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A Kansas federal court enforced an employment arbitration agreement after striking the fee-splitting provision, even though the employee did not recall signing the agreement.
In Griffin v. Yellow Transportation, Inc., No. 06-2264-CM, 2007 WL 3120419 (D. Kan. Oct. 22, 2007), Griffin was employed at Yellow from 2002 until 2006. Griffin signed a dispute resolution agreement when he began his employment at Yellow, requiring all disputes arising out of his employment to be resolved exclusively by arbitration.
Griffin filed an employment discrimination claim against Yellow, prompting it to file a motion to dismiss and compel arbitration. Yellow argued that Griffin was bound by the dispute resolution agreement.
Griffin argued that the court should not enforce the arbitration agreement because he did not remember signing an arbitration agreement and because he believed that the dispute resolution process was not binding.
The Court found Griffin’s lack of recollection insufficient to invalidate the signed agreement. Griffin did not challenge the authenticity of the agreement or dispute the signature on the agreement was his own.
Next, Griffin argued that the cost-splitting provisions of the dispute resolution plan render it unenforceable because he cannot afford to bear the financial burden incurred, as stipulated in the agreement.
The Court noted that a party seeking to invalidate an arbitration agreement because it is prohibitively expensive bears the burden of showing a likelihood of incurring such costs. While there was no information on the actual cost of the arbitration, the Court examined a similar local case, which cost the plaintiff nearly $30,000 in fees.
After accounting for Griffin’s $40,000 annual income, the Court determined that splitting the costs of arbitration would effectively deny Griffin a forum. Therefore, Griffin met the necessary burden, and the fee-splitting provision was rendered unenforceable.
Although the fee-splitting provision was unenforceable, the agreement contained a savings clause, which provided that Yellow will pay the costs and fees associated with arbitration. Therefore, the Court severed the fee-splitting provision and required Yellow to pay the costs of arbitration. With this new construction in place, the Court stayed the litigation and compelled arbitration between the parties.
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