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
