NELP Legal Department Discusses Employment-at-Will Doctrine in Amicus Brief

In December, NELP co-wrote an amicus brief with Public Justice in the Third Circuit on behalf of Abdul Jaludi, a worker who reported his employer, Citigroup, for purported violations of the Sarbanes-Oxley Act. NELP contributed to the brief written by Karla Gilbride and Ellen Noble of Public Justice, and we were joined by Community Legal Services of Philadelphia as an amicus party as well.

The brief looked at the issue of forced arbitration clauses in the retaliation context and how employers resurrect these clauses again and again, leaving workers unable to vindicate their rights.

In this particular case, Mr. Jaludi alleges that he suffered from retaliation after reporting his employer, Citigroup, for potential violations of the Sarbanes-Oxley Act, which is an act that protects investors by requiring that corporations disclose liabilities accurately, holds CEOs personally responsible for errors, and protects whistleblowers from retaliation if they come forward with evidence of corporate fraud. After reporting the violations, Mr. Jaludi left Citigroup and filed a lawsuit alleging retaliation.

However, because Jaludi had signed a forced arbitration agreement in 2009, Citigroup sought to move the case to arbitration, where Jaludi would have to make his case alone and behind closed doors. Citigroup sought to enforce the 2009 agreement despite the fact that Jaludi signed another agreement in 2011 that expressly excluded claims of retaliation under the Sarbanes-Oxley Act among claims that could be forced into arbitration. Citigroup argued that the parties had settled expectations regarding which law would be applicable: The law from 2009, because of the arbitration agreement signed at that time.

NELP’s section discussed the employment-at-will doctrine, arguing that since Mr. Jaludi was an at-will employee, Citigroup and Jaludi could not have settled expectations regarding which laws would apply at the time of his firing. Due to the nature of at-will employment, the duration of the employment relationship is not set, and therefore the traditional arguments about retroactivity cannot hold true—the expectation is that the laws will change and things will not remain static throughout the employee’s relationship with the company. Such a reading is unrealistic, and so Citigroup has to apply the 2010 Sarbanes-Oxley Act amendments.

Amici also argued that to resurrect the Citigroup 2009 Arbitration Agreement was resurrecting an outdated arbitration clause. Amici also looked at how corporations try to enforce arbitration clauses when they are contrary to the principles of contract law—even when the text of the clause says that the clause should not apply.

If the Third Circuit rules against Mr. Jaludi, it will be yet another strike against workers’ ability to bring their claims in court. But NELP remains committed to fighting back against forced and mandatory arbitration.

If the Third Circuit rules against Mr. Jaludi, it will be yet another strike against workers’ ability to bring their claims in court. But NELP remains committed to fighting back against forced and mandatory arbitration.

As highlighted in recent research by Cynthia Estlund, the introduction of forced arbitration agreements has had a devastating effect on the number of claims brought by workers. The increase in the usage of these agreements has also opened the door for many other coercive waivers in the workplace such as non-compete clauses and non-disclosure agreements. As discussed in our fall 2018 webinar in conjunction with National Women’s Law Center, many lawyers are continuing to develop strategies to fight back against these agreements and NELP is proud to have partnered with Public Justice on this issue.

If you would like amicus support on this issue, do not hesitate to reach out to the legal department by emailing Cathy Ruckelshaus.