In recent years, the Supreme Court has issued many decisions about arbitration, including the enforceability of arbitration agreements and employment agreements that bar classwide arbitration. Recently, the Eighth Circuit issued a decision in a case involving those issues, holding that an employment agreement’s arbitration clause mandating individual arbitration was unenforceable. Shockley v. PrimeLending, -- F.3d. --, 2019 WL 3070502 (8th Cir. 2019). The arbitration clause provided that the employee and the company agree to “resolve the covered dispute exclusively through final and binding arbitration,” that both parties waive “the right to initiate a class, collective, representative or private attorney general action,” and that “[a]ll Covered Disputes will be settled by binding arbitration, on an individual basis.” The court did not find that belt-and-suspenders language defective in any way. Rather, the court reasoned that a valid agreement to arbitrate had not been formed because the employer had provided the employee with a link to the agreement, but there was no evidence the employee had clicked the link or otherwise assented to the agreement.
August 05, 2019 Practice Points
Eighth Circuit Reminds: The First Principle of Arbitration Is Get Consent
The court held an employment agreement’s arbitration clause was unenforceable as there was no evidence the employee had assented to the agreement.
By Gabriel Gillett
The Eighth Circuit’s decision does not provide gloss on the Supreme Court’s arbitration jurisprudence—it does not even cite many of the Court’s recent cases. The Eighth Circuit’s decision also does not discuss a novel legal theory or break new ground in the arbitration space. Nor does it address one of the many open and often litigated issues related to arbitration. Still, the holding is notable because it serves as an important reminder: even the best, clearest language in an arbitration clause (or any contract for that matter) is enforceable only if the parties actually agreed to it. See, e.g., Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1415 (2019) (“‘[T]he first principle that underscores all of our arbitration decisions’ is that ‘[a]rbitration is strictly a matter of consent.’” (citations omitted)).
Gabriel Gillett is an associate at Jenner & Block LLP in Chicago, Illinois.
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