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Arbitration Agreement Not Signed By Employer

The Texas First District Court of Appeals recently ruled that the employer`s failure to sign an arbitration agreement did not make that agreement impossible to enforce. SK Plymouth, LLC v. Simmons, #01-19-00433-CV (April 16, 2020). The Tribunal`s decision focused on the absence of language in the arbitration agreement, which indicates that the employer`s signature was a condition precedent for the application of the agreement. It would be unfair to allow Blain to rely on the employment contract to the extent that he benefits from it, but to reject the corresponding arbitration agreement because it burdens him, the court concluded. Blain argued that PresbiBio did not have a valid and binding arbitration agreement. The court of justice accepted and rejected the company`s request. PresbiBio appealed. The Court of Appeal set aside an arbitration and ordered arbitration. After the plaintiffs` class action lawsuit was filed, the defendants filed a request for arbitration, arguing that the employees were bound by “independent ownership agreements.” These agreements contained an arbitration clause that covered “all claims, disputes or controversies related to or arising out of this agreement.” However, the agreements were only signed by many defendants and among themselves. In the future, employers may want to ensure that their arbitration agreements contain the signature of their own representatives. Since this can be overlooked, given that many employees now work from home, employers may wish to check the language of their arbitration agreements to determine whether their agreements require the signing of the company as a condition precedent to its application.

Eliminating such language can minimize the risk that arbitration agreements will be found unenforceable simply because of the employer`s lack of signature. It is indisputable that Blain agreed to settle his labour disputes as a condition of his employment, the court said. And Blain executed both the job offer and the arbitration agreement before working for PresbiBio. First, it recognized the general rule that signatures are not necessary to constitute a binding contract. However, the court stated that the intention of the parties, as stated in the letter, was that both parties had to sign before being effective. It relied on the language of the agreement, which stated that “the employee and the company, by using this process and signing this agreement, have waived all rights to sue the claims covered by this agreement.” Professional Note: Although the court ordered arbitration proceedings in this case despite the shortcomings of the agreement, other jurisdictions have been less generous to employers in interpreting these documents…

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