Sixth Circuit: USERRA Claims Subject to Arbitration Clause in Employment Agreement.

Today, the Sixth Circuit held that an optometrist’s claims that he was discriminated against in violation of USERRA was subject to the arbitration clause he signed when he was hired. In Landis v. Pinnacle Eye Care LLC, 07-6204 (6th Cir.), when the plaintiff optometrist signed his employment agreement upon being hired in 1995, it contained an arbitration clause where he promised “to ‘resolve any controversy, dispute or disagreement arising out of or relating to [the] Agreement’ through negotiation or, if negotiation proved unsuccessful, through arbitration governed by the American Arbitration Association.” He claims that he negotiated revised terms of employment in 2004 when he was called up by the National Guard to serve in Afghanistan. However, when he returned to work in 2005, the defendant employer refused to honor the alleged modified terms of employment and allegedly “threatened that any further
involvement with the military would adversely affect his career.”

When the plaintiff optometrist filed suit over the breach of the modified agreement and threats about his military career, the district court stayed the action on account of the arbitration clause in his employment agreement and referred the entire matter (including the claims against the individual defendants) to arbitration. The Sixth Circuit agreed because the plaintiff’s claims “fall within the scope of the employment agreement since Article VIII, Section 8.7 of the agreement states that ‘[t]his Agreement constitutes the entire agreement between Practice and Optometrist pertaining to the employment relationship between Practice and Optometrist.’ Therefore, any termination or modification of employment necessarily relates to ‘the employment relationship’ and is subject to the arbitration clause.” Moreover, the claims against the individual defendants (who were not parties to the employment agreement) “were subject to the arbitration clause of the employment agreement. These parties were employers within the meaning of USERRA, 38 U.S.C. § 4303(4)(A), and the claims against them arose in their capacities as managers” of the employer’s offices. Finally, although a few district courts in other jurisdictions disagreed, the Sixth Circuit found that there was nothing in the statutory language of USERRA or its history to indicate that it was not subject to the Federal Arbitration Act to the same extent as Title VII, the ADEA and other federal employment statutes.

Insomniacs can read the full decision at http://www.ca6.uscourts.gov/opinions.pdf/08a0285p-06.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.