Posting an arbitration section in your employee handbook may put an employee on notice of a company policy or “offer,” of which the employee could be said to be “generally aware,” but it might not, without more, establish that there is an agreement to arbitrate, pints out Gilbert A. Samberg for Mintz, Levin, Cohn, Ferris, Glovsky and Popeo.

There must be evidence of the employee’s acceptance, he explains in a post on the firm’s website.

He illustrates his point with a case from the Eighth Circuit, concluding: “An employer needs to be able to prove acceptance by each employee of an ‘offer’ of arbitration.”

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On the heels of the Supreme Court’s recent pro-arbitration pronouncements, the U.S. Court of Appeals for the Eighth Circuit issued a reminder that, although agreements to arbitrate are favored under the law, arbitration agreements must still be contracts, writes Susan Fitzke for Littler Mendelson.

“In order to enforce an agreement to arbitrate, therefore, the employer must prove that a valid contract to arbitrate was created,” she explains. “This may seem self-evident, but in an era where some arbitration programs are contained only in employee handbooks or on-line, this is a point worth closer review.”

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If a contract is too one-sided, it can be ruled illusory and unenforceable, warns Shepard Davidson in the Burns Levinson In-House Advisor blog.

That is exactly what happened to the defendant in McNamara v. S.I. Logistics, Inc. when it tried to enforce its contractual right to arbitration he writes.

In that case, the defendant sought to compel arbitration based on an agreement that  purported to grant the company the unilateral right to modify its terms without any prior notice to McNamara, a former affiliate.

The court found in favor of McNamara, finding that the agreement was illusory.

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The United States Supreme Court has agreed to resolve a key issue in international arbitration agreements: whether the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards permits a non-signatory to an arbitration agreement to compel arbitration against a signatory to arbitration based on the doctrine of equitable estoppel.

A post on the Harris Bricken China Law Blog points out that the question has split the circuit courts, meaning that now the answer to the question depends on where in the United States the dispute is being litigated.

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Two recent court decisions dealing with mandatory arbitration agreements highlight why some manufacturers may gain by requiring pre-dispute employment arbitration agreements, writes Matthew Miklave for the Robinson+Cole Manufacturing Law Blog.

He discusses two federal court rulings favoring individual arbitration over litigation.

In one of the cases, the Second Circuit Court of Appeals reversed a lower court and found that a union labor contract which contained a clause requiring the arbitration of all disputes between the union represented employees and the employer prevented an employee from bringing an individual claim in federal court.

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The Eighth Circuit recently ruled that an employee was not subject to the employer’s arbitration agreement, including a delegation clause. The agreement was contained in an employment handbook addendum, which was available to the employee electronically.

Henry Allen Blair, writing for Arbitration Nation, discusses the case in a post about the ruling in Shockley v. PrimeLending.

Blair cites the court’s opinion, which states that “[w]e are aware of no legal authority holding that an employee’s general knowledge or awareness of the existence of a contract constitutes the positive and unambiguous unequivocal acceptance required under Missouri law.”

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Delta Air Lines scored a victory when a California federal court granted the company’s motion to dismiss a putative class action based on a data breach, primarily by arguing that its publicly posted privacy policy is not a contract and Delta did not have any enforceable obligation to keep the plaintiff’s data secure, reports Manatt, Phelps & Phillips.

A Delta passenger sought to represent a nationwide class of consumers alleging breach of contract after the airline suffered a data breach, explains Jesse M. Brody.

The court found that the plaintiff could not assert a breach of contract based on Delta’s privacy policy, because it expressly disclaimed that it constitutes a contract, stating, “This Privacy Policy is not a contract and does not create any legal rights or obligations.”

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A post on the website of The In-house Advisor offers some cautionary advice about transactions that may be documented through a primary contract and subsidiary agreements that are referenced in, or even attached as exhibits to, the primary.

Shep Davidson of Burns & Levinson explains:

“While there is nothing inherently good or bad about papering a transaction this way, it is important to keep in mind that doing so may mean that the dispute resolution provisions of the primary contract do not apply if litigation arises and only involves a claimed breach of a subsidiary contract. Indeed, that is the hard lesson that was learned by the defendant in National Dentix, LLC v. Gold.”

