Arbitration Agreement Which Splits Costs of Arbitration Cannot be Modified by Trial Court
Don Drennen v. McClung
The Alabama Supreme Court recently issued an opinion reversing a trial court’s order that modified the payment structure for costs in relation to an arbitration agreement.
The plaintiff (McClung) alleged that he sustained injuries while working for the defendant (Drennen) and he received medical treatment for those injuries. Drennen terminated McClung shortly thereafter. Subsequently, McClung filed a lawsuit for retaliatory discharge in Jefferson County. Drennen filed a motion to dismiss the complaint and compel arbitration, as the parties had signed a predispute arbitration agreement as part of McClung’s employment with Drennen.
The trial court granted the motion to compel arbitration. In response, McClung filed a reply requesting further instruction about responsibility for costs of the arbitration agreement, despite that the agreement contained a provision that “the parties shall share equally the costs, fees, and expenses.” McClung complained that he was unable to pay for the costs and that Drennen, due to its superior financial standing, should bear the full cost. The trial court agreed, and ordered Drennen to pay all costs associated with arbitration. Drennen appealed.
Upon review, the Supreme Court noted that “general contract law requires a court to enforce an unambiguous, lawful contact as it is written,” and that “a trial court may not enter orders compelling parties to act in a manner that is inconsistent with the parties own arbitration agreement.” Further, the arbitration agreement provided instructions for the procedure that a plaintiff must follow if he lacks the resources to pay his share of the expenses. As such, the trial court was reversed and the Supreme Court ordered that the arbitration agreement is to be enforced without modification.