Arbitration Program Unilaterally Imposed On At-Will Employees Was Unenforceable
This case addressed the issue of whether a program adopted by Hallmark Cards, Inc., requiring employees to give up their right of access to the courts for employment-related claims, and providing arbitration as the exclusive means of resolution of those claims, is a legally enforceable contract.
The Missouri Court of Appeals held that Hallmark's dispute resolution program (DRP), which contained four levels with the fourth level being binding arbitration, lacked consideration and thus was not a legally enforceable contract pursuant to which terminated employee could be compelled to arbitrate her age discrimination and retaliation claims.
The employee/plaintiff was an
at-will employee, Hallmark unilaterally imposed the DRP and did not ask its
employees to express agreement, and thus DRP thus was a term and condition of
employment that could not be enforced following termination of the employment
relationship. Furthermore, the DRP was non-mutual as it only covered employment
related claims, Hallmark was free to sue any employee for any reason without
having to arbitrate, and Hallmark reserved the right to change DRP's terms at
any time. Finally, because the employee was at-will, there was no offer of
continuing employment that could constitute consideration for the DRP.
Morrow v. Hallmark
Cards, Inc.