Unsigned And Out Of Luck

In keeping with Missouri courts' increasingly narrow view of enforcing arbitration agreements in the employment arena, the Missouri Court of Appeals in Baier v. Darden Restaurants yesterday upheld the trial court's decision finding that no valid arbitration agreement existed because both parties did not sign the bilateral contract. Arbitration clauses, which require parties resolve their disputes through an arbitration process and outside of the courtroom, are an extremely useful tool for employers and can be an effective method of reducing the cost of long trials and lowering the risk of "runaway" juries. However, in light of this and other recent decisions by the Missouri courts regarding arbitration agreements in the employment context, employers must draft and execute arbitration agreements precisely and in accordance with Missouri case law to ensure enforceability.

In this case, Baier, a former waitress for Darden Restaurants, sued her employer alleging gender discrimination, retaliation, and harassment in violation of the Missouri Human Rights Act. The trial court denied a motion filed by Darden to enforce an arbitration agreement in which both parties promised to forego litigation and to arbitrate employment-related disputes between them. While Baier signed the document, nobody at Darden signed on behalf of the company. The Missouri Court of Appeals, Western District affirmed the trial court's decision refusing to enforce the agreement on the ground that Darden did not sign the bilateral contract. Specifically, the court noted it was "hard pressed to discern any purpose for placing a signature line for Darden . . . unless it was to require an authorized signature as a condition of mutual assent."

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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