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Firm’s failure to sign arbitration agreement invalidates it

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An engineering and construction firm’s former employee cannot be compelled to go through arbitration in her sexual harassment case because the company never signed the arbitration agreement, says a federal appeals court, in overturning a lower court ruling.

Kimberly Huckaba sued her former employer, Odessa, Texas-based Ref-Chem L.P., in U.S. District Court in Midland, Texas, in 2016 charging she had been terminated after complaining of sexual harassment by a co-worker, according to court papers in Kimberly Huckaba v. Ref-Chem LP.

The company moved to dismiss and compel arbitration, according to Monday’s ruling by the 5th U.S. Circuit Court of Appeals in New Orleans.

To support its motion, Ref-Chem provided the court with an arbitration agreement that had been signed by Ms. Huckaba. “Next to Huckaba’s signature is a signature block for Ref-Chem. Ref-Chem, however, did not sign the agreement,” said the ruling. 

Based on the agreement, the District Court granted Ref-Chem’s motion to compel arbitration and dismissed the case.

On appeal, a three-judge appeals court panel unanimously held the agreement was invalid. The arbitration agreement’s “express language clearly indicates an intent for the parties to be bound to the arbitration agreement by signing the agreement,” said the ruling.

While Ref-Chem points to evidence that it intended to be bound by the agreement without signing, such as creating the arbitration agreement, keeping it as a business record and moving to compel arbitration when Ms. Huckaba sued, “Considering the record as whole, this evidence does not satisfy Ref-Chem’s burden that it intended to be bound without signing the agreement,” said the ruling, in reversing the lower court’s ruling and remanding the case for further proceedings.