Another interesting case from the Daily Labor Report:
Fifth Circuit 2-1 Affirms Lower Court Ruling
Some KBR Injury Claims Were Not Arbitrable
A former employee of Halliburton Co. who alleges that she was raped by other employees while working for the defense contractor in Iraq is not required by her employment contract to arbitrate claims she made against the employer for assault and battery and other torts, a divided U.S. Court of Appeals for the Fifth Circuit held Sept. 15 (Jones v. Halliburton Co. d/b/a KBR Kellogg Brown & Root, 5th Cir., No. 08-20380, 9/15/09).
Writing for the court, Judge Rhesa Hawkins Barksdale said that although the assault upon Jamie Leigh Jones took place in the Baghdad barracks room KBR provided for the employee, the clerical worker’s agreement to arbitrate claims “related to her employment” stopped “at Jones’ bedroom door.” Judge Carl E. Stewart joined in the majority opinion.
Judge Harold R. DeMoss Jr. dissented. Noting that Jones was required to stay in the barracks as a condition of her employment, the dissenting judge found that “the issue before this court is debatable and therefore should be resolved in favor of arbitration.”
The clause at issue said, “any and all claims that you might have against Employer related to your employment, including your termination, and any and all personal injury claims(s) arising in the workplace.”
I think the majority gets this one right — the “outer limits” of “related to” should not include intentional torts committed against an employee (traditionally intentional torts are outside of the scope of emplyoment anyway) simply because she was staying in company-owned barracks at the time.
I agree. Something as serious as rape shouldn’t have to go to arbitration simply because she was living in a company-owned building. It’s too serious an offense to be lumped in with wrongful termination or your boss making suggestive comments.
Exculpatory clauses relating to intentional conduct are usually invalid as a matter of law, and one way to read the arbitration clause in this case (which likely prohibits punitive damages) is as an exculpatory clause.
Domestic worker’s compensation regimes typically require compensation for harms caused by intentional torts at work on the job, whatever the cause (indeed, intentional torts rival automobile accidents as the most common claims in non-hazardous fields and in manufacturin industries), but allow suit against responsible third parties (although responsible employees is a split different call — domestically, criminal prosecution often makes this issue moot). Worker’s compensation claims against a company, and premises liability claims against a landlord in employee-rape case wouldn’t be unusual.
But, of course, very few on the job intentional tort cases involve allegations of intentional conduct by an employer to cover up a crime.
Given that a contrary result would add fire to a case that is already a cause celebre for ending employee-employer arbitration entirely, the 5th Circuit is hard pressed to be called anti-employer or anti-arbitration for making a distinction that is rarely likely to recur for most employees (and could create similar controversy when it comes up again with an employer like Halliburton one of the few that, due to the nature of its business in both military contracting and remote energy extraction work, routinely has employee housing).