For years, a recurring topic of debate amongst federal courts of all levels has been the issue of whether an arbitration agreement that waives an employee’s statutory right to bring a collective action under the Fair Labor Standards Act (“FLSA”) is enforceable under the Federal Arbitration Act (“FAA”). On January 6 of this year, we posted a review of 2013 cases that included a laudatory reference to the District Court’s (Judge Totenberg) opinion in Walthour v. Chipio Windshield Repair, LLC,  in which the court demonstrated how the right to collective action under the FLSA was intended by Congress to be a substantive, non-waivable right. However (as we noted then), after making its point, the court “yielded to the reality of overwhelming contrary precedent and upheld the collective action waiver.” Late last month, the 11th Circuit affirmed that decision, holding for the first time that a waiver of the right to collective action under the FLSA is, indeed, enforceable.
A bit of background may be useful before we jump into the specifics of this seminal case. The FLSA was enacted in 1938 for the primary purpose of protecting “employees who lack sufficient bargaining power”;  accordingly, it grants a statutory right to collective actions against employers. 29 U.S.C. § 216(b).  Since its enactment, both the Supreme Court and the 11th Circuit have made clear that contractual waiver of certain rights afforded by the FLSA is not permitted;  however, until Walthour, neither court had addressed the enforceability of the collective action provision specifically. And perhaps arbitration law is the only force strong enough to successfully waive such an ostensibly clear non-waivable right: the FAA represents a “liberal federal policy favoring arbitration agreements,” and “establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” 
In Walthour, the plaintiff-employees had signed an employment agreement with the defendant-employers, which contained an arbitration provision. It stated, in relevant part:
“By signing this agreement, employee and employer are each giving up . . . his/her/its right to participate in aclass action because all claims will be resolved exclusively through arbitration. Employee and employer agree that each may bring claims against the other only in his/her/its individual capacity and not as a plaintiff or class member in any purported class or representative proceeding.”
An overtime wage dispute arose, and plaintiffs filed suit in federal court. Defendants moved to compel arbitration pursuant to the above employment agreement; plaintiffs countered that the FLSA established an un-waivable right to file a class action, and thus the contractual waiver contained in the arbitration provision was not enforceable. As noted above, the District Court for the Northern District of Georgia ultimately disagreed and compelled arbitration.  The 11th Circuit affirmed, stating that “a contrary congressional command in the FLSA” is required in order “to override the FAA,” and cited the Supreme Court’s decision in CompuCredit  as guidance in addressing this issue; specifically, by “focus[ing] primarily on the statutory text of the FLSA to determine whether that text precludes a waiver of the statutory right to bring a collective action.”
The court then went on to review other pertinent Supreme Court precedent, citing SCOTUS’s decisions in Gilmer  (holding that “[m]ere inequality in bargaining power . . . is not a sufficient reason to hold that arbitration agreements are never enforceable in the employment context”) and Italian Colors Restaurant  (rejecting plaintiffs’ claims that the waiver of class arbitration barred “effective vindication” of their federal statutory rights under antitrust laws) as support for the 11th Circuit’s own conclusion in Walthour that collective action waivers are permissible in this narrow arbitration context. Indeed, the Walthour court relied heavily on that precedent to reject plaintiffs’ argument that the “right” to bring collective actions is non-waivable:
“As interpreted in Italian Colors Restaurant, the Supreme Court in Gilmer had ‘no qualms’ about enforcing an arbitration agreement that would result in the parties forgoing their right to proceed collectively . . . [Although these decisions] addressed the ADEA, [the rationale] applies with equal force to the FLSA, because, as noted , the ADEA expressly adopts the FLSA’s class action provision.”
Ultimately, the court in Walthour concluded that, after examining Supreme Court precedence and the text, legislative history, and purposes of the FLSA, “we discern no ‘contrary congressional command’ that precludes the enforcement of plaintiffs’ Arbitration Agreements and their collective action waivers.”
Although this decision is certainly a victory for arbitration, we can’t help but pay homage to the victory’s bittersweet tinge, as a little part of employees’ rights somewhere utters its death rattle.
 1:12-CV-1491-AT (Feb. 27, 2013).
 Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 707 n.18 (1945).
 “An action to recover the liability prescribed in [§ 216(b)] may be maintained against any employer . . . by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.”
 See, e.g., Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 707 (1945).
 Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1367 (11th Cir. 2005).
 Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983).
 Walthour et al v. Chipio Windshield Repair, LLC et al, 1:12-CV-1491-AT (Feb. 27, 2013).
 CompuCredit Corp. v. Greenwood, 132 S. Ct. 665 (2012)
 Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 33, 111 S. Ct. 1647, 1652 (1991).
 Am. Express Co. v. Italian Colors Rest., 133 S. Ct. 2304, 2309 (2013)
People of various faiths have been using extrajudicial forms of religious-based dispute resolution for centuries in the United States, including here in our home state of Georgia. Such tribunals include the Orthodox Jewish Beth Din tribunal and the ecclesiastical courts of the Catholic Church. Most commonly, these faith-based tribunals resolve matters of family law, such as divorce and property settlement disputes; however, some also engage in commercial arbitration and mediation. Historically, Georgia courts have enforced these tribunals’ judgments either under prevailing arbitration laws or principles of comity, provided the awards and procedures are consistent with public policy. Georgia courts have also historically enforced foreign arbitral tribunal rulings in accordance with the same principles.
But a bill introduced this year in the Georgia General Assembly would have called all of these time-tested practices into question. The 2013-2014 Regular Session saw the introduction – and defeat – of House Bill 895 (“HB895”). HB895, officially titled “Laws and statutes; effect and enforcement of foreign laws; revise provisions,” was a thinly-veiled attempt at implementing anti-Sharia legislation in order to address a problem perceived by some political conservatives, namely that Sharia law is “creeping” into U.S. and Georgia courts.
HB895 purported to respond to this problem by including broad language proscribing the incorporation of any “foreign” laws by Georgia courts. The Bill’s approach to achieving this, in short, was to amend two age-old provisions of Georgia law: the comity provision and the forum non conveniens provision. It should be noted that nowhere in HB895 itself are the words “Sharia law” included, since to enact a law for such a specific discriminatory purpose would be a flagrant violation of the First Amendment right to freedom of religion. However, behind the scenes, the only real justification cited for the Bill was this problem of “creeping Sharia law.” The only evidence of that claim is a report prepared by the private Center for Security Policy (“CSP”), which purports to provide hundreds of pages of evidence of Sharia law being applied to cases in American courts, but is in fact merely an amalgamation of copied-and-pasted court decisions that may – or may not, as the case may be – at some point in the opinion include the word “Islam,” “Muslim,” or “Sharia.”
So what’s the problem with trying to keep Sharia law out of Georgia law, anyway? The problem, simply put, is that Sharia law isn’t creeping in to Georgia law at all. To the contrary, our review of the CSP report revealed that most of the cases in the report have absolutely nothing to do with Sharia law at all. Those few cases that do discuss Sharia law, discuss it in the context of ruling it out as a possible application of the law for the foreign litigants in that court. No case cited is from Georgia.
Aside from the practical problems implicated by a total lack of evidence, the Bill also presents more complex, long-term problems for Georgia courts and Georgia commerce. To begin with, the effect of HB895 on courts would have been to restrict them in terms of applying public policy. The bill could also bar enforcement of rulings by the previously-mentioned religious tribunals. It ain’t broke, and to fix it would have unintended consequences. For example, it could adversely affect Georgia courts’ ability to enforce a divorce decree issued by, say, a court of the United Kingdom because UK legal procedure does not match that of Georgia. This could disrupt long-standing practices upon which many Georgians rely – or at least have taken for granted until now. Ultimately, such legal xenophobia would become a permanent deterrent for foreign businesses to choose Georgia as a forum for arbitration and other forms of dispute resolution, effectively undoing the Atlanta legal and ADR communities’ efforts to make the city an international hub for ADR.
Thankfully, HB895 was thrown out as of “Crossover Day,” Monday, March 3. A similar bill was introduced in the 2012 session, so it remains to be seen whether it will reappear in the next session.
 See, e.g., The Roman Catholic Archdiocese of Atlanta, “Introduction to the Court and its Cases,” available at http://www.archatl.com/offices/tribunal/intro.html; Catholic Diocese of Arlington, “Outreach: The office For Canonical affairs and the Tribunal,” available at http://www.arlingtondiocese.org/tribunal/index.aspx.
 See O.C.G.A. § 1-3-9 (generally recognizing the validity of other courts’ decisions, in the same vein as the deeply-embedded American legal concepts of reciprocity and full faith and credit).
