In Ohio, a party must have actual knowledge of an agreement that requires arbitration of disputes before that party can be compelled to arbitrate a dispute under the agreement. Thus, merely posting a copy of an agreement in a place of employment is insufficient, in itself, to require an employee to arbitrate disputes with the employer under that agreement. This is the holding in Jones v. Carrols, LLC d/b/a Burger King, 9th Dist. Summit C.A. No. 2738, 2015-Ohio-2250, ¶ 12, a recent ruling out of Summit County, Ohio.
The plaintiff in Jones began working at an Akron-area Burger King restaurant in 2004. Id. at ¶ 2. Two years later, Carrols—the owner of the Burger King location—implemented a Mandatory Arbitration Policy (MAP) that required employees to arbitrate nearly all employment claims. Id. Although Carrols required all new employees to sign a copy of the MAP, it did not require its then-existing employees (like Jones) to sign a copy. Id. Instead, Carrols: (1) distributed a memorandum to managers (to be disseminated to then-existing employees) stating that, by reporting to work on or after August 1, 2006, an employee agreed to the MAP; and (2) required managers to hang a poster containing the MAP in the place of employment. Id.
September 30, 2015
On August 17, 2015, one of the major sports law cases over the last two years came to a surprising close. The National Labor Relations Board (“NLRB” or “Board”) declined to exercise jurisdiction over the question of whether Northwestern University football players were employees of the university as defined by the National Labor Relations Act (“NLRA”). 29 U.S.C. § 152(3).
On March 26, 2014 NLRB Region 13 Director, Peter Sung Ohr, ruled that “all grant-in-aid scholarship players for the Employer’s football team who have not exhausted their playing eligibility are ‘employees’ under Section 2(3) of the Act,” and directed a union election to be held. Region 13 Decision and Direction of Election, 23. Northwestern appealed Director Ohr’s ruling to the full Board, and the briefing and evidence submitted to the NLRB by Northwestern and the College Athletes Players Association (“CAPA”), the labor organization representing the players, largely focused on the question of whether the football players are, indeed, employees. Neither party even discussed the Board’s jurisdiction until Northwestern raised the issue as a two-paragraph alternative argument in its reply. Reply Brief, 23 (citing 29 U.S.C. § 164(c)(1)). Northwestern asserted, among other reasons, that the “relatively small number of private universities [that] are potentially impacted by the Board’s holding” was a reason that “the Board should decline to assert jurisdiction over private intercollegiate athletic programs.” Id.
September 1, 2015
Many business contracts have an arbitration provision that states something similar to: “any dispute arising out of or related to this agreement shall be subject to binding arbitration, not to a lawsuit filed in court.” Some provisions even expressly state that the parties waive their right to file a lawsuit if such a dispute arises. It is therefore reasonable for those parties to assume that they will not see the inside of a courtroom if there is a dispute.
However, the Ohio Court of Appeals for the Second Appellate District recently emphasized that “even if a contract requires arbitration, a contracting party can waive the right to arbitration.” White v. Smith, 2nd Dist. Greene No. 2014-CA-48, 2015 Ohio App. Lexis 1603, 2015 Ohio 1671, ¶¶1-2 (May 1, 2015). The court made its decision while still acknowledging the presumption in favor of resolving disputes through arbitration. Id. at ¶22-23 (quoting from Ohio’s arbitration statute and stating that “arbitration is encouraged as a method to settle disputes, and a presumption favoring arbitration arises when the claim in dispute falls within the scope of an arbitration provision.”) (internal quotation and citation removed). The court held that, “‘[l]ike any other contractual right, the right to arbitrate may be waived,’” although “‘[d]ue to Ohio’s strong policy favoring arbitration, the party asserting a waiver has the burden of proving it.” Id. at ¶24, quoting Murtha v. Ravines of McNaughton Condominium Assn., 10th Dist. Franklin No. 09AP-709, 2010-Ohio-1325, ¶20.
June 17, 2015