Employees Who did not Sign Agreement in Their Individual Capacities Nevertheless Entitled to Enforce Arbitration Provision

On July 3, 2018, the First Department issued a decision in Huntsman International LLC v. Albemarle Corp., 2018 NY Slip Op. 04962, holding that employees who did not sign an agreement containing an arbitration provision nevertheless were entitled to enforce the provision, explaining:

The individual defendants, who were officers or employees of Rockwood and did not sign the SPA in their individual capacities, are nevertheless entitled to enforce the arbitration provision, because any breach of the SPA would have to be the result of an action or inaction attributable to them. A rule allowing corporate officers and employees to enforce arbitration agreements entered into by the corporate principal is necessary not only to prevent circumvention of arbitration agreements but also to effectuate the intent of the signatory parties to protect individuals acting on behalf of the principal in furtherance of the agreement. Further, even a nonsignatory may be estopped from avoiding arbitration where he knowingly accepted the benefits of an agreement with an arbitration clause.

(Internal quotations and citations omitted).

Commercial litigation involves more than courts. Disputes often are--by agreement--decided by private arbitrators. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have a question regarding a dispute that is subject to an arbitration agreement.