In U.S. ex rel. Paige v. BAE Systems Technology Solutions & Services, Inc., No. 13-2237 (6th Cir. May 22, 2014) (click here for a copy of the decision), the Sixth Circuit recently rejected the enforceability of an arbitration clause with respect to statutory whistleblower or retaliation claims filed by employees because the arbitration clause was too narrowly drafted. The clause at issue covered “any dispute, which arises under the terms of this Agreement.” The Sixth Circuit reasoned that the plaintiff employees’ claims do not arise from the terms of the employment agreement. Instead, the claims were purely statutory and existed independently of the employment agreement. Hence, the claims were not subject to the narrowly-drafted arbitration clause. The Sixth Circuit suggested that perhaps if the arbitration clause specifically referred to such statutory claims, or perhaps if the arbitration clause more broadly covered any claims “related to” the agreement, the arbitration clause would have been enforceable with respect to these statutory claims.
Based on the history of the FAA’s drafting and enactment, I do not believe the FAA was ever intended to cover statutory claims. However, the Supreme Court rejected this view long ago in cases like Mitsubishi Motors. Interestingly, if the Sixth Circuit would apply its textual analysis from this Paige case to the language of the FAA, instead of just the language of a contract, the court could conclude that the FAA, because of its narrow language, was never intended to cover statutory claims. I believe the FAA was originally intended in 1925 to cover only contractual claims between merchants. For a more detailed explanation of this textual argument regarding the FAA and statutory claims, please see a very thoughtful, well-reasoned article by Professor Stephen E. Friedman, The Lost Controversy Limitation of the Federal Arbitration Act, 46 U. Rich. L. Rev. 1005 (2012).