Kansas City Chiefs Start the Season 0-2

What, you ask? It’s only March, so how can the Chiefs already be at no wins and two losses?

Not on the football field, dear reader, but in the Missouri Court of Appeals.

On February 26, 2013, the Missouri Court of Appeals, Western District ruled on the cases of two former Kansas City Chiefs employees who had been terminated, and had filed complaints of age discrimination. In one case, the day after she was hired, the employee (a Community Relations Director) was directed to sign an agreement requiring that any dispute between the employee and the Chiefs be referred to the NFL Commissioner for binding resolution.   In the other, the employee (a Controller) was directed to sign the agreement two years after he began work.

When these individuals filed separate lawsuits in Circuit Court, Jackson County, the Chiefs moved to dismiss and to compel arbitration, claiming that the agreement with the Chiefs constituted a binding arbitration agreement.

In each instance, the Circuit Court denied the Chiefs’ motion, and the Chiefs appealed, arguing that there were two forms of consideration that supported an agreement to arbitrate: a “mutual promise” to be bound by the Commissioner’s decision; and a promise of continued employment with the team. The Court of Appeals, in separate opinions, held that Missouri law governed whether a valid arbitration agreement existed, and that in both cases, there was no consideration for the agreement. Regarding “mutual promises” to arbitrate, the Court held that the employee gave promises to be bound by league rules, to have disputes decided by the Commissioner, and to release various parties upon the Commissioner’s decision; and that the Chiefs promised nothing. The Court likewise rejected the Chiefs’ argument that the employee’s continued employment long after the agreement was signed was consideration, observing that the employee could have been fired fifteen minutes after signing the agreement, and that under the Court’s prior decisions in Morrow v. Hallmark Cards, Inc., 273 S.W.3d 15 (Mo.App. 2008) and Whitworth v. McBride & Son Homes, Inc., 344 S.W.3d 730 (Mo.App. 2011), the fact that the employee continued to work for the team did not constitute consideration.

Missouri law contains significant pitfalls for employers who seek to have their employees’ discrimination claims referred to arbitration. Employers who seek to utilize arbitration agreements should work closely with their legal counsel, to ensure that the agreements are enforceable under the Morrow-Whitworth-Clemmons-Sniezek line of cases.

Clemmons v. Kansas City Chiefs Football Club, Inc., - S.W.3d -, case no. WD75329 (Mo. App. W.D. Feb. 26, 2013), available here.

Sniezek v. Kansas City Chiefs Football Club, Inc., - S.W.3d -, case no. WD75206 (Mo. App. W.D. Feb. 26, 2013), available here.