SW Legal studies in Business

Arbitration May Not Proceed in Absence of Clear Agreement to Arbitrate
Description

Missouri appeals court held that there was an issue raised by an employee about whether he ever agreed to an arbitration agreement as would be required to compel arbitration. The trial court should have taken evidence to determine if a contract existed under which parties agreed to arbitrate.

Topic Alternate Dispute Resolution
Key Words

Arbitration; Employment

C A S E   S U M M A R Y
Facts

Kunzie worked as an at-will employee for Jack-in-the-Box (Jack) for 18 years before he was fired. He filed a discrimination claim with the state contending wrongful termination on the basis of age and sex. Jack files a motion to compel arbitration because Kunzie has signed an agreement by which “he agreed that he would arbitrate any and all claims or disputes that arouse out of or were related to the termination of this employment.” The trial court granted Jack’s motion, finding that the parties entered into a valid agreement with an arbitration provision. Kunzie filed a motion for rehearing, claiming that he never signed the agreement. He provided evidence that the signature on the agreement was not his. The trial court ordered the parties to proceed with arbitration. The arbitrator held for Jack, finding no evidence of discrimination. The trial court then held that Kunzie knew of the arbitration agreement, so it could be applied and the decision of the arbitrator was final. Kunzie appealed.

Decision

Reversed. When faced with a motion to compel arbitration, the court must determine whether the valid arbitration agreement existed and, if so, whether the dispute fell within the scope of the agreement. The court may hold evidentiary hearings to determine if an agreement exists so as to determine if arbitration may proceed. Arbitration is a matter of contract, so there must be a contract present. The court must find that a mutual agreement existed. Given the dispute as to whether Kunzie ever agreed to the arbitration agreement, the court failed to settle that issue before allowing the matter to proceed.

Citation

Kunzie v. Jack-in-the-Box, ---S.W.3d--- (2010 WL 779367, Ct. App., Mo., 2010)

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