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Florida Court Once Again Reinforces the Enforceability of Arbitration Agreements

Employees who sign mandatory arbitration agreements with their employers in connection with their employment must arbitrate all disputes with their employers according to Florida’s Fifth District Court of Appeal. In Hobby Lobby Stores, Inc. v. Alan Cole, the Court recently ruled that a former employee must arbitrate his wrongful termination claim pursuant to the arbitration agreement executed by the former employee as a condition of his employment.

Alan Cole, a former employee, sued Hobby Lobby, for wrongful termination alleging that Hobby Lobby improperly discharged Cole in retaliation for filing a worker’s compensation claim. Hobby Lobby moved to compel arbitration pursuant to the arbitration agreement Cole executed as a condition of his employment with Hobby Lobby.

The arbitration agreement stated that the parties agreed that any employment-related dispute Cole had with Hobby Lobby, including “disputes involving interference and/or retaliation relating to worker’s compensation,” would be submitted to and settled by final and binding arbitration.

The trial court denied Hobby Lobby’s motion to compel arbitration, concluding that the agreement was unconscionable. In deciding that the agreement was unconscionable, the trial court improperly relied on California law, which states that an arbitration agreement that is an essential part of a “take-it-or-leave it” employment condition, without more, is unconscionable.

However, in Florida, the “take-it-or-leave-it” nature of arbitration agreements is not dispositive. Instead, under Florida law, courts should consider the circumstances surrounding the execution of an arbitration agreement before concluding that it is procedurally unconscionable.

In looking at the totality of the circumstances, the Court found that there was no evidence to support a finding that the arbitration agreement was unconscionable. There was no evidence that Cole could not read the arbitration agreement, or that Hobby Lobby pressured, rushed or coerced Cole into signing it. The arbitration agreements terms were not hidden, minimized or buried in fine print and Cole did not assert that Hobby Lobby made any false representations or engaged in deceptive sales practices in order to induce Cole into signing the agreement. Accordingly, the Fifth District Court of Appeal, reversed the decision of the trial court and held that the arbitration agreement was binding and enforceable.

Further, because a finding of unconscionability requires a determination that the covenant is also substantively unconscionable, the Fifth District Court of Appeal held that there was nothing in the nature of an arbitration clause that rendered it substantively unconscionable. The Court stated that all arbitration agreements waive the parties right to a jury trial as a means of dispute resolution and, accordingly, this waiver cannot serve as the basis for a finding of substantive conscionability.

Contact Rosenthal Law Group to guide you through the process of contacting for and enforcing arbitration clauses.