Legal Question in Workers Comp in Alabama

The answer is up in the air somewhat. I do not think you can contract out of a mandatory statute. If I can post it, i will below, but a Circuit Judge in Jefferson County recently issued the following Order (e-mail me, and I will send you the official copy - [email protected]).

AlaFile E-Notice

To: NOMBERG DAVID PHILIP

[email protected]

01-CV-2010-902641.00

Judge: ELISABETH A FRENCH

NOTICE OF ELECTRONIC FILING

IN THE CIRCUIT COURT OF JEFFERSON COUNTY, ALABAMA

The following matter was FILED on 3/23/2011 1:01:25 PM

BILAL BARAKA v. AUTOMATION PERSONNEL SERVICES, INC. ET AL

01-CV-2010-902641.00

Notice Date: 3/23/2011 1:01:25 PM

ANNE-MARIE ADAMS

CIRCUIT COURT CLERK

JEFFERSON COUNTY, ALABAMA

JEFFERSON COUNTY, ALABAMA

BIRMINGHAM, AL 35203

205-325-5355

[email protected]

IN THE CIRCUIT COURT OF JEFFERSON COUNTY, ALABAMA

CIVIL DIVISION

BILAL BARAKA, )

)

Plaintiff, )

)

v. ) CASE NO. CV 10-902641

)

AUTOMATION PERSONNEL )

SERVICES, INC.; BUFFALO ROCK )

COMPANY, )

)

Defendants. )

ORDER

The motion before the Court is a Motion to Compel Arbitration and Stay Instant

Proceedings, filed by the Defendant, Automation Personnel Services, Inc. (�APS�) and a

Motion to Compel Discovery Responses, filed by the Plaintiff, Bilal Baraka (�Baraka�).

The Plaintiff seeks workers� compensation benefits arising out of his employment with

APS. Generally, issues involving workers� compensation are decided by the Alabama

Workers� Compensation Act (the �Act�). APS asserts that any dispute involving

employment would be governed by an arbitration agreement, which was executed by

both parties.

Section 25-5-81(a)(1) of the Alabama Workers� Compensation Act sets forth the

procedure for handling disputed workers� compensation claims and the commencement

of actions, such as this one.

In a case of a dispute between employer and employee� with respect to the right

to compensation under this article and Article 2 of this chapter,� either party

may submit the controversy to the circuit court of the county which would have

jurisdiction of a civil action in tort between the parties. The controversy shall be

heard and determined by the judge who would hear and determine a civil action

between the same parties arising out of tort,� The decision of the judge hearing

the same shall be conclusive and binding between the parties, subject to the right

of appeal provided for in this article. � 25-5-81(a)(1).

By law, these cases are to be handled in Circuit Court by a Judge.

ELECTRONICALLY FILED

3/23/2011 1:01 PM

CV-2010-902641.00

CIRCUIT COURT OF

JEFFERSON COUNTY, ALABAMA

ANNE-MARIE ADAMS, CLERK

APS cited Ryan�s Family Steakhouse, Inc. v. Kilpatric, 966 So.2d 273

(Ala.Civ.App. 2006), in support of their position to compel arbitration. In Kilpatric, the

Court of Civil Appeals reversed the trial court�s decision to deny Ryan�s motion to

compel arbitration on the grounds of waiver and unconscionability. Kilpatric was an

employee of Ryan�s. When Kilpatric applied for employment, she signed an arbitration

agreement with Employment Dispute Services, Inc. (�EDSI�). The arbitration agreement

stated that Ryan�s and EDSI had entered into a contract

�to arbitrate and resolve any and all employment-related disputes between

[Ryan�s] employees (and job applicants) and [Ryan�s] under EDSI�s program.�

Kilpatric at 277.

The arbitration agreement further states,

� employment-related disputes between [Kilpatric] and [Ryan�s] shall be resolved

through arbitration.�

Another pertinent part contains,

�Any employment-related dispute between [Ryan�s], [Kilpatric] and/or other

signatories which would otherwise be brought in state or federal court will be

brought ONLY in the EDSI arbitration forum and under EDSI rules and

procedures.� Kilpatric at 282.

