In what appears to be a regrettable determination for employers, the Massachusetts Appeals Court ruled last month that a business cannot compel an individual to arbitrate a dispute against its employees who are not named specifically in an arbitration agreement. In Constantino v. Frechette, the Appeals Court ruled that an arbitration provision in an application for nursing home residence applied only to disputes against the nursing home and not to claims against nurses who worked there. This decision would seem to fly in the face of ample precedent holding that claims against employees whose behavior is intertwined with the actions of their employer are encompassed by the employer’s arbitration agreement. The matter may be appealed to the Supreme Judicial Court, and we will monitor it accordingly. The decision should cause employers to re-examine any arbitration provisions upon which they currently rely.
Arbitration Agreements Take a Hit
January 1, 2009