July 15, 2020, Joseph G. Harraka, Jr., Esq., Co-Chair of the Trucking and Logistics Group
In resolving two separate cases before it, the New Jersey Supreme Court recently issued a ruling that the New Jersey Arbitration Act (“NJAA”) applies to arbitration agreements even if the parties to such agreements may be exempt under Section 1 of the Federal Arbitration Act (“FAA”).
Each of these cases involved arbitration provisions within contracts for employment that the plaintiffs had argued fell within the “exemption clause” of the FAA. That clause exempts from the scope of the FAA any contracts of employment of “seamen, railroad workers, or any other class of workers engaged in foreign or interstate commerce.” The question that the Court had to determine in both cases was whether the disputed arbitration agreements would still be enforceable under the NJAA even if they were exempt from the FAA as plaintiffs in both of the underlying cases alleged that they were transportation workers engaged in interstate commerce. Read more