Can You Be Forced to Arbitrate Even If You Didn’t Sign the Underlying Arbitration Agreement?

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Can You Be Forced to Arbitrate Even If You Didn’t Sign the Underlying Arbitration Agreement?

by Joel N. Kreizman on January 16, 2013

To the surprise of many New York and New Jersey businesses, the answer may be yes. Based on the theory of “intertwinement,” at least one New Jersey court has held that parties who did not sign the underlying arbitration agreement can be forced to arbitrate their claims.

In an April 23, 2011, unreported Opinion, the Appellate Division held that Michael and Robyn Hirsch were required to submit their claims against Amper Financial Services (“Amper”) to a Financial Industry Regulatory Agency (“FINRA”) arbitration panel even though the Hirsches had no agreement to arbitrate disputes between themselves and Amper. The ruling appeared to be contrary to the generally accepted principle that arbitration is a creature of contract and parties may be required to arbitrate only with persons with whom they have contracted to arbitrate their disputes.

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