In a June 11, 2018 decision, the U.S. Court of Appeals for the Fifth Circuit held that an arbitration agreement between an employer and an employee was not enforceable when the agreement had been signed only by the employee and not by the employer. The case, Huckaba v. Ref-Chem, L.P., 17-50341, involved the potential arbitration of a workplace dispute. The United States District Court for the Western District of Texas had ruled on behalf of the defendant, Ref-Chem, L.P., to dismiss Huckaba’s case without prejudice and to compel arbitration. The Fifth Circuit reversed.
In its reasoning, the Fifth Circuit analyzed the validity of the arbitration agreement as a matter of state contract law. The state law at play was the law of Texas, “which has no presumption in favor of arbitration when determining whether a valid arbitration agreement exists.” In addition, the Court cited Klein v. Nabors Drilling USA L.P., 710 F.3d at 236 (5th Cir. 2013) in stating that, because the question of the validity of the arbitration agreement was a matter of state contract law, “at this stage, the strong federal policy favoring arbitration does not apply.”
In its analysis of the agreement under Texas state contract law, the Fifth Circuit emphasized express language in the arbitration agreement requiring signature by both parties and the presence of a signature block for both parties, accompanied by the actual signature of the employee, alone.
The full opinion of the Fifth Circuit in Huckaba v. Ref-Chem, L.P. is available here.