Arbitration Waiver, Quirky Question # 131
Quirky Question # 131:
We have employment agreements with our employees that contain mandatory arbitration provisions. Recently, one of our senior executives departed and joined a competitor. This arguably violated his non-competition agreement, though that involves issues unrelated to my present inquiry.
We filed a lawsuit against our executive alleging breach of contract and other wrongful conduct. At the same time we filed our Complaint, we filed a Motion for Preliminary Injunction and a Motion to Compel Arbitration. We decided not to pursue the Motion to Compel Arbitration, electing instead to see what kind of result we could first obtain from the federal court on our preliminary injunction motion. Our thinking was that if we could get a positive outcome from the federal judge on the injunction motion, we could keep the case in federal court and disregard the arbitration forum. Unfortunately, the federal judge ruled against us on our motion for injunctive relief, so our former employee continues to compete with us.
We now are trying to schedule our motion to compel arbitration. Our ex-employee’s attorney, however, claims that we “waived” our right to pursue our claims in arbitration. How can that be? We filed our Motion to Compel Arbitration at the beginning of the case, some four months ago, so our ex-employee was on notice all along regarding our desire to arbitrate. Moreover, shouldn’t the arbitrator decide the issue of whether we “waived” our right to pursue arbitration? Answer→