Fifth Circuit Sends Marine to Arbitration

Late last week, the Fifth Circuit Court of Appeals handed down another opinion holding that a federal statutory cause of action was subject to binding arbitration (link is to .pdf file). This time, the Court ruled that in enacting the Uniform Services Employment and Reemployment Rights Act (“USERRA”), Congress did not intend to preclude employers from requiring military employees to arbitrate their statutory rights.

The case itself is fairly straightforward, factually. A Marine reserve office was fired by Circuit City immediately before being called up to active duty. He sued, claiming that the firing was in violation of his rights pursuant to USERRA. Circuit City moved to compel arbitration, and the Marine objected, stating that arbitration would deprive him of his statutory rights under USERRA.

The Fifth Circuit explained the analysis that litigants must undertake in these cases, holding that to avoid arbitration a would-be litigant must show a clear intention on Congress’ part to exempt a statutory cause of action from the potential of arbitration:

Because the parties agreed to arbitrate the dispute at issue, the agreement is enforceable unless Garrett can demonstrate that Congress intended to preclude arbitration. Congressional intent “will be discoverable in the text of [USERRA], its legislative history, or an ‘inherent conflict’ between arbitration and [USERRA]’s underlying purposes.”

Internal Citation Ommitted. The Court found that none of these factors was present, and it ordered the case to arbitration. While not everyone may have an active USERRA practice, the Court’s opinion will be important in any case in which a statutory cause of action runs across an arbitration clause.

Garrett v. Circle C. Stores, Inc., ___F3d ___ (5th Cir. 2006) (Cause No. 04-11360).

UPDATE: Michael Fox, one of the other Austin lawyers who blogs, offered his own commentary on the case over on Jottings by an Employer’s Lawyer. Being that he blogs over the weekend, he beat us to the punch. Mr. Fox, as his blog’s title indicates, is an Austin attorney who represents employers in employment disputes. Being that arbitration cases are often also employment cases, I would guess we will see more overlap in the future between our blog and Mr. Fox’s.

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