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Litigation News

Litigation News | 2021

Federal Court Holds Whistleblower Must Arbitrate

Andrew Robertson


  • Statutory right to jury trial does not override Federal Arbitration Act.
  • The court reasoned that the language of a statute protects only the “rights” and “remedies” provided by the statute, not the right to “judicial enforcement.” 
  • Section leaders note the opinion raises serious public policy concerns.
Federal Court Holds Whistleblower Must Arbitrate
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A federal court of appeals has held that a statutory right to a jury trial does not preclude the enforcement of an arbitration agreement. The appeals court reasoned that the language of a statute protects only the “rights” and “remedies” provided by the statute, not the right to “judicial enforcement.” ABA Litigation Section leaders agree that the court of appeals followed the law; however, the opinion raises serious public policy concerns.

Former Employee Files Whistleblower Complaint

The conflict in Robertson v. Intratek Computers, Inc. began after the defendant employer fired its employee, the plaintiff. Not long before his firing, the plaintiff filed a whistleblower complaint with the Office of the Inspector General for the Department of Veterans Affairs (VA). The plaintiff alleged that the employer bribed VA officials to secure “lucrative government contracts” and that a VA employee accepted the bribes.

During the whistleblower investigation, the plaintiff filed suit in the U.S. District Court for the Western District of Texas against his former employer and the VA employee, claiming that the employer fired him due to his whistleblower complaint in violation of 41 U.S.C. § 4712. Section 4712 allows either party to request a jury trial and includes an anti-waiver provision. The plaintiff requested a jury trial. However, the district court ordered the claims to be resolved through arbitration because of an arbitration agreement signed between the employer and the plaintiff.

Fifth Circuit Addresses a Matter of First Impression

On appeal, the U.S. Court of Appeals for the Fifth Circuit held that section 4712 did not allow the plaintiff to escape the arbitration agreement that he signed. However, the arbitration agreement applied only to the plaintiff’s claims against the employer and not his claims against the VA employee because the VA employee was not a signatory of the arbitration agreement.

Relying on the U.S. Supreme Court’s decision in Compu Credit v. Greenwood, the Fifth Circuit noted that under the Federal Arbitration Act (FAA), courts are obligated to enforce arbitration agreements according to their terms, unless the FAA has been “overridden by a contrary congressional command” that “preclude[s] a waiver of a judicial forum” for the claims at issue.

The Fifth Circuit held that section 4712 creates whistleblower rights that protect employees from retaliation by an employer regarding an employee’s “blowing the whistle on certain government-contracting abuses.” The privilege to request a jury trial included in section 4712, however, is not a “right” or “remedy” created by the statute, but instead, only a means to vindicate a whistleblower’s statutory rights.

The court reasoned that section 4712’s anti-waiver provision applied only to the statutory right to be free from retaliation for blowing the whistle. It did not preclude the waiver of litigating section 4712 disputes in a judicial forum. The court reasoned that Congress must “speak with great clarity when overriding the FAA.” The statute’s granting of a jury trial at the request of either party was not sufficient to establish a contrary congressional command overriding the FAA.

The Fifth Circuit Got It Right Under Compu Credit…but the Case Is Distinguishable

Litigation Section leaders agree that the Fifth Circuit followed the law, but some believe that there is room to distinguish this case from Compu Credit. “The Supreme Court’s recent case law on arbitration has been extremely protective of arbitration agreements, and without a stronger statutory protection of jury trial rights, I think that the court had to uphold the arbitration agreement,” concludes Cassandra B. Robertson, Cleveland, OH, chair of the Appellate Subcommittee of the Section’s Civil Rights Litigation Committee.

“One distinguishing factor that the Fifth Circuit could have latched on to was the language of section 4712’s anti-waiver clause. The language of the Compu Credit case anti-waiver clause was not as robust as this one, and it did not specifically reference prospective waivers,” says Dustin Crawford, Atlanta, GA, chair of the Employment Subcommittee of the Section’s Civil Rights Litigation Committee. “It is black letter law that one cannot prospectively waive their right to bring a claim under federal law,” Crawford observes. If section 4712’s anti-waiver provision applied only to a waiver of the substantive right created by the statute—despite the right to request a jury trial included in the statute—the anti-waiver provision would be “superfluous,” according to Crawford.

Public Has an Interest in Disclosure of Misconduct

While the court may have reached the correct legal decision, Section leaders note that the Robertson opinion highlights serious public policy concerns. “This case is a great example of why there would be a strong public interest in disclosure—the underlying allegations that gave rise to the whistleblower allegation are about improper influence in government contracting. If those allegations are true, that’s a waste of taxpayer dollars and the public would have a strong interest in both the disclosure of that misconduct and in remedying it,” explains Robertson.

But, as recent precedent suggests, Congress may have its hands tied with drafting statutes that clearly override the FAA and provide for such disclosure. “If using the words ‘right to sue’ does not create a right to sue, it’s hard to imagine what Congress would have to do to enact an anti-waiver provision that preserves the right to a jury trial,” Crawford poses.