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Store’s Arbitration Agreement Does Not Violate OWBPA

Dillard’s department store can enforce an arbitration agreement against four employees alleging termination in violation of the Age Discrimination in Employment Act, as the parties’ pre-dispute arbitration agreement does not violate the Older Workers Benefit Protection Act, says a Richmond U.S. District Court.

Plaintiffs argue the OWBPA precludes pre-dispute arbitration agreements covering ADEA claims. Specifically, the OWBPA was adopted by stop employers from coercing or misleading older employees into signing unfair separation agreements. The OWBPA requires agreements to be in plain English and slows the termination process. The statute says an employee may not waive any right or claim under the ADEA unless the waiver is knowing and voluntary.

The OWBPA sets minimum standards for a “knowing and voluntary” waiver of rights. The waiver must be written in plain English, must state the specific rights given up, must advise an employee to consult an attorney, must give an individual 21 days to consider the agreement and must allow seven days to rescind it. The employee must receive consideration for the waiver and cannot waive claims that may arise in the future.

The arbitration agreements in this case do not meet the standards of the OWBPA. Employees are not given 21 days to consider the waiver, are not given seven days to rescind and are not expressly told to consult an attorney.

The Courts of Appeals have followed Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991), which held the ability to have a trial in court is not a substantive right. To the extent Gilmer left any doubts about the validity of pre-dispute arbitration agreements, the doubts were resolved in 14 Penn Plaza LLC v. Pyett, 129 S.Ct. 1456 (2009). This court therefore holds the arbitration agreement here does not violate the OWBPA.

The arbitration agreement here also meets the 4th Circuit’s requirements for enforcement. The parties clearly consented to arbitration, even though they claim they did not read the agreements. The language of the agreement is clear enough so that any layman would know he could not sue Dillard’s in court. Congress did not intend to preclude arbitration in the circumstances of this case. And arbitration provides an effective means to resolve the dispute.

The parties are directed to submit this matter to arbitration. Since all the issues in this case are subject to arbitration, the case will be dismissed with prejudice.

Bennett v. Dillard’s Inc. (Gibney) No. 3:10cv39, March 10, 2011; USDC at Richmond, Va. VLW 011-3-128, 10 pp.

VLW 011-3-128

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