324 Ga. App. 172
Ga. Ct. App.2013Background
- Davidson worked as a broker/dealer for A.G. Edwards from 1994, serving clients in multiple states, and signed an employment agreement containing an arbitration clause covering disputes "in respect to this agreement or your employment."
- Davidson retired in April 2007 and shortly thereafter A.G. Edwards sent letters to his former clients discouraging them from transferring accounts to him.
- Davidson sued in state court for defamation (intentional tort) based on the post-termination letters.
- A.G. Edwards moved to compel arbitration and to stay proceedings; the trial court granted the motion and denied Davidson’s request to reopen discovery.
- Davidson appealed, arguing (1) the arbitration clause was not validly executed under OCGA § 9-9-2(c)(9), (2) his personal-injury claim was exempt under OCGA § 9-9-2(c)(10), (3) the clause does not cover post-employment torts and the FAA does not apply because the claim did not involve interstate commerce, and (4) the trial court erred in denying reopening discovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of arbitration clause (OCGA § 9-9-2(c)(9) signature/initial requirement) | Davidson: Clause unenforceable because he did not separately initial it as state law requires. | A.G. Edwards: FAA preempts Georgia’s signature/initial requirement, making clause enforceable. | FAA preempts the state initial/signature rule; arbitral clause enforceable. |
| Exemption for personal injury (OCGA § 9-9-2(c)(10)) | Davidson: His defamation claim is a personal-injury claim exempt from arbitration. | A.G. Edwards: FAA preempts the state exemption; moreover defamation is not a "personal bodily injury" as the statute narrowly reads. | FAA preempts the state exemption; defamation claim not excluded and is arbitrable. |
| Coverage of post-termination intentional tort (scope of arbitration clause) | Davidson: Clause does not extend to future tort claims arising after employment termination. | A.G. Edwards: Clause covers disputes "in respect to this agreement or your employment," so post-termination claims touching employment are covered. | Court applies federal precedent: post-termination defamation touching employment contract is arbitrable. |
| Interstate commerce / FAA applicability and discovery denial | Davidson: Defamation is not interstate commerce, so FAA should not govern; trial court improperly denied reopening discovery. | A.G. Edwards: Employment involved multistate clients; FAA governs and stay of discovery was proper. | Court need not decide interstate-commerce point given scope ruling; denial to reopen discovery was proper after compelling arbitration. |
Key Cases Cited
- Brown v. Coleman Co., 220 F.3d 1180 (10th Cir. 2000) (post-termination defamation that "touches" the employment agreement is arbitrable)
- Morgan v. Smith Barney, Harris Upham & Co., 729 F.2d 1163 (8th Cir. 1984) (ordering arbitration of post-employment defamatory statements tied to employment)
- Aspero v. Shearson Am. Express, 768 F.2d 106 (6th Cir. 1985) (post-employment tort claims ordered to arbitration where statements related to employment)
- Langfitt v. Jackson, 284 Ga. App. 628 (Ga. Ct. App.) (FAA preempts Georgia signature/initial requirement)
- Primerica Fin. Servs. v. Wise, 217 Ga. App. 36 (Ga. Ct. App.) (federal policy favoring enforcement of arbitration agreements preempts conflicting state rules)
- Volt Info. Scis. v. Bd. of Trustees, 489 U.S. 468 (U.S. Supreme Court) (state law that conflicts with FAA enforcement objectives may be preempted)