Nelson v. Carl Black Chevrolet of Nashville, LLC, 3:17-cv-00687

Background

Nelson was hired by Carl Black in January 2016 and signed an Agreement to Arbitrate Claims covering a broad range of employment disputes; the Agreement stated it "shall survive the termination of the Employee’s employment" and could be revoked only by a signed written document.
Nelson resigned May 2, 2016 and returned on May 14, 2016 as General Sales Manager with higher pay and duties; he did not re-sign or receive a new arbitration agreement upon rehire.
Nelson was terminated July 30, 2016 and sued in federal court asserting Title VII, § 1981, MAP-21 whistleblower, and Tennessee Human Rights Act claims.
Carl Black moved to stay and compel arbitration under the Federal Arbitration Act, asserting Nelson’s claims fall within the arbitration agreement.
Nelson opposed, arguing (1) Carl Black waived arbitration by litigation conduct, (2) the arbitration agreement lacks mutual assent as to his second employment period, and (3) the MAP-21 statutory provision requires a jury trial in district court and is thus non-arbitrable.
The court denied waiver, found the original arbitration agreement enforceable as to Nelson’s claims (noting the survival clause and consideration), and concluded MAP-21 does not preclude arbitration; it stayed the case pending arbitration.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Waiver of arbitration by litigation conduct	Nelson: Carl Black failed to raise arbitration in its answer and thus waived the right	Carl Black: promptly notified opposing counsel, raised arbitration at initial case management, and filed the stay motion soon after	No waiver — delay was short and conduct not inconsistent with preserving arbitration rights
Enforceability (mutual assent / consideration)	Nelson: Agreement not enforceable for second employment period because he did not re-sign or discuss arbitration on rehiring	Carl Black: Agreement contains survival clause, continued employment constitutes consideration and acceptance	Enforceable — survival clause and continued employment support arbitration; arbitrator may revisit applicability to second term
Scope: Are Nelson's claims (including MAP-21 whistleblower) covered?	Nelson: MAP-21 grants a right to de novo jury trial in district court, so the claim is non-arbitrable	Carl Black: Agreement broadly covers statutory claims including whistleblowing and delegates arbitrability questions to the arbitrator	MAP-21 does not clearly preclude arbitration; the arbitration clause is broad and covers whistleblower/retaliation claims; arbitrability delegation is valid
Who decides gateway arbitrability questions	Nelson: statutory text and jurisdictional language require court adjudication	Carl Black: contract delegates arbitrability and enforceability questions to arbitrator	Court enforces delegation provision; arbitrator should decide gateway issues (subject to later judicial review if necessary)

Key Cases Cited

Huffman v. Hilltop Cos., LLC, 747 F.3d 391 (6th Cir. 2014) (strong federal policy favoring arbitration)
Glazer v. Lehman Bros., 394 F.3d 444 (6th Cir. 2005) (arbitration agreements may be invalidated for general contract defenses)
Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (ambiguities are resolved in favor of arbitration)
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) (arbitration agreements are enforced like other contracts)
Johnson Assoc. Corp. v. HL Operating Corp., 680 F.3d 713 (6th Cir. 2012) (failure to plead arbitration can support waiver when coupled with inconsistent litigation conduct and prejudice)
Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010) (party must specifically challenge delegation clause to avoid enforcement)
Masco Corp. v. Zurich Am. Ins. Co., 382 F.3d 624 (6th Cir. 2004) (court must determine existence and scope of agreement before compelling arbitration)
Shearson/American Express Inc. v. McMahon, 482 U.S. 220 (1987) (statutory claims can be subject to arbitration absent clear congressional intent otherwise)
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (statutory employment claims are arbitrable if arbitration permits effective vindication of rights)
AT & T Techs., Inc. v. Communication Workers of America, 475 U.S. 643 (1986) (broad arbitration clauses presumptively cover disputes unless expressly excluded)