A surprising and cautionary tale for employers from the usually conservative and employer-friendly Fifth Circuit Court of Appeals – you might want to sign your arbitration agreements. The court last week struck down an employer’s arbitration agreement which was signed by the employee but not by the company. See here. The arbitration agreement at issue included (1) a statement that “[b]y signing this agreement the parties are giving up any right they may have to sue each other;” (2) a clause prohibiting modifications unless they are “in writing and signed by all parties;” and (3) a signature block for the employer. Based on those facts, the court held that neither party was bound by the agreement and declined to enforce it.
Employers should consider reviewing their arbitration agreements to make sure that, if the agreement references a company signature or has a signature block, the agreement is actually signed.