## Facts

- Michael J. Lewis began working for Circuit City in 1996 and became a full-time roadshop manager.
- In 1997, Lewis injured his knee at work and pursued medical treatment through a workers’ compensation claim; he continued to report knee problems.
- In November 2002, Lewis told his supervisor he still had knee pain and requested specialist care; he asserted the supervisor then became hostile, disciplined him, and suspended him.
- On January 6, 2003, Circuit City terminated Lewis’s employment.
- Lewis claimed he was fired in retaliation for seeking workers’ compensation benefits; Circuit City asserted it terminated him for violating its weapons policy after allegations he brought gun parts to work following a confrontation with another employee.
- Lewis had signed an employment arbitration agreement and previously arbitrated a retaliatory-discharge claim based on the same termination; the arbitrator rejected the retaliation theory and found the termination justified.
- After losing in arbitration, Lewis filed a retaliatory-discharge suit in court; Circuit City obtained summary judgment on claim preclusion grounds, and Lewis appealed.

## Issues

1. Whether a prior final arbitration award on the merits barred Lewis’s later court action asserting the same Kansas retaliatory-discharge claim arising from the same termination.
2. Whether Lewis waived Kansas contract-law challenges to the arbitration agreement by fully participating in arbitration without objecting to enforceability.
3. Whether enforcing the arbitration agreement and award was barred by public policy or otherwise improper in light of the Federal Arbitration Act (FAA).
4. Whether sanctions were warranted based on Lewis’s appellate arguments.

## Decision

- The court affirmed summary judgment for Circuit City.
- The court held Lewis’s retaliatory-discharge claim was barred by claim preclusion because it involved the same parties, the same claim arising from the same termination and alleged harm, and a final merits decision in arbitration.
- The court held Lewis waived contract-law challenges to the arbitration agreement by arbitrating without objection and raising invalidity only after an adverse award.
- The court rejected Lewis’s public-policy argument and concluded the FAA and controlling precedent supported enforcement of the arbitration agreement and the arbitral result.
- The court denied Circuit City’s request for sanctions.

## Legal Principles

- A final arbitration award can have claim-preclusive effect when traditional claim-preclusion elements are satisfied (same parties, same claim, final merits disposition).
- A party who proceeds through arbitration without timely contesting the arbitration agreement’s enforceability generally waives later contract-law challenges to that agreement in subsequent litigation.
- Public-policy objections rooted in state employment protections do not, by themselves, permit courts to disregard valid arbitration agreements or deny preclusive effect to arbitral awards where the FAA applies.
- Appellate sanctions are discretionary and generally require more than losing arguments; denial is appropriate where the appeal is not sufficiently baseless.

## Conclusion

Because Lewis previously arbitrated and lost the same retaliatory-discharge claim based on the same termination, the arbitration award barred his later court suit, and his post-loss effort to attack the arbitration agreement’s validity was waived; enforcement was consistent with the FAA, and sanctions were unwarranted.


Lewis v. Circuit City Stores, Inc., 500 F.3d 1140 (10th Cir. 2007)