In Alabama, Excluding Workers’ Compensation from an Arbitration Agreement Does Not Exclude Retaliatory Discharge
On May 19, 2017, the Alabama Supreme Court released its opinion in SSC Selma Operating Company, LLC, d/b/a Warren Manor Health & Rehabilitation Center and SavaSeniorCare Administrative Services, LLC v. Jackie Fikes in which it reversed the trial judge’s order denying the employer’s motion to compel arbitration of a retaliatory discharge claim brought pursuant to §25-5-11.1.
On appeal the Court noted that there was no question as to whether or not the employment dispute resolution program (hereinafter EDR Program), was valid and that the parties had agreed to be bound by it. However, the issue on appeal was whether or not the language in the EDR Program that stated disputes not covered under the EDR Program include claims that relate to workers’ compensation...would also exclude a retaliatory discharge claim filed pursuant to §25-5-11.1 of the Alabama Workers’ Compensation Act. §25-5-11.1 specifically states that an employee cannot be terminated solely for bringing a workers’ compensation claim. On appeal the employer stated that the EDR Program specifically stated that it covered employment matters related to termination, discrimination, retaliation and harassment and other legally protected rights. The employer acknowledged that the EDR Program specifically stated that disputes not covered under the program are ones that relate to workers’ compensation, unemployment benefits, health, welfare and retirement benefits and claims by companies for injunctive relief to protect trade secrets and confidential information.
On appeal, the employee relied solely on the provision that stated claims related to workers’ compensation are not covered under the EDR Program and argued that the language was plain and unambiguous and, therefore, the discharge claim pursuant to §25-5-11.1 should be excluded from the EDR Program. However, the employer argued that, while the Alabama Workers’ Compensation Act gives rise to the discharge claim, that the retaliatory discharge claim pursuant to §25-5-11.1 is not a claim in the nature of a workers’ compensation claim and is actually a tort claim that was clearly intended to be included in the EDR Program requiring arbitration. In its opinion, the Supreme Court stated that it was apparent from the language in the EDR Program that the intent of the program was to submit to arbitration those employment related disputes where the plaintiff would ordinarily be entitled to have resolved by a jury, specifically noting claims arising from tort law and not claims governed by specific statues such as the Workers’ Compensation Act. The Court specifically stated that while a discharge claim pursuant to §25-5-11.1 arises out of the workers’ compensation factual setting, the claim is never the less a tort action and governed by general tort law. This includes the ability to recover damages for mental anguish and lost wages. The Court noted that while there are claims that relate to workers’ compensation laws, that those claims are generally for occupational disease and accident injuries as opposed to claims alleging retaliatory discharge. They also pointed out that the two claims, a workers’ compensation claim and tort claim (retaliatory discharge claim), are mutually exclusive.
In conclusion, the Supreme Court stated that the trial court erred in denying the employer’s Motion to Compel Arbitration of the employee’s retaliatory discharge claim since it was the clear intent of the EDR Program to have employment related disputes such as a retaliatory discharge claim brought pursuant §25-5-11.1, resolved by arbitration as opposed to a jury trial. Therefore, the Court held that the employee’s retaliatory discharge claim was not “related to” disputes concerning workers’ compensation laws, which are governed by the Workers’ Compensation Act, and are instead governed by the general rules of tort law.
About the Author
The article was written by Joshua G. Holden, Esq. a Member of Fish, Nelson & Holden, LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and related liability matters. Mr. Holden is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive. Holden and his firm are members of The National Workers’ Compensation Defense Network (NWCDN). The NWCDN is a national and Canadian network of reputable law firms organized to provide employers and insurers access to the highest quality representation in workers’ compensation and related employer liability fields.