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A Missed Opportunity

A Missed Opportunity

In a long string of cases, the West Virginia Supreme Court has consistently enforced arbitration agreements in the face of legal challenges. The Court continued this trend in Hampton Coal, LLC v. Varney. Unfortunately, the Court in Varney refused to provide protection against forced arbitration in two important areas—in employment cases generally and in cases involving statutory claims.

The plaintiff, Michael Varney, worked at a coal company for nearly 15 years. When the company was bought out, the new company required all employees to sign an agreement stating that all future employment disputes would be resolved through binding arbitration. Thereafter, Mr. Varney sued the company for “deliberate intent,” alleging that he was entitled to compensation for a workplace injury caused by the company’s intentional conduct. Mr. Varney also alleged that the company violated the human rights act, W.Va. Code 55-11-1, by demoting him after an illness. Citing the arbitration agreement Mr. Varney was forced to sign, the company moved to compel arbitration. The trial court found the agreement to be unenforceable. The Supreme Court, however, reversed the trial court’s ruling and found the agreement to be enforceable in its entirety.

First, the Court rejected the argument that more stringent rules should be applied in the employment context. Employers often require employees to sign an arbitration agreement as a condition of employment. Because the arbitration agreement is offered on a take-it-or-leave-it basis, Mr. Varney argued that it was unsupported by consideration and, therefore, unenforceable. The Court disagreed, finding that the agreement was valid simply because it contained mutual promises to arbitrate.

Second, Mr. Varney argued that statutory claims should not be arbitrated. Claims arising under the human rights act are meant to implement our state’s public policy favoring equal treatment. Those claims should be heard by law-trained judges and decided by juries chosen from a cross section of our communities--not by arbitrators. There are, after all, critically important rights at stake. Nevertheless, the Supreme Court held that even statutory claims are subject to arbitration, depriving Mr. Varney of his right to a jury trial.

Unfortunately, this case is part of a steady erosion of the right to a jury trial—a right guaranteed by the Seventh Amendment. Compelling arbitration in employment cases deprives working West Virginians of a valuable right. Hopefully, the Supreme Court will correct its course in the future so the right to a jury trial will be fully protected.

Image courtesy of Unsplash

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