South-Western Legal Studies in Business

Arbitration Agreement for All Employment Disputes Does Not Violate Public Policy
Description Illinois high court held that an employment arbitration agreement was valid and did not violate public policy. Since the agreement did not limit the remedies available to employees, it did not reduce their statutory rights to remedies that could be available by litigation.
Topic Alternate Dispute Resolution
Key Words Arbitration; Employment; Retaliation; Statutory Rights
C A S E   S U M M A R Y
Facts Freeman was fired by Anheuser-Busch (AB). She sued, claiming the dismissal was in retaliation for her filing a workers’ compensation claim. AB moved to compel arbitration. The terms of employment at AB included mandatory arbitration for employment-related disputes. The trial court and appeals court ruled against AB, which appealed to the Illinois supreme court.

Reversed and remanded. Whether an arbitration agreement is enforceable depends on if there is a valid contract that applies the agreement. The employment contract is valid and the arbitration agreement, a part of the employment contract, is valid and enforceable. Freeman claims the agreement violates public policy by depriving her of the right to recover statutory remedies. That is not correct. If she has a remedy based on retaliation for filing a workers’ compensation claim, which would violate state law, the arbitration process can provide such remedy. The arbitration agreement did not limit the remedies available to employees.

Citation Melena v. Anheuser-Busch, Inc., ---N.E.2d--- (2006 WL 723496, Sup. Ct., Ill., 2006)

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