St. Fleur v. WPI Cable Systems/Mutron

(Massachusetts Supreme Judicial Court)

• Supporting Employers' Arbitration Programs

This case before the Massachusetts Supreme Judicial Court raised the question whether an employee may be compelled to arbitrate employment discrimination claims pursuant to a pre-dispute, written arbitration agreement where the employee argues that she did not knowingly and voluntarily agree to waive her right to a jury trial.  A decision adopting St. Fleur’s proposed “knowing and voluntary” defense would have threatened the enforceability of arbitration policies adopted by employers throughout Massachusetts.  NELF filed an amicus brief arguing that the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq., (“FAA”) expressly limits courts to considering generally applicable contract defenses when determining the validity of arbitration agreements and preempts any state law that would impede their enforceability.  Therefore, NELF argued, St. Fleur’s proposed “knowing and voluntary waiver” standard is preempted.  NELF further argued that the FAA preempts the attempt by St. Fleur and the Superior Court to import into Massachusetts law a heightened standard of scrutiny that derives from language unique to the 1991 Civil Rights Act and applies at most to agreements to arbitrate certain federal employment discrimination claims.  In a unanimous decision issued on January 4, 2008, the Court agreed with NELF that the FAA permits invalidation of arbitration agreements only where the challenging party can prove a generally applicable contract defense under state law, such as fraud, duress, or unconscionability, and remanded the case to the Superior Court for an evidentiary hearing to determine whether St. Fleur was fraudulently induced to enter into the arbitration agreement.