Employee-signed arbitration agreement—what could possibly go wrong?

During the onboarding process, employers often have employees sign various agreements, including arbitration provisions. But what obligation does the employer have to likewise sign the agreements? In a recent federal court opinion, an employer learned the hard way that it, too, should sign the agreement when the document itself suggests the parties both agree to be bound by it. Let’s take a closer look!

Facts

Janell Byars alleged her former employer, Gray Daniels Ford-Lincoln, was liable to her for sexual harassment, retaliation, and several state-law torts (wrongful acts). She claimed the dealership “never did anything” when she reported the harassment. She said she was demoted for complaining and later resigned.

After Byars filed suit against Gray Daniels, it asked the court to dismiss her claims or send the case to private arbitration. She opposed the request.

Decision

On review, the Mississippi federal court found the arbitration agreement couldn’t be enforced.

Arbitration agreements are contracts, and under Mississippi law, they must be enforced as the contracting parties intended. According to the court, “The analysis begins (and usually ends) with the plain language of the contract.”

Byars was the only one who actually signed the arbitration agreement. Gray Daniels did not. The agreement had express language, however, clearly indicating an intent for the parties to be bound to the arbitration agreement by signing.