The FMLA Blog

FMLA Claim Dismissed Pursuant to Arbitration Provision of Employee Handbook

In Hogue v. Sky Financial Group, Inc., No. 02:07cv0108, 2007 U.S. Dist. LEXIS 20918 (W.D.Pa. March 23, 2007), the employee handbook contained notice that any disputes arising out of termination of employment would be subject to arbitration.  Hogue was granted intermittent FMLA leave in April 2004. He was granted FMLA leave again in September 2004, with a planned return date of October 12, 2004.  He subsequently called and notified his employer that he would be unable to return to work until January 31, 2005.  His employer notified Hogue that it could not hold his position open, and that if there were no comparable positions available at the time he was available to return to work, he would be terminated.  He was subsequently terminated.

Hogue filed suit alleging that his termination violated the FMLA.  The employer moved for summary judgment to dismiss the matter.  The employer argued that the dispute was subject to arbitration pursuant to the employee handbook.  Hogue, the employer argued, also failed to timely invoke arbitration within 90 days as required by the arbitration agreement.  The Court agreed to dismiss the suit.

The Court noted that the employee handbook specifically provided for arbitration as the sole means for employees to "contest discharge" and explained that the parties agreed to arbitrate "disputes concerning termination of employment."  Hogue, the Court observed, claimed that he was discharged in violation of the FMLA.  According to the Court, "[t]his claim falls within the scope of the arbitrating provision and is, therefore, subject to dismissal in favor of arbitration."  Absent jurisdiction, the Court declined to address the employer's argument that Hogue was precluded from arbitrating the matter because he failed to timely invoke arbitration within the time frame (90 days) provided in the employee handbook.

Employer Failure to Pay Arbitration Filing Fee Loses Ability to Compel Arbitration of FMLA Claim

In Stowell v. Roll Brothers, No. 06-cv-2103, 2007 U.S. Dist. LEXIS 287 (E.D.Pa. Jan. 4, 2007, a provision in the plaintiff's employment contract required that all disputes arising out of plaintiff's employment must be arbitrated through the American Arbitration Association (AAA).  The plaintiff submitted the dispute to arbitration.  AAA requested that the employer pay the the filing fee of $ 750. When the fee was not received AAA declined to administer the case.  The employee sued the employer for money damages in court alleging violation of the FMLA.  The court found that, under the Federal Arbitration Act, the employer's s failure to to remit the filing fee constitutes a default of the arbitration process.  Because of the employer's default of the arbitration proceedings, the court concluded that it no longer had the authority to stay the court proceedings and compel arbitration.  The Court observed:

The court concludes that compelling arbitration after Defendant's prevented the arbitration from going forward by failing to remit the proper fee would prejudice Plaintiff, who as a result of Defendant's failure , went forward with all of the administrative procedures required before filing a complaint in the District Court.

Comment: Employers who include arbitration clauses in employment contracts must take great care to ensure that all arbitration fees are timely paid to ensure that the matter will be heard by an arbitrator rather than through the traditionally more expense and time consuming civil jury trial process.

Court Enforces Arbitration of FMLA Claim and Stays FMLA Civil Suit

Plaintiff Wayland Hyde began employment with the Defendant as a jeweler in November 1987.  In June 1998, the Defendant instituted a mandatory dispute resolution program. Pursuant to the program, all disputes alleging unlawful behavior between the Defendant and its employees were subject to a mandatory three-step dispute resolution process, culminating in binding   Neither party could file a lawsuit instead of using the Program or accepting the arbitrator's final decision.

The Defendant publicized the Program by distributing materials to its regional managers, including Hyde.  Plaintiff continued to work for the Defendant for more than eight years after the Program was adopted.  He did not, however, sign any form expressing his agreement to be bound by the Program.  In June 2006, Hyde filed a workplace claim with the Program.  He abandoned the claim before binding arbitration and filed a civil suit against his employer alleging violation of this FMLA rights. 

