CONTINUED EMPLOYMENT SUFFICES AS ADEQUATE CONSIDERATION FOR AN ARBITRATION AGREEMENT
The plaintiff’s employer adopted a dispute resolution program containing language stating that by continuing or accepting employment each employee agreed to submit all covered claims to the dispute resolution program and to accept the resulting arbitration award. The employer later amended the dispute resolution program, clarifying, among other things, that the employer was equally bound to submit all claims to arbitration. When a dispute arose between the parties, the plaintiff filed suit in federal district court, arguing that the amended dispute resolution program was not supported by any consideration and, consequently, was not a valid contract. The court disagreed and found that by continuing his employment the plaintiff’s conduct manifested intent to be bound by, and constituted acceptance of and consideration for, the amended dispute resolution program. The court alternatively found that mutual promises to submit claims to binding arbitration constituted adequate consideration. Rangel v. Hallmark Cards, Inc., Case No. 10-04003 (USDC D. Kan. Mar. 4, 2010).
This post written by Dan Crisp.
