A Georgia employee impacted by a reduction-in-force recently lost her opportunity to arbitrate her age discrimination claim simply because she missed her filing deadline by one day. The Eleventh Circuit Court of Appeals (the federal court deciding appeals from Alabama, Florida, and Georgia) recently explained how and why this happened. See Smith v. Int’l Bus. Machs. Corp., 2023 U.S. App. LEXIS 10957 (11th Cir. 2023)
The Facts
IBM employed Tanya Smith for more than 30 years until her May 21, 2020, termination at age 54. As part of her severance package, Smith signed a separation agreement, whereby she agreed to arbitrate any potential employment claims, with the agreement plainly describing the procedure and time limits for initiating arbitration. In particular, the agreement expressly required Smith to submit a written demand for arbitration directly to IBM no later than the deadline for filing an EEOC charge of discrimination (in Georgia, 180 days from her termination), or else “the claim shall be deemed waived.” The separation agreement explained that once a written demand was sent to IBM it would then file it with the designated arbitrator service, in this case, JAMS.
On November 17, 2020 – precisely 180 days from Smith’s termination – she electronically filed an arbitration demand directly with JAMS, asserting that her termination violated the Age Discrimination in Employment Act (ADEA). However, Smith failed to send a written demand for arbitration to IBM, where she was supposed to send it in the first place, until the following day, November 18, 2020 – one day past the stated deadline.
The Analysis
IBM moved to enforce the agreement’s claim filing requirements on the technical grounds that it was a day too late. In response, Smith argued that her 24-hour delay in submitting her demand to IBM was a de minimis (in other words, trivial and inconsequential) violation of the agreement and should be excused. Agreeing with IBM, the arbitrator reasoned that he was obligated to apply the contractual terms of the agreement, which required her to submit the written demand to IBM not to JAMS, by the filing deadline, which she had clearly failed to do.
Smith also argued that her one-day delay was due to several pandemic-related hurdles, including that her counsel had been working remotely during the COVID-19 lockdown, miscellaneous postal service failures (entirely plausible), and other purported reasons. But, the arbitrator also rejected those arguments, noting that the pandemic had obviously not impeded Smith’s ability to file her demand with JAMS on November 17, and that the pandemic was no excuse. In granting IBM’s motion to dismiss, the arbitrator concluded that Smith’s self-inflicted failure to file her demand directly to IBM by the November 17 deadline had caused her to waive her rights to pursue her ADEA claim.
Undeterred, Smith filed a petition in federal court, seeking to invalidate the arbitrator’s decision claiming that, among other theories, he had engaged in misconduct by refusing to consider her arbitration demand as being timely. However, the court adopted the arbitrator’s decision, a ruling that was later upheld on appeal to the Eleventh Circuit. As the arbitrator, a federal judge, and an appellate court collectively observed, Smith lost her ability to bring a discrimination claim simply because she failed to send her arbitration demand to IBM by the November 17 deadline explained in her separation agreement. That is a harsh but predictable result.
The Takeaway
Alas, we never get to the merits of Smith’s age discrimination claim, because, quite simply, arbitration is a matter of contract and contracts are generally enforced as written. And, here, Smith failed to abide by the terms of the contract, which meant she never got to arbitrate her dispute. But, had Smith been able to litigate as opposed to arbitrate her ADEA claim, under these circumstances a federal judge may have given her greater latitude and accepted her filing as being timely to avoid undue prejudice. And, despite her tardiness, Smith might have had her day in court (where she may have just as well lost her case on the merits).
The key lesson here for employees, employers, and lawyers alike is that following directions is a life skill, calendars serve a purpose, and missed deadlines have consequences. And, when an arbitration agreement clearly states where and when to file a claim, do just that; and a day early if possible. The art of effective litigation is centered on timing and observing deadlines. If you have a time-sensitive legal dispute on your hands, perhaps Agenzia can help.
(CBLLC.6.2.2026)
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