To the extent that it attempted to limit the prospective waiver of procedural rights in favor of arbitration or other alternative dispute resolution, the 2019 amendment to the New Jersey Law Against Discrimination (NJLAD) is preempted by the Federal Arbitration Act (FAA), a New Jersey federal court has ruled in an unpublished opinion. New Jersey Civil Justice Institute, et al. v. Grewal, No. 19-17518 (D.N.J. Mar. 25, 2021).

The NJLAD amendment in Section 12.7, passed in March 2019, sought to make unenforceable any provision in an employment contract that waived any substantive or procedural right relating to discrimination, retaliation, or harassment claims. The court reasoned that, in violation of Section 2 of the FAA, Section 12.7 effectively disfavors agreements to arbitrate certain types of claims.

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