A lawsuit filed by a former F&I director alleging racial discrimination at a Nissan dealership will not need to be arbitrated, despite a provision the employee signed at a Honda dealership within the same company, a New Jersey state appeals panel ruled this month.
Now, the former employee, Tian Reid, doesn't have to arbitrate his racial discrimination claims against the store — Freehold Nissan in New Jersey — and the dealership group — DCH Auto Group Inc. — because DCH stores are separate corporate entities, according to the panel.
Instead of arbitration, the case will now proceed with pre-trial discovery and either be settled or go to trial unless DCH successfully asks the state Supreme Court to review the case, said Reid's lawyer, Thaddeus Mikulski of Pennington. N.J.
The New Jersey Appellate Division said that if the company intended the arbitration provision to apply to "future employment relationships between Reid and affiliates of DCH Academy Honda [for which he signed an arbitration provision], then the language in the arbitration provision needed to reflect that intent."
Reid initially worked for the dealership group's Freehold Toyota store as a sales consultant in 2002-03, according to the suit. In 2006, DCH's Kay Honda in Eatontown hired him as an F&I manager, and in 2008 he was promoted to F&I director at DCH's Academy Honda in Old Bridge, the decision said.
In April 2014, he transferred to Freehold Nissan as finance director after complaining about racial discrimination at Academy Honda. He was fired in August 2015 for what the general manager allegedly said at the time was a "failure to lead," according to the complaint. Lithia Motors acquired the dealership group in 2014.
The suit contends that Reid was fired because of his race and prior complaints of discrimination on the basis of race. Court documents said he "had been passed over for promotional and merit opportunities that were accorded to less qualified individuals, that at times he had been set up for failure by higher level managers, that at times higher level managers had attempted to undermine his integrity with the sales staff and that he had been subjected to differential treatment."
A Monmouth County Superior Court judge dismissed the suit and ordered the dispute to arbitration. On appeal, the dealership and DCH argued that Reid's employment application explicitly required arbitration as "the sole and exclusive means to resolve all disputes that may arise out of or be related in any way to his employment with DCH, including claims of employment discrimination."
But the Appellate Division sided with Reid, saying, "although Reid signed a job application containing an arbitration provision with his former employer, that provision did not state that it would continue to apply when, as here, he transferred employment to a separate affiliated company."
DCH attorney Kathleen Einhorn, of Newark, said, "We take these matters seriously, but we did not comment on pending litigation."