Mintzer Sarowitz Zeris Ledva & Meyers, LLP Employment Practices Group Scores Big in Arbitration

(November 15, 2018)  Bradley Shafer, partner in the firm’s Wheeling, West Virginia office scored a huge victory for its client fighting off a retaliatory discharge claim.  Not only did Shafer obtain an arbitration award in the client’s favor, but he also recovered all attorney’s fees and costs associated with litigating the enforcement of the arbitration agreement.

Employee Resource Group LLC operates several Wendy’s franchise restaurants in West Virginia.  The Company received a call from a parent of one of its employees complaining about the behavior of the general manager at one if its restaurants.  Employee Resource Group conducted an investigation of the complaints, which included interviewing all store employees.  The investigation confirmed the complaint and the general manager was terminated.

The general manager filed suit in Boone County, West Virginia.  In her lawsuit, she claimed she was actually fired for reporting instances of sexual harassment of other employees in the workplace to her superior.  Answering on behalf of Employee Resource Group, we moved to enforce the arbitration agreement that the general manager had signed agreeing to arbitrate her claims instead of filing them in court.  The employee opposed the arbitration motion and the Circuit Court Judge refused to enforce it.

We appealed the court’s refusal to enforce the arbitration agreement to the West Virginia Supreme Court of Appeals.  The Supreme Court agreed that the arbitration agreement was enforceable and held that the lower court judge should have ordered the case to arbitration.

The case proceeded to arbitration and the employee was deposed and testified that she told her supervisor words to the effect of that the supervisor needed to speak to a particular individual because they were spending too much time talking to the crew, the crew is talking to them, people are not getting their work done, and there were going to be problems.  When counsel challenged the general manager in her deposition that this was not a complaint of sexual harassment, she modified her testimony saying she informed her supervisor that conversations of a sexual nature were being held and she also reported that.  The supervisor denied receiving any complaint of sexual harassment from the general manager or anyone else in that restaurant.  The Human Resources Department also had no record of any complaint of sexual harassment, whether it be from this general manager or any alleged victim from that restaurant.  Employee Resources Group also pays for an outside service to provide an 800 number that is manned 24/7 every day to receive complaints from employees, even if they choose to be anonymous.  The company had no record of any sexual harassment complaint coming from that restaurant.  The Company also had no record of any complaints against the employee in question.

In the hopes of supporting her claim, the general manager produced several former employees to testify that they were the victims of sexual harassment.  They all testified they told her about the harassment and testified that she told them she reported it to her supervisor.  None of them actually saw or heard her make the report though.  Two of the witnesses said they reported the harassment to the 800 number as well, but left a message and no one called them back.  There was no corroborating evidence for these claims as the 800 service has live operators manning the phones 24 hours a day, 7 days per week, 365 days per year. 

The Arbitrator ruled that the general manager could not prove that she reported the harassment to her supervisor.  If she did not report the harassment, then she could not have been fired in retaliation for those reports.  Accordingly, the Arbitrator dismissed the claim for retaliation.

The arbitration agreement contained a clause stating that Employee Resource Group could recover its fees and costs associated with enforcing the agreement if the opposing party refused to abide by it.  The general manager argued that she offered to agree to go to arbitration if Employee Resource Group would agree to drop its claim for fees and costs.  The Company refused to do so.  The Arbitrator ruled that Employee Resource Group should not have to give up its rights of recovery to enforce an agreement.  Accordingly, the Arbitrator awarded the full amount of fees and costs Employee Resource Group spent litigating the enforcement of the arbitration agreement, including those associated with the Supreme Court appeal.