Arbitration Clause Validity: Employees Must Demand Jury Trial On a Specific Issue

arbitration validity jury trial
Employees challenging the validity of an arbitration agreement must ask for a jury trial on the specific issue in dispute.

An employee who contests the validity of an arbitration agreement, and wants a jury to determine validity, must demand a jury trial on the specific issue in question.  See Burch v. P.J. Cheese, Inc., No. 13-15042, 2017 WL 2885095 (11th Cir. Jul. 7, 2017).  This is an interesting procedural issue which could trap many unwary lawyers.  Typically, a lawyer filing a complaint for an employee (called the “plaintiff” in court) will make a generalized request at the end of the complaint:  “Plaintiff Demands a Trial By Struck Jury.”  In Burch, the Eleventh Circuit Court of Appeals found that a generalized request for a jury trial is insufficient to actually obtain a jury trial on issues affecting the validity of an arbitration clause.

In Burch, the employee attempted to sue his former employer for discrimination in federal court in Alabama.  After being sued, the employer provided the court with a  copy of an employment contract containing an arbitration clause, and asked the court to compel arbitration.  The employee resisted arbitration by claiming that the signature on the employment contract was not his.  As a result, there was a factual issue on whether a valid, binding arbitration agreement existed.  If the employee signed the agreement, he could be compelled to arbitrate his claims.  If he did not sign the agreement, he was entitled to continue litigating in federal court.

The employee claimed that he was entitled to have a jury determine whether he actually signed the agreement.  Nevertheless, the Eleventh Circuit found that he waived any right to a jury trial on the validity of his signature.  The Court found that the generalized request for a jury trial in his complaint was not sufficient. Instead, the Federal Rules of Civil Procedure and the Federal Arbitration Act required the employee’s lawyer to demand a jury trial on the specific issue of the signature’s validity at the same time that he generally opposed the motion to compel arbitration.  Because the employee’s lawyer failed to file a jury demand on that specific issue, the employee waived his right to a jury trial.

This issue made its way to the Eleventh Circuit, because the judge in Alabama conducted a bench trial and determined that the employee’s signature was valid.  After the judge compelled arbitration, the employee appealed.   In most cases, juries are perceived to be more sympathetic to employees than judges.  As a result, employees want juries to determine as many issues as possible.   The Burch case provides an additional procedural defense to employers seeking to avoid juries, and also represents a procedural roadblock that could catch some lawyers by surprise.