Lower Court Orders Arbitration Too Soon, Appeals Court Rules
Posted: July 14, 2021
A ruling from the U.S. Court of Appeals for the Sixth Circuit (Michigan, et al) says a lower court wrongfully compelled arbitration as the employee claims he did not agree to have employment-related disputes resolved via arbitration.
Timothy Boykin is a 73-year-old African American who worked as a manager at a Family Dollar store located in Michigan. Just before the store closed one night in July of 2018, a customer entered to buy a greeting card. Boykin said that when he politely asked the customer to make his selection and check out, the customer responded by using a racial slur. He added that he then asked the customer to leave, after which the customer allegedly cursed at him, crumpled up a greeting card and pushed him.
The police came to the store, escorted the customer out, and told Boykin the store could ban the customer from the premises.
The store later talked to the customer. The customer demanded that Boykin be fired. The store fired Boykin a few weeks later. The operations manager who delivered the news to Boykin told him that he disagreed with the termination decision.
Boykin sued Family Dollar. He alleged that it fired him based on his age and race.
In response, Family Dollar filed a motion to compel arbitration and dismiss the suit.
HR Manager: 'We Have Proof'
In support of the motion, it supplied a declaration from a human resources manager. In the declaration, the human resources manager said all Family Dollar employees must undergo training that includes an online session relating to arbitration.
She added that employees must review and accept Family Dollar's arbitration agreement. According to the manager, employees agree to arbitrate any future disputes by clicking "I ACCEPT" on the screen.
Dispute About Online Session
Family Dollar said it had a record of exactly when Boykin completed the online arbitration session.
Not surprisingly, Boykin took a different point of view. He swore under oath that he never consented to or acknowledged an arbitration agreement at any time. He said he had no recollection of taking any arbitration session and that no one ever told him that agreeing to arbitration was a condition of his employment. He also asked for his personnel file after he sued, and the file did not include any agreement to arbitrate disputes.
A lower court granted Family Dollar's motion to compel arbitration, and it dismissed the suit. The lower court held that it was for an arbitrator to decide whether the parties had entered into an arbitration agreement. Boykin appealed.
The Sixth Circuit appeals court issued a decision that reversed the lower court's decision and remanded the case for additional proceedings. (Boykin v. Family Dollar Stores of Michigan, LLC)
The appeals court explained that under Section 3 of the Federal Arbitration Act, if a defendant seeks arbitration of any issue pending in an existing federal suit and the court is satisfied that the issue is referable to arbitration under a written agreement, then the court is to stay the action pending arbitration.
Reliance Was Forfeited
Here, Family Dollar forfeited reliance on this section and its remedy because it did not cite it or adequately request a stay, the appeals court said. Section 4 of the state statute allows plaintiffs to file contract claims seeking specific performance of an arbitration contract, the appeals court continued. Under that section of the act, courts are to compel arbitration if the making of the agreement is not in issue.
Here, there was a factual dispute as to whether Boykin accepted and authorized an arbitration contract, the court said, adding Boykin was entitled to conduct discovery and have a trial on that question.
The lower court's decision was reversed, and the case was remanded for further proceedings.
Posted In: Human Resources, General; Quit, Resigned, Termination of Employment, etc.
Want to know more? Read the full article by Tom D'Agostino at HR Morning