Arbitration agreements have to meet basic contract rules, including one that says both parties must be bound by its terms. Otherwise, the agreement is “illusory” and won’t be considered a binding contract.
Recent case: Daniel Mendivil’s employer had him sign an arbitration agreement as a condition of employment. The agreement was very strict and limited Mendivil’s rights.
When he was fired after filing a workers’ compensation claim, Mendivil sued, alleging retaliation.
The trial court said his case had to go to arbitration. The Texas Court of Appeals disagreed and reinstated Mendivil’s lawsuit. It concluded the agreement was so one-sided that it was not a contract at all because nothing in the document bound the employer to its terms. (Mendivil v. Zanios, No. 08-10-00359, Court of Appeals of Texas, 2012)
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