Does Your Georgia Employment Agreement Require Arbitration?

In Georgia employment is generally considered “at-will,” meaning either the employer or employee can terminate the relationship at any time without cause. Of course, employers must still comply with various federal and state employment laws, such as the Fair Labor Standards Act (FLSA), which governs subjects like the minimum wage and overtime pay for non-exempt employees. An at-will employee always has the right to sue an employer for violating such laws.

Judge: Goldman Sachs Contract Still Bound Employees Post-Divestiture

But what happens when an employee signs an employment contract agreeing to arbitration of any legal disputes arising from their employment? Such contracts are generally enforceable in Georgia. And even if the employer undergoes a corporate reorganization or change of ownership, a previously signed arbitration agreement can still remain in effect.

A federal judge here in Georgia recently addressed such a case. In Stephens v. GreenSky, LLC, the plaintiffs were six current and former employees of GreenSky, an Atlanta-based technology company formerly owned by Goldman Sachs. The six plaintiffs joined GreenSky in 2022. As a condition of their employment, Goldman Sachs required each plaintiff sign an employment agreement that contained a binding arbitration clause.

In October 2023, Goldman Sachs announced it planned to sell GreenSky to a private investment firm. The sale became final in March 2024. At that time, the now-divested GreenSky asked its employees, including the plaintiffs, to sign a letter as a condition of their continued employment. This letter, which 2 of the 6 plaintiffs signed, stated that any prior obligations made to Goldman Sachs would “continue to apply according to their terms.”

The plaintiffs subsequently sued GreenSky, alleging violations of the FLSA with respect to their hourly compensation. GreenSky moved to compel arbitration as to all plaintiffs. A federal judge granted this motion and stayed the federal lawsuit pending arbitration.

The judge held that all six plaintiffs had executed valid agreements to arbitrate under Georgia law. The key issue the plaintiffs raised here is that Goldman Sachs’ divestiture of GreenSky effectively nullified those agreements. The judge disagreed. GreenSky had acted as an “agent” of Goldman Sachs (the “principal”) when the employees signed their contracts. The divestiture simply meant GreenSky now acted as its own principal in continuing the agreement.

More to the point, the judge held that there was nothing in the specific employment agreement between Goldman Sachs/GreenSky and the plaintiffs that “indicated it would be negated by divestiture, expiration, or other legal constraints.” As such, there was no legal question the arbitration agreements remained in force requiring the plaintiffs to submit their FLSA claims to binding arbitration under federal law.

Contact a Atlanta Wage & Hour Dispute Attorney

If you have a dispute with your employer over minimum wage, overtime, or paystub violations, it is critical to speak with a qualified Atlanta wage and hour dispute lawyer as soon as possible. The Forsythe Law Firm, LLC, can review your case and advise you of your rights and obligations under the law. Contact The Forsythe Law Firm, LLC, today at 404-476-2717 to schedule a consultation.

Source:

scholar.google.com/scholar_case?case=3962971537509875476