Right hand, left hand: Release cancels arbitration agreement

Did you hear the one about the right hand not knowing what the left hand was doing? The punch line was anything but funny for one of the country’s biggest companies. While the case arose in the Northeast, the result would be the same here in Texas. Forewarned is forearmed.

The right hand: arbitration agreement

Patrice Kantz worked for AT&T. One day in December 2011, she arrived at work to an e-mail titled “Action Required: Arbitration Agreement.” The agreement required her to submit to binding arbitration any dispute “arising out of or related to your employment or termination of employment with the Company.”

The agreement had an opt-out provision—that is, the employee could opt out of the agreement if desired. If not, the employee was presumed to have consented to the agreement. The agreement also stated it survived after the employment relationship ended.

All went fine until one day several years later. That day, Kantz came to work only to learn she was being let go in a reduction in force. She was asked to sign a different document, this one releasing all claims she might have against the company in exchange for severance benefits, and she did so.

The left hand: the release

So, what did the release language say? Here are the key portions: