Unity Communications Corp resold phone services provided by

Unity Communications Corp. resold phone services provided by Cingular pursuant to a reseller agreement that included an arbitration clause. Unity sue Cingular in federal district court, alleging breach of contract. The parties engaged in pretrial activity, and Cingular filed a motion for summary judgment regarding a letter agreement between Unity an Cingular. The district court denied the motion for summary judgment, and on appeal the Fifth Circuit affirmed the district court\'s decision. On remand before the district court. Cingular moved the court to compel arbitration. The district court ruled that Cingular had waived its right to arbitration by participating in the litigation and waiting three years to raise the arbitration argument. Do you think the appellate court agreed? Why? [Unity Communications Corp. v. Cingular Wireless. 256 Fed. App. 679 (5th Cir. 2007).] General Dynamics sent out a companywide e-mail to its employees announcing a policy requiring: arbitration of employment disputes. Some time after the e-mail was sent, an employee filed a lawsuit arguing that he was fired because of a disability. General Dynamics argued that the employee should be required to arbitrate his claim under the new company policy.

Solution

Answer-4 Despite the high bar for finding waiver, waiver was found in Cingular. In that case, the defendant waited three years after Unity commenced the suit and the parties had engaged in extensive pretrial activity to file a motion to compel arbitration.The district court found waiver, and the Fifth Circuit agreed, determining that the parties had been substantially involved in the litigation process and that the discovery on arbitrable issues had prejudiced the non-moving party. The court also dismissed Cingular‘s argument that the three-year delay was due to issues largely outside of its control, including the effects Hurricane Katrina had on the Southern District of Mississippi. In doing so, the circuit court reminded practitioners that it is the content of the delay, and not necessarily the time, that matters.

Answer-5 Under the Court\'s analysis, the question turned on whether the employer provided minimally sufficient notice of the contractual nature of the e-mailed policy and of the concomitant waiver of an employee\'s right to access a judicial forum. The Court weighed the attendant circumstances; concluded that the notice was wanting and that, therefore, enforcement of the waiver would be inappropriate; and upheld the district court\'s denial of the employer\'s motion to stay proceedings and compel the employee to submit his claim to arbitration.