The Sixth Circuit rules that an employee’s right-to-sue waiver and agreement to alternative dispute resolution must be “knowing and voluntary”
On April 26, 2010, the Sixth Circuit Court of Appeals further explained what is required in order for an employee’s waiver relinquishing his/her right to pursue a court action for employment claims to be “knowing and voluntary” and therefore, effective. In the decision of Alonso v. Huron Valley Ambulance, Inc., Case No. 09-1812 (6th Cir., Apr. 26, 2010), plaintiffs, Alan and Kimberley Alonso, had signed waivers of their right-to-sue and agreed to submit any employment related disputes, including wrongful discharge, civil rights, and discrimination claims, to defendant Huron Valley Ambulance, Inc.’s (“HVA”) internal grievance procedure. They also agreed to bring such claims within six months of their occurrence.
The waivers were contained in employment applications that the two had executed approximately one month prior to their hire as paramedics. Neither received any documentation describing HVA’s grievance procedure nor any explanation of it at the time they signed the applications. It was only after their hiring that the Alonsos received HVA’s Operations Policies and Procedures Manual, which contained the grievance procedure.
Subsequently, Alan Alonso was terminated. He was terminated for two violations of HVA’s code of conduct: (1) lying about his attendance at Army National Guard training; and (2) testing positive for an unauthorized substance while at work. He initiated HVA’s grievance procedure and the termination was upheld. Alan Alonso then filed an action in the Federal District Court for the Eastern District of Michigan, alleging violations of the Uniformed Services Employment and Reemployment Protection Act, Michigan’s Military Leaves Reemployment Protection Act, retaliation under MIOSHA, and retaliation for having filed an EEOC charge.
Kimberly Alonso, although not terminated at the time, joined her husband in the lawsuit, alleging violations of Michigan’s Elliott-Larsen Civil Rights Act and Title VII (sex discrimination and harassment), retaliation for having filed charges with the EEOC, the Family Medical Leave Act, and emotional distress. Kimberly Alonso never submitted her claims to HVA’s grievance procedure, but rather proceeded directly to court.
The trial court dismissed all the claims finding the Alonsos had waived their right to proceed with their claims in court due to the waivers they had previously signed in their employment applications. Their remedies were limited, the trial court held, to the exclusive confines of HVA’s grievance procedure.
The Alonsos appealed and the Sixth Circuit Court of Appeals (which includes the states of Michigan and Ohio) reversed the dismissal, holding that the Alonsos’ waiver of their right-to-sue and their agreement to assert a claim within six months were not “knowing and voluntary,” and thus were not enforceable. Specifically, the Sixth Circuit held that the following must be considered in determining whether or not a waiver is executed “knowingly and voluntarily:”
- The education, background and experience level of the individual signing in order to determine if he/she knows and understands the effect of the waiver;
- the period of time the individual has to consider the waiver, including the opportunity to consult an attorney, if the individual chooses to do so;
- the clarity of the waiver;
- consideration offered in exchange for the waiver; and
- other circumstances surrounding the execution of the waiver.
In this case, the Sixth Circuit determined the fact that the Alonsos did not receive any information regarding HVA’s grievance procedure until one month after they signed the waiver and after they were ultimately hired, fatal to the waivers’ enforceability. The Court explained, “They [the Alonsos] cannot be said to have knowingly and voluntarily waived their right to a judicial forum when they were not informed of the alternative procedures until a month after they began working for HVA.”
Based on this decision, employers, especially those within the Sixth Circuit (Kentucky, Michigan, Ohio, and Tennessee), need to reevaluate any waivers that they may have asked employees to execute in the past. These waivers are most often used in connection with employers’ alternative dispute resolution plans for employment disputes, including plans calling for the arbitration of all such disputes. Issues to consider include the clarity and/or plain language of the waivers, the time employees were given to consider them, and the explanation given to the employees at the time they were presented with the waivers, among others.
Employers should also note that although this decision arose out of an employer’s alternative dispute resolution plan (specifically an internal grievance procedure) and an agreement to a shortened period of time to assert a claim, this decision is relevant to any limitation on employees’ rights with respect to employment claims, including waivers of jury trial rights. Many employers have agreements with employees that do not restrict access to the courts, but require employees to waive their right to a jury in such actions.
In sum, it is time to revisit your waivers and other agreements where employees are relinquishing any of their rights with respect to potential employment claims, including waivers of rights to pursue such actions in court. We will be happy to help you get started and answer your questions.
James J. Boutrous II
Douglas V. Bartman
Labor and Employment Practice
We have an impressive team of labor and employment attorneys who specialize in representing management in all aspects of labor and employment law at both the state and federal level. They have significant expertise in counseling clients on labor, employment and human resources issues and representing employers in state and federal courts and administrative agencies in all aspects of labor and employment-related litigation.