 See O.C.G.A. § 9-10-31.1 (allowing a court to determine that a particular action “would be more properly heard in a forum outside this state” or elsewhere within this state).
 See Awad v. Ziriax, 670 F.3d 1111 (10th Cir. 2012) (holding Oklahoma Referendum 755, an explicit anti-Sharia law, was unconstitutional as a violation of the Establishment Clause of the First Amendment).
 Center for Security Policy, “Sharia Law and American State Courts: An Assessment of State Appellate Court Cases,” Version I.3 (May 20, 2011).
It’s a common scenario for attorneys. You’re sitting across the table from another lawyer. To your left is your client. It could be a husband, a company, or a contractor. To your bar brethren’s right is her client–a wife, a consumer, or a home owner. You could be negotiating a prenup or a contract, or you could be trying to settle a dispute. Either way, it’s your job to be wary. From the minute you shake hands with your counterpart you may question the truthfulness of his every word. “Good morning” she says. “Good morning” you respond. You ask yourself, “Is the morning really….good?”
Unfortunately the negotiation table can turn into a poker table in which those bearing “esquire” after their name try their hardest to act as both player and pit boss. No one expects the full truth, but when does a half-truth become a full lie? What is acceptable in the game of negotiation? Am I liable for everything I say?
Under the Georgia Rules of Professional Conduct (The GA Rules), adopted verbatim from the ABA Model Rules, lying to the “other side” is unacceptable and could result in disbarment. Rule 4.1 states:
In the course of representing a client a lawyer shall not knowingly make a false statement of material fact or law to a third person or fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited under [the rule of confidentiality].
Does this extend to all statements made in negotiation? What about the customary little exaggerations or “puffing” considered customary in most negotiations? The GA Rules seem to recognize some wiggle room for puffery in Rule 4.1, Comment 2:
Under generally accepted conventions in negotiation, certain types of statements ordinarily are not taken as statements of material fact. Comments which fall under the general category of ‘puffing’ do not violate this rule. Estimates of price or value placed on the subject of a transaction and a party’s intentions as to an acceptable settlement of a claim are in this category, and so is the existence of an undisclosed principal except where nondisclosure of a principal would constitute fraud.
Here, Georgia has defined “puffery” and it appears that there is no room for the definition to expand much beyond the bounds of “negotiating the price/‘bottom line’.”
Currently, California is trying to decipher what Georgia already has already attempted to do. In a proposed California ethics opinion it appears that California wants to make clear that “permissible puffery” is perfectly acceptable. In fact, the opinion states that it is expected during negotiations; however, Californians beware, “improper false statements of material fact” during these same negotiations may leave California lawyers negotiating the status of their legal license with the California State Bar.
So what’s the difference between puffery and improper false statements of material fact in the eyes of our West Coast Counterparts? The California Standing Committee on Professional Responsibility and Conduct states that it expects lawyers to keep opposing parties “at arm’s length” during negotiations. Ironically, the opinion states that an attorney revealing a client’s actual “bottom-line” could be a violation of the attorney/client privilege. This is to say that the ethics committee expects some dishonesty between opposing parties when sitting at the negotiation table. To say one’s bottom line is $10,000 when it is really $2,500 seems to be acceptable, but revealing that bottom line explicitly may not be acceptable.
Where things begin to get tricky is when an attorney says, “That will cause my client to go into bankruptcy.” This statement may materially alter the terms of the negotiation. However, if this statement is made in good faith and there is a good faith basis that your client might actually file for bankruptcy and be accepted as a candidate for bankruptcy, then claiming this potential fact is perfectly acceptable. What we do know, for certain, is that California lawyers will find themselves facing sanctions when they make false statements of material facts or actively conceal or suppress material facts. Any statement made with the intention of having a party rely on false, material, and verifiable facts or information is impermissible. Attorneys are not permitted, under any circumstance, to lie or conceal evidence, especially when it will materially alter the terms of the negotiation.
So, in sum, lawyers are allowed to play hard ball… but not allowed to cheat in hopes of getting the home run.