He writes that the lesson here is that “even very closely related agreements still may be viewed as completely independent if there is a claim that only one of them has been breached.”

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When arbitration awards resolving contract claims are not based on the actual provisions of the relevant contracts, but rather on an individual arbitrator’s personal sense of “justice” and “public policy,” they can be successfully challenged, and vacated by the courts, points out Robert J. Kaler in a post for Holland & Knight.

He discusses a case in which an arbitration award purported to remedy an alleged breach of and “failure of consideration” for the owner’s underlying network operator agreement with the plaintiff’s subsidiary by rewriting that agreement so as to materially change its financial requirements.

A court subsequently vacated the award, finding that the arbitrator exceeded his powers by voiding the guaranty of the parent company while re-writing the terms of the operating agreement.

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The Ninth Circuit upheld the district court’s grant of a motion to compel individual arbitration in a case that “tests the outer limits of what constitutes a ‘reasonably conspicuous’ provision” in an online contract, according to Ballard Spahr.

The article says Holl v. United Parcel Service, Inc. “contrasts with prior Ninth Circuit rulings, arguably involving less extreme facts, which denied motions to enforce online arbitration clauses. Holl, however, was decided on a petition for mandamus, a remedy that requires the petitioner to establish clearly and indisputably that ‘extraordinary circumstances’ exist to overturn the district court’s decision.”

The class action complaint in Holl alleged that UPS systematically overcharged its retail customers.

Companies with online terms of use that include an arbitration clause must still exercise great care in designing the website so that users become contractually bound to arbitrate, the firm advises.

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Holland & Knight offers some tips for preparing a memorandum of understanding or similar agreement executed at the conclusion of the mediation.

Authors Gregory R. Meeder and Lisa M. Kpor explain:

“An agreement reached at the conclusion of a mediation session typically represents an abbreviated version of a formal settlement agreement that will be entered into by the parties at a later date. Occasionally, however, parties are unable to finalize the comprehensive settlement agreement, and the terms of the memorandum of understanding become vital to resolving related disputes.”

The discuss seven important points to cover in drafting the memorandum.

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A federal judge in Pennsylvania has ruled that the employer of a company was bound by an arbitration agreement with her employer even though she did not sign or return the agreement, according to a post on the website of Ballard Spahr.

The court found that the former employee was bound by language in the policy, which had put the plaintiff on notice:

If you do not opt out of this Policy within this 14-day period, both you and Compassus will be required to arbitrate all claims and disputes covered by this Policy in accordance with its terms.

Her acceptance of its terms could be inferred from her failure to opt-out within 14 days outlined in the policy and by her continued employment, the court ruled.

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Attorney Deborah Hankinson has been selected for the 14th time to D Magazine’s list of the Best Lawyers in Dallas for her practice in conflict resolution.

The 2019 honor recognizes the former Texas Supreme Court Justice’s comprehensive practice in conflict resolution, which includes mediation, early neutral evaluation, arbitration, settlement consulting, and special settlement counsel.

The award recognizes Hankinson’s practice as a broad range of consulting and counseling options that take full advantage of her analytical and problem-solving skills. From pre-litigation to post-trial, she advances procedural efficacy and the potential for settlement.

Her practice promotes opportunities for problem-solving and resolution at all stages of a dispute by making a range of easily accessible services available to those seeking alternatives to trial. This approach expands traditional mediation and arbitration to offer a new, broad-based resource for solving legal conflicts.

Hankinson offers early neutral evaluations to assess the merits of a dispute as a predicate to potential settlement. She also conducts pre-suit mediations and helps clients develop early settlement strategies. Based on her broad expertise, she is often retained as special settlement counsel.

Hankinson has earned recognition from The Best Lawyers in America, Chambers USA, Texas Super Lawyers, Benchmark Appellate, Texas Lawyer, Dallas Business Journal, Martindale-Hubbell and Lawdragon, in addition to D Magazine. She also has been honored as a Texas Trial Legend by the Dallas Bar Association and was selected to The National Law Journal’s inaugural ADR Champions list, recognizing trailblazers from across the nation.

