Last week, the Fifth Circuit decided Geraldine Nicholas v. KBR, Inc., No. 08-20140, (5th Cir. Mar. 15, 2009). The court affirmed the district court’s ruling denying Nicholas’ motion to compel arbitration of her contract dispute with KBR. Nicholas waived her right to arbitrate (pursuant to an arbitration clause) because she substantially invoked the judicial process to the prejudice of KBR.
The court applied a two-prong test:
- Did Nicholas substantially invoke the judicial process?
- Was KBR prejudiced?
The court based its holding on the following facts: Nicholas filed a lawsuit against KBR, engaged in substantial litigation activity, and waited 10 months to assert her right to arbitrate. The court found that KBR would be prejudiced by delay, expenses, and damage to its legal position.
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arbitration, ADR, law, KBR,
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