An employer entered into identical employment agreements with two employees. Both employment agreements stated that they would establish "the terms and conditions of the employee's employment and further committed to arbitrate "any dispute, which arises under the terms of this agreement." After taking many actions in making many efforts to stem what they believe to be fraudulent activities, the employees were terminated. They filed suit under the anti-retaliation provisions of the False Claims Act, 31 USC 3730. The employer, BAE Systems Technology Solutions & Services, sought to compel arbitration, a motion the district court granted. The Sixth Circuit reversed in U.S. ex rel. Paige v. BAE Systems, No 13-2237 (May 22, 2014).
The employment agreement committed the employees to arbitrate "any dispute, which arises under the terms of this agreement." The Sixth Circuit ruled that the agreement did not reach the relator's retaliation claims under the False Claims Act for three reasons:
(1) the "claim is purely statutory and exist independent of" the employment agreement;
(2) "the employment agreement nowhere refers to the False Claims Act, retaliation or statutory claims; and,
(3) the arbitration provision in the employment agreement is narrower than those in cases where broadly-worded arbitration clauses applied to claims "related" to the agreement or that arise out of the employment relationship between the parties.
The Sixth Circuit's opinion was authored by Circuit Judge Helene White and joined by Circuit Judge Raymond Kethledge and Senior Circuit Judge Richard Surheinrich.
