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Contract Still Key to Arbitration Says Eighth Circuit

In Shockley v. PrimeLending, the company maintained its PrimeLending Handbook Addendum (Handbook) and policies on a computer network available to all employees. Clicking to open the Handbook automatically generated an acknowledgment of review and a pop-up window with a link to the entire Handbook. In that Handbook is the company’s arbitration provisions, including its “Dispute Resolution/Arbitration Clause” and the “Control of Decisions” section. The latter section, which is part of the arbitration provision, gives the Arbitrator exclusive authority to resolve all claims, including whether the arbitration clause is enforceable. Shockley did click on the link but had no memory of opening the document and reviewing the Handbook.
Shockley sued PrimeLending for alleged violations of the Fair Labor and Standards Act, claiming she was not paid all of her earned wages and overtime pay. PrimeLending sought to compel arbitration. “Arbitration is a matter of contract law, and favor status notwithstanding, parties cannot be compelled to arbitrate unless they have contractually agreed to be bound by arbitration.” The validity of the delegation provision was the primary issue before the appellate court. If there was offer, acceptance, and bargained-for consideration (the elements of a contract), then all issues, including enforceability, must go to an arbitrator. In Missouri (as well as other states), the mere continuation of employment is not enough to reflect the acceptance of an arbitration agreement. However, if PrimeLending’s Handbook had stated that continued employment demonstrates acceptance and the employer advised employees of the same then it might have withstood. However, in this case where such language was lacking and there was no evidence that Shockley had reviewed the Handbook, the motion to compel arbitration was unsuccessful.