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Court Strikes Down Arbitration Agreement Signed as Part of Employee Handbook

June 28, 2022


An arbitration agreement contained in the employee handbook of Nationwide Motor Sales Corp. failed because the signature page indicated that Nationwide could unilaterally change its terms, the 4th U.S. Circuit Court of Appeals ruled.

Five former employees of Nationwide sued the company and its owners in federal district court, alleging fraudulent payment practices that reduced employees’ sales commissions and final paychecks. Nationwide moved to compel arbitration and to dismiss or stay the proceedings.

The Nationwide employee handbook contained a section titled “Agreement to Submit All Employment Disputes to Arbitration.” The first four paragraphs of the arbitration agreement stated an intent to arbitrate employment-related claims and specified the rules and procedures that would apply.

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