The Revised Florida Arbitration Code allows parties to arbitration to file a motion to vacate, modify, or correct an award in limited circumstances. See §§ 682.13 – 682.14, Fla. Stat. § 682.13 provides, in part, that a court can vacate an arbitration award only if:

(a) The award was procured by corruption, fraud…(b) There was:1. Evident partiality by an arbitrator …3. Misconduct by an arbitrator prejudicing the rights of a party to the arbitration proceeding; (c) An arbitrator refused to postpone the hearing upon showing of sufficient cause for postponement, refused to hear evidence material to the controversy, …(d) An arbitrator exceeded the arbitrator’s powers;(e) There was no agreement to arbitrate …(f) The arbitration was conducted without proper notice …

Further, § 682.14, Fla. Stat., provides, in part, that a court can modify or correct an award only if:

(a) There is an evident miscalculation of figures or an evident mistake…(b) The arbitrators have awarded upon a matter not submitted in the arbitration …(c) The award is imperfect as a matter of form, not affecting the merits of the controversy. Therefore, a party that encounters any of the grounds listed in §§ 682.13 – 682.14 should timely file a motion to vacate, modify, or correct with the court. See Nestor v. Ward, 163 So. 3d 582, 585 (Fla. 3d DCA 2015) (“In the absence of a motion to vacate, modify, or correct the arbitration award, the trial court must confirm the award”).

In sum, potential parties to arbitration proceedings should understand the finality of an arbitrator’s decision. Like a judgment from a lower court, “[t]he binding effect of an arbitration … award becomes final once the arbitrator releases his findings.” Capital Factors, Inc. v. Alba Rent-A-Car, Inc., 965 So. 2d 1178, 1182–83 (Fla. 4th DCA 2007). Unlike a judgment from a lower court, the right to judicial review is exclusively limited to the grounds enumerated in the Revised Florida Arbitration Code: This is true even if an arbitrator makes errors of judgment as to the law or fact and even when an award is excessive under substantive law. See Managed Care Ins. Consultants, Inc. v. United Healthcare Ins. Co., 2017 WL 3085339 (Fla. 4th DCA July 19, 2017); Prudential-Bache Sec., Inc. v. Shuman, 483 So. 2d 888 (Fla. 3d DCA 1986). No matter the facts, unless provided for by statute, the award of an arbitrator cannot be disturbed. An arbitration award operates “as a final and conclusive judgment, and – however disappointing it may be – the parties must abide by it.” Cassara v. Wofford, 55 So. 2d 102, 105 (Fla. 1951). Therefore, individuals and businesses should enter agreements with an awareness of dispute resolution clauses and negotiate accordingly if the concept of arbitration of an unassailable arbitration award is undesirable.

The Mavrick Law Firm has successfully represented many parties in arbitration proceedings. This article is not a substitute for legal advice tailored to a particular situation. Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311.

Generally, a “fee-splitting” provision is a contractual provision requiring that the parties to an arbitration agreement share (or “split”) the costs of arbitration. Moreover, a “fee-shifting” provision is a contractual provision that requires the losing party in an arbitration proceeding to pay the prevailing party’s fees and costs associated with the arbitration, i.e., the costs of arbitration “shifts” to the losing party. “Fee-splitting” and “fee-shifting” provisions would normally not render an arbitration agreement unenforceable. However, the analysis changes when federal statutory rights are subject to arbitration. The rule is as follows: an arbitration agreement is unenforceable if the cost of arbitration effectively precludes the employee from vindicating his federal statutory rights. One such federal statutory right is the right to payment of minimum and overtime wages under the Fair Labor Standards Act (FLSA).

In Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79 (2000), the U.S. Supreme Court held that the “risk” that a party will be saddled with prohibitive arbitration costs is too speculative to render an arbitration agreement unenforceable. Following Green Tree, several federal court have upheld the validity of arbitration agreement containing fee-splitting provision. For example, in Maldonado v. Mattress Firm, Inc., 2013 U.S. Dist. LEXIS 58742 (M.D. Fla. Apr. 24, 2013), an employee argued that the arbitration agreement’s fee-splitting provision rendered the agreement unenforceable against his FLSA claim. The federal court held that in order to prevail on his argument, the employee was required to present evidence of (1) the amount of costs he is likely to incur and (2) his inability to pay those costs. A showing of the “possibility” of incurring prohibitive costs is not sufficient. The federal court held that the arbitration agreement was enforceable despite the employee’s FLSA claim.

Several months later, a Florida state court held that a fee-shifting provision rendered an arbitration agreement unenforceable against the employee in an FLSA case. In Hernandez v. Colonial Grocers, Inc., 124 So. 3d 408 (Fla. 2d DCA 2013), the Florida state court held that an arbitration agreement containing a fee-shifting clause was unenforceable because the fee-shifting provision was directly at odds with the FLSA’s remedial purpose. The FLSA allows the prevailing employee to recover his attorney’s fees and costs. However, the FLSA does not have a similar provision favoring the employer. Therefore, the Florida state court in Hernandez held that the fee-shifting provision “renders the potential cost of arbitration to be far greater to [the employee] than the potential cost of civil litigation” and that the arbitration agreement exposes the employee “to a potential liability to which he would not be exposed if the litigation occurred in civil court because the federal statute specifically protects him from such liability.” Hernandez, 124 So. 3d at 410. The state court therefore found that the arbitration agreement was unenforceable.

Arbitration can be a much cheaper and quicker alternative to litigation. However, arbitration is a creature of contract. If not properly drafted, a court may find that the arbitration agreement is unenforceable and require that the parties litigate their case in court. Although every case is different, proper drafting is essential to an enforceable arbitration agreement.

Peter T. Mavrick has successfully represented many employers in labor and employment matters. This article is not a substitute for legal advice tailored to a particular situation. Employment attorney Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: peter@mavricklaw.com.