The agreement also stipulated that Ryan�s was third-party beneficiary of the agreement

between Kilpatric and EDSI and that Kilpatric was a third-party beneficiary of the

contract between Ryan�s and EDSI. Id. Issues presented to the Appellate Court in

Kilpatric were (1) whether the arbitration agreement is valid; (2) whether the arbitration

agreement calls for the arbitration of workers� compensation claims; (3) whether Ryan�s

waived its right to compel arbitration; (4) whether the arbitration agreement is

unconscionable; and (5) whether general public- policy arguments against the arbitration

of workers� compensation claims foreclose Ryan�s from compelling the arbitration of

Kilpatric�s workers� compensation claim. Id at 278. The Kilpatric court ruled that the

arbitration agreement at issue was enforceable.

In Ward v. Check Into Cash of Alabama, LLC., 981 So.2d 434 (Ala.Civ.App

2007), the Court of Civil Appeals held that: (1) terms of Workers� Compensation Act

would be read into employment contract; and (2) as a matter of first impression, in

resolving ambiguity in employment contract, implied agreement that specifically

addressed worker�s compensation would govern over general provision addressing all

employment-related disputes, and, thus, workers� compensation claim was not subject to

arbitration. This was a reversal of the trial court�s order to compel arbitration. The

pertinent part of the arbitration agreement at issue, states as follows:

Employee agrees that any employment-related dispute, controversy or claim that

employee may have with the Company�shall be resolved only through

arbitration and not through litigation in federal, state or local court.

Employee agrees that he/she cannot bring any claim or lawsuit in federal, state or

local court involving�employment�with the Company including, but in no way

limited to,�statutory�claims under�state�law.

On appeal, Ward raised four issues for the Court to consider. The fourth issue,

however, was the main focus of the Court of Civil Appeals opinion. This concerned the

ambiguity of the arbitration agreement. Ward contends that the arbitration agreement is

ambiguous as to its scope and the ambiguity should be resolved against arbitration. Ward

at 436. The rationale of Ward is that there is an implied agreement attached to the

Alabama Workers� Compensation Act. The Act generally presumes that every employer

and employee has accepted the provisions the Act. Ward at 437. This presumption,

however, may be overcome by evidence indicating that the employer has elected not to

accept coverage by notifying its employees. Id. In other words, �by entering into an

employment contract, the parties presumably consent to the terms of the Act unless the

employer specifically opts out of the coverage.� Ward at 437. The Court in Ward went

on to conclude that, �because the record contains no evidence indicating that the

employer in this case has opted out of coverage under the Act, the terms of the Act must

be read into the employment contract between the parties.� Ward at 438. The Alabama

Court of Appeals ultimately ruled that Ward did not have to arbitrate her workers�

compensation case because the contractual nature of the Workers� Compensation Act is

part of every employment relationship, such that the terms of the Act are contractually

part of the employment relationship.

The cases of Ward and Kilpatric differ in that the issue of ambiguity was not

raised in the Kilpatric case. Ambiguity was considered for the first time in Ward. The

Plaintiff in this case, Baraka, argues that the arbitration agreement he entered into with

APS is very similar to the arbitration agreement discussed in Ward. Baraka also argues

that like the arbitration agreement in Ward, an ambiguity has been created in this case.

The applicable paragraphs of the arbitration agreement between APS and Baraka read as

follows:

This Agreement is between Employer (Automation Personnel Services, Inc.) and

Employee�. In the event that disputes arise between Employer and Employee,

Employer and Employee agree that arbitration will be the exclusive forum for

resolving disputes between them, including statutory claims and all disputes

arising out of the employment relationship and termination of such relationship.

The Employer and Employee expressly waive their entitlement, if any, to have

controversies between them decided by a court or jury.

Agree to Arbitrate All Employment Disputes�. Any dispute arising out of the

Employee�s employment with Employer, including termination of employment

and statutory claims, will be submitted to binding Arbitration�.

Arbitrable Claims. The parties understand, except as otherwise provided by law,

this Agreement applies to all claims, including, but by no means limited to,

claims�based on federal, state or local ordinance, statute, regulation,

constitutional provision, or any other law.

The language of the arbitration agreement between APS and Baraka is in line with the

language in Ward.

WHEREFORE, it is ORDERED, ADJUDGED, and DECREED:

1) That the Defendant�s Motion to Compel Arbitration and Stay Proceedings is

hereby Denied.

2) That the Plaintiff�s Motion to Compel Discovery Responses is hereby

GRANTED. Defendant has fourteen (14) days from the entry of this order to

respond.

Done this 23rd day of March 2011.

/s/ Elisabeth A. French

ELISABETH A. FRENCH

CIRCUIT JUDGE

EAF/jw

cc: All parties