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In a per curiam opinion, the Alabama Court of Civil Appeals held that a workers' compensation claim fell within the scope of an arbitration agreement and rejected the employee's argument that the public policy of Alabama precludes the arbitration of workers' compensation claims.
In Ryan's Family Steakhouse, Inc. v. Kilpatric, No. 2040557, 2006 WL 3691554 (Ala. Civ. App. Dec. 15, 2006), Kilpatric sued Ryan's, his former employer, seeking workers' compensation and alleging retaliatory discharge.
Ryan's filed a motion to compel arbitration based on an arbitration agreement that Kilpatric signed when she applied for employment with Ryan's. The trial court denied the motion on various grounds.
On appeal, the Court addressed several issues. A pivotal issue was whether Kilpatric's workers' compensation claim fell within the scope of the arbitration agreement. The agreement required arbitration of all "employment-related disputes" except for any employee claims filed with a "state or federal agency," including a "state workers' compensation commission, where applicable."
Kilpatric relied on the exception for claims filed with a "state or federal agency" in arguing that her workers' compensation claim was not subject to arbitration. The Court determined that the exception was not applicable because Alabama does not have a workers' compensation commission. Accordingly, the Court held that Kilpatric's claim for workers' compensation fell within the scope of the arbitration agreement.
The Court also rejected Kilpatric's argument that the arbitration agreement was unconscionable. Specifically, the Court concluded that Kilpatric failed to show that the agreement was procedurally unconscionable because she "made no showing that she would have had considerable difficulty obtaining similar employment with another employer without signing an arbitration agreement." Given Kilpatric's failure to demonstrate procedural unconscionability, the Court did not reach the issue of substantive unconscionability.
Finally, Kilpatric argued that as a matter of public policy, workers' compensation claims should not be subject to arbitration. In rejecting this argument, the Court pointed out that the Federal Arbitration Act "does not provide an exclusion for workers' compensation claims." Moreover, as the Court explained, any policy concerns underlying the arbitration of workers' compensation claims is not a matter for the courts to decide.
As noted in one of the concurring opinions, the Texas Court of Appeals has similarly concluded that parties may agree to arbitrate workers' compensation claims. See In re David's Supermarkets, Inc., 43 S.W.3d 94 (Tex. Ct. App. 2001). In that case, the court reasoned that "[a]ny public policy expressed by the Texas Legislature in enacting the workers' compensation statutes is irrelevant" to the question of whether "Congress intended to preclude a waiver of judicial remedies for the statutory rights at issue." Id. at 99-100 (emphasis in original).
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