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Friday, August 11, 2017

Waffle House Smothers Lawsuit



William Jones applied for a job at a Florida Waffle House in Ormond Beach in December 2014 but was rejected. In October 2015, Jones sued Waffle House and various data-reporting companies in federal district court, claiming that they violated the Fair Credit Reporting Act by failing to give him a copy of the background checks that were run on him in connection with his job application and by failing to give him an opportunity to dispute those background checks. Jones also sought class relief, seeking to represent a class of United States residents who applied for employment with Waffle House in the preceding five years who Waffle House did not hire based on a background check.

While that lawsuit was pending, Jones continued to seek employment with Waffle House elsewhere, and, in February 2016, Jones was hired at a Waffle House in Kansas City, Missouri. In connection with that employment, Jones signed an arbitration agreement that covered “all claims and controversies, past, present, or future, arising out of any aspect of or pertaining in any way to his employment.”  The agreement also included a delegation provision requiring that “the Arbitrator, and not any federal, state, or local court or agency, shall have authority to resolve any dispute relating to the interpretation, applicability, enforceability, or formation of this Agreement.” Jones neglected to tell his new employer in Kansas City that he was actively suing Waffle House in Orlando. When Waffle House’s legal team later learned, in March 2016, that Jones had signed an arbitration agreement, it moved to compel arbitration pursuant to the agreement.

This week the 11th Circuit Court of Appeals held that the Waffle House arbitration agreement contains a broad, valid, and enforceable delegation provision that expresses the parties’ clear and unmistakable intent to arbitrate gateway questions of arbitrability, including questions concerning the interpretation, applicability, enforceability, and formation of the agreement. “In the face of the Federal Arbitration Act’s clear preference for and presumption in favor of arbitration, we are obliged to enforce the parties’ clear intent to arbitrate these issues.” The 11th Circuit has the same track record on similar past decisions.

Common Sense Counsel: in the employment law the most feared words a plaintiff’s employment lawyer hates to hear their client say is “oh by the way I signed an arbitration agreement with my employer.” It is like yelling Zika on South Beach – all the lawyers scatter. It will be the single best employment law risk reduction strategy you may ever use.
The best programs have the following components: 1) an internal complaint process with a promise of no retaliation; 2) handbook provisions giving employee two channels to make their complaint and fair investigation process; 3) well drafted and broadly worded arbitration provision, covering class claims, that will pass court scrutiny; 4) private arbitration panel of former local judges, or AAA Arbitration, and mostly importantly; and 5) a Human Resource professional with a listening ear and risk reduction mindset.

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com