Ohio Supreme Court Rules that Nursing Home Arbitration Agreement is Enforceable

Yesterday, the Ohio Supreme Court ruled that an arbitration agreement contained in a nursing home contract is enforceable because the 95 year old signatory, Hayes, voluntarily signed it and her signature was not a precondition to her admission to the nursing home. The case, Hayes v. Oakridge Home, Slip Opinion No. 2009-Ohio-2054, focused on whether Hayes’s age rendered the arbitration agreement procedurally unconscionable and whether a voluntarily signed arbitration agreement, that was not a condition of admission to residency, was substantively unconscionable. The Court of Appeals below found both procedural and substantive unconscionability because the arbitration agreement took away Hayes’s rights to attorney fees, punitive damages, and a jury trial (substantive unconscionability) and Hayes was a 95-year-old woman with no business or contract experience, and Oakridge had all the bargaining power (procedural unconscionability).

The Court held, correctly in my view, that age alone is not evidence of procedural unconscionability. The Court found no evidence, other than Hayes’s age, to support a finding of procedural unconscionability. To find that old age alone would preclude enforcement of a contract would create significant problems for older persons trying to enter into contractual relationships.

The Court also held, again correctly in my view (although this was a closer call), that the agreement was not substantively unconscionable. The terms of the arbitration agreement, which required Hayes to waive her right to a jury trial, punitive damages and attorney’s fees, are harsh, but, given the voluntary nature of the agreement, not substantively unconscionable. While federal or state legislation may ultimately render these types of agreements unenforceable, right now, such agreements continue to be enforceable.

One thought on “Ohio Supreme Court Rules that Nursing Home Arbitration Agreement is Enforceable”

  1. Typo above.

    There is a bill in Congress to ban arbitration agreements in Nursing Home Agreements (not the Arbitration Fairness Act of Feingold which is another one). I It is important for ADR community members to weigh in forcefully on questions related to arbitration as it appears we are at a time that for the first time in 84 years serious consideration is being given to the manner in which arbitration operates in domestic and international settings.

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