Hill v. Wackenhut Services International
865 F. Supp. 2d 84
D.D.C.2012Background
- Plaintiffs were US contractors’ firefighters in Iraq and Afghanistan claiming in-country and other employment benefits were denied.
- Defendants include Wackenhut entities and Halliburton/Kellogg Brown & Root associated firms with control over Wackenhut.
- Plaintiffs signed annual employment contracts containing a dispute resolution and arbitration clause.
- Defendants submitted a standard-form agreement and excerpts showing an arbitration clause; Plaintiffs challenged its existence and validity.
- Court applies Buckeye framework to decide arbitrability and whether the clause is severable from the contract as a whole.
- Court finds arbitration clause valid, applies Florida law defenses to the clause, and holds the claims fall within arbitration scope.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a valid arbitration agreement | Hill/others did not sign the exemplar; dispute over whether contract exists | Three signed agreements with arbitration provision prove existence | Arbitration agreement proven and enforceable |
| Who decides arbitrability | Court should decide all challenges to arbitration clause | Arbitrator should decide challenges to the underlying agreement | Court decides threshold arbitrability issues; arbitrator handles contract defenses when applicable |
| Contract defenses to arbitration clause (unconscionability) | Arbitration clause is unconscionable (procedural/substantive) | Arbitrator should decide contract defenses; Florida law governs | Court finds no genuine issue of substantive unconscionability; not a basis to defeat arbitration |
| Meeting of minds and duress | No meeting of minds; signing under duress | Signing occurred; duress insufficient to nullify clause | No material dispute; arbitration clause valid and severable from contract |
| Scope of arbitration clause | Counts may not all be within scope | Clause broadly covers any claims related to employment | All twelve counts fall within the scope; arbitration is required |
Key Cases Cited
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (Supreme Court 2006) (establishes framework for who decides arbitrability (court vs arbitrator))
- Bridge Fund Capital Corp. v. Fastbucks Franchise Corp., 622 F.3d 996 (9th Cir. 2010) (what matters is the substantive basis of the challenge; court decides arbitrability if clause is challenged)
- Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (Supreme Court 1967) (separable arbitration clause; threshold to adjudicate contract vs clause)
- Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct. 2772 (Supreme Court 2010) (arbitration clause validity governed by federal law; severability principles)
- Volt Info. Sciences, Inc. v. Bd. of Trustees Leland Stanford Junior Univ., 489 U.S. 468 (Supreme Court 1989) (federal policy favoring arbitration and interpretive guidance)
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (Supreme Court 1991) (FAA policy and enforceability of arbitration agreements in employment)