Earlier this week, I was quoted in the New Jersey Law Journal regarding the lawsuit Grethen Carlson recently filed against Roger Ailes, the CEO of Fox News Network. Ms. Carlson alleges that Mr. Ailes sexually harassed her and eventually fired her as a Fox News anchor because she resisted his sexual advances.
Ms. Carlson filed her lawsuit in Bergen County, New Jersey. However, Mr. Ailes had the case removed to Federal Court. He is currently seeking to force the case into a confidential arbitration rather than a public court. Mr. Ailes is relying on the fact that Ms. Carlson’s employment contract with Fox News includes an arbitration clause.
According to the Law Journal article, Fox News Suit Could Hinge on Disparate Arbitration Stances in NY, NJ, Ms. Carlson is claiming the arbitration clause does not apply to her case because Mr. Ailes is not a party to her employment agreement with Fox News and is not even mentioned in it. In contrast, Fox is arguing that a lawsuit against Mr. Ailes in his capacity as Fox’s CEO is in effect a lawsuit against the network, and that the arbitration clause is broad enough to encompass this dispute because it arises out of Ms. Carlson’s employment relationship with it.
As I explained to the Law Journal, Ms. Carlson’s arbitration clause does not include any language indicating she intended to waive her right to a jury trial. But in a 2014 case, Atalese v. Legal Services Group, the New Jersey Supreme Court ruled that arbitration clauses are unenforceable unless they make it clear that the individual signing them is giving up his or her right to a jury trial. Although Atalese involved a consumer fraud claim, lower courts have applied it to employment law cases. That being said, Ms. Carlson’s arbitration clause is governed by New York law, making it questionable whether Atalese even applies. I previously discussed Atalese in my article: Arbitration Agreement Unenforceable Unless Clearly Indicates Waiving Right to Go to Court.
As I told the Law Journal, unless the case is either referred to arbitration or “remanded to state court, it seems likely to be transferred to the Southern District of New York.” That is because both Ms. Carlson and Mr. Ailes worked in New York City, and it appears that the alleged sexual harassment and retaliation occurred predominantly, if not exclusively, in New York City.
There are several things at stake with respect to whether the case will be litigated in court or decided in arbitration. Arbitration is a confidential process that would be private. In contrast, court proceedings are presumed to be open to the public. In other words, Mr. Ailes is trying to keep the matter private, while Ms. Carlson appears to be seeking publicity for her case which has already been the discussed in countless newspapers and talk shows. In addition, the conventional wisdom is that arbitration favor businesses over individuals, making arbitration preferable to Mr. Ailes and court preferable to Ms. Carlson. As a result, there is a lot at stake for the parties and the public.