Date: February 9, 2023Attorney: Brian M. Block

In a groundbreaking published decision, County of Passaic v. Horizon Healthcare Services, Inc., a New Jersey appeals court held that where parties to a contract “are sophisticated and possess relatively equal bargaining power,” an arbitration clause does not need to contain an express waiver of the parties’ right to seek relief in court. Until now, it was unclear whether the New Jersey Supreme Court’s landmark decision in 2014 requiring an express waiver of the right to proceed in court applied outside the consumer and employment contexts. The appellate court rested its holding on the premise that, when the parties to a contract are sophisticated, possess similar bargaining power, and are typically represented by counsel during negotiations, the concerns animating the need for an express waiver greatly diminish. Accordingly, the standard for enforceability of an arbitration clause is now dependent on the nature of the contract and parties thereto. That said, it is very likely that the New Jersey Supreme Court will take up this case to have the last work on this issue of general public importance, assuming the County files a petition for certification.

Our Labor and Employment law team is closely monitoring this development and is available to answer any questions you may have.