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Employer’s Signature May Not Be Essential to Enforceability of Arbitration Agreement 

From JDSupraArnoldo Rodriguez discusses a unique case in which an employer did not sign an arbitration agreement but was still able to enforce it. Arnoldo writes:

The Court of Appeals for the First District of Texas recently held that the absence of the employer’s signature from an arbitration agreement did not render that agreement unenforceable. SK Plymouth, LLC v. Simmons, No. 01-19-00433-CV (April 16, 2020). Central to the court’s holding was the absence of any language in the arbitration agreement indicating that the employer’s signature was a condition precedent to the enforcement of the agreement.

Court of Appeals Decision

The Court of Appeals for the First District reversed and remanded, holding the arbitration agreement to be enforceable and applicable to Simmons’s claims. While acknowledging that the enforceability of a contract requires mutual assent, “[T]he Supreme Court of Texas has held that the FAA [Federal Arbitration Act] does not require parties to sign an arbitration agreement for it to be valid ‘so long as [the agreement is] written and agreed to by the parties.]” The court went on to state that “[u]nder principles of Texas contract law, a party’s failure to sign an agreement will render it unenforceable when the terms of the contract make it clear that the party’s signature is required to make it binding.”

Applying these principles, the court noted that nothing in the language of the arbitration agreement contemplated the employer’s signature “as a condition precedent to the agreement’s enforceability.” The fact that Simmons had to sign the arbitration agreement to demonstrate her acknowledgment of receipt was insufficient, by itself, to conclude that SKEPOA was required to sign the agreement as evidence of its assent. In the absence of SKEPOA’s signature, the court concluded that SKEPOA nevertheless intended to be bound by the agreement because the agreement bound “the parties” to submit to arbitration and SKEPOA drafted the agreement in the first instance.

In reversing the lower court’s decision, the court rejected Simmons’s argument related to whether she had been an employee of SKEPOA. Neither SK Plymouth and SKEPOA’s inability to find a signed transfer letter, nor Simmons’s affidavit, negated the employer’s evidence that she had been employed by SKEPOA, which included her payroll records and an affidavit regarding her transfer. Moreover, as the court explained, her argument had nothing to do with the ultimate issue on appeal, which was whether SKEPOE had assented to the arbitration agreement given the absence of its signature.

Source: Employer’s Signature May Not Be Essential to Enforceability of Arbitration Agreement | Ogletree, Deakins, Nash, Smoak & Stewart, P.C. – JDSupra

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