Missouri Supreme Court Enforces Arbitration Agreement in At-Will Employment

An at-will employee argued that his promise to arbitrate was not supported by consideration. Soars v. Easter Seals Midwest, 563 S.W.3d 111 (Mo. 2018). While both lower courts agreed with the employee and thus refused to compel arbitration, the Missouri Supreme Court reversed because the agreement “includes a delegation clause, identical to the one upheld in Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010), providing:

The Arbitrator, and not any federal, state, or local court or agency, shall have

exclusive authority to resolve any dispute relating to the interpretation,

applicability, enforceability or formation of this Agreement including, but

not limited to any claim that all or any part of this Agreement is void or

voidable.”

“For [employee] to properly contest the validity of [this] delegation provision, he must have challenged the delegation provision specifically,” according to the Missouri Supreme Court. “The delegation provision is supported by adequate consideration because the provision, severed from the rest of the Agreement and considered by itself, is a bilateral contract supported by consideration.” So the court held that it was for the arbitrator to consider the employee’s other arguments.

In contrast, two dissenters “believe the arbitration agreement in this case is not enforceable because it lacked legal consideration due to Soars’ at-will employment status.”

Lisa Larkin of Baker Sterchi Cowden & Rice LLC covers the case with more details.