Although closer to Georgia than to Georgia, this winter Olympics has some interesting disputes for our readers. The Court of Arbitration for Sport (CAS) is an arbitral institution tasked with deciding disputes, usually between an athlete and his/her country’s national Olympic committee (NOC) or governing sports federation. CAS’s jurisdiction arises from member entities’ by-laws or agreements among the parties. CAS has been active since 1984 and was very busy during the Atlanta Olympics operating out of the offices of Alston & Bird, but it is sure to gain world-wide attention this month as the world focuses Sochi. Currently, the CAS is three cases in and is ready for more…
Earlier this month, Austrian skier Daniela Bauer brought the first application for this winter Olympics to the CAS. The Austrian skier felt she was discriminated against when she was unjustly left off the Austrian Olympic ski team. Bauer argued that she was left off the team despite having “met the FIS qualification requirements.” About 24 hours after hearing Bauer’s complaint, the CAS panel of three dismissed the case stating that Bauer was not discriminated against and the ASF acted reasonably as they excluded Bauer from the Austrian ski team based on her level of performance. However, the panel did highlight the fact that unofficial sources connected with ASF may have created unreasonable expectations that Bauer would have been selected had she met certain criteria. The CAS recommended the ASF publish official criteria that will allow athletes to clearly understand the qualification methods for the Olympic Games and avoid further confusion.
One day after the Bauer decision, CAS registered a new application from Argentinean freestyle skier, Clyde Getty. Getty filed a complaint against the International Skiing Federation (FIS). The 52-year-old skier’s complaint was soon dismissed. Citing the Freestyle Skiing Qualification System (FSQS), the CAS ruled that there was no interpretation of the qualifications that would make Getty eligible as Getty had not even met the minimum amount of qualification points required by FSQS.
With the athletes on a “complaint” losing streak, Marie Belen Simari Birkner, another Argentinian skier, received her ruling from CAS today. Birkner sought the CAS to force the Argentinean NOC to let Birkner compete in this winter’s Olympics. Much to the chagrin of Birkner, the CAS ruled they had no jurisdiction in this matter and dismissed the case on those grounds. According to the official media release of the CAS, Brinker was notified on January 20th that she was not going to be on the team. This made “the dispute well before January 28, 2014, i.e. 10 days before the Opening Ceremony of the Games, which is the date when the jurisdiction of the CAS” starts to be effective. However, to add insult to injury, the CAS decided to consider the merits of the case and ruled that Birkner “would have failed as she had not established that the COA decision was discriminatory.”
With ten day left in Russia the athletes are clearly faring better on the slopes then they are in front of the CAS.
What can a court do when driven too far? As I and many others predicted when the 11th Circuit adopted manifest disregard of the law in Montes and when the state legislature added manifest disregard of the law to the enumerated grounds for vacatur in the Georgia Arbitration Code, it served merely as an open invitation for every loser to challenge awards and that courts would lose their patience with it. Until the 11th Circuit abolished manifest disregard in the wake of the Hall Street decision, it consistently discouraged petitions for vacatur on this ground and warned of sanctions in future appeals. See B.L. Harbert Intern., LLC v. Hercules Steel Co., 441 F.3d 905, 914 (11th Cir. 2006) (the Court “is exasperated by those who attempt to salvage arbitration losses through litigation that has no sound basis in the law applicable to arbitration awards.”). Although the 11th Circuit refrained from imposing sanctions in Harbert, its intention to do so in the future inspired the imposition of sanctions in Cohen v. A.G. Edwards & Sons, Inc., Case 2005-CV-100-613, Fulton County Superior Court order dated July 20, 2006 (using the 11th Circuit’s rationale in Harbert to award attorney’s fees against movant who had no substantial justification to argue manifest disregard of law). In 2013, Fulton County drove the court too far in Fulton County v. Lord, 746 S.E.2d 188 (Ga. App. 2013) (award of attorney fees justified when County asserted manifest disregard of the law but only showed that the arbitrator merely disagreed with the County’s position).
What can an arbitrator do when driven too far? I’ve always asserted that arbitrators lack overt power to sanction parties for abuse of the arbitral process. Instead, they can use their power to award costs and attorneys’ fees (when expressly empowered). As for the parties’ claims, arbitrators need to decide on the evidence presented. Perhaps I was wrong. In Murtagh v. Emory Univ., 741 S.E.2d 212 (Ga. Ct. App. 2013), reconsideration denied (Ga. Ct. App. Apr. 11, 2013), the court determined that the arbitrator did not exceed his authority by dismissing claims as a response to the malfeasance of a party to the arbitration. The court cited a federal case out of Florida, First Preservation Capital v. Smith Barney, Harris Upham & Co., 939 F.Supp. 1559 (S.D.Fla.1996) (arbitration panel did not exceed its authority when it dismissed claims with prejudice after claimant interfered with arbitration procedures). In October, the AAA revised its rules to specifically authorize the arbitrator to impose “appropriate sanctions” upon request by a party in the situation where the other party has failed to comply with the rules or an order of the arbitrator. The arbitrator is required to explain in writing any such order and further is required to permit submission of evidence and argument before making an award. The party facing a potential sanction has the opportunity to respond. Rule 58. This is a game-changing power, in my opinion.
