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End run around state court
November 16, 2005 by Ross Runkel at LawMemo

Larry Wood sued his employer in West Virginia state court alleging state law claims of sex discrimination and wage law violations. There was an arbitration clause in his employment agreement, so you might expect the employer to file a motion to compel arbitration.

Not so.

The employer preemptively filed an action against Wood in federal district court seeking

• to compel arbitration of those claims under the Federal Arbitration Act (FAA), 9 U.S.C. § 4, and
• to enter a prohibition against Wood from prosecuting the state action against AGLA.

The district court granted that relief and entered judgment against Wood. And the 4th Circuit affirmed. American General Life v. Wood (4th Circuit 11/14/2005).

My view:

• Quite an interesting tactic.


• What? They don't trust the state courts?


• Why should federal court resources be used this way when an action is already pending in state court?

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