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Court Compels Arbitration where Employer's Right to Modify Terms is not "Unfettered"

A number of recent court decisions have invalidated employment arbitration agreements where the employer reserves the right to modify terms. Courts have increasingly held that modification rights make the employer’s promise to arbitrate illusory, and thus, the agreement to arbitrate lacks consideration. Bucking this trend, however, the District of Kansas, in an opinion by Judge Toby Crouse, recently affirmed that an employment arbitration agreement which does not give the employer “unfettered” authority to modify its terms is supported by valid consideration and is enforceable. The Court also held that an arbitration agreement which incorporates AAA delegation rules is a “clear and unmistakable” delegation, giving the arbitrator the authority to rule on his or her own jurisdiction and issues of arbitrability.

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