Florida Court Ruling Highlights Importance of Specific Terminology in Arbitration Agreements

Author: Michael C. Jacobson, XpertHR Legal Editor

September 23, 2013

A specifically-worded arbitration agreement was expansive enough to include retaliatory discharge for workers' compensation activity, even though the agreement created an exception for workers' compensation benefits claims, according to a Florida appeals court in Audio Visual Innovations, Inc. v. Spiessbach, 2013 Fla. App. LEXIS 12860 (Fla. Ct. App. 2013).

This holding is a reminder for all employers that use arbitration agreements that using specific terms and listing causes of action to be arbitrated can make an arbitration agreement stronger, more encompassing and more effective. Employers that use vague or unclear language may not be able to prevent the types of disputes they had sought to reduce.

In Spiessbach, the employee was injured at work, instituted a workers' compensation claim and then was allegedly terminated in retaliation for filing a claim for benefits. The employee then filed a complaint against the employer for terminating him in retaliation for filing his workers' compensation claim, which he alleged was a violation of Fla. Stat. § 440.205. The employer sought to arbitrate the retaliation claim pursuant to its arbitration agreement, but the employee argued that his retaliation claim should be considered separate from the arbitration agreement.

The dispute reached a Florida appeals court, which evaluated the arbitration agreement and found that it reflected the employer's and employee's agreement to arbitrate all claims and disputes "based on a common law contract or tort claim, or a federal, state or other statutory claim." Importantly, the agreement carved out a specific exception for "any legal action by [the] employee for workers' compensation benefits," meaning those claims were not intended to be arbitrated.

The employee argued that his retaliation claim fell within the arbitration agreement's exception because the same Florida law that provides for workers' compensation benefits, Fla. Stat. § 440.205, also protects against retaliatory discharge. Thus, the employee argued that his claim for retaliation was merely a further attempt to secure a form of workers' compensation benefits.

The court disagreed, holding that the claim for retaliation was "arbitrable" because the arbitration agreement was worded to create a specific exception for disputes pertaining to disability or benefits payments only. In fact, Florida law specifies that claims for workers' compensation retaliation should be submitted to state court and are not to be considered by administrative bodies like the worker's compensation court or commission. This explains why the employer sought to include such claims in its arbitration agreement - to avoid state court litigation.

The court also ruled that the employer did not waive its right to arbitration by filing motions for extension of deadlines and attempting mediation prior to starting arbitration. The court stated that the employer still could pursue arbitration despite using these tactics because it had not taken action deemed "inconsistent" with the right to arbitrate, like actively participating in or defending the merits of a lawsuit. This is also an important point for employers as it illustrates how they can be flexible in working to resolve disputes, even if they have mandatory arbitration agreements in place. Employers that use arbitration agreements are free to try other means to resolve disputes prior to arbitration like settlement discussions or non-binding mediation, and if those tactics fail, they can fall back on arbitration.