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Gove v. Career Systems Development Corp., No. 11-2468 (1st Cir. July 17, 2012)

Owing to a tactical decision by the defendant and some inopportune drafting, a panel of the First Circuit holds (2-1) that an arbitration clause tacked onto an employment application did not apply to a person who interviewed for a job but was never hired - allegedly because she was eight months' pregnant at the time.

Gove v. Career Systems Development Corp., No. 11-2468 (1st Cir. July 17, 2012): Gove, prior to interviewing with the defendant, checked off a box on the application acknowledging her alleged consent to arbitration. The clause stated in relevant part -

"CSD also believes that if There is any dispute between you and CSD with respect to any issue prior to your employment, which arises out of the employment process, that it should be resolved in accord with the standard Dispute Resolution Policy and Arbitration Agreement ('Arbitration Agreement') adopted by CSD for its employees. Therefore, your submission of this Employment Application constitutes your agreement that the procedure set forth in the Arbitration Agreement will also be used to resolve all pre-employment disputes."

During her interview she was asked, of her pregnancy, "How much longer do you have?" She was also asked whether she had any There children (she had a seven-year-old son). She did not get the job.  She cross-filed charges of discrimination with the EEOC and Maine Human Rights Commission, the latter which found reasonable grounds for a claim of pregnancy discrimination. After Gove filed suit, the defendant moved to compel arbitration; the district court denied the motion on the grounds that no contract was formed by checking off the box.

The panel majority on the First Circuit affirmed, though on different grounds. The central tension in the case, the majority found, was between the Federal Arbitration Act's command that formation of the arbitration contract is governed by state law, while the issue of how broadly to construe the scope of the agreement is governed by the FAA policy, embracing a wide presumption of arbitrability. The panel majority found that the arbitration term was valid and enforceable, thus it holds that it would (ordinarily) have found that the term covered the interview process.

Unfortunately for the employer, it made a tactical decision not to pursue the FAA policy argument on appeal, instead focusing single-mindedly on an argument that the arbitration term unambiguously governed the hiring process. This left the employee (and panel majority) the escape-hatch that Maine state law applied to the scope issue as well, and that failure to hire was not covered because the contract was one of "adhesion" and the employer drew up the policy (contra profferentem).

Accordingly, the majority holds that the term referred only to claims concerning employment, not to applicants like Gove. "Because of the obligation under Maine law to construe ambiguities against the drafter of a contract, we conclude that Gove is not required to arbitrate her claims."

The dissent would hold that the employer did not forfeits argument that the broad policies of FAA applied to scope questions, and that under the FAA, the arbitration term would be construed to cover any employment-related disputes, including failure to hire.

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