A federal district court in Maine denied an employer’s motion to compel arbitration of a dispute over the enforceability of an employee’s arbitration agreement because the arbitration agreement contained a severability clause empowering the court to sever any offending provisions from the agreement, thus creating an ambiguity that precluded the Court from finding "clear and unmistakable" evidence of the parties’ intent to arbitrate the enforceability of the arbitration agreement.

In Morris v. Regis Corp., No. 08-68-P-H, 2008 WL 2945431 (D. Me. July 25, 2008), Morris and her employer Regis entered into an arbitration agreement that precluded an award of punitive damages, shortened the statute of limitations, and required the parties to share the costs of arbitration.

After Regis terminated her employment, Morris filed a declaratory judgment action asking the court to determine that the arbitration agreement was unenforceable. In response, Regis filed a motion to compel arbitration of the enforceability question. Specifically, Regis claimed that the parties had agreed that an arbitrator would decide questions of arbitrability, including the question of the enforceability of the arbitration agreement.

As the Court noted, questions of arbitrability are decided by the court, rather than an arbitrator, unless there is "clear and unmistakable" evidence of the parties’ intent to submit questions of arbitrability to the arbitrator. The Court found that such evidence was lacking in this case because there were conflicting provisions in the agreement.

Specifically, the arbitration agreement contained a severability clause authorizing "the court" to sever any offending provisions from the agreement. According to the Court, this language created an ambiguity that precluded a finding of "clear and unmistakable" intent to submit the enforceability question to the arbitration. The Court thus denied the motion to compel arbitration and retained jurisdiction over the issue of the arbitration agreement’s enforceability.

The Court’s ruling in this case was premised on a magistrate’s report and recommendation that was affirmed by the presiding judge in Morris v. Regis Corp. No. 08-68-P-H, 2008 WL 4120220 (D. Me. Sept. 2, 2008).