In Collier Engineering Co v. Martin (Tenn. Ct. App. M.S., No. M2022-01641-COA-R3-CV, Sept. 23, 2024), Collier Engineering sued Martin, a former employee, for breach of contract – specifically, an “Employee Confidentiality, Non-Compete, and Non-Solicitation Agreement” he had signed at the commencement of his employment. Collier alleged that after Martin’s resignation, he had made disparaging comments about Collier and disclosed confidential information. Collier filed suit for injunctive relief, damages and attorneys’ fees. Martin counterclaimed, alleging he had effectively been terminated for refusal to participate in illegal activity pursuant to T.C.A. § 50-1-304. Collier sought to compel arbitration of Martin’s claim under the agreement’s arbitration provision, which required arbitration of any claim “arising out of or related to this agreement”. (It is not clear why Collier did not seek arbitration of its claim in the first instance). The trial court held the parties had only agreed to arbitrate disputes “arising out of or related to this agreement”, and because the retaliatory discharge did not arise out of the agreement and was thus not within the scope of the arbitration provision, the court denied the motion to compel arbitration. The Tennessee Court of Appeals reached the same conclusion and affirmed.
Retaliatory Discharge Claim Not Covered by Arbitration Provision in Employee Confidentiality Agreement
