Fiola v. VALIC Financial Advisors, Inc.
Posted on Categories Business & Employment, Court Decisions

By Paul J. Dubow

A party cannot avoid compelled arbitration by generally denying the facts upon which the right to arbitration rests.

Fiola vs. VALIC Financial Advisors, Inc., No. 19-02777 (D. Kan., 4/8/20).

Plaintiff was hired by Valic, a subsidiary of AIG Life and Retirement, in 2012. Her application for employment stated that, if she were hired, she would be subject to AIG’s employment dispute resolution (EDR) program, which provided for arbitration as the sole method of resolving most employment disputes under the program. In November 2013, Valic sent an email to all of its employees, including plaintiff, advising them of a new EDR program requiring arbitration of employment disputes that would be effective on January 1, 2014, if employment continued after that date, unless the employee advised Valic by January 8 that participation in the program was declined. It also advised the employees of a video, which would explain the program, including how to decline.

In the following month, Valic sent an email to plaintiff noting that she had not downloaded the video and reminding her of the program’s effective date and the method to decline participation. Plaintiff neither downloaded the video nor declined to participate. In March 2014, Valic sent an email to plaintiff confirming her participation in the program. In November 2014, Valic sent her a fourth email noting that the EDR program had merged with the EDR program of another AIG subsidiary, but that there were no changes to the arbitration provision. After Valic terminated plaintiff, she filed a lawsuit alleging a violation of Title VII and the Americans with Disabilities Act. Valic moved to compel arbitration.

Plaintiff opposed the motion, asserting that she never entered into an agreement to arbitrate. She accompanied her opposition with an affidavit asserting that she did not recollect receiving the email notices. The District Court grants the motion. Plaintiff disputes that she ever received any of the EDR program emails. But a party cannot avoid compelled arbitration by generally denying the facts upon which the right to arbitration rests. Instead, she must come forward with evidence that creates a factual dispute about whether she was offered an agreement to arbitrate. The only evidence that plaintiff cites is her affidavit, which only states that she has “no recollection of receiving any of the four emails.” Not remembering and not receiving are two different things. And not remembering does not create a triable issue of fact as to whether she in fact did receive them.

Plaintiff also argues that the emails, if sent, did not provide adequate notice of an offer because the emails did not use certain words “that would provide such notice, for example: arbitration, agreement, binding, accept, offer, contract, opt-out, access to court, or jury trial.” Notably, plaintiff cites no authority that any of these “magic words” are required. Nor can the Court conclude that the language used was too vague. The emails clearly referenced an “Employee Dispute Resolution” program. That sufficiently put plaintiff on notice of what was at stake, especially when considered in conjunction with plaintiff’s employment application, which explained that the EDR program required arbitration as the sole method of resolving most employment related disputes. Plaintiff was thus provided with adequate notice. That she apparently failed to investigate further or take any action, despite warnings that she would be covered by the EDR program, does not establish lack of adequate notice.

(P. Dubow: The “magic words” that the Court dismisses are required, or at least useful, in advising an employee that she will be subject to an arbitration agreement. But Valic apparently supplied some of these “magic words” when it referred to “arbitration” in the employment application and used the phrase “employee dispute resolution” when describing the program.)

(SOLA Ref. No. 2020-19-03)

NOTICE: The court decision synopsis published above represents an abbreviated description of the actual decision and is re-printed here for its educational value. The author's effort is to report concisely the substance of the decision or a selected portion of the decision; commentary or analysis is generally reserved for the italicized section at the bottom of the summary. Subscribers to SAC's Online Litigation Alert (SOLA), from which this synopsis is excerpted, have immediate access to the full decision, in addition to the synopsis.

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