By Ty Hyderally, Esq. and Kenny Delgado

August 20, 2025

On February 26, 2024, the New Jersey Appellate Division affirmed a trial court’s decision in Aguirre, et al.  v. CDL Last Mile Solutions, et al., DOCKET NO. A-3346-22.  In doing so, the Appellate Division denied the Defendant’s motion to compel arbitration and more broadly laid out when the state of New Jersey may find its interests in worker protections in conflict with clauses in employment contracts.

The Court’s decision revolves around whether the contracts between CDL, which was headquartered in New York, complied with the New Jersey’s rules regarding waivers and arbitrations and whether New Jersey law applied to those waivers.  The decision gives guidance for non-New Jersey companies regarding whether New Jersey law applies to arbitration agreement even if there are choice of law provisions in the agreement.

Employees In New Jersey, Protections In New Jersey

The opinion in this case involves the Defendant, CDL, which is a Delaware corporation, headquartered in New York, and operating a warehouse in Bergen County, New Jersey. CDL employed workers who reported to the warehouse in Bergen County, New Jersey. The warehouse drivers made deliveries predominantly in New Jersey.  Further, the warehouse workers were supervised by a manager, who was a named Defendant, who worked out of the Bergen County warehouse.  The court took note of the fact that not only did the warehouse workers work in Bergen County, but most of the employees, including the Plaintiffs, lived in New Jersey.

CDL subcontracted with co-defendant, Subcontracting Concepts, LLC d/b/a SCI (SCI). SCI was also a Delaware LLC and also headquartered in New York.  SCI provided third party administrative support to CDI, such as payroll processing and delivery driver onboarding, sine 2012.

The plaintiffs, Maria Aguirre, Andrea Palacios, and Lorena Varas, filed a putative class action complaint on behalf of the Bergen County workers claiming that they were intentionally misclassified as independent contractors to deprive them of overtime pay that they were allegedly owed under the New Jersey Wage and Hour Law, N.J.S.A. 34:11-56a4(b) (WHL).  Further, the putative class plaintiffs argued that Defendants unlawfully deducted from the class members’ wages in violation of the New Jersey Wage Payment Law, N.J.S.A. 34:11-4.4 (WPL).

Plaintiffs alleged that when they were hired as drivers by CDL, they had to sign Independent Contractor agreements with SCI to provide courier and logistics activities for SCI’s customers.  The contract mandated arbitration of disputes and stated that New York law was the governing law.

Thus, Defendants argued that the case should not have been filed in New Jersey and had to be filed in arbitration with New York law being the predominant law to analyze whether the arbitration clause mandated the arbitration of the WHL and WPL claims.  The trial court ruled against Defendants and the consolidated cases went up on appeal to the New Jersey Appellate Division.

The New Jersey Appeals Court, analyzed which state had an interest in the action and ruled, for many of the reasons stated above, that “New Jersey has a materially greater interest than New York.”   Thus, the Court found that New Jersey law applied, regardless of the choice of law provision that existed in the contract.  Next, the Court next took cognizance of the fact that the law in New Jersey was contrary to New York.  The Court found that, “New York law is contrary to New Jersey’s fundamental public policy of ensuring any waiver of the right to a jury trial is knowing, intelligent, and voluntary.”

The Appellate Court leaned on New Jersey’s strong public interest and policy of protecting workers and conducted an analysis of the validity of the arbitration clause under what is required by the New Jersey Supreme Court, as set forth in Atalese v. U.S. Legal Services Group, L.P., 219 N.J. 430 (2014).   The Appellate Court relied upon this seminal decision from the New Jersey Supreme Court, in holding, “[W]e conclude the arbitration agreements here are unenforceable because they fail to adequately “explain that the plaintiff[s] [are] giving up [their] right to bring [their] claims in court or have a jury resolve the dispute.”

The State of New Jersey has many protections for its workers, and this decision strengthens the notion that New Jersey workers deserve New Jersey protections. However, it can be difficult to understand where the protections begin and end. If you have any questions regarding your rights as an employee, you should seek out an experienced attorney who concentrates in employment law. Our firm has been concentrating in employment law for over twenty-two (22) years!

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