Hats off to the Georgia Court of Appeals on both cases.
Guess what I do during the Christmas break—I update the treatise, ADR: Practice and Procedure in Georgia (West, new 4th edition, forthcoming May 2014– BUY TODAY!). In this year’s end-of-the-year frenzy, I am once again struck by some of the amazing judicial decisions that come down from on high. This is the first of several blog entries that comment on 2013’s arbitration cases.
Let’s start with class arbitrations and Scalia’s ham-fisted continuing efforts to crush class actions through the Federal Arbitration Act. After reading his majority decision in American Express v. Italian Colors, I was left scratching my head. So, despite making it economically irrational to prove antitrust and thus essentially impossible to vindicate one’s statutory rights under the Sherman and Clayton Acts, class arbitration waivers are enforceable? No problem—one still has the right to vindicate the statutory remedy even if now no one will. Score again for the American Chamber of Commerce–Concepcion and then this. Not so classy. The absurdity of Scalia’s logic is brilliantly dissected in Kagan’s cogent dissent (worth the read).
Perhaps it was a tradeoff. Kagan got to write for the majority in Oxford Health Plans v. Sutter upholding the arbitrator’s decision to proceed with class arbitration when the arbitral clause was silent on the matter. Working off what appeared to be a tiny window of opportunity in Alito’s majority decision in Stolt-Nielsen v. Animalfeed, Kagan gave arbitrators all they needed. In the absence of a class arbitration waiver, all you need to do to have class arbitration is show that you are “arguably construing” the contract. Well, it also helps if the parties are asking you to decide whether that’s what they agreed to. Thinking he must have killed class arbitrations with Stolt-Nielsen but trapped by his own previous logic, Alito had to weigh in with an ominous and not so classy concurrence: absent class members will not be bound by this arbitrator’s decision in spite of the fact the clauses are the same because they didn’t “consent.” What does that mean? I’ve got some ideas, and it isn’t pretty.
Nevertheless, the Sutter decision cleared the way for the 11th Circuit in 2013 to affirm Judge Totenberg’s push back against Stolt-Nielsen with her decision in Southern Communications Services, Inc. v. Thomas (N.D. Ga. 2011). My good friend and classy law school classmate, Bob Williams, at
Troutman, represents Southern Communications and is determined to take it to the U.S. Supreme Court, where he may find a friendly ear or two. I hope they take it on cert just because it’s bound to create another fascinating decision. But let’s get back to Judge Totenberg. If we gave an award for classy judicial opinions on arbitration each year, she would have won in 2011 for the Thomas decision and this year for her decision in Walthour v Chipio Windshield Repair LLC. In a very well-reasoned one-two punch, she showed how the right to collective action / arbitration under the Fair Labor Standards Act was intended by Congress to be a substantive right that could not be waived. After making her case, she graciously yielded to the reality of overwhelming contrary precedent in this jurisdiction and upheld the collective action waiver:
In sum, the Court finds persuasive authority to support Plaintiffs’ assertion here that the right to proceed collectively, either in a judicial forum or in arbitration, is a substantive right afforded by the FLSA. However, there are also requisite grounds for enforcing the Arbitration Agreements at issue in this case in light of the trend in the Eleventh Circuit to uphold class waivers in employment agreements and the strong presumption in favor of arbitration. Thus, while the Court itself doubts that the Arbitration Agreements are enforceable in light of the express waiver of the Plaintiffs’ right to collective action under the FLSA in any forum, in the absence of binding precedent holding that such a provision is unenforceable as a matter of law, the Court in an exercise of prudence will require that the parties proceed to arbitration pursuant to the provisions of the FAA.
Unfortunately, she relied heavily on the National Labor Relation Board’s recent decision in In re D.R. Horton, Inc. which took a trouncing in December by the 5th Circuit’s ruling on the matter. Nevertheless—Classy.