While certain courts look with skepticism on class-action waivers in arbitration agreements, it is clear from the Supreme Court’s decisions, beginning with AT&T Mobility LLC v. Concepcion through the court’s most recent decision in Epic Systems Corporation v. Lewis, that class action arbitration waivers do not violate the law, according to a Faegre Baker Daniels website post.

Ehren M. Fournier writes that Epic Systems reiterates the Court’s deference to arbitration agreements.

He discusses several points to consider when drafting an arbitration agreement with a class action waiver, including an opt-out option, conspicuous language, delegations to an arbitrator to decide enforcement, authority to allow class action, cost and fee provisions, severance language, and a claimant-friendly forum.

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The law firm Polsinelli recently defeated a motion to dismiss a client’s judicial review of an arbitration award, successfully arguing that adopted arbitration rules that waive appellate rights do not waive a party’s right to judicial review under the Federal Arbitration Act.

A post on the firm’s website introduced the case:

The case presented a conflict between the parties’ contractually-adopted arbitration rules and an individual party’s statutory rights under the FAA. Although ultimately successful, the case served as an important reminder for parties to thoroughly review contractual arbitration provisions – and any procedural rules referenced therein – before agreeing to them.

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To get around the unilateral character of adhesive contracting, U.S. courts have, over the past five decades, refocused contract formation on constructive notice, points out Henry Allen Blair in Arbitration Nation.

“If a reasonable person in the position of the recipient of boilerplate should have seen the terms, the recipient will be bound by those terms, regardless of whether she ever actually read or understood the them. Constructive awareness coupled with an individual purchasing something from a commercial party amounts to assent,” he adds.

The article discusses Starke v. SquareTrade, Inc., in which the Second Circuit concluded that the a purchaser of a consumer product protection plan did not have reasonable notice of an arbitration provision contained in the terms and conditions communicated via a hyperlink in a post-sale email.

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The Ninth Circuit has ruled in a contract arbitration case that incorporated multiple Federal Acquisition Regulation clauses that govern the recovery of expenses in the event a contractor is terminated for convenience, i.e. required documentation and procedures.

Pepper Hamilton’s Constructlaw blog discusses Aspic Eng’g & Constr. Co. v. ECC Centcom Constructors LLC, in which an arbitrator had awarded Aspic more than $1 million. The arbitrator concluded that Aspic was not required to strictly comply with the FAR requirements based on several factors.

“The crux of the decision turns on whether the arbitrator’s decision draws its essence from the contract. The Ninth Circuit also explained that whether the award directly conflicted with the subcontracts was insufficient—on its own—to vacate the award,” the blog post explains.

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In a post on the Mintz, Levin, Cohn, Ferris, Glovsky and Popeo website, Gilbert A. Samberg discusses the question: What if a contracting party fails to appear to seek enforcement of an enforcement clause?

“At least two New York State trial courts tell us that your unexcused default in responding to a summons and complaint can be deemed a waiver of a contractual right to arbitrate,” he writes.

Courts in those cases granted default judgments on contract claims in such circumstances notwithstanding that the contracts in question contained arbitration clauses.

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Bloomberg Law is reporting that a former Winston & Strawn LLP intellectual property attorney can litigate—and can’t be forced to arbitrate—her pay, bias, and retaliation claims.

The California Supreme Court declined to review an appellate ruling that the arbitration agreement Constance Ramos signed as an income partner contained unfair provisions that couldn’t be separated from the rest of the agreement, according to Bloomberg’s Joyce Cutler.

Under those provisions, Ramos would have been required to pay half the costs, and she would be subject to secrecy clauses that would have prevented her from interviewing potential witnesses.

Read the Bloomberg Law article.

The Second Circuit affirmed a ruling that denied a web service’s motion to compel arbitration, finding that the user did not have reasonable notice of the arbitration provision contained in the terms and conditions that were communicated via a hyperlink in a post-sale email, reports Proskauer Rose in its New Media and Technology Law Blog.

Jeffrey Neuburger, a partner in the firm, wrote the article.

“While the court recognized that a party has a duty to read a contract, it stressed that this does not morph into a duty to ‘ferret out contract provisions when they are contained in inconspicuous hyperlinks,’ particularly where, as in this case, the user was presented with multiple documents, each containing different sets of terms,” Neuburger writes.

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