The employer filed a pretrial motion to enforce the arbitration agreement and, thereby, dismiss the civil suit.  Hyde argued that the arbitration agreement should not be enforced because he refused to sign a form expressing his agreement to be bound by the terms of the Program.  He argued that, absent a signature, he is not bound or barred from filing suit.  The Court disagreed.

The Court noted that Hyde failed to cite any case law supporting his argument that execution of a document explicitly agreeing to be bound by arbitration is required in order for an employee to be bound by the terms of a dispute resolution program.  Applying Ohio law, the Court opined that a contract exits when there is (1) mutual assent, (2) an offer and acceptance of the offer, and (3) consideration.  Here, the Defendant extended an offer to all of its employees through its promotion of the Program.  The only question was whether Hyde evidenced his intent to accept the offer. 

The Court found that Hyde's failure to execute a formal agreement was not dispositive of the issue.  The Court went on to find that Hyde's continued employment for eight years after the program was initiated, his intimate familiarity with the Program (as one of its publishers), and his use of the program established that Hyde accepted his employer's offer and was bound by the terms of the dispute resolution program.  The Court granted the Defendant's motion to stay all proceedings pending arbitration.

Hyde v. Sterling Jewelers, Inc., No. 5:06-cv-02161, 2006 U.S. Dist. LEXIS 81755 (N.D.Ohio Nov. 8, 2006)

Comment: There is a continuing dispute whether the anti-waiver provisions of the FMLA preclude an employer from enforcing an arbitration agreements.  This case is interesting because the employee expressly refused to sign an agreement waiving his right to sue his employer, but the court enforced the ADR agreement anyway after finding agreement by his continued employment and use of the program. 

Arbitration of FMLA Claims Pursuant to Employment Contract Enforceable

In Moncrief v. The Terminix International Co. Limited Partnership, No. 06-1047-JTM, 2006 U.S. Dist. Lexis 43816 (D.Kan. June 27, 2006), the court found that Moncrief must arbitrate her FMLA claims in accordance with an employment and arbitration agreement she signed as a condition of her employment.  The Agreement requires arbitration of all employment disputes.  The court, citing the Supreme Court, noted that compelled arbitration is permitted for alleged violations of federal employment statutes where a valid employment contract so requires.  The court distinguished the enforcement of a broad arbitration provision in a valid employment contract from a wavier provision in a severance agreement, noting Fourth Circuit case law that agreeing to arbitration is entirely different from agreeing to waive a claim. 

Comments:  The anti-wavier provisions of 29 CFR 825.220(d) do not apply to valid, pre-employment agreements to arbitrate FMLA claims in lieu of civil suit.

 

FMLA Claims Dismissed Pursuant to Arbitration Agreement

The court in Mason v. Praxair, Inc., No. 3:06CV-218-R, 2006 U.S.Dist. LEXIS 58003 (W.D.Ky. Aug. 16, 2006) dismissed an employee claim that her termination during medical leave violated the FMLA pursuant to an arbitration clause contained in her application for employment.  The arbitration clause broadly provided:

I agree to pursue any dispute in connection with any future separation from employment by the Company promptly through binding arbitration pursuant to the rules of the American Arbitration Association before an arbitrator selected by the Company and me by striking from no more than three panels of arbitrators obtained from the Federal Mediation and Conciliation Service, or through such equivalent alternative dispute resolution procedure as the Company may designate, except that to the extent permitted by law, this will be my sole and exclusive remedy for such dispute.

In support of dismissal the court initially recognized the strong federal policy favoring enforcement of arbitration agreements, and that any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.  In determining whether a party has agreed to arbitrate a particular issue, the court applies ordinary contract principles.  Here, the court rejected the employee’s argument that the arbitration clause did not cover the FMLA because it did not specifically mention statutory claims.  The court found that “any dispute in connection with any future separation” language was broad enough to include FMLA claims. 

Comment:  Courts have generally enforced agreements to arbitrate FMLA claims even where, as here, the arbitration language does not specifically mention the FMLA.  Applying general contract principles, if the arbitration agreement language is broad enough to encompass the FMLA claims courts will frequently dismiss civil suits where the employee has not submitted the claim to arbitration.