In a previous post, I argued that in order to compel arbitration in Minnesota, an employer must attempt to come within the purview of the Federal Arbitration Act (FAA) and not just the Minnesota Uniform Arbitration Act (MAA) because of the ruling in Correll, D.D.S v. Distinctive Dental Services, P.A. (2000). In that case, the plaintiff advanced a Minnesota Human Rights Act (MHRA) claim, while the defendant filed a motion to compel arbitration pursuant to the MAA. The distinguishing factor was that the defendant never raised the applicability of the FAA, and thus, the court never considered whether arbitration could be compelled under the FAA. Instead, the court held that the MHRA claim must be litigated.
Many plaintiffs’ attorneys attempt to use Correll as a shield to prevent arbitration. But, in a recent state court opinion—brought in Hennepin county district court, to be exact—the court followed Johnson v. Piper Jaffray (1995) and held that when the FAA applies, arbitration must be compelled, even when it involves an MHRA claim. Specifically, the court held that the motion to compel arbitration should be granted because the court lacked jurisdiction over the claims. The FAA applied because the employer engaged in interstate commerce. Whether the employee engaged in interstate commerce was of no consequence. “The FAA pre-empts any conflicting state law to the extent the state law requires a judicial forum.” Piper Jaffray, Inc.
Practical Pointer
So, what does this tell us? It tells employers that it is extremely helpful—and necessary—to argue that you fall within the FAA when compelling arbitration. It also tells employers that courts want to compel arbitration when we give them the Piper Jaffray sword to do so.