Newsflash! The Alabama Supreme Court Really Likes Arbitration

Facebooktwittergoogle_plusredditpinterestlinkedinmail
Alabama employment law arbitration
The Alabama Supreme Court recently compelled arbitration of an employment-related dispute, even though the employer was not a named party to the arbitration agreement.

When I was a young lawyer, the Alabama Supreme Court really disfavored arbitration.  They would find almost any excuse to give somebody their “day in court,” instead of enforcing contractual dispute resolution.  Times have certainly changed.   Binding decisions from the United States Supreme Court, and election of pro-business candidates to the Alabama Supreme Court have lead to a sea-change.  Now, the Alabama Supreme Court almost always enforces arbitration agreements.

This point recently hit home in Bridgestone Americas Tire Operations, LLC v. Adams, No. 1160877, 2018 WL 1355966 (Ala. Mar. 16, 2018).  Ottis Adams was hired by BFS Retail and Commercial Operations (“BFS”) in 2006.  When he was hired, Adams signed BFS’s Employee Dispute Resolution Plan which required arbitration of almost all employment disputes.  At some point, Adams changed employers from BFS to a sister company — Bridgestone Americas Tire Operations, LLC (“Bridgestone”).  Adams left Bridgestone in 2016 and began work for a competitor — McGriff Tire Company.  Bridgestone then sent a letter to McGriff stating that Adams’s employment violated a noncompetition and nonsolicitation agreement signed by Adams.  Bridgestone also suggested that Adams violated a duty of loyalty by selling tires for McGriff while still employed by Bridgestone.

McGriff terminated Adams’s employment, and Adams sued Bridgestone for interference with his business relationship with McGriff and for defamation.  Bridgestone moved to dismiss the lawsuit and compel arbitration.  Adams convinced the trial court that Bridgestone was not a named party to the the BFS agreement, and that court denied the motion.  So, Bridgestone appealed.

The Supreme Court compelled arbitration for two reasons.  First, the BFS agreement required arbitration of “all disputes covered by that plan, not just disputes with BFS.”  Second, the agreement applied to all “sister companies,” “related companies,” and “affiliate companies” of BFS.  Even if Bridgestone was not a named party to the agreement, it fell within the definition of a “sister company,” “related company” or “affiliate company.”

Adams provides guidance to employers who want to avoid trial courts and jury trials.  By broadly wording an  agreement to cover all disputes related to employment, and by making the agreement applicable to any sister companies or affiliates, employers can avoid litigation and compel arbitration.

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *