Originally from Dispute Resolution Journal

EMPLOYMENT

Expanded Review Provision

The Ohio Supreme Court severed an unlawful provision in an employment arbitration agreement, concluding that it was not an essential term and severing it would not fundamentally alter the nature of the arbitration agreement.

Diane Ignazio sued Clear Channel claiming age and sex discrimination, and retaliation and wrongful termination of employment. Clear Channel moved to compel arbitration. The parties’ arbitration agreement contained a provision expanding judicial review of arbitration awards, as well as a severability clause.

The trial court granted Clear Channel’s motion to compel arbitration but the Ohio Court of Appeals reversed, ruling that expanded judicial review transformed the agreement into non-binding arbitration. The appeals court remanded the case to the district court with instructions to allow the lawsuit to go forward.

The Ohio Supreme Court reversed, reinstating the trial court’s ruling enforcing the arbitration agreement but without the offending judicial review provision. The court first found that having an unconventional standard of review in an arbitration agreement is not enough to make the overall agreement unenforceable.