Third Parties Fail To Force Arbitration in Three Circuits
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The “Summer of Arbitration” draws to a close tomorrow, if you can believe it. (On the first day of fall, it is supposed to be 91 degrees in Minnesota. Yikes.) But before I close that chapter, let’s take a look at a theme that emerged in these last weeks: non-signatories losing their attempts to compel arbitration (see last post).
In one case, Google’s self-driving car project, Waymo, sued Uber (and others) for misappropriating trade secrets. Waymo LLC v. Uber Technologies, Inc., 2017 WL 4018404 (Fed. Cir. Sept. 13, 2017). Although no defendant had an arbitration agreement with Waymo, they moved to compel arbitration based on an arbitration agreement between Waymo and its former employee. (The employee allegedly brought the secrets to Uber after downloading 14,000 Waymo files. That is a lot of thumb drives.) Defendants argued that equitable estoppel applied to compel arbitration, because the source of the claims was the employee’s breach of his employment agreement. However, the district court and appellate court found the complaint did not allege any breach of the employment agreement, and did not rely on or use the terms of the employment agreement as the foundation of its claims. Therefore, Waymo did not have to abide by the terms of the arbitration clause in the employment agreement.
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