This month the Missouri Court of Appeals for the Eastern District issued an opinion which slammed the door, once again, on the ability of employers to enter into an agreement with their employees whereby parties agree to bypass the court system in favor of private arbitration.  In Jimenez v. Cintas Corporation, S.W.3d (Mo. App. E.D. 2015) the Court found that there was insufficient consideration to support such an agreement due to lack of mutuality of obligation and the at will status of Jimenez’s employment.  This is not the first time in which a Missouri court has addressed this issue.  In Morrow v. Hallmark Cards, Inc., 273 S.W.3d 15 (Mo. App. W.D. 2008) these concepts were also addressed.  However, in Morrow, the issue of consideration was in reference to continued employment, not initial employment, which was the case in Cintas.  However, even more concerning was the fact that Cintas found that since the employer alone was exempt from arbitrating alleged violations of the non-compete provisions the agreement lacked mutuality.

The Court of Appeals reasoning is contrary to basic contract law as noted by the dissent.  Further, there is indeed mutuality in the agreement as the law does not require identical mutuality Vondras v. Titanium Research and Development Co. 511 S.W.2nd 883 (Mo. App. E.D. 1974).  Indeed, some of the exclusions from arbitration were those benefiting the employee, not the employer, including workers compensation claims and employment benefit claims.  If the parties do not desire complete mutuality there is no reason why an agreement cannot otherwise be enforceable.

Unfortunately, given the current makeup of the Supreme Court of Missouri, it is not likely that these legal issues will be clarified in the near future, especially given the Court’s recent decision of Baker v. Bristol Care, Inc. WL 4086378 (Mo 2014), wherein, these same arguments were addressed by the dissent.  Accordingly, when drafting such agreements great care should be taken when addressing issues of consideration and mutuality to insure conformity with the current case law in Missouri.

For additional information, please contact Terry Potter or Joe Orlet.