Fifth Circuit Rules on Arbitration Clauses

Fifth Circuit Rules on Arbitration Clauses

Justice News Flash
February 19, 2012

The Fifth Circuit Court of Appeals just ruled that an arbitration clause contained in an employee handbook was invalid and unenforceable. Under Texas law, an arbitration clause is invalid if one party can avoid its promise to arbitrate by amending the provision or terminating it. Because the employer could amend the handbook at will, an employee’s signature of having received the handbook was not valid as enforcing the clause.

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