The Factual Background
Employers who use arbitration agreements, whether under FINRA, AAA, JAMS, or other arbitration association, must be aware of the recent decision of Mertens v. Benelux Corporation, 162 F. 4th 492 (5th Cir. 2025).
Plaintiffs were employed as waitstaff by Benelux Corporation’s “Palazio Men’s Club” in Austin, Texas. Palazio’s gave its employees an agreement to arbitrate all disputes between them.
A signature box/line appeared directly below for both the employee and the employer.
The employees signed the arbitration agreement. The employer did not sign the arbitration agreement. The employer described its failure to sign the arbitration agreement as an “unintentional mistake.”
Result of the Employer’s Failure to Sign the Arbitration Agreement
Employees filed a lawsuit against the employer. The employer immediately moved to compel arbitration. The court held the arbitration agreement unenforceable because the employer had failed to sign the arbitration agreement.
Patrick McShan, a licensed FINRA arbitrator at the Rogge Dunn Group, believes the Mertens decision is hugely significant for all employers and companies who use arbitration agreements. Arbitration attorney Patrick McShan says, “best practices is to always double check to make sure arbitration agreements are signed by both parties.”
Rogge Dunn, a lead arbitration attorney for the Group, advises “using electronic signatures will help avoid the problem of people forgetting to sign arbitration agreements.”
Arbitration lawyers know an arbitration agreement is simply a contract, and like all contracts, it must be mutually agreed to by both parties. The parties’ signatures request this mutuality.
A party’s failure to sign the arbitration agreement makes the agreement unenforceable. Hence, the court of appeals held the arbitration agreement was unenforceable.
Arbitration lawyers know the importance of attention to detail, as this hugely significant court ruling points out.
Bottom line: If you want arbitration, don’t forget to have both parties sign the agreement.
What Texas Employers Should Do Now
The Rogge Dunn Group arbitration lawyers are ready to assist employees, employers, and companies and review your arbitration agreement language carefully, audit existing arbitration agreements, and advise on strategies regarding arbitration agreements. The Rogge Dunn Group includes experienced arbitration lawyers like Rogge Dunn and licensed FINRA arbitrator Patrick McShan.
If you have arbitration questions, reach out to the experienced and battle-tested FINRA and arbitrator lawyers at the Rogge Dunn Group who are ready to advise and help you.