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Category Archives: Arbitration

Contracts Must Be Drafted With Specific Language To Enforce Arbitration.

01 Monday Dec 2014

Posted by Celia C. Elwell, RP in 5th Circuit Court of Appeals, 8th Circuit Court of Appeals, Appellate Law, Arbitration, Arbitration, Breach, Contract Law, Employment Law, Legal Analysis, Legal Writing, Precedent

≈ Comments Off on Contracts Must Be Drafted With Specific Language To Enforce Arbitration.

Tags

Arbitration, Breach of Contract, Contract Law, Legal Writing, Lexology, Liz Kramer, Stinson Leonard Street LLP

“Harmonizing” Contract Language Leads Two Circuit Courts To Deny Arbitration, by Arbitration Nation Blog, posted at Lexology Blog

http://tinyurl.com/mh3y6z3

Two parties recently convinced federal circuit courts that the language of their arbitration agreements was not sufficient to compel arbitration of their disputes. Both cases turned on how courts ‘harmonize’ language from different parts of an agreement or from multiple agreements.

The decision from the Eighth Circuit was a pretty easy one. The parties’ contract required them to mediate any dispute. Then it said: ‘if the dispute is not resolved through mediation, the parties may submit the controversy or claim to Arbitration. If the parties agree to arbitration, the following will apply…’ The party fighting arbitration (a city in South Dakota) argued the quoted language does not mandate arbitration, it makes arbitration an option for the parties, so the case should remain in court. [Emphasis in original.]

The party seeking arbitration emphasized a sentence at the end of the arbitration paragraph saying that the arbitrator’s ‘decision shall be a condition precedent to any right of legal action.’ It argued that the only way to harmonize that language is to conclude that arbitration is required. The court disagreed, finding that a reasonable interpretation is simply that if the parties decided to arbitrate, the arbitration decision is a condition precedent to further legal action. Quam Construction Co., Inc. v. City of Redfield, ___ F.3d___, 2014 WL 5334781 (8th Cir. Oct. 21, 2014). Therefore, the Eighth Circuit affirmed the district court’s denial of the motion to compel arbitration.

The Fifth Circuit had a harder case in Sharpe v. AmeriPlan Corp., __ F.3d__, 2014 WL 5293707 (5th Cir. Oct. 16, 2014). In that case, three former sales directors of a company sued for breach of contract after they were terminated. The company moved to compel arbitration and the district court granted the motion.

Their original employment agreements with the company did not call for arbitration, in fact they set the venue for legal proceedings exclusively in Texas courts. The employment agreements also incorporated a ‘Policies and Procedures Manual.’ The employment agreements could only be modified with written consent of all parties, but the Manual could be unilaterally modified by the company. Years later, the company amended its Manual to provide for mandatory arbitration.

The Fifth Circuit reversed the district court, finding that the new arbitration clause was unenforceable. First, the court concluded that the jurisdiction and venue clauses in the original employment agreements survived the amendment to the Manual, because there was no written and signed change to the employment agreements themselves and because the company had affirmatively relied on the venue clause (calling for Texas courts) when it transferred the case from California to Texas. And second, the court found that the old and new provisions “cannot be harmonized” without rendering the original agreement meaningless.

There are drafting lessons from these cases: if you want to have mandatory arbitration of disputes, the contract must consistently say that, and if you want to modify existing agreements to add arbitration, make sure to honor any language in the original agreement about how that agreement can be amended or modified and be clear what clauses are replaced or superseded.

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Duty to Arbitrate Survives End of Employment Contracts.

05 Saturday Apr 2014

Posted by Celia C. Elwell, RP in 6th Circuit Court of Appeals, Arbitration, Arbitration, Collective Bargaining, Employment Contracts, Employment Law, Fair Labor Standards Act, United States Supreme Court

≈ Comments Off on Duty to Arbitrate Survives End of Employment Contracts.

Tags

Arbitration, Baker & Hostetler, Class Action, Employment Contract, FLSA, Gregory V. Mersol, Mortgage Loan Officers, U.S. Court of Appeals for the Sixth Circuit, U.S. Supreme Court

Sixth Circuit Holds That Duty To Arbitrate Survives Expiration Of Employment Contract, Requires Individual Arbitration, by Gregory V. Mersol, Baker & Hostetler

http://tinyurl.com/q7yg9s5

With the Supreme Court having issued a series of decisions overruling many of the roadblocks to the enforcement of arbitration agreements in the class context, we are now seeing more courts fill in the gaps as to whether and when employers may rely on such agreements.

The latest of these is the case of Huffman v. The Hilltop Companies, LLC, Case No. 13-3938 (6th Cir. Mar. 27, 2014), which concerned the question of whether the duty to arbitrate and limits to class arbitration extend beyond termination.  In one respect, the decision was obvious, but in another, it represents the growing, if at time reluctant, acceptance by courts of the enforceability of arbitration agreements. . . .

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Arbitration – Some Like It and Some Don’t.

06 Monday Jan 2014

Posted by Celia C. Elwell, RP in 9th Circuit Court of Appeals, Arbitration, Arbitration, Employment Law

≈ Comments Off on Arbitration – Some Like It and Some Don’t.

Tags

9th Circuit Court of Appeals, Arbitration, ContractsProf Blog, Employment Law, Kprofs2013, Wal-Mart

GLOBAL K: Contrasting Attitudes towards Arbitration Clauses, by Kprofs2013, ContractsProf Blog

 http://tinyurl.com/kpnbmhu

The recent discussion of the December 2013 decision by the Ninth Circuit in In re Wal-Mart Wage & Hour Employment Practices Litigation calls to mind the contrast in attitudes between international and domestic practice. Mention “arbitration” among international practitioners and profs, and you are likely to get a bit of a swoon from most – arbitration, properly structured, rescues us from the risks and uncertainties of unfamiliar legal systems and provides a comfort level in terms of predictability of process if not outcome. Mention “arbitration” in domestic circles, particularly with respect to consumer protection issues, and you encounter a growing skepticism if not outright hostility about the imposition of arbitration as an exclusive contract remedy.

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