Virginia Lawyers Weekly

The Supreme Court of Virginia again rejected by unpublished order the contention of Dillard’s Inc. that malicious prosecution complaints filed by two former employees had to be decided by arbitration.

This time, the decision in Dillard’s Inc. v. Judkins, Record No. 071302, was on the merits.

Dillard’s fired two employees it suspected of embezzlement and then filed criminal charges against them. After the charges were dismissed, the employees filed malicious prosecution suits against them in Hampton Circuit Court.

The trial judge rejected Dillard’s claim that the suits were barred by an agreement that required employees to resolve all employment disputes by arbitration, but the retailer filed an interlocutory appeal that the Supreme Court granted.

However, the court said the arbitration agreement applied only to termination, and the plaintiffs’ complaints were based on criminal prosecution after their employment ended. “If Dillard’s intended to require its employees to submit to arbitration all disputes arising out of the employment, it could have employed less restrictive language in the agreement,” the court said in remanding the case for further proceedings.

In June, the court dismissed the appeal as having been improvidently granted because Dillard’s had filed it after the trial judge ruled from the bench but before the final order was entered.

That violated Rule 5:9(a), the court said, but it withdrew the order after Appellate Defender S. Jane Chittom filed an amicus brief pointing out that public defenders have relied on a decision to the contrary by the Virginia Court of Appeals for more than 15 years.

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