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Fee-Sharing Provision May Make Mandatory Arbitration Pact Unenforceable

A mandatory arbitration agreement that requires an employee split the costs of arbitration with the employer makes the entire agreement unenforceable, according to the Florida District Court of Appeal. Flyer Printing Co. v. Hill, No. 2D00-5008 (Fla. Dist. Ct. App. July 18, 2001).  The court found enforcing the agreement to arbitrate the employee’s claim of pregnancy discrimination would contravene her right to seek an award of attorneys’ fees and costs if her suit was successful under Title VII of the Civil Rights Act and the Florida Civil Rights Act.   the remedial purpose of the statutes on which her claim was based, Title VII of the 1964 Civil Rights Act and the Florida Civil Rights Act. 

Specifically, the court held enforcement would contravene the employee’s statutory right to seek a full award of attorney’s fees and litigation costs if she wins her claim under Title VII or the Florida law.  Citing the U.S. Supreme Court decision in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991), the court noted parties may agree to arbitrate statutory claims, however, the agreement must furnish an adequate mechanism for vindicating the claimants statutory rights.  The court relied on the Federal Circuit Court of Appeals case of Perez v. Globe Airport Sec. Servs., Inc., No. 00-13489 (11th Cir. June 12, 2001), in which a similar arbitration agreement was held unenforceable on the same grounds.