Home>Judiciary>Federal judge overturns N.J. ban on mandatory arbitration

U.S. District Court Judge Anne Thompson.

Federal judge overturns N.J. ban on mandatory arbitration

By David Wildstein, March 29 2021 1:43 pm

The New Jersey Civil Justice Institute won a victory in federal court on Friday after challenging New Jersey’s law banning employment contracts that include mandatory arbitration.

U.S. District Court Judge Anne E. Thompson found that the state law violated the Federal Arbitration Act that permitted workplace disputes to be solved through arbitration.

The group, along with the U.S. Chamber of Commerce, challenged a 2019 amendment to an anti-discrimination statute

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

Thompson enjoined the state attorney general’s office from enforcing the law.

“Although New Jersey has a significant interest in protecting the rights of its citizens through legislation, New Jersey’s laws must ‘give way’ to conflicting federal law,” Thompson wrote in her decision.  “The Supreme Court has observed that arbitration provisions hold ‘real benefits.’”

Steven Barnes, a spokesman for the attorney general, had no comment on the defeat.

This story was updated at 4:06 PM with no comment from Attorney General Gurbir Grewal’s spokesman.

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