The Sixth Circuit Court of Appeals in Cincinnati has issued a remarkable non-published decision reinstating retaliation claims by Alan and Kimberly Alonso against Huron Valley Ambulance (HVA) of Ann Arbor, Michigan.  The decision is remarkable no so much for what it holds as for its break from the prevailing judicial trend favoring arbitration. The Court’s precise holding is that the Alonsos did not make a "knowing and intelligent waiver" of their right to go to court when they signed HVA’s form employment agreement incorporating a "grievance review board" that was based on documents HVA did not provide until weeks after the Alonsos started work.

HVA hired the Alonsos in July 2005. Before hiring them, HVA asked them to fill out an employment application.  The last page contained a notice of an internal grievance procedure for employment-related disputes, and a six-month limitations period for any employment-related claims. Both Alonsos signed it. Only after they were hired did the Alonsos receive HVA’s policy manual that provided the details of the grievance process. HVA then had them each sign a receipt for the policy manual.

Two years later, Alan Alonso joined the Army National Guard. Although HVA approved his request for leave to attend training, it checked with the National Guard and learned that he did not attend one of the trainings. Alan also filed a health and safety complaint with the Michigan Occupational Safety and Health Administration (“MIOSHA”). When Alan suffered a medical emergency while taking prescribed medication, HVA fired him, allegedly for misrepresenting his training schedule and for working while medicated. HVA’s grievance review board upheld the termination. Meanwhile, Kimberly Alonso asked for leave under the Family and Medical Leave Act (FMLA) for her pregnancy. After she returned to work, she claimed she suffered a hostile work environment, and retaliation for filing a complaint with the Equal Employment Opportunity Commission (EEOC). Alan and Kimberly filed suit together claiming that Alan’s termination violated the Uniformed Services Employment and Reemployment Rights Act (“USERRA”), 38 U.S.C. § 4323, and related Michigan laws, and that Kimberly suffered retaliation in violation of FMLA.

From the text of the opinion, I think the Court was moved by the fundamental unfairness of HVA’s grievance review board policy. It provides that the final step is an arbitration before a board of five people.  The company picks two, and the employee picks two, but one of the employee’s two selections must be a manager or supervisor at HVA. The company and the employee would pick the fifth member together, but the policy already guarantees that three of the five members were HVA managers.

Still, the decision is remarkable for recognizing a limit on how far companies can push their employees to give up their rights to go to court.  Too often, whistleblower claims are lost because crafty employers have required all their employees to sign agreements giving up their right to sue in exchange for some management-selected arbitration process. We need a national law to forbid such clauses, such as the Arbitration Fairness Act (AFA), currently pending as HR 1020 and S 931. It is curious, though, that the Court chose to make its opinion unpublished.  Without publication, it will be harder for employees to use it as authority in other cases.

HVA’s attorney told the National Law Journal that HVA is prepared to contest the Alonso’s claims on the merits, and that there was case law saying waivers were valid. The case is Alonso v. Huron Valley Ambulance Inc., 2010 WL 1644233 (6th Cir. April 26, 2010) (unpublished). Congratulations to attorney Heidi Sharp of Clinton, Michigan, for achieving this precedent-setting legal victory.