“The mediation apparently didn’t go well,” said Manchester, Tennessee police investigator Butch Stewart. That’s an understatement: a few weeks ago, Brenda Bartee shot her estranged husband, Dr. Harry Bartee, four times outside a Manchester law office immediately following a divorce mediation session. Dr. Bartee remains in critical condition, while Mrs. Bartee has been charged with criminal attempt to commit first-degree murder and is being held on a $1 million bond.
Proponents have argued mediation in the divorce context is empowering for women as compared to litigation; however, others have countered that mediation actually disadvantages women in divorce settlements. Similar arguments can be made about firearms, we suppose, but we do not condone conflating the two concepts.
The motive for the shooting in this case remains unconfirmed. Brenda Bartee claims her husband and his girlfriend had been harassing her, but Assistant Police Chief Adam Floied said Mrs. Bartee’s actions were evidently prompted by a breakdown in the mediation, at which point she left the law office to retrieve her handgun from outside. Nothing is known about the mediator’s role in all this, but one might wonder. Were there obvious indications of Ms. Bartee’s intentions during the session? If so, what responsibility did the mediator have? Could the mediator have done something to diffuse this, or did the mediator or merely the structure of the process inflame the situation? One thing, however, is clear: notwithstanding its success in the field of family law, mediation can’t resolve every dispute, but neither can a gun.
The University of North Georgia, Dahlonega campus, is looking for a full-time ombuds. For further information, see the following link on the university’s HR website:
Employment Arbitration Agreement is Enforceable after Employee Termination if Claims arise out of the Underlying Contract
Guest contributor: John Allgood
Two recent Court of Appeals cases deal with challenges to enforcement of agreements to arbitrate issues arising from previous employment contracts. In the first, the employee of a securities firm, a financial adviser, had previously been employed by a broker under a written employment agreement. The employee retired from the brokerage firm in 2007 but then continued to provide services to former clients under a different organization and fee structure. The brokerage firm mailed letters to the former employee’s clients urging them to remain clients of the brokerage firm. The letter stated in part: “[A]lthough you have developed a relationship with Jon v. Davidson, please ask yourself if it is in Your best interest to transfer your account.”
The employee filed a complaint seeking damages for the intentional tort of defamation by the broker based on the letter. The brokerage firm answered and moved to compel arbitration under the written employment contract with the former employee that included the following arbitration provision:
You agree that any controversy or dispute arising between you and [A.G.] Edwards in respect to this agreement or your employment by [A.G.] Edwards shall be submitted for arbitration before the New York Stock Exchanged, Inc., or the National Association of Securities Dealers, Inc.
The employee opposed the motion contending the dispute arose post-termination and did not fall within the scope of the arbitration provision and also challenging the enforcement of the arbitration agreement based on OCGA § 9-9-2(c)(9) which required that an employee separately initial an arbitration clause and further challenging the motion to arbitrate based on the fact the claim arose in tort as a personal injury and therefore was excluded from arbitration under OCGA § 9-9-2(c)(10).
The trial court granted the motion to compel arbitration and the employee appealed. Davidson v. A.G. Edwards & Sons Inc., A13A1115 (9/19/2013, 9/30/2013).
On review the Court of Appeals confirmed the trial court’s decision requiring arbitration. Citing the principles of FAA preemption, and prior supporting state court decisions finding preemption of OCGA § 9-9-2(c)(9) the court disposed of the OCGA signature requirement. See Langfitt v. Jackson, 284 Ga. App. 628,635 (3) (644 SE2d 460) (2007).
On the claim of exemption of “personal bodily injury claims” under OCGA § 9-9-2(c)(10), the Court noted that while this challenge had not been presented before, the law on preemption eliminates state laws that conflict with the provisions of the FAA that undermine the enforcement of private arbitration agreements. The Court concluded “ we find no reason why there should not be preemption in this regard as well.” See Results Oriented v. Crawford, 245 Ga. App. 432, 436 (1)(a) (2000). [See also the discussion in fn 3 related to the construction of § 9-9-2 (c) (10).]
The Court next considered the challenge to the enforcement of the arbitration clause based on post-employment (future) tort claims which the employee urged was not enforceable under the FAA because his claim was based on an intentional tort and further that defamation does not involve interstate commerce.
The Court again noted this argument was one of first impression but looked to existing precedent in a similar decision from the 10th Circuit.
