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Tulsa court enforces agreement to arbitrate

published in Oklahoma Employment Law Letter | March 1, 2013

By Charles S. Plumb

In a January 23 decision, the federal district court in Tulsa continued a recent trend in Oklahoma cases — enforcing arbitration clauses included in employment agreements.

Das agreement

Jeana Morrison went to work as a sales associate for Volkswagen Tulsa in April 2011. When she began her employment, she signed an arbitration agreement requiring her to submit any disputes that arose between her and her employer to mandatory and binding arbitration. Under the agreement, disputes would be settled by the American Arbitration Association and covered by applicable Oklahoma arbitration law. The agreement was very broad, requiring any and all disputes involving Morrison’s employment to be arbitrated. Additionally, claims had to be made within one year after a dispute arose. The agreement provided that the losing party could be liable for filing fees, administrative costs, and/or arbitrator fees.

Employee driven to legal action

Morrison tried to file a lawsuit (rather than an arbitration claim) against Volkswagen Tulsa. The lawsuit included claims of race discrimination, hostile work environment, gender discrimination, and retaliation under Title VII of the Civil Rights Act of 1964. She also claimed Volkswagen Tulsa had violated wage and hour laws. When Volkswagen Tulsa asked the court to postpone the lawsuit and require Morrison to submit all her claims to arbitration under the arbitration agreement, Morrison objected, arguing that the agreement shouldn’t be enforced for a number of reasons.

First, Morrison argued that the agreement’s requirement that the losing party pay filing fees, administrative costs, and potentially half of the arbitrator’s fees imposed an extreme hardship, one that Morrison said could deter individuals from pursuing their rights. She also argued that the one-year limit to file a claim was significantly shorter than the statutory time limit under Title VII. For those reasons, she believed the agreement should be ignored and she should be permitted to proceed in federal court. Significantly, Volkswagen Tulsa had already agreed it would bear all the costs associated with the arbitration.

Lawsuit detoured

The Tulsa federal court postponed Morrison’s lawsuit and required her to proceed with arbitration of all her claims against Volkswagen Tulsa under the arbitration agreement. The court noted that the Federal Arbitration Act (FAA) favors disputes being resolved through arbitration agreements, including employment claims. Thus, the court reasoned that favorable treatment also should be applied to Title VII claims. It recognized a number of recent cases from Oklahoma and the U.S. 10th Circuit Court of Appeals (whose rulings apply to all Oklahoma employers) enforcing employment agreements like the one Morrison signed. The court was willing to strike the one-year time limitation, and Volkswagen Tulsa’s agreement to assume all arbitration costs meant the fee aspect of the agreement was no longer an issue. Morrison v. Volkswagen Tulsa, LLC, Case No. CV-375-JED-PJC (N.D. Okla., 1/23/13).

Bottom line

This decision stopping Morrison’s lawsuit and requiring her to submit all her employment claims to arbitration continues a recent trend in Oklahoma and the 10th Circuit to enforce arbitration agreements between employees and employers when it comes to employment disputes.