English, Legally SpeakingNovember 1, 2008
Employment Agreement Enforceable Even When the Employee Didn’t Understand English
Juan Morales, the plaintiff, is a Spanish-speaking welder who resided in St. Croix, U.S. Virgin Islands. Welders were in great demand when he was hired by Sun Constructors. The company had Morales sign an employment agreement that contained an arbitration-of-all-employment-disputes requiremenOpen Interest Listt.
When hired, Morales passed a written exam, in English. Sun hired him and required him to attend a 2.5-hr. orientation conducted in English and to sign the hourly employment agreement.
Five paragraphs of the employment agreement pertained to arbitration and covered nearly eight of the 13 pages of the agreement. The employee who conducted the orientation, Mr. Langner, asked Jose Hodge, a bilingual applicant at the orientation, and whom Morales knew, to explain what Langner was saying and help Morales fill out the documents. Hodge testified that he generally understood about 85 percent of what was said and written in English. He also stated that Morales did not ask him what he was signing and that he did not specifically explain the arbitration clause to Morales. Langner stated that he did explain the arbitration provisions in English and that, during the orientation, Hodge spoke to Morales in a foreign language. The agreement governed the employment relationship between Morales and Sun for the entirety of the relationship.
Sun later fired Morales for allegedly dumping a bottle of urine from a great height on another contractor’s employees in violation of safety standards. Morales filed a wrongful termination suit against Sun in federal court seeking relief to avoid the employment agreement’s arbitration clause.
Ignorance of the law (or contracts one signs) is no excuse, absent fraud. The Third Circuit U.S. Court of Appeals, which heard this case, relied on several key principles:
• There is a strong federal policy in favor of the resolution of disputes through arbitration (instead of clogging the civil or federal courts);
• Arbitration agreements are enforceable to the same extent as other contracts;
• Contract law principles applicable include:
a) The formation of a contract requires a bargain in which there is a manifestation of mutual assent of terms and conditions and legal consideration.
b) Acceptance is measured in the law not by the parties’ subjective intent, but rather by their outward expressions of agreement or assent.
c) Every contracting party has the duty to “learn and know the contents of a contract before he signs and delivers it.”
d) Arbitration-clause employment contracts constitute no exception to these principles.
The Appeals Court cited an 1875 U.S. Supreme Court decision for the further corollary that “it will not do for a man to enter into a contract, and when called upon to respond to its obligations, to say that he did not read it when he signed it, or did not know what it contained.” The court cited precedent that even an illiterate person can bind himself by contract when failing to learn the contents of an instrument that he has signed.
The only exception to this binding impact is if a signed contract represents fraud, but the Appeals Court noted that Morales did not claim fraud nor that Sun misrepresented the agreement contents.
Morales v. Sun Constructors, Inc., No. 07-3806, August 28, 2008