Precedent: Rejecting Forced Arbitration in Nursing Homes

Historical Archive: June 9, 2016

When families admit a loved one to a nursing home, they are often handed a stack of complex admission documents. Buried within these papers are frequently "forced arbitration clauses." These clauses attempt to strip residents of their constitutional right to a jury trial if they are abused or neglected, forcing them instead into a private, corporate-friendly arbitration process.

Background of the Case

A resident of a CareOne facility in Westwood, New Jersey, filed a lawsuit alleging severe neglect. In response, the corporate operator attempted to compel the resident to drop the lawsuit and submit to private arbitration, citing a clause hidden in the admission paperwork.

The lower court initially dismissed the lawsuit in favor of arbitration. However, the plaintiff, represented by Thomas S. Howard of the former Howard Law LLP, appealed the decision, arguing that the clause was unfair and unenforceable.

The Appellate Court's Decision

In a unanimous ruling, the Appellate Division of the Superior Court of New Jersey set a new precedent by rejecting CareOne's attempt to compel arbitration. The Court ruled that aspects of the arbitration clause "may be unconscionable" and noted that the specific arbitration process required by the corporation was not even available at the time the contract was made.

The Court strongly criticized the corporate tactics, stating that the facility was seeking to take advantage of the elderly and infirm who require nursing home care, noting: "CareOne apparently imposes upon its patients an obligation to arbitrate disputes because it can."

Impact on Patient Rights

By reversing the lower court's decision, the Appellate Division returned the case to the courts in Bergen County for a public trial. This ruling was a major step forward in allowing for fair remedies in cases of nursing home neglect and abuse in New Jersey.

It established that laws such as the Federal Arbitration Act are supposed to protect people's rights, not take them away through deceptive, unconscionable contracts forced upon vulnerable seniors during a medical crisis.

For more information on protecting residents' rights, visit our guide on New Jersey Nursing Home Abuse Laws.