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Eleventh Circuit: Arbitration Compelled for Employment Claims that Arose Before Plaintiff Signed Arbitration Agreement

 

On August 7, 2017, the United States Court of Appeals for the Eleventh Circuit issued a unanimous 3-0 decision in Jones v. Waffle House, Inc. et al., holding that an arbitration agreement between the parties would be enforced even though the plaintiff signed the agreement after filing his original suit.

In December 2014, William Jones applied to work at a Waffle House in Florida, but Waffle House rejected his application because Mr. Jones failed a background check. In October 2015, Mr. Jones filed a complaint in the U.S. District Court for the Middle District of Florida claiming that Waffle House had violated the Fair Credit Report Act (FCRA) by not providing him with a copy of the background check and an opportunity to challenge and rebut the background check’s findings. In his suit, Mr. Jones also sought to represent a class of people who had been subjected to adverse employment actions by Waffle House because of background checks.

Despite the litigation in the Middle District of Florida, and without the knowledge of any of the lawyers involved, Mr. Jones continued pursuing employment with Waffle House, and eventually succeeded when a Waffle House in Missouri hired him in February 2016. When he took this job, Mr. Jones signed an agreement that he and Waffle House would arbitrate all claims “past, present, or future… pertaining in any way to [his] employment.”

In April 2016, Waffle House discovered that Mr. Jones had signed its standard arbitration agreement. Waffle House then filed a motion to compel arbitration in the Middle District of Florida case. The district court denied the motion to compel arbitration because it agreed with Mr. Jones’ arguments that the late arbitration agreement was unconscionable and it was an unauthorized ex parte communication between Waffle House’s counsel and an unrepresented party. Waffle House then appealed to the Eleventh Circuit, which vacated the denial and remanded the case back to the district court with instructions to compel arbitration.

In its opinion, the Eleventh Circuit explained that “it is now basic hornbook law” that the Federal Arbitration Act is “both a liberal federal policy favoring arbitration and the fundamental principle that arbitration is a matter of contract.” The court also explained that this case did not involve lawyers engaging in deliberate communications aimed at convincing Mr. Jones or the putative class to give up their rights to participate in a pending class action. The court further explained that the arbitration agreement was not unconscionable because Mr. Jones was the only person who had knowledge of the pending lawsuit at the time he signed, and he voluntarily agreed to the language that would require him to arbitrate all “past, present or future” claims involving his employment with Waffle House. Thus, Mr. Jones will now have to pursue his FCRA claim through arbitration instead of through the court.

The attorneys at CCLB represent clients of all types and sizes in connection with employment-related matters, including those involving arbitration agreements. For any questions, or if we can be of any assistance with such a matter, please contact us at (404) 262-6505 or sgrubman@cclblaw.com.