MARILYN FLANZMAN VS. JENNY CRAIG, INC. (L-6238-17, BERGEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2580-17T1

MARILYN FLANZMAN,

APPROVED FOR PUBLICATION

Plaintiff-Appellant,

November 13, 2018

v. APPELLATE DIVISION

JENNY CRAIG, INC., LILLIAS

PIRO, individually, and DENISE

SHELLEY, individually,

Defendants,1

and

JC USA, INC.,

Defendant-Respondent.

______________________________

Submitted September 24, 2018 – Decided November 13, 2018

Before Judges Messano, Fasciale and Rose.

1

The court administratively dismissed the claims against defendants Lillias

Piro and Denise Shelley because plaintiff did not serve them with the

complaint. The merits briefs do not mention defendant Jenny Craig, Inc., but

plaintiff's brief refers to defendant "JC USA, INC." as "Jenny Craig." Our

reference to "defendant" throughout this opinion is to JC USA, INC., and by

"parties," we mean plaintiff and JC USA, INC.

On appeal from Superior Court of New Jersey, Law

Division, Bergen County, Docket No. L-6238-17.

Zatuchni & Associates, LLC, attorneys for appellant

(David Zatuchni, on the brief).

Ogletree, Deakins, Nash, Smoak & Stewart, PC,

attorneys for respondent (Sharon P. Margello and

Jocelyn A. Merced, on the brief).

The opinion of the court was delivered by

FASCIALE, J.A.D.

This appeal requires us to decide whether to invalidate an arbitration

agreement because the parties failed to identify any arbitration forum and any

process for conducting the arbitration. In general, a forum is the mechanism –

or setting – that parties use to arbitrate their dispute. They could have

designated an arbitral institution (like the American Arbitration Association

(AAA) or the Judicial Arbitration and Mediation Services (JAMS)), or they

could have communicated a general method for selecting a different arbitration

setting. The mechanism or setting for the proceeding is important because the

rights associated with arbitration forums may differ depending on which forum

the parties choose, or on how they define the arbitral process. Here, the

agreement ignored the subject altogether.

We hold that the parties lacked a "meeting of the minds" because they

did not understand the rights under the arbitration agreement that ostensibly

A-2580-17T1

2

foreclosed plaintiff's right to a jury trial. We therefore reverse the order

compelling arbitration for lack of mutual assent.

I.

At the time of her termination, plaintiff was eighty-two years old. She

had worked for defendant – a weight loss, weight management, and nutrition

company – for twenty-six years. During that time, plaintiff provided weight

loss counseling. Defendant gradually reduced plaintiff's full-time hours to

only three hours per week. The substantial reduction in hours led to her

termination.

Plaintiff filed her complaint alleging (1) age discrimination and

harassment in violation of the New Jersey Law Against Discrimination

(NJLAD), N.J.S.A. 10:5-1 to -49; (2) discriminatory discharge and/or

constructive termination in violation of the NJLAD; and (3) aider and abettor

liability under the NJLAD. Defendant then filed its motion to compel

arbitration relying on the parties' arbitration agreement.

Plaintiff has no recollection of signing the document that contained the

arbitration agreement, which the parties did not execute when defendant hired

her. Rather, in 2011, twenty years after she was hired, defendant presented

plaintiff with the document, which she signed to maintain her employment . In

pertinent part, the agreement provides:

A-2580-17T1

3

Arbitration Agreement

Any and all claims or controversies arising out

of or relating to [plaintiff's] employment, the

termination thereof, or otherwise arising between

[plaintiff] and [defendant] shall, in lieu of a jury or

other civil trial, be settled by final and binding

arbitration. This agreement to arbitrate includes all

claims whether arising in tort or contract and whether

arising under statute or common law including, but not

limited to, any claim of breach of contract,

discrimination or harassment of any kind.

. . . [Plaintiff] will pay the then-current Superior

Court of California filing fee towards the costs of the

arbitration (i.e., filing fees, administration fees, and

arbitrator fees) . . . .

[(Emphasis added).]

If enforceable, plaintiff gave up her right to a jury trial by executing the

agreement. That is not an issue. The agreement, however, said nothing about

what forum generally replaced that right (although it confusingly referred to

California court filing fees). The judge recognized this important omission

when he suggested that "the choice of which arbitral body would conduct the

arbitration would be turned over to the [p]laintiff." In other words, the judge –

not the parties – decided who would pick the forum.

