Non-Signatories Bound by Reinsurance Participation Agreement’s Arbitration Clause, N.J. Court Affirms

TRENTON, N.J. — A trial court did not err in granting two non-signatories’ motion to compel arbitration in a workers’ compensation insurance dispute, ruling that the contract at issue created an agency relationship between the signatories and non-signatories, thereby binding them to the arbitration clause incorporated within that contract.

In an Oct. 13 opinion, the New Jersey Superior Court, Appellate Division, further ruled that the arbitration clause was not unconscionable and therefore enforceable.

Jade Apparel Inc. and Americoat Limited Corp. jointly retained broker United Assurance Inc. and its employee, Joseph Marino, to secure workers' compensation insurance. Jade and Americoat …