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A Colorado Federal Court refused to compel arbitration under an expired employment agreement.
In Cornell v. Harmony Homes, Inc., No. 06-cv-00323-EWN-MEH, 2007 WL 38132 (D. Colo. Jan. 04, 2007), Cornell was employed with Harmony Homes, beginning in 2001. In 2002, she signed an employment agreement with an end date specified as "December" but lacking a year to define the term. The agreement contained an arbitration clause.
Cornell was terminated from her position in 2004. She brought suit against Harmony Homes, alleging discrimination under the American Disabilities Act. Harmony Homes moved to compel arbitration.
The Court rejected Harmony Homes' argument that the ambiguity regarding the term of the contract should be interpreted to encompass the remainder of Cornell's employment. "In this case, the omission of the year after 'December' cannot overcome the express reference to the year '2002' appearing two words before it." The Court held the ambiguous language specifying the term of the contract encompassed only the year 2002.
The Court held that the dispute did not arise under the contract. "[A]ll of the alleged actions upon which [Cornell] bases her claim…took place after the expiration of the Employment Agreement." The disputes did not "relate to events which...occurred at least in part while the agreement was still in effect" or "involve rights which to some degree have vested or accrued during the life of the contract and merely ripened after termination." United Food & Commercial Workers Int'l Union v. Gold Star Sausage Co., 897 F.2d 1022, 1024-25 (10th Cir. 1990). Thus, there was no enforceable arbitration agreement.
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