On appeal, plaintiff primarily argues that the arbitration agreement

lacked mutual assent and is therefore invalid as a matter of contract law. She

maintains that the parties did not reach a "meeting of the minds" as to the

A-2580-17T1

4

rights that replaced her right to a jury trial. She also argues that the arbitration

agreement is unconscionable. 2

Appellate courts exercise de novo review of a judge's decision on the

enforceability of contracts, such as an arbitration clause. Morgan v. Sanford

Brown Inst., 225 N.J. 289, 302-03 (2016). Whether a contractual arbitration

clause is enforceable is a legal issue; therefore, this court affords no special

deference to the judge's determination of that issue. Hirsch v. Amper Fin.

Servs., LLC, 215 N.J. 174, 186 (2013).

II.

We begin by addressing plaintiff's contention that the arbitration

agreement is invalid as a matter of law. Plaintiff emphasizes that there are

significant consequences to the absolute absence of any reference in the

arbitration agreement as to the process for generally selecting an arbitration

forum. She asserts that without that information communicated somehow in

the agreement – whether it be by designating AAA, JAMS, or some other

mechanism intended to replace her right to a jury trial – there exists no mutual

assent.

2

We need not reach the question of whether the arbitration agreement is

otherwise unconscionable because we have invalidated the agreement for lack

of mutual assent.

A-2580-17T1

5

Longstanding principles of law govern our analysis. The Federal

Arbitration Act (FAA), 9 U.S.C.A. §§ 1 to 16, and the New Jersey Arbitration

Act, N.J.S.A. 2A:23B-1 to -32, reflect federal and state policies favoring

arbitration of disputes. Roach v. BM Motoring, LLC, 228 N.J. 163, 173-74

(2017). Congress enacted the FAA "to 'reverse the longstanding judicial

hostility' towards arbitration agreements and to 'place arbitration agreements

upon the same footing as other contracts.'" Id. at 173 (quoting Gilmer v.

Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991)).

In Atalese v. United States Legal Services Group, L.P., the New Jersey

Supreme Court recognized that "[t]he FAA requires courts to 'place arbitration

agreements on an equal footing with other contracts and enforce them

according to their terms.'" 219 N.J. 430, 441 (2014) (quoting AT&T Mobility

v. Concepcion, 563 U.S. 333, 339 (2011)). As to the application of contract

law principles to arbitration agreements, the Court stated:

[A] state cannot subject an arbitration agreement to

more burdensome requirements than other contractual

provisions. An arbitration clause cannot be

invalidated by state-law defenses that apply only to

arbitration or that derive their meaning from the fact

that an agreement to arbitrate is at issue.

Arbitration's favored status does not mean that

every arbitration clause, however phrased, will be

enforceable. . . . Section 2 of the FAA permits

agreements to arbitrate to be invalidated by 'generally

applicable contract defenses. Accordingly, the FAA

A-2580-17T1

6

permits states to regulate . . . arbitration agreements

under general contract principles, and a court may

invalidate an arbitration clause upon such grounds as

exist at law or in equity for the revocation of any

contract.

[Ibid. (citations omitted).]

Indeed the Supreme Court of the United States recently proclaimed that the

FAA requires that courts place arbitration agreements "on equal footing with

all other contracts." Kindred Nursing Ctrs. Ltd. P'ship v. Clark, 581 U.S. ___,

137 S. Ct. 1421, 1424 (2017).

Our courts decide "whether an agreement to arbitrate exists." N.J.S.A.

2A:23B-6(b). We recognize that such agreements are generally valid, "except

upon a ground that exists at law or in equity for the revocation of a contract ."

N.J.S.A. 2A:23B-6(a) (emphasis added). See also Morgan, 225 N.J. at 304

(indicating that "[a]lthough the FAA expresses a national policy favoring

arbitration, the law presumes that a court, not an arbitrator, decides any issue

concerning arbitrability"). "[S]tate contract-law principles generally govern a

determination whether a valid agreement to arbitrate exists." Hojnowski v.

Vans Skate Park, 187 N.J. 323, 342 (2006).

New Jersey law governing the enforceability of arbitration agreements is

well settled. Like any contract, the parties must reach such an agreement by

mutual assent. Atalese, 219 N.J. at 442. There must be a "meeting of the

A-2580-17T1

7

minds" for the agreement to be enforceable. Ibid. The party from whom an

arbitration clause has been extracted, must "clearly and unambiguously" agree

to waive his or her statutory rights. Id. at 443 (quoting Leodori v. Cigna

Corp., 175 N.J. 293, 302 (2003)). "[C]ontractual language alleged to

constitute a waiver [of statutory rights] will not be read expansively."

