Lessons Learned from the New York Jets: Mandatory Arbitration Clauses

On November 14, 2025, Judge Anthony R. Suarez of the Superior Court of New Jersey, Bergen County Law Division (the “Court”), in Chen v. New York Jets, LLC, denied the motion to compel arbitration filed by defendant New York Jets, LLC’s (the “Jets”) in connection with a retaliation suit filed by its former Vice President of Finance (“Plaintiff”). The Court held that, despite the arbitration clause contained in Plaintiff’s nondisclosure agreement with the Jets (the “Arbitration Clause”), the Arbitration Clause did not unequivocally require Plaintiff’s lawsuit be resolved by arbitration.

Case Background and Ruling

After the Jets terminated Plaintiff’s employment earlier this year, Plaintiff filed a lawsuit alleging, among other claims, discrimination and retaliation under the New Jersey Law Against Discrimination (“NJLAD”). The Arbitration Clause read, in relevant part, “any and all disputes…concerning [Plaintiff’s] employment or relationship with [the Jets]…will be subject to  [arbitration].” The Arbitration Clause also specifically referenced claims for unlawful discrimination as being subject to mandatory arbitration.

In order for arbitration clauses in employment-related contracts to be enforceable under New Jersey law, they must (i) reflect the parties’ clear and unmistakable mutual agreement and (ii) specifically and unambiguously inform the employee that the employee is waiving a right to a jury trial for all employment-related or statutory claims, including, but not limited to, claims related to termination of employment.

In this case, the Court held that the Arbitration Clause failed to make clear whether claims under the NJLAD, retaliation claims, or claims related to the termination of Plaintiff’s employment were subject to mandatory arbitration. The Court further concluded that the Arbitration Clause did not “in plain language, make clear to employees that they are giving up their right to a court or jury trial for claims alleged in this case[.]” Accordingly, the Court refused to enforce the Arbitration Clause and denied the Jets’ motion to compel the case to arbitration.

Importantly, the Court also denied the Jets’ motion to compel arbitration because: (i) the NJLAD contains prohibitions on mandatory arbitration of claims related to harassment, discrimination, and retaliation and (ii) the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act bars forced arbitration of claims relating to sexual harassment.

What Should Employers Do Now?

The Chen decision underscores the careful scrutiny courts can apply to arbitration agreements or clauses that employers require employees to sign. Employers should review their existing arbitration agreements and clauses and consult with counsel to determine whether revisions are necessary in light of this decision. Additionally, employers should ensure that their agreements account for carveouts under applicable federal and state law, as certain claims cannot be subject to mandatory arbitration.