Landers v. Federal Deposit Insurance
402 S.C. 100
S.C.2013Background
- Landers and Bank entered into an employment agreement with a broad arbitration clause covering any controversy arising out of or relating to the contract; Landers alleged he was constructively terminated due to Arnold’s conduct; Landers asserted five causes of action (breach/constructive termination, slander, intentional infliction of emotional distress, illegal proxy solicitation, wrongful expulsion as director); trial court held arbitration only for breach of contract, denial for four other claims; court applies FAA and broad clause to all claims with significant relation to the contract; the appellate court reverses to compel arbitration of all five claims; the opinion discusses the framework for arbitrability and the “significant relationship” vs “touch matters” tests; the decision emphasizes policy favoring arbitration and that broad clauses often reach more than the literal contract terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether tort claims are within arbitration scope | Landers argues tort claims do not require contract reference | Appellants contend torts relate to employment relation | All five claims arbitrable under the broad clause |
| Whether corporate claims (proxy solicitation, wrongful expulsion) fall within arbitration | Landers asserts no contractual nexus | Appellants contend significant relationship to contract exists | Corporate claims arbitrable under the clause |
| Whether constructive termination claim is arbitrable | Landers ties termination to contract terms | Arbitration clause covers termination-related disputes | Breach/constructive termination arbitrable |
| What framework governs arbitrability (significant relationship vs touch matters) | N/A | N/A | Significant relationship and touch matters converge; arbitration favored; clause broad enough |
| Whether the court should stay nonarbitrable claims if any | N/A | N/A | Not necessary to resolve remaining issues; disposition dispositive |
Key Cases Cited
- Am. Recovery Corp. v. Computerized Thermal Imaging, Inc., 96 F.3d 88 (4th Cir. 1996) (arbitration favored when clause broad; scope to be interpreted liberally)
- Zabinski v. Bright Acres Assocs., 346 S.C. 580, 553 S.E.2d 110 (S.C. 2001) (broader clause smooths arbitrability; significant relationship emphasized)
- J.J. Ryan & Sons, Inc. v. Rhone Poulenc Textile, S.A., 863 F.2d 315 (4th Cir. 1988) (significant relationship test governs scope of broad arbitration clauses)
- Oldroyd v. Elmira Sav. Bank, FSB, 134 F.3d 72 (2d Cir. 1998) (retaliatory discharge linked to contract terms; within arbitration scope)
- Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967) (broad arbitration clauses reach disputes arising out of or related to contract)