A DISPUTE OVER DISPUTE RESOLUTION
Earlier last month, in EQT Corp. v. Miller, the United States District Court for the Northern District of West Virginia provided its most recent guidance regarding the enforceability of alternative-dispute-resolution (“ADR”) agreements subject to the Federal Arbitration Act. Before discussing the court’s conclusion and what it means for employers, some background regarding the case may be helpful.
Brenda Miller (“Miller”) began working for EQT Corporation (“EQT”) as a Landman II in September 2010. Before starting her job, she signed an Alternative Dispute Resolution (“ADR”) agreement, which required her to submit certain disputes to an ADR Program created by EQT.
In November 2011, Miller’s employment with EQT was terminated. Subsequently, her attorney began sending letters to EQT, threatening to sue EQT for sexual harassment, discriminatory and retaliatory discharge, and violations of the West Virginia Wage Payment and Collection Act (“WPCA”). Through a number of those letters, Miller’s attorney took the position that the ADR Agreement would be unenforceable with regard to her client’s threatened claims.
In turn, EQT filed a two-count complaint, seeking a declaration regarding the parties’ respective rights under the ADR Agreement. Through count one of its complaint, EQT sought declaratory judgment regarding the enforceability of the ADR Program with respect to all of the claims that Miller threatened to bring against EQT. Through count two of its complaint, EQT sought a declaration of the arbitrability of Miller’s threatened WPCA claims.
Miller raised a number of arguments, only a few of which are discussed in this piece, in support of her position that the ADR Agreement was unenforceable. Among other things, Miller argued:
- that no one at EQT explained to her that she had the opportunity to consult with counsel before signing the ADR Agreement;
- that no one at EQT suggested that she had the ability to negotiate any changes in the terms of the ADR Agreement or the ADR Program;
- that the ADR Agreement was a contract of adhesion;
- that the negotiating positions of the parties were highly unequal because EQT is a large, sophisticated corporation and she does not have a college degree; and
- that the ADR Agreement contained complex legal terms that she did not understand.
One by one, the Court rejected each of Miller’s arguments. To the extent Miller argued that no one explained to her (1) that she could consult with a lawyer about the agreement and (2) that she could negotiate changes to the agreement or the program, the court observed that no such explanations are required under West Virginia law in order to make a negotiating process fair. The court then noted that the ADR Agreement clearly stated that Miller had “been provided with an opportunity to seek legal advice before signing” it. The court also noted that the ADR Program explanation provided that the final claims exempted from the program are “[c]laims specifically excluded from the ADR Program by written agreement between EQT and an [e]mployee.” To that end, the court found that such language clearly should have placed Miller on notice that she could negotiate the terms of the ADR Program with EQT.
As for Miller’s argument that the ADR Agreement was a contract of adhesion, the court found no indication in the ADR Agreement that signing the agreement was a mandatory condition of employment or that the agreement was offered on a “take-it-or-leave-it” basis. Moreover, the court found that, rather than asking questions, Miller just signed the agreement. Consequently, the court refused to find a “lack of meaningful choice” or “unfairness in the bargaining process” based upon uncorroborated understandings or beliefs about the agreement when Miller took no steps to confirm such understandings or beliefs.
Furthermore, despite Miller’s arguments regarding the parties’ relative negotiating positions and her inability to understand complex legal terms in the ADR Agreement, the court determined that there was actually no indication that the parties’ bargaining positions were in any way uneven. The court found that Miller desired to be employed by EQT and that EQT desired to employ her. Additionally, the court found no evidence that EQT forced Miller to sign the ADR Agreement as a condition of her employment, nor did the court find any evidence that Miller challenged, questioned, or attempted to negotiate the ADR Agreement or the ADR Program. The court then refused to find that the parties’ bargaining positions were unequal based simply upon the comparative sophistication of the parties and Miller’s conclusory assertions.
Ultimately, the court concluded (1) that the ADR Agreement and the ADR Program are enforceable and (2) that the WPCA is preempted to the extent Miller attempted to apply it for the purpose of invalidating the otherwise enforceable ADR Agreement. Given those conclusions, EQT Corp. v. Miller, although unpublished, is a noteworthy opinion for companies, including energy companies such as EQT, that have ADR agreements and programs in place. If nothing else, the opinion provides yet another layer of useful guidance regarding the analyses a district court, at least in the Northern District of West Virginia, will likely undertake in a case where the enforceability of similar agreements and programs is at issue.