HR Management & Compliance

Case Study: Dish Network Disconnects on Arbitration Agreement

You would think drafting an arbitration agreement should be simple enough. After all, arbitrating employment discrimination claims was court-approved several decades ago. But issues still persist, as we see in this very recent case from the El Paso Court of Appeals.

Where’s Waldo?

Yvette Delgado sued her former employer, Dish Networks, for unlawful discrimination and retaliation. The company asked the court to send the case to binding arbitration because it and Delgado had agreed to arbitration for such claims when she was an employee. But her lawyer no doubt examined the entire agreement on sort of a Where’s Waldo? mission to find a flaw in the agreement. The lawyer found one. And here it is:

The employee agrees that this [Arbitration] Agreement is governed by the Federal Arbitration Act and is fully enforceable. . . . The arbitration shall be governed by and construed in accordance with the substantive law of the state in which the employee performs services for the for [the Employer] as of the date of the demand for arbitration. . . . A Single arbitrator engaged in the practice of law from the American Arbitration Association [AAA] shall conduct the arbitration under the then current procedures of the AAA’s National Rules for the Resolution of Employment Disputes.

Seems OK, right? Not quite. The agreement didn’t outline procedures for picking the arbitrator. While the employer apparently wanted the AAA procedures to govern the selection process, it didn’t say that did it?

Now What?

So, the employee and the employer voluntarily tried to pick an arbitrator under the AAA rules and failed. The trial court then appointed an arbitrator. The employer went ballistic, appealed, and lost.

The appeals court essentially said: “You had the chance to write the agreement the way you wanted, and it doesn’t spell out how the arbitrator will be selected if the employer and the employee cannot agree on one. Thus, you are stuck with whomever the court appoints.”

Measure Twice, Cut Once!

First a side note: Why did the employer care who decided the matter? Because the AAA is a well-known organization and the employer wanted, well, a known entity to appoint an arbitrator so it didn’t end up with a wild card. The employer lost control.

The appeals court helpfully suggested language other courts approved, such as: “If the parties fail to agree on an arbitrator [under the AAA Rules or otherwise], then the AAA will appoint the arbitrator under then current rules.” There are many other options noted in the court’s opinion. In Re Dish Network, L.L.C. (Tex. App.—El Paso, August 30, 2022).

Bottom Line

Don’t blindly follow the agreements written by other employers when you write or revise your arbitration agreement. There’s a big body of case opinions that deal with how to write the agreement to achieve your goals. Access it and use it.

And when you write, use simple language. As my supervisor at the National Labor Relations Board (NLRB) often counseled: “Write like Ned in the First Grade Reader: ‘This is Spot. Spot is a dog. See Spot run.’” Your goal isn’t to impress your employees by sounding smart. Oh no. Rather, your goal is for them to understand what you’re communicating to them.

Finally, do a stress test on the agreement. Ask yourself what issues could arise, and then process the answer through the agreement you drafted.

The Bonus Room

As long as I’m at it, employers often mess up forum selection clauses. These clauses require an employee who sues you to file suit only in a specific locale (called a jurisdiction in lawyer lingo).

Here is a flawed example:

In the event of any litigation that arises in connection with your employment, in whole or in part, the employer and the employee agree to submit to the jurisdiction of the Dallas County District Courts.

Not so good. Why? Because the agreement above says the parties can agree to submit themselves to the jurisdiction of the Dallas County courts, not that they must.

It’s so better to say: The parties agree that any lawsuit or claim relating to employment, in whole or in part, shall be brought only in the Dallas County District Courts to the exclusion of any other court or forum.” Decide what you want, and then say it!

Michael P. Maslanka is a professor at the UNT-Dallas College of Law. You can reach him at

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