Perhaps a Chink in the Arbitration Armor?

As posted on the Contracts Law Prof Blog this past Monday, a Missouri Court of Appeals held that Hallmark’s ADR program was not a contract that could bind an employee to mandatory ADR. As Professor Meredith Miller wrote,

“Mary Kay Morrow began employment with Hallmark in 1982. In 2002, the company adopted an ADR program. The policy provided that, if an employee continued to work for the company after the policy’s effective date, that employee was deemed to have agreed to arbitration under the policy’s procedures. When Ms. Morrow sued Hallmark for age discrimination, the company pointed to its ADR program as a binding contract. Morrow argued that “the notion that the [ADR policy] is a contract is an illusion.” The Missouri appellate court held that Morrow could not be compelled to arbitrate because the ADR program did not constitute a “contract.” The court appeared to reason that simply continuing employment did not amount to assent to be bound by the ADR policy and, thus, no contract was formed.” Morrow v. Hallmark, 2008 WL 2582662 (Mo. App. W. D., June 30, 2008).

The court seems to center its analysis on consideration, arguing that remaining employed is not sufficient consideration to bind an employee to mandatory arbitration. If the decision holds (itself questionable given the overwhelming federal case law finding in favor of arbitration) this would potentially create a new avenue of challenges to mandatory arbitration clauses.