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Dodd-Frank Doesn’t Nix Arbitration Pact Governing Employment Claims

By Stephen J. Dunn  6/19/2014
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The Dodd-Frank Act does not invalidate agreements to arbitrate non-whistle-blower employment disputes, the 4th U.S. Circuit Court of Appeals held.

One of the goals of Dodd-Frank was to strengthen whistle-blower protections for employees reporting illegal or fraudulent activity by their employer. Although the statute provides that whistle-blower claims cannot be subject to mandatory arbitration, the court held this prohibition does not apply to other employment claims.

Armand Santoro worked for Accenture for 13 years as the program manager for the website of the Internal Revenue Service,, and as the account lead for Accenture’s Department of Treasury account. Santoro’s employment contract contained a provision for mandatory arbitration of “any and all disputes” arising out of or related to his employment.

In 2010, Santoro began working for a new supervisor, who, according to the complaint, “instantly disliked” him. In September 2011, Accenture terminated Santoro’s employment as part of a cost-cutting measure.

Santoro filed suit asserting claims under the Age Discrimination in Employment Act, the Family and Medical Leave Act, and the Employee Retirement Income Security Act. Accenture moved to compel arbitration of all claims. Santoro argued that the arbitration agreement was invalid under Dodd-Frank, but the district court ruled that the statute’s anti-arbitration provision only applies to whistle-blowers.

Santoro appealed, arguing that Dodd-Frank invalidates all pre-dispute arbitration agreements lacking a specific carve-out for whistle-blower claims. The 4th Circuit disagreed, comparing the pro-arbitration Federal Arbitration Act with the provisions of Dodd-Frank invalidating arbitration agreements as to disputes “arising under” the statute. Since Santoro was not a whistle-blower asserting claims under Dodd-Frank, the court reasoned, his arbitration agreement with Accenture remained valid.   

Santoro v. Accenture Federal Services LLC, 4th Cir., No. 12-2561 (May 5, 2014).

Professional Pointer: Although there is no need for employers to amend their contracts to include specific carve-outs for Dodd-Frank whistle-blower claims, it is often prudent to include language in contracts specifying they do not apply beyond the limits of applicable statutes or regulations.  

Stephen J. Dunn is an attorney with Van Hoy, Reutlinger, Adams & Dunn, the Worklaw® Network member firm in Charlotte, N.C.


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