Employment Law Daily No compelled arbitration of applicant’s FCRA claim without limited discovery on arbitrability
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Monday, September 12, 2016

No compelled arbitration of applicant’s FCRA claim without limited discovery on arbitrability

By Brandi O. Brown, J.D. A job applicant whose offer of employment with Johnson & Johnson, garnered through a staffing company, was denied on the basis of a background report that misreported criminal offenses will not yet be compelled to arbitration after a ruling by a federal district court in Pennsylvania. The would-be employee presented sufficient evidence that he did not intend to be bound by the arbitration agreement, including evidence that although his other documents were hand-signed the arbitration agreement he allegedly signed contained only a "typewritten version" of his name. Thus, limited discovery would be called for on the question of arbitrability. The defendant's motion was denied (Noye v. Johnson & Johnson, September 7, 2016, Kane, Y.). Job offer rescinded. The plaintiff applied for an operations supervisor position with Johnson & Johnson through Kelly Services, a staffing company. He later accepted the position. His application indicated that he had been convicted of a crime and, as requested by Kelly, he provided additional documentation. A few weeks later he was informed that he had cleared the staffing company's screening process. However, Johnson & Johnson had decided not to hire him because of a background report the staffing company purchased, which misreported four summary offenses as misdemeanors. Motion to compel. Thereafter, he filed a putative class action against both companies under the Fair Credit Report Act (FCRA). The staffing company filed a motion to compel arbitration. At issue was an arbitration agreement the staffing company claimed the employee had signed. Arbitrability facially established. In order to decide whether there was a valid arbitration agreement, the court first had to determine whether to apply Fed. R. Civ. P. 12(b)(6) or 56. Although the complaint did not refer to the purported arbitration agreement, the plaintiff did not dispute the authenticity of the agreement or challenge the argument that his claims were based on his employment application and, by extension, on the Arbitration Agreement." Therefore the court found that arbitrability was facially established. But further discovery needed. However, the employee had presented sufficient evidence warranting the application of the Rule 56 standard by questioning why the arbitration agreement was signed with a typewritten signature whereas the other documents were hand-signed and by alleging that he could not recall signing the agreement and could not verify his signature. He also noted that on the day following his alleged signature on the agreement, he actually executed an agreement agreeing to non-binding alternative dispute resolution. His was not a "mere naked assertion" and the evidence he submitted in response to the staffing company's motion was "not insubstantial." The court denied the motion, noting that the parties were entitled to discovery on the arbitrability question before the court would consider additional briefing on the matter.

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