Cost-Sharing Provision of Arbitration Clause Illegal and Unenforceable
Description Appeals court held that a provision in an employment arbitration clause requiring parties to share the costs of arbitration equally is illegal since Title VII allows a prevailing party to be awarded costs and fees. An arbitration clause may not be contrary to the rights provided in federal law.
Topic Alternate Dispute Resolution
Key Words Arbitration; Costs
C A S E   S U M M A R Y
Facts Perez worked for Globe as a security agent at the Miami airport. To obtain employment, he has to sign an arbitration agreement that called for arbitration of any dispute relating to employment. The agreement stated that all costs of arbitration would be shared equally by the employee and the employer. After Perez was fired, she sued Globe for sex discrimination in employment. Globe moved to compel arbitration. The trial judge refused to compel arbitration, holding that the arbitration agreement was invalid. Globe appealed.
Decision Affirmed. The provision in the arbitration agreement stating that the costs of arbitration would be shared equally was illegal and unenforceable in light of the fact that the agreement also required the employee to submit Title VII discrimination claims to arbitration and the fact that Title VII provides that a prevailing party is entitled to be awarded fees and costs. Since this aspect of the arbitration agreement is illegal and unenforceable, the entire arbitration agreement is unenforceable.
Citation Perez v. Globe Airport Security Services, Inc., C F.3d C (2001 WL 649497, 11th Cir., 2001)

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