Jottings By An Employer's Lawyer

Friday, October 04, 2002

How far can an arbitration agreement go?

Not far enough to protect a law firm accused of giving bad legal advice to a reporter for WFAA. After having been told it was permissible to tape wireless phone conversations, a reporter and WFAA were sued by the individuals taped, resulting in a settlement of over $5,000,000. The reporter then sued the law firm. In discovery the firm obtained his employment agreement with WFAA which had an arbitration agreement. As do many, it contained broad language covering:

all disputes between you and [WFAA] . . . which relate to, or arise from the employment relationship, the parties agree to forego litigation . . . and the parties consent to the final and binding arbitration of all claims and disputes which may arise between the parties including, but not limited to, disputes arising from your employment and the termination of your employment. Such claims and disputes will include any claims or disputes that [WFAA] may have against you, as well as those that you might have against [WFAA], its parent corporation, owners, affiliates, officers, directors, employees, and/or agents.

Relying on the extension of the contract to agents of WFAA, the law firm argued that when it gave advice it was acting as the agent of WFAA, citing established case law that attorneys are the agents of their clients. The employee argued, and the Dallas Court of Appeals agreed, that the language was intended to cover only those parties for whom WFAA would be vicariously liable for their conduct. Since both parties agreed that WFAA was not liable for legal advice given by the law firm, the arbitration agreement did not apply and the motion to compel arbitration was properly denied. Jenkens & Gilchrist v. Riggs (9/17/02)


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