"The problem stems from that fact that these commands were being issued from within a batch file. The % symbol has a special meaning in batch files. They can be escaped by doubling up the symbol (%%). Example:
7z a ""My%%Archive.zip"" ""My%%File.txt"" -mx9
I also tried to escape with the caret (^) but that did not work.
The percent symbol problem has nothing to do with 7zip.