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Be Explicit: Arbitration Agreements in the 3rd Circuit

Posted by Frank Steinberg | Mar 27, 2009 | 0 Comments

Employers: if you want your arbitration agreements to hold up, two things are crucial.  First, you must be able to point to a clear and unambiguous policy to arbitrate discrimination claims. Second, you must be able to prove that the employee actually knows about it.  This formula has been recited ad nauseum by the courts, but employers still find creative ways to screw things up.

In Kirleis v. Dickey, McCamey & Chilcote, P.C., decided March 24, 2009 by the 3rd Circuit Court of Appeals, the plaintiff was a female partner (and long time employee) in the defendant law firm.  She sued for sexual harassment.  Her firm tried to force her out of court and into arbitration.  They failed. 

The arbitration "agreement" was contained in the partnership's by-laws.   Kirleis swore that she had never seen the by-laws before the litigation was started.  The firm couldn't prove otherwise, so the case stayed in court.

While I generally disagree that arbitration is the superior alternative to litigation that some attorneys claim, if you decide that you prefer arbitration, pay attention to the details so you can actually get there, for heaven's sake.  On this one there was just no excuse.  The plaintiff was an attorney, highly educated, and a long-term employee.  She was certainly capable of understanding an arbitration agreement if it had been shown to her.  The fact that it wasn't is just mind-bogglingly sloppy on the part of the firm.

Sloppy or not, many professional practices and small businesses are loosely managed.  Kirleis is a warning to all of us to pay attention to the details.

About the Author

Frank Steinberg

Frank is the founder and principal of Steinberg Law, LLC. A Jersey boy born and bred, he focuses on employment litigation and counseling, business litigation,  and aviation law. Following law school and a clerkship in the federal district court Frank spent his early career with large litigation ...

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