A federal appeals court has ruled a lawsuit against an employer must be arbitrated when the employee knowingly and voluntarily waives their right to a judicial forum.
The court’s decision in Zoller v. GCA Advisers means that in cases that fall under the Federal Arbitration Act, the Ninth Circuit will enforce broad agreements to arbitrate between employers and individual employees, Caruso Law School professor Thomas J. Stipanowich, the William H. Webster Chair in Dispute Resolution at Pepperdine University’s Straus Institute, told the Northern California Record by email.
“This means requiring parties to submit all pertinent civil claims and controversies, including claims pursuant to various statutes, to binding arbitration in lieu of suing in court,” Stipanowich said.
He noted that the arbitration contract doesn’t need to specify individual causes of action.
“However, the arbitration agreement must evidence an employee's knowing and voluntary waiver of the right to sue on certain statutory claims in court,” Stipanowich said. “It appears that this requirement will be met by assent to a clear and broad agreement to arbitrate disputes associated with an employment contract.”
The court’s decision cited as precedent, Gilmer v. Interstate/Johnson Lane Corp.
“In Gilmer, the U.S. Supreme Court determined that an employee's claims under the Age Discrimination in Employment Act (ADEA) were subject to arbitration under the terms of the Federal Arbitration Act,” Stipanowich said. “While not all statutory claims may be appropriate for arbitration, ‘if a party agreed to arbitration, the party will be held to that agreement unless the party could prove a congressional intent to preclude a waiver of judicial remedies for the statutory rights at issue.’ (Such circumstances are relatively rare.) The Court concluded that there was no reason to conclude that binding arbitration could not be a satisfactory forum for resolution of ADEA claims.”
The three-judge Ninth Circuit panel noted in its unanimous ruling that while the defendant argued against the lower court’s evaluation of the knowing waiver standard and the validity of it, they did not reach that conclusion.
“The panel assumed, without deciding, that this knowing waiver requirement remained good law and was applicable to the statutes at issue,” the ruling states. “The panel concluded that the arbitration agreement included clear language encompassing employment disputes, and the evidence showed that Zoller knowingly waived her right to a judicial forum to resolve her statutory claims. Accordingly, the panel reversed the district court’s denial of GCA’s motion to compel arbitration of these claims.”
The appellate court’s decision remanded the suit to the U.S. District Court for the Northern District of California, with direction for all claims to be sent to arbitration and the case dismissed without prejudice.
“Although Zoller requires employees to arbitrate civil claims and controversies that fall within the scope of broad arbitration agreements in their employment contracts, including actions under civil rights and discrimination statutes, the Ninth Circuit still requires employers to make certain that employees have had the opportunity to read and signify assent to the agreement to arbitrate,” Stipanowich said.
“For example, an employee's indication that they have received an employee handbook that includes an arbitration provision is unlikely to be sufficient evidence of a ‘knowing and voluntary waiver’ of the right to pursue certain statutory claims in court.”