USERRA Claim Subject to Arbitration - 5th Cir.

Overturning a district court's finding that USERRA prohibits arbitration, the 5th Circuit has found such claims are subject to a valid arbitration agreement, just like other employment statutes. Garrett v. Circuit City Stores, Inc. (5th Cir. 5/11/06) [pdf]. Although the Court does not say so explicitly, this appears to be the first federal appellate court ruling on the arbitrability of USERRA claims. (If there are others, they are not mentioned by the Court in its opinion.)

Plaintiff, and the lower court, relied on the following phrase (and a "snippet" of legislative history) for their position:

This chapter supersedes any State law (including any local law or ordinance), contract, agreement, policy, plan, practice or other matter that reduces, limits, or eliminates in any manner any right or benefit provided by this chapter, including the establishment of additional prerequisites to the exercise of any such right or the receipt of any such benefit.

The problem with that view according to the Court -- it confuses the difference between substantive and procedural rights. The choice of forum -- which is what an arbitration provision is -- is not a substantive right protected by the quoted section.

As far as the legislative history, it was too small, from only one chamber, and as the Court noted must be considered in light of a long line of Supreme Court authority that legislative history is rarely to be considered, perhaps because as Judge Edith Jones noted, it is "often contrived."

Congratulations to my colleague John Harrison of the Dallas office of Ogletree Deakins who successfully argued the case for Circuit City.