Missouri Court of Appeals finds arbitration agreement unenforceable

 

If you have suffered from discrimination or harassment, you may be able to obtain a jury trial even if your employer wants to arbitrate.

Missouri courts have restricted the ability of employers to enforce arbitration agreements in recent years. While businesses generally prefer arbitration because using private arbitration can take less time and expense than the traditional court process, employees may prefer to take their case for discrimination, harassment or other employment law violation to a jury. Depending on the circumstances, a jury trial may provide a greater ability for an employee who has suffered an employment law violation to obtain fair compensation.

Missouri Court of Appeals finds employee gained no benefit for signing arbitration agreement

Generally, courts look favorably on arbitration agreements to encourage parties to resolve issues without using the resources of the court. However, in recent years Missouri courts have been willing to restrict the enforceability of arbitration clauses in employment contracts. The Missouri Court of Appeals has continued to uphold that trend so far in 2015, recently finding that an arbitration agreement entered into between an employer and employee was not enforceable because there was no “consideration” for the employee to sign the agreement. In order for a contract to be enforceable, each party must receive some benefit from the agreement, called “consideration.”

The case, decided on January 13, 2015, arose when an employee brought a lawsuit alleging she suffered illegal discrimination and harassment. The trial court refused to dismiss the case, claiming that the existing arbitration agreement did not provide the employee any consideration. The employer appealed, arguing that there was consideration for the contract because the employee received a new at-will employment agreement and because the employer also agreed to arbitrate legal disputes, although it carved out a significant exception for itself.

The Missouri Court of Appeals disagreed.

In this case and others, Missouri courts have routinely held that continued at-will employment is not consideration for a contract. At-will employment means that the employer and employee continue under the contract if each side agrees – there is no definite length of employment, and the contract can end at any time for any reason not prohibited by law. In this case, the judges held that there was no benefit for the employee to obtain a new at-will employment, either, since an at-will employment contract can end at any time.

The employer also argued that because it agreed to arbitrate claims, the employee received consideration. However, the arbitration agreement allowed the employer to bring the enforcement of a non-compete agreement to a court. As the court put it, the employer was free to bring its most likely legal claim to the courts, but the employee could not bring her most likely legal cause of action to court. As such, the court held the arbitration agreement was not enforceable.

Understand and protect your rights

If you have suffered discrimination or harassment in the workplace, you may have legal options, including the ability to file a lawsuit. However, you need the help of an experienced employment law attorney to ensure you understand and protect your rights throughout the legal process. If successful, a lawsuit alleging discrimination or harassment can result in back pay, reinstatement to a position, and other money damages.

The attorneys at Thornberry Brown, LLC, have significant experience protecting employee rights in the workplace.

Keywords: Arbitration, employment law, harassment, discrimination, lawsuit, Missouri Court of Appeals.