Garfinkel v. Morristown Obstetrics & Gynecology Assocs., 168 N.J. 124, 132

(2001). "[B]ecause arbitration involves a waiver of the right to pursue a case

in a judicial forum, 'courts take particular care in assuring the knowing assent

of both parties to arbitrate, and a clear mutual understanding of the

ramifications of that assent.'" Atalese, 219 N.J. at 442-43 (emphasis added)

(quoting NAACP of Camden Cty. E. v. Foulke Mgmt., 421 N.J. Super. 404,

425 (2011)).

Following basic principles of contract law, our courts have previously

invalidated arbitration agreements. See, e.g., id. at 445-48 (concluding the

agreement failed to clearly identify the waiver of a jury trial); Leodori, 175

N.J. at 302-07 (finding there existed no evidence that an employee consented

to an arbitration provision in an employee handbook); Garfinkel, 168 N.J. at

132-36 (invalidating an arbitration agreement as ambiguous); Kleine v.

Emeritus at Emerson, 445 N.J. Super. 545, 552-53 (App. Div. 2016) (reversing

A-2580-17T1

8

for lack of mutual assent because the arbitration process contemplated by the

clause in question was unavailable when the parties executed their contract).

Kleine is similar to our facts but not directly on point. In Kleine,

although the parties designated AAA as the arbitral forum, AAA was not

available when they executed the arbitration agreement. 445 N.J. Super. at

550, 552. Applying the requirement for mutual assent to the enforceability of

the agreement, we stated that

when the parties contracted, their exclusive forum for

arbitration was no longer available; there being no

agreement to arbitrate in any other forum, arbitration

could not be compelled. In short, . . . there was no

meeting of the minds as to an arbitral forum if AAA

was not available. As Atalese instructs, the party from

whom such a provision has been extracted must be

able to understand – from clear and unambiguous

language – both the rights that have been waived and

the rights that have taken their place.

[Id. at 552-53 (emphasis added).]

The difference between Kleine and our case is that, here, the parties omitted

any reference whatsoever to an arbitral forum. See, e.g., Foulke, 421 N.J.

Super. at 431 (voiding an agreement for a number of reasons, including the

fact that "the documents do not clearly and consistently express the nature and

locale of the arbitration forum itself").

To further illustrate the parties' failure to reach a meeting of the minds,

the judge determined that the "chosen forum" was California, concluding that

A-2580-17T1

9

"it can be deduced [from the arbitration agreement] that California law will

control the arbitration, while the arbitral forum is assumed to be California." 3

Defense counsel indicated – without any support whatsoever in the language of

the agreement – "that [defendant was] flexible on permitting the arbitration

proceeding to take place closer to New Jersey as long as California law is

applied to the proceeding." That led the judge to unilaterally decide that

plaintiff "in the interest of fairness, [would have] the choice of which 'arbitral

body' would conduct the arbitration . . . ." In doing so, he re-wrote the

agreement but failed to clarify its inherent ambiguity.

Our opinion should not be misread to hold that the parties' failure to

identify a specific arbitrator renders the agreement unenforceable. This is not

a situation where on the one hand, the parties generally addressed in some

fashion the process that foreclosed plaintiff's right to a jury trial, but on t he

other hand, simply failed to identify a specific method for selecting an

arbitrator. If that were the case, either party arguably could have filed a

motion under N.J.S.A. 2A:23B-11(a), entitled "Appointment of arbitrator;

conflict of interest," asking the judge to appoint the arbitrator. That statute

provides:

3

Even if the agreement required the law in the State of California to apply –

which is not the case – the judge did not analyze whether the agreement was

enforceable under that law.

A-2580-17T1

10

If the parties to an agreement to arbitrate agree on a

method for appointing an arbitrator, that method shall

be followed, unless the method fails. If the parties

have not agreed on a method, the agreed method fails,

or an arbitrator appointed fails or is unable to act and

a successor has not been appointed, the court, on

application of a party to the arbitration proceeding,

shall appoint the arbitrator. An arbitrator so appointed

has all the powers of an arbitrator designated in the

agreement to arbitrate or appointed pursuant to the

agreed method.

[(Emphasis added).]

The plain language of this statute refers to "a method for appointing an

arbitrator," not a method for appointing a "forum." In this opinion, we defined

a "forum" as the mechanism – or setting – that parties utilize to arbitrate their

dispute.4 There must first be a meeting of the minds about the forum itself,

and then, if the parties are unable to agree on a "method for appointing an

arbitrator," then they can arguably make an application under N.J.S.A.

