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Binding arbitration ordered despite agreement ambiguity

August 2021 employment law letter
Authors: 
Paymon Mondegari and Ryan McKim, Clark Hill LLP

Arbitration agreements are basically contracts, and they won't be enforced absent proof both parties agreed to their terms. When the agreement is ambiguous and the ambiguity was created by the employer, one might expect a court won't enforce the contract against the employee. But arbitration agreements are favored by some basic legal tenets, so is that enough to save an ambiguous agreement?

Trial court finds ambiguity

Jose Calderon and Western Bagel Company, Inc., signed an arbitration agreement. The company drafted the English version of it, and a third party created a Spanish translation.

The English version required the parties to engage in binding arbitration of employment disputes. The Spanish version called for both binding and nonbinding arbitration. Paragraph 10 of the English version stated that if any part of the agreement is found to be unenforceable, "this Agreement shall be reformed to the greatest extent possible to ensure that the resolution of all conflicts between the parties as described herein are resolved by neutral, binding arbitration." No part of the English version provided for nonbinding arbitration.

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