MIAMI BUSINESS LITIGATION: ESSENTIAL ARBITRATION TERMS

Arbitration provisions are often heavily litigated because the issue can have significant impact on the case. Determining whether parties must arbitrate can impact a litigant’s right to a jury trial, access to the court system, and the cost of litigation. Whether a litigant is trying to compel arbitration or avoid arbitration, litigants should carefully review the provision contained within the relevant contract to determine whether it is enforceable. The Miami business litigation attorneys of the Mavrick Law Firm represent businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

Courts are required to determine whether arbitration provisions are enforceable if a challenge is made to the enforceability of the arbitration provision as opposed to a challenge to the entire contract containing an arbitration provision. Hound Monds, Inc. v. Finch, 153 So. 3d 368 (Fla. 4th DCA 2014) (holding that arbitrators decide challenges to an entire agreement containing an arbitration provision while courts decide challenges to arbitrations provisions contained within an agreement). Assuming challenge is made to an arbitration provision, the court must consider whether a valid written agreement to arbitrate exists, whether an arbitrable issue exists, and whether the right to arbitration was waived. Seifert v. U.S. Home Corp., 750 So. 2d 633 (Fla. 1999). The first analysis prong requires the court to determine whether the arbitration provision contains sufficient essential terms. Bergman v. DeIulio, 826 So. 2d 500 (Fla. 4th DCA 2002). The essential terms of an arbitration agreement include “the form and procedure for arbitration, the number of arbitrators, how the arbitrators were to be selected, or … the issues to be decided by arbitration.” Malone & Hyde, Inc. v. RTC Transp., Inc., 515 So. 2d 365 (Fla. 4th DCA 1987).

Determining whether an arbitration provision contains sufficient essential terms can be difficult because there is no brightline test. Comparing different cases on the issue can be a useful exercise to help determine when arbitration provisions contain enough essential terms to make enforceable and when they do not. In Osprey Health Care Ctr., LLC v. Pascazi by & through Outwater, the arbitration provision contained a comprehensive list of claims that were subject to arbitration and an extensive guidance as to arbitration procedures such as the number of arbitrators, the parties’ right to counsel, authorization of an award of attorneys’ fees, and the arbitrator’s authority to oversee discovery and motions.  329 So. 3d 177 (Fla. 2d DCA 2021). Conversely, in Spicer v. Tenet Florida Physician Services, LLC, the court determined a valid written agreement to arbitrate did not exist because the arbitration provision did not contain sufficient essential terms. 149 So. 3d 163 (Fla. 4th DCA 2014). The provision in question contained with following terms and conditions:

As a condition of employment, you agree that any and all disputes regarding your employment with TFPS, including disputes relating to the termination of your employment, are subject to the Tenet Fair Treatment Process, which includes final and binding arbitration. You also agree to submit any such disputes for resolution under that process, and you further agree to abide by and accept the decision of the arbitrator as the final and binding decision and exclusive resolution of any such disputes

Although the provision includes language about arbitration, it does not does define what matters are to be arbitrated and does not contain procedures for the arbitration.Whether your particular arbitration provision is enforceable will depend on the number of essential terms contained within the provision. The more the provision contains essential terms, the more likely it will be enforced.

The Miami business litigation lawyers of the Mavrick Law Firm also represent clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.