The Eleventh Circuit Court of Appeals has affirmed an employee's Title VII verdict for unlawful retaliation, finding that the employee's refusal to arbitrate his pending claim of discrimination was not a permissible reason for terminating his employment.

In Goldsmith v. Bagby Elevator Co., Inc., No. 06-14440, 2008 WL 150585 (11th Cir. Jan. 17, 2008), Goldsmith brought a Title VII claim against his former employer, Bagby, for racial discrimination and unlawful retaliation. Goldsmith alleged that he was terminated for filing a complaint with the Equal Employment Opportunity Commission (EEOC) regarding Bagby's racially hostile workplace. Bagby maintained that it had terminated Goldsmith for a non-retaliatory reason – namely, his refusal to sign an agreement to arbitrate employment-related disputes.

The Court acknowledged that an employee could be terminated for his or her refusal to execute an arbitration agreement with the employer without the termination being considered "retaliatory" under Title VII. See Weeks v. Harden Manufacturing Corp., 291 F.3d 1307 (11th Cir. 2002).

However, the Court observed that Weeks did not consider the termination of an employee with a pending EEOC claim against the employer. In the instant case, the Court found that Goldsmith's specific refusal to execute the arbitration agreement was the link between his pending EEOC claim and his termination that supported his Title VII claim.

The Court noted that Goldsmith was immediately terminated after refusing to sign the arbitration agreement. Furthermore, the Court pointed to language in the arbitration agreement that would have required Goldsmith to arbitrate past claims, including his pending EEOC claim. Evidence suggested that Goldsmith had been willing to arbitrate future claims, but Bagby insisted that past claims be included in the scope of the agreement, with full knowledge of Goldsmith's pending EEOC action.

Since Goldsmith had carried his burden of showing that "the protected activity" – filing the EEOC claim – and "the adverse action" – the termination – were not wholly unrelated, Bagby could not claim that Goldsmith's refusal to sign the arbitration agreement was a non-retaliatory reason to terminate his employment.

As this case demonstrates, employers may requires employees to execute an arbitration agreement as a condition of employment, but under some circumstances, an employee's refusal to arbitrate pending claims may be treated as a pretext for retaliatory termination.

Courts have been wary of agreements to arbitrate pending claims in other contexts as well. See Bilbrey v. Cingular Wireless, L.L.C., 164 P.3d 131 (Okla. 2007) (holding that it would be unconscionable to apply arbitration agreement with class waiver to class action lawsuit that was pending when agreement was signed).