Eighth Circuit Enforces Arbitration Agreement in Employment Dispute

The Eighth Circuit Court of Appeals supported an agreement to arbitrate in an employment dispute where an employee refused to sign an acknowledgment form. The Court found that she accepted the agreement through her continued employment.

In Berkley v. Dillard’s, Inc., No. 05-3523, 2006 WL 1626969 (8th Cir. June 14, 2006), Berkley filed complaints with the EEOC and the Missouri Commission on Human Rights (“MCHR”), alleging racial harassment by her coworkers at Dillard’s. Less than a month later, Dillard’s implemented an arbitration program by providing its employees with two documents, one of which advised employees that by “accepting or continuing employment with Dillard’s, you have agreed to accept the Program known as the Agreement to Arbitrate Certain Claims.”

A few days later, Dillard’s asked its employees to sign an acknowledgment form that stated: “Employees are deemed to have agreed to the provisions of the Rules by virtue of accepting employment with the Company and/or continuing employment therewith.” When Berkley refused to sign the form, Dillard’s advised her that refusing to sign would not affect the applicability of the arbitration agreement because it automatically applied to all employees who continued their employment.

Berkley sued Dillard’s after receiving notice of her right to sue from the EEOC and the MCHR. The lower court granted Dillard’s motion to compel arbitration.

On appeal, Berkley argued that she rejected the arbitration agreement by refusing to sign the acknowledgment form. Unpersuaded, the Court held that Berkley accepted the arbitration agreement by her continued employment because the acknowledgment form stated that “employees ‘are deemed to have agreed to the provisions of the Rules by virtue of accepting employment with the Company and/or continuing employment therewith.’”

This decision is in harmony with May v. Higbee Co., 372 F.3d 757 (5th Cir. 2004). In that case, the employee signed the acknowledgment form but argued that her signature indicated only that she had received the rules of arbitration, not that she agreed to be bound by them. Though faced with a different fact pattern, the Fifth Circuit enforced the arbitration agreement under the same principle: “Continuing one’s employment after receiving notice that continued employment will constitute assent is a recognized manner of forming a contract.”