West Virginia Record

Thursday, September 19, 2019

Supreme Court sides with Rent-A-Center regarding arbitration in workers' comp discrimination case

Lawsuits

By Kyla Asbury | Jun 27, 2019


CHARLESTON – The West Virginia Supreme Court of Appeals recently sided with Rent-A-Center in a case alleging workers’ compensation discrimination.

The opinion written by Chief Justice Beth Walker reversed the decision by the Mercer Circuit Court denying a motion to compel arbitration regarding a lawsuit filed by former employee Anita Ellis against Rent-A-Center claiming workers’ compensation discrimination after she was fired.

After Ellis filed her suit, Rent-A-Center moved to compel arbitration based on an arbitration agreement Ellis signed when she was hired, court filings said. The arbitration agreement included a delegation clause requiring challenges of the agreement be resolved by an arbitrator and not a court.

“Because the delegation clause was neither unconscionable nor unenforceable, we reverse the circuit court and remand this case for an order compelling arbitration,” Walker said in the Supreme Court opinion. Justice Margaret Workman concurred and authored a separate opinion.

“After respondent Anita Ellis was terminated from employment, she filed workers’ compensation discrimination claims against petitioners Rent-A-Center Inc. and Rent-A-Center East Inc.,” Walker wrote. “Relying on the arbitration agreement that respondent signed at the time she was hired, petitioners moved to compel arbitration. “

In her suit, Ellis challenged the arbitration agreement’s delegation clause.

“The circuit court found the delegation clause unconscionable and refused to enforce the arbitration agreement,” Walker wrote. “On appeal, petitioners contend that the delegation clause should have been enforced and the matter sent to arbitration.”

The circuit court determined that the agreement substantially impaired a plaintiff’s right to pursue remedies for their losses such as a class action suit, which was expressly waived in the agreement, and that it would deprive the respondent of a statutory remedy that exists to benefit and protect workers that have the claims set forth in West Virginia Code § 23-5A-3, court filings said.

The circuit court also concluded that there was a lack of a real and voluntary meeting of the minds, there was an overall imbalance and one-sidedness to the agreement and there was no choice or bargaining on the part of the respondent, as her only alternative to signing the agreement was not taking the job, court filings said.

“Petitioners contend, and we agree, that the arbitration agreement also contains mutual promises by both parties to arbitrate disputes covered by the agreement, which constitutes sufficient consideration to support the agreement,” the Supreme Court opinion said. “This mutuality is far more than the ‘modicum of bilaterality’ required by our court in employment arbitration agreements. Thus, we find nothing in the delegation clause upon which to conclude that it lacks mutuality.”

The Supreme Court determined the circuit court should have referred the parties’ arguments about the enforceability of the arbitration agreement to the arbitrator.

“For these reasons, we reverse the circuit court’s June 23, 2017, order, and remand the case to the circuit court with directions to refer the respondent’s challenge to the enforceability of the arbitration agreement to an arbitrator, in accordance with the parties’ contract,” Walker wrote.

Workman wrote in her concurring opinion that she wanted to point out that arbitration agreements are trumping individuals’ rights to jury trials and that fundamental right should be “zealously guarded.”

“The arbitration agreement deprived Ms. Ellis of the right to have a jury determine the facts surrounding the issue of whether her statutory rights were violated,” Workman wrote. “I will continue to express my judicial disdain for these mandatory arbitration agreements prepared by sophisticated businesses and forced upon people as a condition of employment.”

West Virginia Supreme Court of Appeals Case No. 17-0644

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