Labor & Employment Law Daily Wrap Up, ARBITRATION—M.D. Ga.: Georgia federal court refuses to enforce arbitration clause in former employee’s lawsuit, (Jul 16, 2025)

By Ursula Furi-Perry, J.D., MBA

Because the employer did not attempt to remedy its non-compliance with the American Arbitration Association’s rules, it was not entitled to compel arbitration.

Gas POS, Inc. was not entitled to compel arbitration of a former employee’s claim that he was fired without just cause because the employer did not attempt to remedy its non-compliance with the American Arbitration Association’s rules, a federal district court found. The former employee filed a lawsuit against Gas POS in a Georgia federal court after being terminated. Though he had previously signed an employment contract that required arbitration of any employment-related claims, he initially submitted the claim to arbitration, the AAA did not err in finding that an arbitration could not be administered because Gas POS had not complied with AAA’s rules in the past (Mullen v. Gas POS Inc., No. 5:24-cv-387 (MTT) (M.D. Ga. July 11, 2025)).

Discharge without cause. The plaintiff worked for the defendant employer until March 22, 2024, when he was allegedly terminated without cause.

Demand for arbitration. In July 2024, he submitted a demand for arbitration to the American Arbitration Association (AAA), seeking $333,780 in compensatory damages for wrongful termination, in accordance with the employment contract he had signed, which required arbitration of any employment-related claims.

Employer’s prior noncompliance with AAA rules. Two weeks later, AAA informed the plaintiff that the employer had not complied with its “requests in the past to abide by [the AAA’s] Employment Due Process Protocol and/or [the AAA’s] Employment arbitration rules,” and that no arbitration would be administered until the employer notified AAA of its intent to abide by the rules.

No attempt to cure. The employer made no attempt to remedy its violations with AAA, and in October 2024, the plaintiff filed a lawsuit in the U.S. District Court for the Middle District of Georgia, Macon Division.

Reconsider? Then, in February 2025, seven months after being notified of the AAA’s refusal to arbitrate the plaintiff’s claims, the employer asked the AAA to reconsider its position and administer the claim between the parties.

Employer’s motion to compel and stay. AAA then agreed to “accept future cases as long as the AAA rules and protocols are abided by,” and the employer filed a motion to compel arbitration and motion to stay the action.

Not entitled to compel. Noting that the plaintiff attempted to comply with the arbitration clause by submitting his claims to arbitration with the AAA, the federal district court held that the employer was not entitled to compel arbitration or stay the action. The employer learned of its non-compliance on July 29, 2024, at the latest, the court found, but it did not attempt to remedy its non-compliance until February 2025, fully four months after the plaintiff filed suit.

Totality of circumstances. Considering the totality of the circumstances, the court held that the employer acted “inconsistently with its right to arbitrate” by failing to comply with the AAA’s protocols and/or rules and by failing “to remedy the barrier it had caused” until long after the plaintiff filed his complaint. As such, the court could not stay the action, nor compel arbitration.

Lapse in naming arbitrator? The court also rejected the employer’s argument that its default constituted a “lapse in naming an arbitrator,” noting that the employer provided no support for that argument, and that no authority requires the appointment of an arbitrator when the purported “lapse” was a result of the movant’s default. The employer was thus also not entitled to the appointment of another arbitrator.

The case is No. 5:24-cv-387 (MTT).

Judge: Treadwell, M.

Attorneys: Jonathan B. Frank (Law Offices of Jonathan B. Frank) for Kennon Mullen. Sigfredo Rubio (Law Offices of Sigfredo Rubio) for Gas POS Inc.

Companies: Gas POS Inc.

Cases: Arbitration Discharge ContractClaims Procedure GeorgiaNews