South-Western Legal Studies in Business

Complicated Arbitration Agreement Does Not Affect Validity
Description Appeals court upheld an arbitration agreement that required all employment disputes to be subject to arbitration. Plaintiff's claim that a sexual harassment case should be litigated, and that the arbitration clause was difficult to comprehend, did not affect the validity of the arbitration requirement.
Topic Alternate Dispute Resolution
Key Words Employment Discrimination; Compulsory Arbitration; Contract
C A S E   S U M M A R Y
Facts Gold worked for Deutsche Bank. He signed a document that contained an arbitration clause requiring all employment disputes with the bank to be arbitrated. He was fired after a year and sued for employment discrimination based on sexual orientation. He contended he was harassed because of his orientation and that one supervisor promised to help him if he engaged in a sexual relationship with him. Gold sued in federal court, contending that the arbitration clause was too broad and too difficult to understand. The district court dismissed the suit; holding that he must submit his complaint to arbitration. Gold appealed.

Affirmed. Statutory claims of employment discrimination can be subject to mandatory arbitration. No special circumstances existed to hold invalid the broad arbitration clause in the National Association of Securities Dealers form signed by the employee. While he claims that he did not understand the form and its reference to NASD procedures, as a competent adult with an MBA, he was capable of asking for the needed materials to understand the form. In the absence of fraud or other wrongful conduct by one of the contracting parties, the parties to a contract are presumed to know the contents of a contract and to have assented to them.

Citation Gold v. Deutsche Aktiengesellschaft, 365 F.3d 144 (2nd Cir., 2004)

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