Arbitration clauses are prevalent in employment agreements. Typically, however, an officer or manager of a company will not be a party to other employees’ employment agreements with the company, and oftentimes arbitration clauses in employment agreements do not expressly state that they apply to claims asserted against officers or managers, as opposed to claims between the parties to the agreement (i.e., claims between the company and the signatory employee). Workplace sexual harassment or discrimination claims, however, often are asserted against senior employees personally, whether in conjunction with claims against the company or not.1 When an officer or manager is sued by an employee, he or she may seek the benefit of the company’s arbitration agreement with the employee. The case law under the Federal Arbitration Act is murky, however, concerning the extent to which a non-signatory senior employee may enforce the company’s arbitration clause for claims of sexual harassment or discrimination, particularly if the company is not a party to the suit.2
Arbitration is a creature of contract, and the general rule is that a party cannot be compelled to arbitrate a dispute he or she did not agree to arbitrate. Non-signatory senior employees who are sued for sexual harassment or discrimination, however, often seek to rely on an agency theory as an exception to this general rule. In the leading Second Circuit case in which the court held that non-signatory defendants could enforce an arbitration agreement, Roby v. Corporation of Lloyd’s, the court stated that “[c]ourts in this and other circuits consistently have held that employees or disclosed agents of an entity that is a party to an arbitration agreement are protected by that agreement.”3 But the case law is more nuanced than how it is painted by this broad statement.
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