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Ailes Ends Attempt To Get Carlson Suit Decided By NY Fed Court
After arguing that New Jersey was an improper venue for former Fox News anchor Gretchen Carlson's suit accusing him of sexual harassment, former Fox News CEO Roger Ailes agreed to drop his effort to transfer the suit's venue to the U.S. District Court for the Southern District of New York.
In a stipulation he filed jointly with Carlson in August, Ailes also agreed to withdraw his petition in the Southern District to compel arbitration of the dispute if the judge hearing the New Jersey case approves the agreement. Carlson, for her part, consented to proceeding before the American Arbitration Association in New York City if U.S. District of New Jersey Judge Jose Linares, who is hearing the case, determines that her claims are subject to arbitration. Carlson's consent to arbitration is subject to the right to appeal, says the stipulation.
The agreement came after weeks of battling between the two sides over the venue of the case, which Carlson, a Connecticut resident, filed in state court in Bergen County, New Jersey, in early June, citing Ailes' home in Creskill, NJ. Carlson v. Ailes (Supr. Ct. N.J., Bergen Cty.). Ailes removed the case to federal court in Newark, claiming he does not live in New Jersey but resides in Manhattan and Garrison, NY. Carlson v. Ailes, 2:2016cv04138 (D.N.J.). On July 8, Ailes moved in the federal court in Newark to compel arbitration, but on July 15 he withdrew that petition and filed a separate suit in the Southern District of New York. Ailes v. Carlson, 1:2016cv05671 (S.D.N.Y.). Also on that date, Ailes' lawyers moved to transfer the case to the Southern District, or, in the alternative, to stay the case pending the outcome of the petition to compel arbitration in the New York court.
The Carlson-Ailes agreement also stated that if District Judge Linares declined to approve the stipulation, Carlson would have seven days thereafter to respond to Ailes' petition to compel arbitration in the Southern District.
Ailes has argued that the case is subject to arbitration based on a clause in Carlson's employment contract requiring job disputes to be submitted to an arbitrator. But it remained to be seen whether Judge Linares would order arbitration, because New Jersey law is reluctant to impose such a condition without explicit language stating that the parties are giving up their rights to a trial in court.
Carlson's suit claims she was fired for resisting Ailes' sexual advances and complaining about sexual harassment. Ailes, who helped found Fox News, was let go in late July after an internal investigation of his conduct by New York law firm Paul, Weiss, Rifkind, Wharton & Garrison.
Meanwhile, several publications reported that Carlson and Ailes were working to negotiate a settlement. Vanity Fair reported on its website that the settlement is expected to exceed $10 million because of concern by Ailes that several women made audio recordings of their conversations with him.
Carlson's lawyer, Nancy Erika Smith of Smith & Mullin in Montclair, NJ, declined to comment on the stipulation. David Garland of Epstein Becker & Green in New York, representing Ailes, said in a statement that “our position all along has been that this case belongs in arbitration. [The Carlson-Ailes stipulation] filing moves us closer to that goal as Ms. Carlson has waived any objection to the federal court in New Jersey ordering arbitration in New York City.”
Charles Toutant is a Reporter for the New Jersey Law Journal, an ALM sibling publication of Entertainment Law & Finance.
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