Arbitration agreements are playing an increasing role in employment contracts. Arbitration has remained the preferred method of dispute resolution for businesses and has increasingly become a popular clause in employment contracts. Yet binding arbitration agreements are not always enforceable.
Still, Ohio courts look favorably on arbitration as an alternative dispute resolution method. One recent case in Ohio reinforces this stance.
Can arbitration agreements limit ability of workers to file qui tam lawsuits?
A case just decided in District Court may have ramifications for arbitration agreements between employers and employees regarding whistleblower claims in Ohio, especially as it involves actions under the False Claims Act. The case arose when three nurses claimed the hospital they had worked for was defrauding Medicare, alleging that the hospice they worked for neglected Medicare patients, among other FCA violations. They brought suit on behalf of the U.S. government in a whistleblower (qui tam) action.
However, the nurses had in place an arbitration agreement with their employer in their employment contract, which purported to include whistleblower claims. The nurses also claimed retaliation for bringing the whistleblower suit.
The decision was whether the health care facility could compel arbitration when the lawsuit was brought on behalf of the U.S. government. Ultimately the court said it could, and stayed the qui tam claim pending the outcome of arbitration proceedings.
That is not necessarily the end of the matter. The court held that the U.S. government must consent to the non-binding arbitration result or the qui tam claim could resume.
Enforcement of arbitration agreements often contested
In its decision, the court reiterated that federal policies encourage arbitration as a means of dispute resolution. Arbitration is an oft-contested aspect of many contracts, as employees in a dispute often seek to have their claims heard in court. Despite this, however, arbitration remains an effective means of reducing the cost of litigation for employers and businesses.
For employers moving forward, especially those in the healthcare field, it appears as though well drafted arbitration agreements will remain an effective means of resolving employee claims, including allegations of FCA violations.
Questions? Contact Zagrans Law Firm LLC
Arbitration agreements and disputes over their enforceability can be complex, especially when third parties are involved. If you have questions regarding the enforceability of an arbitration agreement, contact our team at Zagrans Law Firm LLC, to discuss your situation and potential options.