SW Legal Educational Publishing

Mandatory Arbitration Clause Requiring Employees to Pay Arbitrator Not Enforceable
Description Arbitration requirement that employees had to pay half of arbitration fees when discrimination claims filed stricken as unenforceable. Cost would deprive employees of forum to resolve disputes.
Topic Alternate Dispute Resolution
Key Words Unenforceable Arbitration Clause, Federal Arbitration Act
C A S E   S U M M A R Y
Facts Shankle sued his employer for employment discrimination. The arbitrator invoked an arbitration requirement. The agreement that Shankle signed as a condition of employment stated: "I will be responsible for one-half of the arbitrator's fees, and the company is responsible for the remaining half." The district court refused to compel arbitration. The payment provision was held to be unenforceable, so Shankle's suit could proceed. Employer appealed.
Decision Affirmed. Under normal conditions, Shakle would have to pay about $2,000 to $5,000 to arbitrate his claim. As a janitor he could not afford the fee, so the fee serves as a significant barrier to his pursuing his claim. Without income from the employer he is suing, it would be especially difficult to pay for arbitration. Since this is an impediment to employees who seek to enforce their statutory rights, the fee-splitting requirement may not be enforced and the suit may proceed.
Citation Shankle v. B-G Maintenance Management of Colorado, Inc., 163 F.3d 1230 (10th Cir., 1999)

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