As a general rule, courts will uphold agreements that require employees to arbitrate their employment disputes. But an employer seeking to compel arbitration must show that the employee signed a valid written arbitration agreement. And according to a recent decision by Florida's Fourth District Court of Appeals, an arbitration agreement is not valid if the employer fails to disclose the arbitration procedures to the employee when the employee signs the agreement.
Shelby Ann Spicer signed an employment agreement with Tenet Florida Physician Services, LLC ("Tenet") on December 15, 2011. The agreement stated that any disputes regarding her employment "would be subject to the Tenet Fair Treatment Process ("FTP"), which includes final and binding arbitration." But the FTP was not attached to the employment agreement, and the agreement did not provide any specific directions as to how the employee could obtain a copy or locate the FTP. On January 1, 2012, Spicer was given directions as to how to access the website where the FTP was posted. The FTP described the arbitration procedure in detail.
In February 2013, Spicer filed a complaint against Tenet under the Florida Whistleblower's Act. Tenet moved to compel arbitration, and the trial court granted the motion. Spicer appealed.
In Spicer v. Tenet Florida Physician Services, LLC (Fla. 4th DCA, October 22, 2014), the Fourth DCA reversed, holding that Spicer had not signed a valid arbitration agreement. The court noted that to be valid, an arbitration agreement "must be definite enough so that the parties at least have some idea as to what particular matters are to be submitted to arbitration and set forth some procedures by which arbitration is to be effected." The employment agreement, standing alone, did not meet this test because it contained no description of the procedures to be used in arbitration. And while the agreement referred to the FTP, Spicer had not been given access to the FTP until 17 days after she signed the agreement. Therefore, the court reasoned, the FTP was not incorporated into the agreement, and the agreement was invalid.
Spicer is not the only recent case in which a Florida court has invalidated an employer's arbitration agreement. In December 2013, we reported on a ruling by Florida's Second DCA that an arbitration agreement containing a prevailing party attorney's fee provision was invalid because it had a "chilling effect" that discouraged employees from bringing Fair Labor Standards Act claims.
The takeaway for employers is to treat the process of mandatory arbitration of employment disputes with great care. If you are unsure whether your mandatory arbitration agreements pass legal muster, obtain the advice of a qualified employment lawyer.