To Compel Under the FAA or the MAA? That Is The Question

by Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
Contact

Often, when a plaintiff files a lawsuit, there’s an arbitration agreement somewhere in his or her personnel file. And, unbeknownst to the plaintiff’s counsel, the claims brought actually should be arbitrated—not litigated. But how can an employer compel arbitration?

As an initial matter, this article will not discuss the pros and cons of arbitration or whether class arbitration exists after Concepcion. It will instead focus on Minnesota law with regard to bringing a motion to compel arbitration. In Minnesota, an employer may bring a motion to compel arbitration under either the Federal Arbitration Act (FAA) or the Minnesota Arbitration Act (MAA). So, you might ask, what’s the difference and does it really matter which I use to compel? The answer is yes, it may matter.

Here’s the long and short of it: the FAA, which is a federal law preempts the Minnesota Human Rights Act (MHRA), which is a state law with an exclusivity provision voiding agreements that attempt to waive the right to a judicial forum. What that means is if the employer has an arbitration agreement that requires the arbitration of state discrimination claims, the claims must be litigated under the MHRA. However, if the employer can bring a motion to compel under the FAA, the court must order arbitration of that same MHRA claim.

In order to preempt the MHRA’s exclusivity provision, you have to compel under the FAA. To do so, however, an employer first must prove that the agreement affects interstate commerce. Once that is accomplished, the court will look at the validity and then the scope of the agreement.

Minnesota courts have recognized that a plaintiff’s state law claims are subject to arbitration when the FAA applies. Moreover, the Minnesota Supreme Court, in Johnson v. Piper Jaffray (1995), held that while the MHRA’s exclusivity provision voids agreements that attempt to waive the right to a judicial forum, the FAA preempts it, thereby allowing for arbitration of MHRA claims.

Here’s the tricky part: Plaintiff’s counsel may try to rely on a more recent Minnesota Supreme Court decision in an attempt to avoid arbitration. In Correll, D.D.S. v. Distinctive Dental Services, P.A. (2000), the plaintiff had one state MHRA claim, and a motion to compel arbitration was brought under the MAA, not the FAA. The distinguishing factor was that the defendant never raised the applicability of the FAA, and thus, the court never considered whether arbitration could be compelled under the FAA. Instead, the court held that the MHRA claim must be litigated.

Importantly, the Correll court also left employers with one other possible way to compel the arbitration of MHRA claims. The Correll court posed this question: “The crux of this issue is whether such practical considerations outweigh the legislature’s intent to preclude arbitration of pending human rights act claims.” The answer to this inquiry, from the employer’s standpoint, is that yes, in your case, the practical considerations do outweigh the legislature’s intent to preclude arbitration, and thus arbitration should be compelled. Then, make your list of the practical considerations.

Practical Pointer

Do your best to show that you fall within the FAA. Then argue Piper Jaffray applies. Hope that the court agrees and compels the arbitration of all claims. If you do not fall within the FAA, then argue that the practical considerations outweigh the legislature’s intent to preclude arbitration of the MHRA claims. Finally, of course, cross your fingers.

Jaime N. Cole is an associate in the Minneapolis office of Ogletree Deakins.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ogletree, Deakins, Nash, Smoak & Stewart, P.C. | Attorney Advertising

Written by:

Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
Contact
more
less

Ogletree, Deakins, Nash, Smoak & Stewart, P.C. on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!