In an issue of first impression, the New Jersey Appellate Division held that New Jersey’s Law Against Discrimination’s (LAD) procedural prohibition, which precluded arbitration in the plaintiff’s case, is preempted when applied to an arbitration agreement governed by the Federal Arbitration Act (FAA). After his employment was terminated, the plaintiff filed a complaint against Curvature and two employees. He asserted claims of discrimination and wrongful termination under the LAD. The defendants moved to dismiss the complaint and compel arbitration. The trial court dismissed the complaint with prejudice and ordered arbitration. The Appellate Division affirmed the provision of the trial court’s order compelling arbitration and reversed the provision of the order that dismissed the case with prejudice. First, the Court ruled that the plaintiff was bound by Curvature’s Arbitration Agreement, which the plaintiff assented to. Then, the Court held “that the FAA preempts Section 12.7 of the LAD when applied to prevent arbitration called for in an agreement governed by the FAA.” Accordingly, the Court remanded for the entry of a new order compelling arbitration and staying the Law Division action until the arbitration’s completion.
