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contractlawsuitplaintiffarbitrationappealcorporation
contractplaintiffarbitrationappeal

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Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 96 Fair Empl.Prac.Cas. (BNA) 1367, 87 Empl. Prac. Dec. P 42,167, 151 Lab.Cas. P 60,092, 23 IER Cases 1212, 10 Wage & Hour Cas.2d (BNA) 1842, 18 Fla. L. Weekly Fed. C 1087

Facts

The plaintiffs, current and former employees of Gulfstream, were employed at the company's Savannah, Georgia facility from the summer of 2002 until spring 2003. During this time, Gulfstream adopted a dispute resolution policy (DRP) that required arbitration for covered employment-related disputes. The DRP was distributed to employees via mail, email, and posted notices, and it explicitly stated that continued employment would constitute acceptance of the policy. The plaintiffs later filed lawsuits alleging various claims, prompting Gulfstream to move to compel arbitration based on the DRP.

Each of the plaintiffs is a current or former employee of Gulfstream and was employed at Gulfstream's Savannah, Georgia, facility during the relevant period from the summer of 2002 until the spring of 2003. During the summer of 2002, Gulfstream adopted the DRP to serve as its exclusive method for resolving covered employment-related disputes between itself and its employees.

Issue

Whether the dispute resolution policy (DRP) constituted a binding arbitration agreement under the Federal Arbitration Act and Georgia contract law.

This appeal concerns the validity of Gulfstream's DRP, which includes a requirement to arbitrate certain types of employment-related claims, including those asserted by the plaintiffs in these cases.

Rule

The Federal Arbitration Act governs the enforceability of arbitration agreements, which must be in writing and involve a transaction affecting commerce. General contract principles also apply to determine the validity of the arbitration agreement.

The validity of an arbitration agreement is generally governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (the “FAA”), which was enacted in 1925 to reverse the longstanding judicial hostility toward arbitration.

Analysis

The court found that the DRP was a written agreement to arbitrate, as it was distributed to employees and acceptance was established through continued employment. The court applied Georgia contract law, concluding that the DRP constituted an offer and that the employees accepted it by remaining employed. The court also determined that the DRP was not unconscionable and that the arbitration agreement was enforceable under the FAA.

Here, the DRP is indisputably in writing. Although the employees' acceptance was by continuing their employment and was not in writing, all material terms—including the manner of acceptance—were set forth in the written DRP. The DRP stated that it was a contract and constituted the entire agreement between the employee and Gulfstream as to covered claims.

Conclusion

The Court of Appeals affirmed the district court's decision to compel arbitration, holding that the DRP was a valid and enforceable agreement under the Federal Arbitration Act.

Thus, we proceed to the plaintiffs' final issue in the case—whether the DRP is a binding contract between the plaintiffs and Gulfstream under ordinary Georgia contract law.

Who won?

Gulfstream Aerospace Corporation prevailed in the case because the court upheld the enforceability of the arbitration agreement, determining that the employees had accepted the DRP by continuing their employment.

The Court of Appeals, Hull, Circuit Judge, held that: 1 dispute resolution policy that provided for arbitration of any “covered claims,” and that employer published on its web site and mailed to its employees with cover letter explaining that employees' continued employment would constitute their acceptance of this policy qualified as “written agreement” to arbitrate, within meaning of the Federal Arbitration Act (FAA);

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