2A:23B-11(a). In other words, if they agree that a dispute would be arbitrated

by an arbitral institution, or an arbitrator or arbitrators, then that is the agreed

upon forum. And after that, if they remain unable to actually select the

arbitrator – under such a hypothetical agreement – then the parties could

4

Similarly, N.J.S.A. 2A:23B-1 defines "arbitration organization" as "an

association, agency, board, commission or other entity that is neutral and

initiates, sponsors or administers an arbitration proceeding or is involved in the

appointment of an arbitrator."

A-2580-17T1

11

arguably apply to the court under N.J.S.A. 2A:23B-11(a) and ask the judge to

do so.

Like our case, in the aftermath of Atalese, the panel in Kleine focused on

the lack of mutual assent as to the arbitral forum – the rights that replaced the

right to a jury trial – rather than the parties failing to reference a "method for

appointing an arbitrator." (Emphasis added). Resort to N.J.S.A. 2A:23B-11(a)

potentially comes into play only if the arbitration agreement reflects a meeting

of the minds about what rights the parties gave up and what rights they

received. The failure to reference in the agreement an actual method for

selecting an arbitrator does not in-and-of-itself invalidate this agreement.

Rather, it is the lack of meeting of the minds as to the arbitral forum.

Nevertheless, here, neither party made a N.J.S.A. 2A:23B-11(a)

application to the judge. Additionally, the parties did not argue on this appeal

that the judge should have appointed an arbitrator under N.J.S.A. 2A:23B-

11(a). Neither party brought this statute to the Law Division's or our attention.

That is not surprising because before the judge (and us) they focused primarily

on their inability to define what arbitration forum or process would resolve the

NJLAD dispute.

A-2580-17T1

12

Likewise, the FAA has a similar provision to N.J.S.A. 2A:23B-11(a). 9

U.S.C. § 5 of the FAA entitled "Appointment of arbitrators or umpire"

provides that:

If in the agreement provision be made for a method of

naming or appointing an arbitrator or arbitrators or an

umpire, such method shall be followed; but if no

method be provided therein, or if a method be

provided and any party thereto shall fail to avail

himself of such method, or if for any other reason

there shall be a lapse in the naming of an arbitrator or

arbitrators or umpire, or in filling a vacancy, then

upon the application of either party to the controversy

the court shall designate and appoint an arbitrator or

arbitrators or umpire, as the case may require, who

shall act under the said agreement with the same force

and effect as if he or they had been specifically named

therein; and unless otherwise provided in the

agreement the arbitration shall be by a single

arbitrator.

[(Emphasis added).]

Again, there was no 9 U.S.C. § 5 application before the judge.

As analyzed by the Third Circuit Court of Appeals, 9 U.S.C. § 5

provides "a mechanism for substituting an arbitrator when the designated

arbitrator [unlike here] is unavailable." Khan v. Dell Inc., 669 F.3d 350, 354

(3d Cir. 2012). Nevertheless, when "determining the applicability of Section 5

of the FAA when an arbitrator is unavailable, courts have focused on whether

the designation of the arbitrator was 'integral' to the arbitration provision or

was merely an ancillary consideration." Id. at 354. "In this light, the parties

A-2580-17T1

13

must have unambiguously expressed their intent not to arbitrate their disputes

in the event that the designated arbitral forum is unavailable." Ibid. See also,

Jackson v. Payday Fin., LLC, 764 F.3d 765, 779-80 (7th Cir. 2014) (stating

that under the circumstances presented there, the court "cannot save the

arbitral process simply by substituting an arbitrator").

In our case, it was not that the "designated" arbitral forum was

"unavailable," but rather that there was no designated arbitral forum or general

process selected by the parties in the first place. The parties did not reach any

agreement at all. This became painstakingly evident by defendant's continued

improvised negotiations during oral argument before the motion judge. The

parties here failed to appreciate fully the ramifications of the supposed

arbitration agreement, as required by Atalese.

We emphasize that the issue in this case is whether to invalidate an

arbitration agreement because the parties failed to identify any arbitration

forum and any process for conducting the arbitration. The agreement must

first reflect a meeting of the minds about what rights ostensibly replaced

plaintiff's right to a jury trial. If the parties had done that, but remained unable

to choose a particular arbitrator, then they could have arguably petitioned the

court to make such a selection.

