Terminated Employee Not Bound by Arbitration Agreement When There Was No Evidence That Continued Employment Could Be Counted As Acceptance

When a company conditioned continued employment on signing an arbitration agreement, an employee who was terminated for refusing to sign the agreement cannot be compelled to arbitrate his claims.

In Reheiser v. Terminix Intern. Co., Ltd. Partnership, No. 505CV263RSMD, 2006 WL 1653444 (N.D. Fla. Jun 07, 2006), Terminix changed its terms of employment and required all employees to sign a newly implemented Arbitration Agreement. Employees were required to sign the agreement or face termination. Joseph Reheiser was terminated after he refused to sign.

When Reheiser subsequently sued Terminix, Terminix filed a motion to compel arbitration based upon the new Arbitration Agreement. Although Reheiser had never signed the agreement, Terminix argued that Reheiser had assented to the agreement by continuing to work after being notified of the new terms of employment.

The Court denied Terminix’s motion and rejected its argument. It found that unlike other cases where employees were told that continued employment was deemed acceptance of an arbitration agreement regardless of whether or not the employee signed the policy, Terminix made signing the agreement the “critical event” and only fired Reheiser after he refused to sign.

Had Terminix believed that Reheiser’s decision to continue working for the few days between learning of the new policy and refusing to sign the agreement was sufficient to show implied consent, it would not have demanded that Reheiser sign the agreement or face immediate termination, the Court found.