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Employer Loses Bid to Enforce Arbitration as Part of Employee Agreement

Monday, December, 14, 2015


A Federal Court in Maryland recently denied an employer’s motion to compel arbitration in a case where the plaintiff executed an arbitration agreement included in the plaintiff’s employment application. The court did not believe the agreement was enforceable because the parties had not had what the court called “a meeting of the minds” concerning the agreement. The decision sets the tone and reminds employers to take a look at the content of their employment application, as well as the context in which it is presented and executed.

 

The case involved a plaintiff that worked for a Pizza Hut in Hagerstown, Maryland from 1992 until 2014. The restaurant was purchased by a new owner in 2006 and the outgoing owner asked the plaintiff to complete an employment application for the new owner. The new owner, ADF MidAtlantic required biographical and background information related to each of the current employees to keep on record. The plaintiff completed the application, which included the arbitration provision.

 

ADF terminated the employee in 2014 and she sued, claiming FMLA interference and retaliation, as well as wrongful discharge, defamation, and violations of wage and hour laws. The company pointed out she had signed an arbitration agreement and did not have the authority to file a lawsuit to be heard in court.

 

According to the court, the document was an employment application, but the plaintiff was not applying for employment when she completed it. She did not view the completion of the document as an application for employment because she was already employed and could therefore not have agreed to arbitrate any future claims by signing the application.