Employment Law: Election not only case on Supreme Court docket

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The U.S. Supreme Court has garnered much attention recently because of the presidential election dispute. However, employment lawyers also have been monitoring other arguments before the court, particularly those involving federal employment statutes.|ret||ret||tab|

The court Nov. 6, 2000, heard oral arguments following an appeal from the Ninth Circuit Court of Appeals (California) addressing the arbitration of employment claims. The dispute hinges on the interpretation of the Federal Arbitration Act. Arbitration is an alternative method of dispute resolution which typically provides for final decisions much like courts.|ret||ret||tab|

The Ninth Circuit reversed a lower federal court decision in favor of the employer, who sought to bar the employee's employment action in court and to compel arbitration of that claim. |ret||ret||tab|

The employer, Circuit City, relied upon a document titled "Circuit City Dispute Resolution Agreement" contained within a six-page employment application. |ret||ret||tab|

That specific agreement requires employees to submit all claims and disputes to mutually binding arbitration.|ret||ret||tab|

The Ninth Circuit Court of Appeals held that the arbitration agreement within the employment application constituted "an employment contract," despite a disclaimer stating that it was not such a contract.|ret||ret||tab|

Relying on one of its previous decisions in 1999, the court held the Federal Arbitration Act does not apply to labor or employment contracts. As such, the act was inapplicable and Circuit City could not compel arbitration to preclude the employee's litigation of her employment claim in state court.|ret||ret||tab|

The appeal before the U.S. Supreme Court centers on how broadly one interprets Section I of the Federal Arbitration Act. That section excludes from the act employment contracts of seamen, railroad employees or any other class of workers engaged in foreign or interstate commerce. On appeal, the employee argued this section excludes all contracts of employment from the arbitration act. |ret||ret||tab|

Conversely, Circuit City stated the section should be interpreted very narrowly and should only refer to seamen, railroad employees and other workers who transport goods between state lines (thereby engaging in interstate commerce).|ret||ret||tab|

The Eighth Circuit Court of Appeals, which includes Missouri, has previously addressed the enforceability of arbitration clauses. In 1997, the court stated Section I of the Act did not exclude an arbitration agreement a hospital had with one of its nurses. |ret||ret||tab|

The court stated the arbitration agreement was enforceable and the employee was required to arbitrate rather than litigate her alleged employment discrimination and retaliation claims.|ret||ret||tab|

Interestingly, the Eighth Circuit stated the employee handbook, which contained the arbitration clause, did not constitute an employment contract under Missouri law.|ret||ret||tab|

Notwithstanding, the court found the arbitration clause constituted a separate and enforceable contract. The court went on to state that the act provides that agreements to arbitrate are enforceable subject to the statutory exemptions. |ret||ret||tab|

In this regard, the Ninth Circuit Court of Appeals broadly construed Section I of the act to exempt all employment contracts, whereas the Eighth Circuit noted in its decision that this section should be interpreted narrowly. Specifically, the Eighth Circuit adopted the reasoning of other federal courts that Section I "applies only to contracts of employment for those classes of employees that are engaged directly in the movement of interstate commerce" and not to all employment contracts.|ret||ret||tab|

As you can see, confusion exists in this area of the law, so a decision by the U.S. Supreme Court will, hopefully, provide guidance to employers who desire to resolve employment claims by arbitration rather than through the courts. |ret||ret||tab|

However, I do not anticipate that the Supreme Court will resolve another related dispute of whether arbitration procedures contained in a collective bargaining agreement bar civil claims under federal employment statutes.|ret||ret||tab|

The Eighth Circuit has ruled that arbitration agreements contained in a collective bargaining agreement do not preclude a union employee from filing a lawsuit in court for alleged violations of Title VII or other federal discrimination statutes. Because other federal courts have ruled differently, the Supreme Court may eventually be compelled to consider this issue, too. |ret||ret||tab|

|bold_on|(Bob Lawson Jr. practices labor and employment law representing management with the law firm of Blackwell Sanders Peper Martin LLP in Springfield.)[[In-content Ad]]