A-2580-17T1

14

III.

We now address the important consequences of failing to identify in

some fashion the process for selecting an arbitration forum, such as by

otherwise designating in the contract any arbitral institution or by identifying

any general method for selecting an arbitration forum. Undertaking this

endeavor highlights the importance of addressing – in some fashion – the

rights that replaced judicial adjudication of the underlying dispute. And as

Atalese instructs, and as Kleine applied, had this been done, the parties then

would fully understand both the rights that have been waived and the rights

that have taken their place.

A.

Selecting an arbitral institution informs the parties, at a minimum, about

that institution's general arbitration rules and procedures. Without knowing

this basic information, parties to an arbitration agreement will be unfamiliar

with the rights that replaced judicial adjudication. That is, the parties will not

reach a "meeting of the minds."

We do not mean to imply that the parties must detail in the arbitration

agreement the exact manner in which the arbitration proceeding will proceed.

See, e.g., N.J.S.A. 2A:23B-15(a) (giving the arbitrator such discretion). But to

understand the ramifications of a waiver of a jury trial, the parties must

A-2580-17T1

15

generally address in some fashion what rights replace those that have been

waived. Without limitation, the parties might generally indicate in their

agreement that one or more individuals will arbitrate the case, or they could

identify an arbitral institution. Doing so addresses the rights that replaced the

right to judicial adjudication.

For example, AAA uses certain procedures for arbitrating employment

disputes.5 AAA adheres to due process safeguards, which at a minimum meet

the standards outlined in the National Rules for the Resolution of Employment

Disputes. Ordinarily, when parties select AAA, they make AAA's rules part of

their arbitration agreement. Such rules address, but are not limited to,

notification requirements, the initiation of the proceedings, management

conferences, discovery, the location of the hearing(s), the number of

arbitrators, communications with the arbitrator(s), attendance at the hearings,

dispositive motions, evidence, modification of awards, applications to court,

fees, expenses, and costs. Picking AAA, for example, helps the parties reach a

"meeting of the minds" as to the rights that replace the right to a jury trial in

court.

5

For an analysis of AAA's employment arbitration rules, see www.adr.org.

This site identifies AAA's rules amended as of November 1, 2009, with a

revised introduction as of October 1, 2017.

A-2580-17T1

16

Similarly, JAMS provides its own set of arbitration rules and procedures

applicable to its alternative dispute resolution (ADR) services, such as JAMS '

employment arbitration rules and procedures.6 We need not detail those rules

here. The point is that selection of JAMS as an arbitral institution – or any

other ADR forum – informs parties about the rights that replace those that they

waived in the arbitration agreement. We are not talking about insignificant

aspects of the arbitration process. The associated rights connected with the

selection of an arbitral forum generally establish the substantive and

procedural setting for the entire arbitration process.

Take, for example, the relevant part of the arbitration agreement reached

by the parties in Atalese, in which they identified AAA, JAMS, and the

applicable rules. The agreement stated in part:

[T]he claim or dispute shall be submitted to binding

arbitration . . . . The parties shall agree on a single

arbitrator to resolve the dispute. The matter may be

arbitrated either by [JAMS] or [AAA] . . . . The

conduct of the arbitration shall be subject to the then

current rules of the arbitration service.

[Atalese, 219 N.J. at 437 (emphasis added).]

We do not mean to imply that there must be certain "talismanic words" in the

agreement as to the rights that replace the right to judicial adjudication.

6

See www.jamsadr.com.

A-2580-17T1

17

Imposing such a requirement would upset the "equal footing" that arbitration

contracts enjoy with all other contracts. But, as explained by Atalese, it is

important that the arbitration agreement reflect a "clear mutual understanding

of the ramifications" of the parties' mutual assent to waive adjudication by a

court of law. Id. at 443. In some fashion, the agreement must communicate

that.

Although not binding on us, an issue similar to the one in Kleine arose in

another jurisdiction where the Court was unwilling to permit a judge to select

– or, like here, unilaterally allow one party to do so after the fact – an

arbitration forum when the one selected by the parties in their arbitration

agreement became unavailable. In Covenant Health & Rehabilitation of

Picayune v. Moulds, 14 So. 3d 695, 706 (Miss. 2009), the arbitration clause

provided that the parties would arbitrate any dispute following "[AAA] and its

rules and procedures." AAA then became unavailable. Ibid. The Mississippi

Supreme Court refused to "select a forum not anticipated by either of the

parties." Id. at 707 (emphasis added). Similar to Kleine, the Court invalidated

the arbitration clause. Id. at 706. To do otherwise would be re-writing the

arbitration agreement, as the judge did here.7

7

We note that the parties in Covenant Health did not apply to the court and

ask the judge to appoint a specific arbitrator, although they could have.

