Most practitioners are surprised to learn that Chapter 440 (the Florida workers' compensation law) includes an arbitration provision, section 440.1926. This provides that
"the employer, carrier, and employee may mutually agree to seek consent from a judge of compensation claims to enter into binding claim arbitration in lieu of any other remedy."
That is, the parties could stipulate to have their dispute decided by someone other than the Judge of Compensation Claims. Of course, that would require the assigned JCC's consent. It is another instance in which the Legislature has recognized that JCCs are not a "court," specifically providing for an interpretation in which JCCs are equated with a "court" in this specific instance. Chapter 682 governs the arbitrations, and as used therein "the term 'court' shall mean a judge of compensation claims."
The subject of arbitration recently came to the fore with a decision from The Florida Fifth District Court of Appeal in Hobby Lobby Stores, Inc. v. Cole, Case No. 5D18-3809 (January 3, 2020). This is similarly a workers' compensation statutory issue that was not heard before a Judge of Compensation Claims. There is a provision in the workers' compensation law intended as a protection for injured workers, section 440.205. It is short and succinct:
"No employer shall discharge, threaten to discharge, intimidate, or coerce any employee by reason of such employee’s valid claim for compensation or attempt to claim compensation under the Workers’ Compensation Law."
Because the statute does not specify that such claims would be heard by judges of compensation claims, the Florida Supreme Court concluded years ago that such issues are within the jurisdiction of Florida's court of general jurisdiction, the Circuit Courts. See Smith v. Piezo Technology, 427 So. 2d 182 (Fla 1983). Thus, Mr. Cole's claim for "wrongful discharge" proceeded there, and was appealed to the Fifth District.
Hobby Lobby responded to the civil complaint by filing a "motion to compel arbitration." The employer had hired Mr. Cole in 2015. Also in 2015, Mr. Cole and the employer signed "a two-page, single-spaced document" which "conditioned Mr. Cole’s employment on his acceptance of its terms." He contended that thereafter he was the target of "antagonistic conduct, culminating in his discharge." This agreement stated
"that any employment-related dispute Mr. Cole had with Hobby Lobby, including '[d]isputes involving interference and/or retaliation relating to workers’ compensation,' would be submitted to and settled by final and binding arbitration."
The agreement required the Employer to pay all arbitration costs, and allowed Mr. Cole to "select from two sets of arbitration rules."
Finding this short agreement "unconscionable," the trial court denied the Employer's motion to compel arbitration. Relying upon an affidavit from Mr. Cole, the trial court concluded that Mr. Cole did not understand the contract, had no knowledge of "what an arbitrator or an arbitration was," nor understanding that he was "waiving his right to a jury trial." He also complained that he was not told he could consult with an attorney regarding the agreement. Finally, he concluded that "he believed he had no choice but to sign the agreement to get and keep his job."
The Fifth District reminded of a three-part analysis for the application of a mandatory arbitration agreement:
“(1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived.”
It concluded that there was "no dispute that Hobby Lobby met all three prongs of this test." The Court next examined the conclusion of "general contract defenses, including unconscionability."
The Court described "a court must conclude (such a contract) is both procedurally and substantively unconscionable." It reminded that "the party seeking to avoid arbitration bears the burden to establish unconscionability"; that is, Mr. Cole had to prove it was applicable.
The Fifth District noted that the "trial court relied on California law. In California, “[a]n arbitration agreement that is an essential part of a ‘take it or leave it’ employment condition, without more, is procedurally unconscionable." But, Florida has not adopted that view of unconscionability. While the "take it or leave it" nature may be relevant, it is not dispositive of the question here. The Court explained that Florida employs various factors worthy of consideration:
“(1) the manner in which the contract was entered into; (2) the relative bargaining power of the parties and whether the complaining party had a meaningful choice at the time the contract was entered into; (3) whether the terms were merely presented on a ‘take-it-or-leave-it’ basis; and (4) the complaining party’s ability and opportunity to understand the disputed terms of the contract.”
The Court noted that Mr. Cole had not demonstrated an inability to read the agreement or that he was "pressured, rushed, or coerced . . . into signing it." Furthermore, "He makes no allegation that he lacked a full and fair opportunity to inquire into the Agreement’s terms or to enlist help if confused." Therefore, the Court concluded that "the trial court erred in finding the Agreement procedurally unconscionable."
As to substantive unconscionability, the Court noted that the trial court relied upon 4 points in concluding that the contract was "so unreasonable and unfair" that it should not be enforced:
"(1) the Agreement required Mr. Cole to forfeit his right to a jury trial; (2) the Agreement truncated the statute of limitations for tort claims to one year; (3) the Agreement did not define which arbitration rules apply; and (4) the Agreement required Mr. Cole to pay Hobby Lobby’s attorneys’ fees if he contested the Agreement in court."
The Court found no merit in any of these four, concluding that (1) "all arbitration agreements waive the parties’ right to a jury trial," and "the Agreement’s plain language contravenes the remaining findings." The Court concluded that "ultimately, there is no basis to conclude the Agreement is substantively unconscionable."
The takeaways from this Court's explanation are noteworthy. First, trial judges should look to Florida law when determining issues. Reliance on the law of another state should never be the first resort in such analysis. Second, arbitration clauses are enforced by the Courts of Florida. That may mean that employers are encouraged to utilize them in hopes of evading court litigation. Third, it might be that some will seek to include workers' compensation determinations in such agreements. The sole obstacle then might be the required JCC approval post-accident. Finally, anyone entering a contract is well advised to take the time to read and understand what is being agreed. Before signing, it may behoove one to ask an attorney questions about precisely what is intended and meant.
It may very well be that signing some agreement may be the only choice offered in any exchange. But, even in that context one still has the choice to decline such a contract and seek an alternative elsewhere (there are many places to work). At a minimum, one might seek alternate language in that contract/agreement. In the end, one might still elect to sign such an agreement. But, the decision to do so should be with an understanding of its implications and knowledge of its terms. We alone decide what we sign. We owe it to ourselves to read, understand, and question before we do.
