WV Supreme Court Enforces Arbitration Agreement in Employment Case
February 18, 2018
Last week, the Supreme Court of Appeals of West Virginia continued the trend of affirming arbitration agreements negotiated by the parties. In Hampden Coal v. Varney, a full opinion by Justice Loughry, the Court enforced an arbitration provision in an employment contract and found it required the arbitration of plaintiff’s complaint, which asserted claims of deliberate intent and violations of the West Virginia Human Rights Act.
A significant point in this opinion is that the Court treats arbitration provisions the same, regardless of what kind of contract is at issue: “The petitioners are correct in their argument that this Court has never held that more stringent or different standards apply to our consideration of arbitration agreements in different contexts, nor have we ever adopted separate rules or factors for consideration of arbitration agreements in the employment context.” While recognizing there are factors to be considered in evaluating unconscionability in consumer transactions and employment agreements (the age, literacy, or lack of sophistication of a party; hidden or unduly complex contract terms; the adhesive nature of the contract; and the manner and setting in which the contract was formed…) nor present in sophisticated commercial contracts, “we simply recognize … that these factors could lead to differing results depending upon the factual setting giving rise to the contract or agreement. Accordingly, this Court makes clear that we apply the same legal standards to our review of all arbitration agreements.” Rejecting the lack of consideration arguments, the court found “a mutual agreement to arbitrate is sufficient consideration to support an arbitration agreement,” and concluded there was sufficient consideration (regardless of a “scrivener’s error).
The Court rejected the argument the one-year contractual statute of limitations in the agreement was substantively unconscionable because absent an applicable statue, parties are entitled to agree on periods of limitation. Similarly rejecting the procedural unconscionability argument, the Court stated, “we find no evidence to support any of Mr. Varney’s allegations concerning his personal circumstances or the manner in which the Agreement was presented for his signature. Further, there is no evidence that he tried but was denied the opportunity to either seek the advice of counsel or negotiate any terms of the Agreement. It is axiomatic that his counsel’s arguments are not evidence. There is simply “no evidence in the record to show that the manner or setting in which [Mr. Varney] received the [Agreement] or signed the [Agreement] prevented [him] from having a reasonable opportunity to understand the terms of the [A]greement.” As to the scope of the agreement, the Court found “the Agreement’s exclusion of a claim for workers’ compensation benefits does not extend to an action for deliberate intent. Accordingly, we find that Mr. Varney’s deliberate intent claim falls within the scope of the Agreement.” Similarly, the Human Rights Act claims were subject to the agreement.
[T]he Agreement’s express exclusion of certain administrative claims that cannot be contractually relinquished does not extend to the statutory discrimination claims that Mr. Varney elected to pursue in the circuit court. Moreover, statutory claims can be the subject of an arbitration agreement….As reflected in the clear and unambiguous language quoted above, we conclude that Mr. Varney’s claims of unlawful discrimination indisputably fall within the ambit of the Agreement.
Last, “under the reasoning in New, we find that the single sentence in the Agreement clarifying Mr. Varney’s at-will employment status neither creates a contract of employment nor invalidates the parties’ clear and unambiguous mutual agreement to arbitrate.” Thus, the Court confirms that it will respect alternative methods of dispute resolution to resolve workplace disputes.
Thomas J. Hurney, Jr. wrote this article.