Whistling Arbitration

By Lori Phillips

In Santoro v. Accenture Federal Services, LLC, No. 12-2561 (4th Cir. May 5, 2014), an employee brought ADEA, FMLA and ERISA claims against a former employer.  The employer moved to compel arbitration, and the employee opposed the motion, citing the Dodd-Frank Act – even though the employee had no claim under the Dodd-Frank Act (“DFA”).  The DFA provides whistleblower protection for employees reporting illegal or fraudulent activity and states, in part, that “[n]o predispute arbitration agreement shall be valid or enforceable, if the agreement requires arbitration of a dispute arising under this section.”  Plaintiff argued that, in that one sentence, the DFA invalidated all arbitration agreements by publicly-traded companies, unless the arbitration provision carves-out claims under the DFA.  The court acknowledged that Dodd-Frank whistleblower claims are not subject to pre-dispute arbitration, but concluded that the DFA did not make invalid all arbitration agreements that fail to mention the DFA.

Plaintiffs persist in creative attempts to escape mandatory arbitration agreements.  Once again, a court stuck to its guns and held that, absent a clear congressional command, the federal policy favoring arbitration wins.