was properly before the court.
The Appellate Division returned the case to the Passaic County Superior Court for further proceedings on the merits.