A Minnesota federal court held that an arbitration agreement within an employee handbook does not create an agreement to arbitrate in the absence of any evidence that the handbook containing the agreement was ever delivered to the employees. Moreover, the handbook in this case contained a broadly-worded disclaimer that precluded the formation of "any kind" of contract.

In Nabry v. MV Transportaion, Inc., No. 07-CV-0124 PJS/JJG, 2007 WL 4373107 (D. Minn. Dec. 13, 2007), Nabry and seven co-workers filed a lawsuit against their employer MV Transportation. In response, MV moved to compel arbitration.

Four of the employees signed employment applications that contained an arbitration agreement. These four employees raised two arguments in opposing arbitration. First, they argued that the application contained a disclaimer precluding contract formation. The Court rejected this argument because the disclaimer was limited in scope and precluded only the formation of an employment contract.

Second, the employees argued that the arbitration agreement was superseded by a 2006 employee handbook which contained no arbitration agreement. The Court rejected this argument because there was no evidence that the 2006 handbook was delivered to these employees, and just as the presence of an arbitration agreement in an undelivered handbook is ineffective, the absence of an arbitration agreement in an undelivered handbook is ineffective.

Having determined that the four employees who signed an application containing an arbitration agreement were required to arbitrate, the Court turned to the four employees whose employment application did not contain an arbitration agreement.

The employer argued that those employees were required to arbitrate because the 2003 and 2004 employee handbooks contained an arbitration agreement. The Court rejected this argument because there was no evidence that those handbooks were ever delivered.

There was an acknowledgment form signed by the employees, but this form acknowledged receipt of the 2000 employee handbook, which was not part of the record and thus not a basis for finding the existence of a valid arbitration agreement.

Moreover, even if the 2003 and 2004 handbooks had been delivered, the Court found that the disclaimer in those handbooks would preclude the formation of any contract, including an arbitration agreement, because this disclaimer applied to contracts of "any kind," unlike the disclaimer in the employment application which applied only to employment contracts.

Since the employer failed to prove that these four employees ever agreed to arbitrate, the Court denied the motion to compel with respect to their claims.