Ward v. Check Into Cash of Alabama, LLC

Citations: 981 So. 2d 434; 2007 Ala. Civ. App. LEXIS 600; 2007 WL 2684581Docket: 2060820

Court: Court of Civil Appeals of Alabama; September 14, 2007; Alabama; State Appellate Court

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Teresa Ward appealed the Chambers Circuit Court's order compelling her to submit her workers' compensation claim against Check Into Cash of Alabama, LLC, to arbitration. Ward filed her claim on November 7, 2006, for benefits related to a work-related injury from July 29, 2005. The employer admitted the injury occurred but denied failing to pay benefits. On January 12, 2007, the employer sought to compel arbitration, citing an "Employment, Confidentiality and Non-Compete Agreement" signed by Ward, which mandated arbitration for employment-related disputes.

The trial court granted the employer's motion on May 21, 2007, appointing an arbitrator. Ward appealed, arguing that: (1) Congress did not intend for state workers’ compensation claims to be arbitrated under the Federal Arbitration Act; (2) the arbitration agreement contravenes state public policy; (3) it violates Alabama law; and (4) it is ambiguous regarding its application to her claim. The court found the ambiguity argument decisive, noting that the Alabama Workers' Compensation Act's terms are implied in all employment contracts, suggesting that any express arbitration agreement creates a "patent ambiguity" that should be construed against the drafter, thereby opposing arbitration. The court reversed and remanded the trial court's order.

The employer claims that the court previously dismissed all arguments raised by the employee, including the ambiguity claim, in the case of Ryan's Family Steakhouse, Inc. v. Kilpatric. However, the ambiguity argument was not raised in that case, allowing it to be considered for the first time on this appeal. The employee supports their position by referencing several cases asserting that the terms of the Workers' Compensation Act are inherently part of every employment contract in Alabama. Historically, the Act was deemed effective when both parties agreed to its terms, but recent amendments have changed this requirement. The current Act presumes that all employers and employees have accepted its provisions unless the employer explicitly opts out by notifying employees in writing and posting a notice. Despite these changes, the fundamental elective nature of the Act remains, meaning that by entering into an employment contract, parties implicitly consent to the Act’s terms unless the employer has taken steps to opt out. Since there is no evidence that the employer opted out in this case, the Act's terms are deemed to be included in the employment contract.

The Act's provisions create an ambiguity regarding the resolution of workers' compensation disputes between parties. While the Act mandates that controversies over workers' compensation benefits be settled by circuit courts with binding orders and exclusive enforcement methods, the arbitration agreement stipulates that all employment-related disputes must be resolved through binding arbitration without appellate rights. Courts generally aim to resolve ambiguities without voiding agreements, and should apply specific provisions over general ones. Here, the specific agreement concerning workers' compensation claims prevails over the general arbitration clause, indicating that the parties did not intend to arbitrate such claims. The dissent argues that the Latin maxim expressio unius est exclusio alterius supports arbitration by suggesting that the explicit agreement to arbitrate excludes any implied agreement to utilize the Act. However, Alabama law implies the Act's terms into all employment contracts, meaning that agreeing to arbitrate does not negate the implied requirement to follow the Act for workers' compensation. Thus, the ambiguity remains unresolved in favor of not arbitrating workers' compensation claims, as any implied agreement to do so would contradict the Act's provisions.

The court determined that the ambiguity in the arbitration agreement should be construed against the employer, the drafter, leading to the conclusion that the parties did not agree to arbitrate workers' compensation claims. The parties impliedly entered into an agreement to resolve such claims through the procedures outlined in the Alabama Workers' Compensation Act, and the arbitration clause did not negate this implied agreement. Consequently, the trial court's decision to compel arbitration was deemed erroneous, resulting in the case being reversed and remanded. 

In the dissent, Judge Pittman referenced a three-step contract interpretation process established by the Alabama Supreme Court, emphasizing the need to resolve ambiguities through established contract construction rules. He argued that the main opinion overlooked the principle of expressio unius est exclusio alterius, which implies that the explicit mention of arbitration excludes other forms of dispute resolution. Pittman maintained that the parties' agreement clearly mandated arbitration for employment-related disputes, thus excluding judicial remedies. He would uphold the trial court’s judgment and offered his dissenting opinion. 

The excerpt also noted that the Alabama Workers' Compensation Act allows for resolution through benefit-review conferences or settlements.