Rodney Bodine v. Cook's Pest Control, Inc.
2016 U.S. App. LEXIS 13812
| 11th Cir. | 2016Background
- Rodney Bodine worked for Cook’s Pest Control while serving in the Army Reserve; he alleges military-service discrimination and retaliation, then sued under USERRA and state law.
- Cook’s moved to dismiss or compel arbitration under an employment Contract containing an ADR clause, a $150 cap on employee arbitration costs with possible reallocation by the arbitrator (fee term), and a six-month limitations period (statute-of-limitations term).
- Both unlawful terms were conceded by defendants to conflict with USERRA provisions prohibiting fees and limiting statutes of limitations for USERRA claims. Defendants relied on the Contract’s severability clause to excise the offending terms and enforce the rest under the FAA.
- Bodine argued USERRA’s non-waiver provision, 38 U.S.C. § 4302(b), supersedes any contract or agreement that "reduces, limits, or eliminates" USERRA rights and thus invalidates the arbitration agreement as a whole.
- The district court severed the offending terms under state-law severability principles (Alabama law) and compelled arbitration; the court did not resolve the scope of § 4302(b) relative to the FAA.
- On interlocutory appeal, the Eleventh Circuit (majority) affirmed compelling arbitration, holding § 4302(b) does not automatically void an entire agreement and can be harmonized with the FAA; it reserved to the arbitrator the ultimate determination of the arbitration clause’s terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of delegation clause (who decides arbitrability) | Delegation clause (if present) should not control because it wasn’t properly asserted; court should decide enforceability. | Defendants suggested arbitration should resolve arbitrability (delegation), but did not consistently raise it. | Court: defendants waived delegation by failing to timely and consistently invoke it; judicial determination of enforceability proper. |
| Whether USERRA § 4302(b) automatically voids an agreement containing USERRA-offending terms (conflict with FAA) | Bodine: § 4302(b) "supersedes any ... contract or agreement" that reduces USERRA rights, so any agreement with offending terms is invalid in whole. | Cook’s: § 4302(b) does not conflict with the FAA; severability allows excision of unlawful terms and enforcement of remainder. | Court: § 4302(b) does not automatically invalidate an entire agreement; it replaces offending terms with USERRA protections and can be harmonized with the FAA and state-law severability. |
| Who decides validity of specific arbitration terms (court vs arbitrator) | Court should excise unlawful terms and compel arbitration. | Defendants argued severability and asked court to enforce the remainder; contractual clause delegated validity questions to arbitrator (but waiver issue). | Court affirmed compelling arbitration but held the arbitrator (not the district court) must decide validity of arbitration-agreement terms on the merits; court erred to perform the "surgery" itself. |
Key Cases Cited
- Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (federal policy favors enforcing arbitration agreements)
- Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010) (delegation clauses can commit arbitrability to arbitrators if clearly and unmistakably delegated)
- American Express Co. v. Italian Colors Rest., 570 U.S. 228 (2013) (FAA requires enforcement of arbitration agreements even for federal statutory claims unless Congress says otherwise)
- Anders v. Hometown Mortg. Servs., 346 F.3d 1024 (11th Cir. 2003) (FAA places arbitration agreements on equal footing with other contracts; state contract law controls severability)
- Jackson v. Cintas Corp., 425 F.3d 1313 (11th Cir. 2005) (turn to state law to decide severability of arbitration provisions)
- Parnell v. CashCall, Inc., 804 F.3d 1142 (11th Cir. 2015) (when delegation clause is valid and unchallenged, courts leave arbitrability decisions to arbitrators)
- Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (2013) (courts may vacate arbitral awards only for limited statutory grounds; review of arbitrator's legal error is narrow)