Employee Bound By Arbitration Agreement in Employment Application

Last month Judge Conrad of the Western District of Virginia held that an employee was required to arbitrate his claims because the employees signed an employment application agreeing if employed to be bound by the company's Dispute Resolution Process (DRP), which included arbitration. The employee had denied signing the DRP agreement itself, but admitted he signed the employment application referencing it. In addition to finding the employment application was an agreement to arbitrate, Judge Conrad rejected the employee's arguments that: 1) the DRP violated either the National Labor Relations Act (NLRA) or the Norris-LaGuardia Act of 1932 (NLGA); 2) the arbitration agreement was unconscionable; or 3) the arbitration agreement was a contract of adhesion. While all arbitration agreements stand or fall on individual verbiage and facts, this case provides helpful guidance to employers on developing enforceable and binding arbitration agreements for its employees, and in particular establishing binding arbitration as early as the employment application itself.

Fourth Circuit Upholds Dismissal of EEOC Claims and EEOC's Obligation to Pay Attorneys Fees

The Fourth Circuit Court of Appeals recently provided a warning case to the United States Equal Employment Opportunity Commission (EEOC) about better vetting suits against employers, and acting timely for those the EEOC deems with merit. In the recently decided appeal of EEOC v. Porpoak Logistics, Inc., decided March 25, 2014 (4th Cir. Appeal No. 13-1687), the Fourth Circuit affirmed the district court's dismissal of an EEOC suit filed some six and a half years after the originally filed discrimination charges, finding that the employer had been unfairly prejudiced by the EEOC's delay. The Fourth Circuit also upheld the district court's award to the employer of its attorney's fees.

Among other things, because of the delay, important witnesses were no longer available or had "faded memories" and the company had already destroyed important documents during routine document destruction. Additionally, there were questionable underlying merits to the claim itself. While the EEOC defended its actions in part on its overburdened staff, the Fourth Circuit wholly rejected that as a defense, with one of the justices noting that private companies would not even dream about arguing such a defense to explain misconduct.

Certainly the EEOC performs necessary, important functions; but the Porpoak decision should help ensure that in performing those functions the EEOC gives greater consideration to only pursuing fully vetted claims, and if it chooses to pursue them then doing so promptly.