Recent Employment Arbitration Cases

Three cases, all involving or affecting employment arbitration agreements, have been released over the last couple of days:

Pirooz v. MEMC Electronic Materials, Inc., No. 4:05MC521CDP (U.S. Dist. E.D. Mo. March 7, 2006).  Employment severance agreement contained both a noncompete and an arbitration clause.  Employer initiated arbitration proceedings against employee for breach of noncompete agreement.  Arbitrator found for employee and ordered employer to pay employee’s attorney’s fees.  Employee filed suit in federal district court to confirm the award; employer moved to vacate.  The court found that the arbitrator had not exceeded the scope of his authority by awarding the fees, and confirmed the award.

Jones v. Titlemax of Georgia, Inc., No. Civ.A. 105CV 1154TWT (U.S. Dist. N.D. Ga. March 7, 2006).  Consumer pawned her car in an agreement containing an arbitration clause.  Consumer subsequently brought a Truth in Lending Action in federal district court.  Company moved to compel arbitration.  Consumer argued that a provision in the arbitration agreement stating that the arbitrator “shall not apply any federal or state rules of civil procedure or evidence” made the arbitration agreement unconscionable and unenforceable.  The court disagreed, noting that the rules of civil procedure and evidence traditionally have not been applied to arbitration.

Hobley v. Kentucky Fried Chicken, Inc., No. 04-7202 (D.C. Cir. Dec. 22, 2005).  Employer fired employee for theft, then called the police.  Employee sued employer for false accusation of theft. Employer moved to compel arbitration pursuant to an arbitration clause in the employment application providing parties agreed to arbitrate “any claims that arise” between them.  Employee argued that this clause did not cover post-employment conduct.  The D.C. Circuit, however, disagreed, finding that torts committed after employment may be arbitrable if the claims involve significant aspects of the employment relationship.

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