(continued)

A-2580-17T1

18

B.

The failure to identify in the arbitration agreement the general process

for selecting an arbitration mechanism or setting – in the absence of a

designated arbitral institution like AAA or JAMS or any other ADR setting –

deprived the parties from knowing what rights replaced their right to judicial

adjudication. Again, we do not impose any special language that parties must

use in an arbitration agreement. Imposing such an obligation would violate

Kindred Nursing, Atalese, and the other cases that preclude subjecting

(continued)

Rather, the Court was unwilling to select a new "forum" that had not been

anticipated by the parties. As to the appointment of an arbitrator, Mississippi's

Civil Practice and Procedure sections 11-15-101 to -143, applies to arbitration

of controversies arising from construction contracts and related agreements:

§ 11-15-109. Method of appointing arbitrators

If an agreement or provision for arbitration provides a

method for the appointment of arbitrators this method

shall be followed. In the absence thereof, or if the

agreed method fails or for any reason cannot be

followed, or if an arbitrator who has been appointed

fails or is unable to act and his successor has not been

duly appointed, the court, on application of a party to

such agreement or provision, shall appoint one or

more arbitrators. An arbitrator so appointed shall have

the same powers as if he had been named or provided

for in the agreement or provision.

[(Emphasis added).]

A-2580-17T1

19

arbitration agreements to more burdensome requirements than other

contractual agreements.

For an example of how to generally communicate this important missing

information, we cite Oasis Health & Rehabilitation of Yazoo City, LLC v.

Smith, 42 F. Supp. 3d 821 (S.D. Miss. 2014). In Smith, the parties picked an

arbitral institution that, unbeknownst to them, was non-existent. But in their

agreement, they identified a general process for selecting an arbitration forum

if the institution they selected became unavailable. Id. at 824. In Smith, the

parties agreed to

participate in formal . . . Arbitration to be conducted

by ADR Associates, LLC through its Dispute

Resolution Process for Consumer Healthcare Disputes

("ADR Associates Rules"), which are incorporated

herein b[y] reference, and as more fully set forth

below. If ADR Associates, LLC is unable or

unwilling to conduct the ADR process at the time of

the dispute, the parties shall mutually agree upon an

alternative organization that is regularly engaged in

providing ADR services to conduct the . . .

Arbitration. If the [p]arties cannot agree on a[n] . . .

arbitrator, each party shall select one . . . arbitrator

and they together shall choose a third . . . arbitrator

who shall conduct the ADR Process.

[Ibid.]

In enforcing the arbitration agreement, the court noted that the parties

"explicitly contemplate[d] that the[y] . . . might not agree [on an arbitral

institution] and prescribe[d] an agreed method for selection in that event . . . ."

A-2580-17T1

20

Id. at 826.8 That is, they reached a "meeting of the minds" as to what rights

replaced the right to a jury trial.

Like Smith, and without requiring specific language, an arbitration

agreement might generally reflect a desire for the participation of a neutral

arbitrator, who would participate with a panel of arbitrators selected by the

parties to the arbitration. In such an instance, the arbitration agreement might

permit each party to pick an arbitrator and then those arbitrators would select

the neutral arbitrator. Or the parties might agree to some other forum, so long

as they enter into an arbitration agreement that in some fashion reflects a

"meeting of the minds" about what rights replaced those that they gave up.

In a contract in which one gives up a right – a jury trial for example –

expecting to resolve a dispute in some other forum, one must know about that

other forum. Without that knowledge, they are unable to understand the

ramifications of the agreement. And if after having generally identified a

forum – that is they have reached mutual assent – they still remain unable to

8

In Oasis Health, the plaintiff contended that if state law invalidated an

agreement, because the parties' failed to select or provide a method for

selecting an arbitrator or arbitrators, or because there existed a lapse in the

naming of an arbitrator or arbitrators, then federal law (Section 5 of the FAA)

provided the operative substantive law regarding an arbitration forum. But the

court did not consider this contention because it concluded state law was not

inconsistent with federal law.

A-2580-17T1

21

appoint a specific arbitrator, then they arguably can make the appropriate

application to the court for that purpose.

Reversed and remanded to the trial court for further proceedings. We do

not retain jurisdiction.

A-2580-17T1

22