Somewhere in Austin, Texas, a general manager is having the kind of day that makes you reconsider career choices. He’s the man who looked at a stack of arbitration agreements, saw a signature in the “employer” box, assumed someone else had signed it, and moved on.
That someone else was the employee herself, who had helpfully signed both her box and the employer’s box on the document meant to keep her workplace disputes out of court.
Now, thanks to a Fifth Circuit Court of Appeals ruling issued last month, that unsigned arbitration agreement is worth precisely nothing. And the company that runs the nightclub gets to defend a Fair Labor Standards Act lawsuit in court instead of the arbitration forum it spent time and money creating.
The case reads like a cautionary tale written by someone with a dark sense of humour about corporate processes.
Here’s what happened: In 2020, the company distributed arbitration agreements to its waitstaff. The document was clear enough. It said that by signing, “Employee and the Club’s Representative” agreed to be bound by its terms. Two signature boxes sat at the bottom — one for the club, one for the employee.
The employees initialed every page, dated everything properly, and then — in what appears to be an act of administrative goodwill or confusion — one of them signed both boxes. She later said she didn’t recall why she did this, but made clear she “did not intend to be bound by the Arbitration Agreement until and unless”...
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