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In affirming an order compelling arbitration of an employment dispute, the Fifth Circuit Court of Appeals held that the arbitrator must decide whether the employer lost its right to demand arbitration by breaching its obligations under the initial step of the dispute resolution procedure.
In Pleasant v. Houston Works USA, No. 06-20824, 2007 WL 1648794 (5th Cir. June 7, 2007), Pleasant worked for Houston Works, which maintained an employee dispute resolution program (EDR) consisting of a two-step process: (1) an "open door" process whereby the parties attempt to resolve the dispute through informal discussions; and (2) mandatory arbitration.
After Pleasant was allegedly robbed in the parking lot, the Houston Works manager held a meeting to discuss safety issues. Pleasant was allegedly disruptive during the safety meeting, and he was fired later that day.
When Pleasant sued for race discrimination, Houston Works filed a motion to compel arbitration pursuant to the EDR. The district court granted the motion.
On appeal, Pleasant argued that the arbitration agreement was unenforceable because Houston Works breached its obligations under the "open door" provision of the EDR. Specifically, Pleasant alleged that Houston Works retaliated against him for resolving his safety concerns through the "open door" process.
Citing Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006), the Court ruled that Pleasant must direct his argument to the arbitrator because it was for the arbitrator, not the court, to decide whether Houston Works breached the "open door" provision of the EDR and thus lost its right to demand arbitration. Accordingly, the Court affirmed the order compelling arbitration.
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