Academic journal article Missouri Law Review

When Arbitration Agreement Provisions Time Travel: Illusory Promises and Continued At-Will Employment in Baker

Academic journal article Missouri Law Review

When Arbitration Agreement Provisions Time Travel: Illusory Promises and Continued At-Will Employment in Baker

Article excerpt

Baker v. Bristol Care, Inc., 450 S.W.3d 770 (Mo. 2014) (en banc).

I. INTRODUCTION

Left unrestrained, Baker v. Bristol Care (1) may quietly revolutionize Missouri law regarding employment agreements of many kinds. Baker is a recent Supreme Court of Missouri case favoring an employee's position for denial of an employer's motion to compel arbitration pursuant to a purported employment and arbitration agreement. The court considered the agreement in question to be unsupported by consideration, as neither continued at-will employment, nor an illusory promise to arbitrate on the part of the employer, were found to be adequate consideration. Of particular note was the court's fatal interpretation of a provision of the purported agreement. This provision would have given the employer, with 30-days' notice to the employee, unilateral power to amend or revoke at least the arbitration portion of the parties' purported agreement. The court interpreted this provision as granting retroactive, and not merely prospective, authority to the employer.

This case is an important development of Missouri employer-employee contract law following the 2008 case of Morrow v. Hallmark Cards, Inc. (2) It heals an apparent rift between Missouri's law on this matter and the federal courts' interpretation thereof. Depending on other courts' use of the decision in the future, Baker may have sweeping effects on all agreements--not merely arbitration agreements--between at-will employees and employers in the future. These implications, and how employers and employees might act to create arbitration agreements in light of Baker, will be explored below.

First, this Note discusses the particular facts of the Baker case, including its procedural history and holding. Then, the history of salient cases and law is covered in three main areas related to Baker, specifically the concept of arbitrability, at-will employment's status as effective consideration, and when courts find promises to be illusory. Following that, this Note summarizes the court's decision in Baker and its lengthy and thorough dissent. Finally, this note discusses the significance of this case in relation to both the history of the topics involved and their application going forward.

II. FACTS AND HOLDING

The parties involved in Baker v. Bristol Care, Inc. were appellants David Furnell ("Furnell") and Bristol Care, Inc. d/b/a Bristol Manor ("Bristol") and respondent Carla Baker ("Baker"). (3) Baker was a former employee of Bristol Care, and Furnell was the President of Bristol. (4) After Baker attempted to bring a class action against Bristol, Bristol sought to compel arbitration. (5) Bristol appealed the overruling of this motion to the Supreme Court of Missouri. (6) It made this motion pursuant to Missouri Revised Statutes Sections 435.355 (7) and 435.440, which permitted appeal "from an order denying an application to compel arbitration...." (8)

Bristol and Baker had signed employment and arbitration agreements, both of which were prepared by Bristol at the same time that Baker received a promotion from Bristol. (9) This promotion included a change in pay-scheme from hourly to salary, and Baker was given a role as manager in one of Bristol's long-term care-providing locations. (10) Under the employment agreement, Baker's employment was to "continue indefinitely" unless either Baker provided 60 days' notice or Bristol chose to end her employment in any one of four ways. (11) The parties' signed arbitration agreement identified the consideration as "Baker's continued employment and mutual promises to resolve claims through arbitration," however the agreement also said that it would "not alter [Baker]'s status as an at-will employee" and "that Bristol specifically 'reserves the right to amend, modify, or revoke this agreement upon thirty (30) days' prior written notice to [Baker]."' (12) Baker commenced her class action after being removed from her employment with Bristol. …

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