## Facts

- Gulfstream Aerospace Corporation implemented a written Dispute Resolution Policy (DRP) in summer 2002 as the exclusive method for resolving covered employment-related disputes.
- The DRP established a multi-step internal process culminating in binding arbitration.
- Gulfstream distributed notice of the DRP through first-class mail to employee addresses on file, postings on the company intranet, a management email newsletter, and facility bulletin-board notices.
- The DRP stated that an employee’s continued employment after the effective date would constitute acceptance of its terms.
- In March 2003, Gulfstream revised the DRP to bar covered claims from being brought as class actions; continued employment again operated as acceptance.
- Current and former employees filed putative class actions asserting claims under the ADEA, FLSA, ERISA, and Title VII based on employment practices at Gulfstream’s Savannah, Georgia facility.
- Gulfstream moved to compel arbitration and dismiss the lawsuits under the DRP; the district court granted the motions, and the employees appealed.

## Issues

1. Whether the DRP satisfied the Federal Arbitration Act requirement of a “written agreement” to arbitrate despite the lack of employee signatures.
2. Whether, under Georgia contract law, the DRP formed a valid arbitration agreement through offer, acceptance by continued employment, and consideration.
3. Whether the DRP was procedurally or substantively unconscionable, including due to its nonnegotiable nature, the class-action bar, and Gulfstream’s ability to modify the policy.
4. Whether enforcing arbitration under the DRP impermissibly waived or limited employees’ substantive rights under the ADEA, FLSA, ERISA, or Title VII.

## Decision

- The Eleventh Circuit affirmed orders compelling arbitration and dismissing the actions.
- The DRP qualified as a written arbitration agreement under the FAA even without employee signatures.
- A valid contract to arbitrate existed under Georgia law because Gulfstream made a definite offer, employees accepted by continuing employment after notice, and mutual obligations supplied consideration.
- The DRP was neither procedurally nor substantively unconscionable under Georgia law.
- Arbitration under the DRP was enforceable because it changed the forum for resolving statutory claims without eliminating the employees’ substantive statutory rights.

## Legal Principles

- The FAA requires a written agreement to arbitrate, but not a signed document, if written terms are communicated and assent is otherwise shown.
- Under Georgia law, an employer may form a unilateral arbitration agreement when it clearly offers arbitration as a condition of continued employment and the employee accepts by continued work after receiving notice.
- Mutual promises to submit covered disputes to arbitration and to be bound by the result can constitute sufficient consideration for an arbitration agreement.
- Inequality of bargaining power and nonnegotiable employment terms, without more, do not establish procedural unconscionability.
- An arbitration program is not substantively unconscionable merely because it is employer-drafted, includes a class-action bar, or reserves limited modification rights, absent terms that are overly harsh or effectively prevent pursuit of claims.
- Federal statutory employment claims may be subject to mandatory arbitration when the arbitral forum permits effective enforcement of substantive statutory rights.

## Conclusion

The court enforced Gulfstream’s written dispute-resolution policy as a binding arbitration agreement because employees received notice and accepted by continued employment, the agreement was supported by consideration, it was not unconscionable under Georgia law, and it did not strip employees of substantive rights under federal employment statutes.


Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359 (11th Cir. 2005)