Gary Klein v. Nabors Drilling USA, L.P.
2013 U.S. App. LEXIS 3948
| 5th Cir. | 2013Background
- Klein began working for Nabors in 2008 as a floor hand and signed an Employee Acknowledgment Form to participate in the Nabors Dispute Resolution Program.
- The Acknowledgment states the Program is not a contract of employment and does not restrict rights, but requires adherence to a process that may include mediation and/or arbitration.
- The Program’s Rules provide exclusive, final resolution of disputes and that disputes shall be arbitrated if not resolved by mediation or nonbinding means.
- Nabors terminated Klein and he sued in the Western District of Louisiana for Age Discrimination in Employment Act and Louisiana discrimination claims.
- The district court declined to compel arbitration, deeming the language permissive and not showing an exclusive arbitration obligation.
- Nabors appeals, arguing Klein agreed to arbitrate through the Program.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Valid agreement to arbitrate exist? | Klein argues the language is ambiguous and may allow judicial forum. | Nabors contends the Program creates an exclusive arbitration obligation. | Agreement to arbitrate exists; arbitration is required. |
| Dispute falls within scope of arbitration? | Age-discrimination claim fits within the Program’s definition of disputes. | Dispute is within the exclusive arbitration mechanism of the Program. | Dispute falls within scope; must be arbitrated. |
Key Cases Cited
- First Options of Chi., Inc. v. Kaplan, 514 U.S. 938 (Supreme Court (1995)) (arbitration is a matter of contract; procedural questions depend on contract)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (Supreme Court (1985)) (arbitration does not waive substantive statutory rights)
- Garrett v. Circuit City Stores, Inc., 449 F.3d 672 (5th Cir. 2006) (initial inquiry whether there is a valid agreement to arbitrate under FAA)
- Will-Drill Res., Inc. v. Samson Res. Co., 352 F.3d 211 (5th Cir. 2003) (step-two determination uses federal policy to resolve ambiguities in favor of arbitration)
- Sherer v. Green Tree Servicing LLC, 548 F.3d 379 (5th Cir. 2008) (contract principles govern whether disputes fall within arbitration)
- Jolley v. Welch, 904 F.2d 988 (5th Cir. 1990) (two-step framework to determine arbitration agreement and scope)
- Fleetwood Enters., Inc. v. Gaskamp, 280 F.3d 1069 (5th Cir. 2002) (Louisiana contract principles govern interpretation of arbitration agreements)
- Prejean v. Guillory, 38 So.3d 274 (La. 2010) (Louisiana law on contract interpretation and intent)