In Brown v. Coleman Co., 220 F3d 1184 (III) … the court held that controlling question should be whether the alleged tort of defamation “touch[ed] the underlying contract…Or…did it involve significant aspects of the employment relationship….
Finding the language of the employee’s arbitration agreement with Edwards virtually identical to the language of the arbitration agreement in Brown, the Court sustained the ruling of the trial judge granting the motion to compel arbitration.
Accordingly, because the alleged defamation touched Davidson’s employment contract, the trial court did not err in granting A.G. Edwards’ motion to compel arbitration after his employment terminated. [emphasis mine]
The Court noted that the employee’s clients were not limited to Georgia Residents but did not reach the interstate commerce challenge referring back to the earlier discussion of the Brown decision and related cases.
In a similar case decided also in September, the Court of Appeals again granted a motion to compel arbitration under a written arbitration agreement of a defamation claim brought against an employer by a terminated employee. See Wedemeyer v. Gulfstream Aerospace Corp., A13A0836 (9/27/2013)
In that case the employee had agreed to the employer’s written arbitration agreement which provided specifically for arbitration of claims by “former employees” on disputes “regarding or arising from the employment relationship.”
The employee had been terminated for causing damage to an aircraft that he was operating while employed by the company. Again the employee challenged the enforcement of the arbitration provision because the actions where not “covered” by the arbitration agreement. The court disagreed:
Contrary to Wedemeyer’s contention, the Arbitration Agreement is not limited to disputes involving only applicants or current Gulfstream employees. Notably, the contract language at issue here unambiguously provides that the Arbitration Agreement applies to all employees who were employed by Gulfstream while the Arbitration Agreement or any version was in effect… it is clear that the Arbitration Agreement applies to disputes involving former Gulfstream employees.
The court noted that as a gatekeeper trial courts must determined whether claims are actually covered by the arbitration agreement before submitting the disputes to the arbitrator but that the trail court will not and should not consider whether the claim is tenable or not or otherwise pass on the merits of the dispute. See OCGA § 9-9-4(d). Any doubts about enforcement of arbitration agreements, the Court noted, are, under the FAA, to be resolved in favor of enforcement of the arbitration agreement. In Georgia this standard for the trial court to consider is not burdensome.
[u]nder Georgia law… almost any causal connection or relationship. Indeed, nothing more than a slight causal connection is required to show that a [claim] arose out of a specified [relationship] set forth in a contract.
In granting Gulfstream’s motion to compel arbitration, the trial court conducted a thorough review of the parties’ argument, properly fulfilled its gatekeeping role and properly resolved any doubts concerning the scope of arbitrable issues…[T]he trial court properly granted Gulfstream’s motion to compel arbitration because there [is] a causal connection between Wedemeyer’s claims and his employment with Gulfstream.
NOTE TO GEORGIA ARBITRATORS: In employment contracts containing a broad arbitration agreement covering claims arising out of or related to the employment relationship, then arbitration is appropriate for claims that arise after an employee has been terminated where there is a causal connection to the underlying contract and even where as here there are tort claims asserted, like defamation, but based on the action of the parties while in the relationship of employer and employee. Certain statutory provisions of the GAC requiring separate signatures or excluding future tort claims have been preempted by the FAA under rulings by the Georgia Courts.
Clayton State Mediation Team went on an October run that would make Reggie Jackson jealous. The Lakers began their run with an impressive showing at the Brenau University Eleventh Annual Mock Mediation Invitational Tournament. At Brenau, the team won first place Advocate/Client Team, second place Client/Advocate Team and Mediation Team, and third place Mediation team. Shannon Moultrie took home first place for best mediator while Matthew Blake finished right behind her in second.
The success continued as Clayton State travelled to Georgia State University’s 2013 Peacemaking Tournament. Moultrie and Blake continued to collect the hardware as both members took home the First Place Advocacy Team Award. Furthermore, Moultrie also added to her collection with a Second Place Mediator Award.
Most recently, at the 2013 International Intercollegiate Mediation Tournament at Drake University Law School, the Lakers won first place Mediation Team Award and sixth place Advocate/Client Team Awards. Again, Shannon Moultrie found success as she and Bertha Amosu won Second Place Individual Advocate/Client Award. Latangila Hodges-Bellamy joined previous award winner, Matthew Blake, with the eighth place Individual/Client Award. And lastly, Tamara Johnson took the individual Fifteenth Place Individual Mediator Award.