Washington: Independent Contractor Arbitration Agreement Enforced

APPLIES TO

All Employers with Employees in WA

EFFECTIVE

May 21, 2024

QUESTIONS?

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Quick Look

  • Arbitration agreements may be leveraged by non-signatories to the agreement where the claims against all parties are sufficiently intertwined.
  • Choice of forum clauses in arbitration agreements do not bar enforcement of the agreement, but will depend on the nature of the claims made and public policy to preserve rights available under Washington law.

Discussion

In Norwood v. Multicare Health System, the Washington Court of Appeals upheld an arbitration agreement of an independent contractor, with venue and choice of law provisions in a different state, between the contracting employer and also applied the arbitration agreement to the contracting employer’s clients.

 

There, an anesthesiologist had an independent contractor agreement with an employer that included an arbitration provision. The agreement with the employer provided that the worker would provide services to the employer’s clients as an independent contractor of the employer. The arbitration provision indicated that arbitration would be venued in Georgia and the agreement would be subject to Georgia law. The worker claimed that she was retaliated against for reporting unsafe conditions at the employer’s clients where she was performing services. The employer’s clients were not signatories to the arbitration agreement, but enforcement was sought against the independent contractor who did sign the agreement.

 

The court found that the claims against the contracting employer and contracting employer’s clients were sufficiently intertwined that they could not be separated, and so all claims would be resolved through arbitration. As for the Georgia choice of venue provision, Washington courts presume that forum selection clauses are valid and enforceable. An exception is when enforcement of the provision would contravene a strong public policy of the State where the action is filed. Because the independent contractor is asserting tort claims against Washington residents regarding her work in Washington, and even though the agreement indicates Georgia as the applicable law, the court assumed that the arbitrator will choose to apply Washington law to the arbitration proceedings and thus no Washington public policy will be violated by enforcement of the agreement.

 

Action Items

  1. Have arbitration and independent contractor agreements reviewed by legal counsel for compliance.

 


Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase